FACULTY OF EDUCATION AND LANGUAGE
SEMESTER MAY 2011
BBSB4103
CROSS-CULTURAL MANAGEMENT
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TABLE OF CONTENTS
Table of Contents 1
THE REVIEW OF LITERATURE
1.0 Introduction .……..…………………………,…………………………… 2
2.0 Definition of culture …...………………………………………...…....…. 2
3.0 Overview of selected organization ...…………………………………….. 5
4.0 Corporate culture questionnaire .…………………….…………………... 8
5.0 Deep Dive on each question’s response ……...…………………..……... 9
6.0 Overall evaluation of the result………………………….……….……..…14
7.0 Conclusion ………………………………………………………..….……16
REFERENCES
8.0 References…...………………………………………….………...............18
APPENDICES
9.0 Appendix I : Questionnaire by Nicole C. Moss……………………………… 20
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THE REVIEW OF LITERATURE
This paper evaluates the corporate culture of a selected global organization by reviewing
the result of a survey. The survey is based on the questionnaire posted by Nicole C. Moss
on ―Quiz: What is your corporate culture?‖. Further evaluation of the questionnaire
results was discussed including advantages and disadvantages of the culture.
1.0 Introduction
Culture matters. It matters because decisions made without awareness of the operative
cultural forces may have unanticipated and undesirable consequences. Corporate culture
is believed to influence key aspects of business performance, such as innovation,
customer focus, adaptability to change, and organizational learning. Some experts say it
is also the defining factor in the areas of employee engagement, loyalty, and retention
(Towers Perrin, 2007). When companies ―get the culture right,‖ success often seems to
naturally flow (Saltzman, 2007). But when they get it wrong, failure often seems
inevitable (Neuman, 2007; Probst & Raisch, 2005).
A landmark 1992 study by J. Kotter and James Hesket concluded that, over a 10-year
period, ―companies that intentionally managed their culture effectively outperformed
similar companies that did not. Their findings included revenue growth of 682% versus
166%, stock price increases of 901% versus 74%, net income growth of 756% versus 1%,
and job growth of 282% versus 36%‖ (Warshawsky et al., 2006).
Companies that manage culture well can also benefit in specific performance areas.
Organizations with innovation-friendly cultures, for example, tend to be more profitable,
enjoy faster growth, create more jobs, and have a more productive workforce than their
non-innovative competitors, even in mature industries (Franko, 1989; Capon et al., 1992;
Baldwin & DaPont, 1993). A recent American Management Association (AMA) study,
The Quest for Innovation (2006), discusses at length the importance of an innovative
culture. In such cultures, customers were found to be the number one driver of
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innovation, and the ability to focus on customers was viewed as the top-ranked factor for
developing an innovative culture.
Intel, the organization surveyed, has a long and strong 40years culture since the
establishment. Paul Otellini, the CEO of Intel, when interviewed by Forbes, cited the
success of were due to its culture and belief in egalitarian, merit-based reward, data
driven decision, discipline are the main recipe for the company success. In order to
explore the understanding, an interview was arranged with an Intel manager in Penang,
Malaysia.
2.0 Definition of culture
Before we dwell further on the culture, let’s review its definition. The concept of culture
has been the subject of considerable academic debate in the last five years, and there are
various approaches to defining and studying culture (for example, Barley, Meyer, and
Gash, 1988; Martin, 1991; Ott, 1989; Smircich and Calas, 1987).
Commonly used words relating to culture emphasize one of its critical aspects—the idea
that certain things in groups are shared or held in common. The major categories of such
overt phenomena that are associated with culture in this sense are the following:
1. Observed behavioral regularities when people interact: the language they use, the
customs and traditions that evolve, and the rituals they employ in a wide variety
of situations (for example, Goffman, 1959, 1967; Jones, Moore, and Snyder,
1988; Trice and Beyer, 1984, 1985; Van Maanen, 1979b).
2. Group norms: the implicit standards and values that evolve in working groups,
such as the particular norm of "a fair day's work for a fair day's pay" that evolved
among workers in the Bank Wiring Room in the Hawthorne studies (for example,
Homans, 1950; Kilmann and Saxton, 1983).
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3. Espoused values: the articulated, publicly announced principles and values that
the group claims to be trying to achieve, such as "product quality" or "price
leadership" (for example, Deal and Kennedy, 1982).
4. Formal philosophy: the broad policies and ideological principles that guide a
group's actions toward stockholders, employees, customers, and other
stakeholders, such as the highly publicized "HP Way" of Hewlett-Packard (for
example, Ouchi, 1981; Pascale and Athos, 1981).
5. Rules of the game: the implicit rules for getting along in the organization, "the
ropes" that a newcomer must learn to become an accepted member, "the way we
do things around here" (for example, Schein, 1968, 1978; Van Maanen, 1976,
1979b; Ritti and Funkhouser, 1982).
6. Climate: the feeling that is conveyed in a group by the physical layout and the
way in which members of the organization interact with each other, with
customers, or with other outsiders (for example, Schneider, 1990; Tagiuri and
Litwin, 1968).
7. Embedded skills: the special competencies group members display in
accomplishing certain tasks, the ability to make certain things that gets passed on
from generation to generation without necessarily being articulated in writing (for
example, Argyris and Schön, 1978; Cook and Yanow, 1990; Henderson and
Clark, 1990; Peters and Waterman, 1982).
8. Habits of thinking, mental models, and/or linguistic paradigms: the shared
cognitive frames that guide the perceptions, thought, and language used by the
members of a group and are taught to new members in the early socialization
process (for example, Douglas, 1986; Hofstede, 1980; Van Maanen, 1979b).
9. Shared meanings: the emergent understandings that are created by group members
as they interact with each other (for example, Geertz, 1973; Smircich, 1983; Van
Maanen and Barley, 1984).
10. "Root metaphors" or integrating symbols: the ideas, feelings, and images groups
develop to characterize themselves, that may or may not be appreciated
consciously but that become embodied in buildings, office layout, and other
material artifacts of the group. This level of the culture reflects group members'
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emotional and aesthetic responses as contrasted with their cognitive or evaluative
response (for example, Gagliardi, 1990; Hatch, 1991; Pondy, Frost, Morgan, and
Dandridge, 1983; Schultz, 1991).
In summary, the culture of a group or an organization can be defined as
―A pattern of shared basic assumptions that the group learned as it solved its problems of
external adaptation and internal integration, that has worked well enough to be
considered valid and, therefore, to be taught to new members as the correct way to
perceive, think, and feel in relation to those problems.‖
3.0 Overview of selected organization
The manager interviewed was from Intel, the largest semiconductor company in the
world which has its presence in Malaysia for more than 35years. Mr. Danny Lim who
suggested his name not to be disclosed is the operations manager from an organization
called Embedded and Communications Group.
According to Danny, Intel was established back in 1968 with the headquarter operated
out from Santa Clara, California, United States of America. It has more than 80,000
employees worldwide with approximate 10% of its workforce operated out from
Malaysia. Intel is ranked number one in the semiconductor industry with it revenue of
USD43.6 billion in 2010. It has a very high gross margin ~66%. Its market capitalization
of ~USD120.8 billion provides the scale to lead in semiconductor businesses.
Intel Corporation is the inventor of the x86 series of microprocessors, the processors
found in most personal computers. Intel also makes motherboard chipsets, network
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interface controllers and integrated circuits, flash memory, graphic chips, embedded
processors and other devices related to communications and computing. Founded by
semiconductor pioneers Robert Noyce and Gordon Moore and widely associated with the
executive leadership and vision of Andrew Grove, Intel combines advanced chip design
capability with a leading-edge manufacturing capability.
According to Intel website, Intel’s mission is ―This decade we will create and extend
computing technology to connect and enrich the lives of every person on earth.‖
There are altogether 6 values that are guiding the way how Intel operates. They are :
Customer orientation
Results orientation
Risk taking
Great place to work
Quality
Discipline
Intel’s objectives are:
Grow PC and Datacenter business with new users and uses
Extend Intel Solutions to win in adjacent market segments
Create a continuum of secure, personal computing experiences
Care for our people, the planet, and inspire the next generation
Speaking about Intel Malaysia, over the past 30 years it has grown into the largest, most
mature manufacturing facility outside of the United States. Intel Malaysia now comprises
two big campuses and employs more than 8,500 people. Intel Penang houses assembly
and test and chip design activities while Intel Kulim has its assembly and test operations
for majority of the Intel components as well as board design operations.
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Known for its world-class safety standards in the global semiconductor industry, Intel
Malaysia is also a two-time winner of the Prime Minister's Quality Award, a symbol of
excellence honored to public and private organizations that implement outstanding total-
quality management programs and contribute significantly to the country's economy and
community.
For Embedded and Communication Groups in Intel Malaysia, it was established back in
1992 initially was to transfer the embedded microcontroller business back to Malaysia.
Since then, it has grown from a member of 12 to a much sizable organization of ~300
people. It has multiple capabilities from chip design, validations, software development,
platform design as well as marketing functions. The workforce mainly resides in Penang
operations supporting the customers in Asia Pacific as well as designing embedded
processors to serve Embedded and Communication Groups customer worldwide.
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4.0 Corporate Culture Questionnaires
According to Nicole C. Moss survey, there are altogether 15 questions that could help
one to identify the type of culture for that organization. These are list of questions which
are intended to explore different aspects of corporate practices and attributions in order
for the categorization of the organizational cultures.
In this survey, there are 3 types of cultures being called out by categorizing the questions
into three main sections, question 1-5, 6-10, 11-15. If the person answering the
questionnaire responded the most ―True‖ answers in any of the section, then the
organization will most likely fall into that type of culture. If the same number of most
―True‖ questions in more than one section, then the culture believed to be the
combination of both. Further evaluation by matching to the research news and data will
be correlated.
The three sections of the culture called out are Deliberative/ Traditional culture,
Established/ Stable Culture and Urgent/Seat of the Pants culture.
Below is the set of the questionnaires. If the respondent agrees to the statement, then a
―True‖ statement will be noted and counted. In the end, number of ―True‖ statement will
be calculated and the section which has the most ―True‖ responses will be used as the
result of the categorization for the type of culture that the respondent’s organization falls
into. Each question, with selected answer will be supplied with additional explanation on
rationale.
Deliberative /
Traditional Culture
1. I know how my projects contribute to the success or failure of
our organization.
2. Management here makes lots of announcements to employees.
3. I have colleagues from a wide variety of professional and
personal backgrounds.
4. In this organization, people who are not ready to be promoted
after a certain length of time at their level are generally
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encouraged to leave.
5. Departments or teams compete with each other for our
organization's resources.
Established/ Stable
Culture
6. When people are not getting along here, it's a long time before
we directly address the issue.
7. When it's time for me to learn a new skill, training is readily
available at no cost to me.
8. When the boss tells us to "jump!" we ask "how high?"
9. It takes a long time for this organization to address customer
concerns.
10. Many employees expect to work at this organization for their
whole careers.
Urgent/ Seat of the
Pants culture
11. Senior management says the door is always open -- and they
mean it.
12. It is fun to work here.
13. We have three or fewer layers of management.
14. We have performance reviews less than once a year.
15. 15. Compensation and benefits are relatively low here.
Table 1.0 Cultural questions by Nicole C. Moss.
5.0 Deep Dive on each question’s response
1. I know how my projects contribute to the success or failure of our
organization.
Response: True
Discussion: Each employee of the organization is given a defined roles and
responsibility. The deliverables are tied to a higher goal of the organization
and eventually will be linked and supporting to the overall corporate goal. The
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document used to link to the organizational goal is called IMBO (Intel
Management By Objective).
2. Management here makes lots of announcements to employees
Response: True
Discussion: As a technology leader, Intel has deployed lots of electronic
communication tool to stay in contact with employees worldwide. Tools like
webcast, audiocast that can link the corporate leader to global employees
allow the information to be shared on a real time manner. (Karlgaard, 2011),
Every quarter, there will be BUM (Business Update Meeting) made available
for employees to learn and understand the company business, business
strategies and corporate focus areas. That would allow the employee to
understand and have a clear understanding of how they can contribute to the
overall company direction. Email, web portal, teleconference, Telepresence ®,
phone allows employee to stay in contact with corporate for seamless
information sharing and transfer.
3. I have colleagues from a wide variety of professional and personal
backgrounds.
Response: True
Discussion: Intel observes diversity as the source of innovation and equality in
employment (Karlgaard, 2011). In its diversity policy, the company respects,
values, and welcomes diversity in its workforce, as well as in its customers, its
suppliers, and the global marketplace. Intel policy is to provide equal
employment opportunities for all employees.
Intel does not discriminate on the basis of race, color, religion, sex, national
origin, ancestry, age, disability, veteran status, marital status, gender identity
or sexual orientation. Its policy applies to all aspects and stages of
employment from recruitment through retirement. It also prohibits harassment
of any individual or group.
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4. In this organization, people who are not ready to be promoted after a certain
length of time at their level are generally encouraged to leave.
Response: False
Discussion: In Intel, employee’s performance is based on meritocracy. Merit
is based on performance and not by seniority. For poor performance
employee, Intel has its performance management policy to improve their
performance but not to terminate them without given sufficient opportunity
for improvement.
5. Departments or teams compete with each other for our organization’s
resources.
Response: True
Discussion: Similar to any other companies, budget and resources are always
constraint. Therefore, each organization will compete for resources,
depending on the importance and priority of the projects or deliverables to
corporate.
6. When people are not getting along here, it's a long time before we directly
address the issue.
Response: False
Discussion: Intel practices constructive confrontation in which culture created
by the former CEO, Andy Grove. If there is any people issue, Intel has
process to handle the issue timely and professionally. Even though Intel
operates in Asian countries, all employees have guidelines to adopt the
corporate culture to confront any issues constructively instead of avoiding it.
7. When it's time for me to learn a new skill, training is readily available at no
cost to me.
Response: True
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Discussion: Training and people development is very important to Intel. All
new employees will be given orientation and on the job training. In fact, lots
of money is allocated aside for employee’s training internally and externally.
Intel managers are also required to conduct training and sharing with junior
employees to impart learning and experience.
8. When the boss tells us to "jump!" we ask "how high?"
Response: True
Discussion: This is an interesting statement. According to Danny, this is a
typical behavior from the employee to ask for an accurate description of
deliverables. Each employee has his deliverables / goals to achieve using the
SMART (Specific, Measureable, Achievable, Realistic, Time-bound) criteria.
In this context, the goal has to be specific and measurable.
9. It takes a long time for this organization to address customer concerns.
Response: True
Discussion: This is partly true due to the structure of how the company
operates. There are many organizations which will handle with customer
concerns and the responsiveness is sometimes delayed. However, Paul
Otellini, Intel CEO, launched a shift in customer focus program (Business
Week, 2006). Through out several years’ effort, Intel has won Apple and Sun
which were once had never used Intel chips before.
10. Many employees expect to work at this organization for their whole careers.
Response: False
Discussion: Though Intel wishes to keep their employees, however, the truth
is that employees move from one organization to another. Internally Intel
allows job rotation and job realignment which allow to a larger extent job
enrichment that would enhance job satisfaction as well as employee retention.
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11. Senior management says the door is always open -- and they mean it.
Response: True
Discussion: Intel has policy called ―Open Door Policy‖ which allows the
employee to escalate any issue to senior management or Human Resources
without any fear. In fact, all open door cases are handled confidentially to
respect the employee who raised the issue. Issues can be personal, harassment,
code of conduct, unfair treatment etcetera.
12. It is fun to work here.
Response: True
Discussion: Intel allocated a certain budget to make the work place a ―work
place of choice‖. Events like festive celebrations, durian party, sports
competition, annual function etcetera are commonly held in addition to the
conducive workplace. Relax room, gym, free soft drinks and fruits are among
the perks given to improve the overall work place on top of the flexible
working hour, telecommute etcetera.
13. We have three or fewer layers of management.
Response: False
Discussion: Intel has >80,000 employees worldwide and therefore it has more
than 5 layers of management right from the top. Even though a flatter
organization is desired but it is still a challenge to have less layers given the
size of the organization.
14. We have performance reviews less than once a year.
Response: True
Discussion: Intel practices year round performance though the formal review
will be done twice a year.
15. Compensation and benefits are relatively low here.
Response: False
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Discussion: Intel’s compensation is competitive to the market with the similar
industry. This is to ensure attractiveness to attract talents into the organization.
6.0 Overall evaluation of the result
Based on the survey, there are many ―True‖ answers in the 15 questions. Among them,
section for questions 1-5 have 4 ―True‖s whereby there are 3 ―True‖s for both questions
6-10 and questions 11-15. Therefore, per the guidelines from the survey, the organization
surveyed falls into the type of Deliberative/ Traditional culture. The other two types are
close and it may have some elements from the other two types of culture.
Firstly, let’s discuss the advantages and pitfalls from this type of culture.
6.1 Advantages
The surveyed organization’s culture tends to be traditional type where there are lots
of intellect and thoughtfulness in managing this type of organization. In Intel,
through the 43 years of presence, it bounds to have lots of wisdom in the way how
this organization being managed. From the book of ―Good to Great‖ by Jim
Collins, there are not many companies that can survive through the business
challenges especially in technology based industry. There has to be lots of ―right
people on the bus‖ which will set up good processes to navigate through the
turbulence of business. Intel’s philosophy is to attract talents. Through the diversed
hiring policy, many talents are attracted to join the organization. There are also lots
of structures in place in order to manage the global workforce effectively. Intel’s
former CEO, Andy Grove who was widely recognized by the industry as a
thoughtful leader has set the company ahead of competition using the company
asset which is mainly the people to innovate and deliver one after another, great
products that can excite the personal computer industry. Without which the people,
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there will not be the technology such as processor, wireless connection, WiMAX,
USB etcetera that will become a ―not to be missed‖ technology in today’s life.
In Intel, communication is crucial to the company. Senior management constantly
communicates the company direction, business strategies from time to time via the
BUM (Business Update Meeting), open forum, Meet – the – people session, online
chat, teleconference, intranet, videos, web portal, Internal ―Facebook‖-like network
and many more. It allows the employees to stay connected with the senior
management at the top.
6.2 Pitfalls
One of the recognize pitfalls for the organization is its size which is a challenge for
the company to stay nimble and agile in responding to the ever changing business
environment.
Due to many layers of management, it is also possible that sometimes certain
information is not able to reach to the grass root of the organization. There are also
many stakeholders to be managed in order to reach consensus and agreement on
certain strategies.
Innovation, an element that is vital to a company which relies on technology will
become a challenge if there are many bureaucracy and red-tapes in the
organization. Great ideas may not be able to bubble up to the top and it may be
dead in the middle of the incubation. Therefore, the organization has acknowledged
the barrier and challenge and has put forth processes to incubate and breed new
ideas. New Business Initiative (NBI) is one of the initiatives to invest in new
technologies and breakthrough so as the innovation will continue and flourish
within the organization.
In order to respond to change, the organization will need to stay agile in its decision
making process. There are many tools were deployed in order to facilitate and
expedite decision making process such as product funding, termination, new
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product development etcetera. It is crucial as the more stakeholders are in the
decision making process, the clearer roles are required to avoid any delay in the
decision.
7.0 Conclusion
Though the survey called out the organization as a ―Deliberative/ Traditional‖ type, it
does exhibit attributes from the stable and urgent type of organization. For example, Intel
has been in the industry for more than 40years and its business has been focused on
computing industry all this while is in fact an evidence of a stable company. It has many
processes in place and has emphasized on the importance of people development and
training opportunities. The compensation for the employees is equally good and
competitive. On the other hand, Intel is also a People Orientation company. GPTW
(Great Place To Work) and ―win and have fun‖ is one of the company’s six values. It can
rally the whole organization in addressing the threat and able to navigate through the
challenges such as memory to processor business direction change, rise of mobility,
internet boom challenges, interoperability of different devices and so forth.
As a summary, it is important for a global company like Intel to have a process and
structure in place in order for the people to work with each other and rally the
organization to achieve its goal. However, due to its size and scale, it is also important for
the organization to stay nimble to face the fierce competition in the industry. It has to
strike between the two in managing the size as well as operating like a small company. In
addition, the asset for this company is actually new technology which is invented by the
people should be valued and appreciated. Therefore, the recognition and reward system is
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important to retain the talent. Change management is vital to a technology company in
which the communication is critical for successful transition and also change in the
corporate decision and strategies. Intel has good track record and has proven to the
industry that a global and stable company can still excel and successful using technology
and also the intellects of the organization.
[Total word count: 3950]
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8.0 REFERENCES
American Management Association/Human Resources Institute (2008). Cultivating
Effective Corporate Cultures: A Global Study of Challenges and Strategies: Current
Trends and Future Possibilities 2008-2018, American Management Association
Andrew S. Grove (1995). High Output Management, Vintage Books
Edgar H. Schein (1999). The Corporate Culture Survival Guide, Jossey-Bass
Edgar H. Schein (1999). Organizational Culture and Leadership, Second Edition,
Jossey-Bass
Edwards, Cliff (2006). Inside Intel: Paul Otellini's plan will send the chipmaker into
uncharted territory. And founder Andy Grove applauds the shift, Business Week
Karlgaard, Rich (2011). Intel CEO Otellini on Successful Company Culture, Forbes
[Online] Available: http://blogs.forbes.com/richkarlgaard/2011/02/16/intel-ceo-otellini-
on-successful-company-culture/
Lövey Imre, Manohar S. Nadkarni Manohar, and Eszter Erdélyi Eszter (2007).
How Healthy is Your Organization?: The Leader’s Guide to Curing Corporate Diseases
and Promoting Joyful Cultures, Greenwood Press
Neuman, J. H. (n.d.). Measuring the costs associated with stress, injustice and bullying.
Workplace Bullying Institute. Retrieved on September 2, 2007, from
www.bullyinginstitute.org
Nicole C. Moss (2006). Quiz: What is your corporate culture? [Online] Available:
http://www.inc.com/articles/2001/08/23312.html
Towers, Perrin (2007). Global Workforce Study. [Online] Available:
http://www.towersperrin.com/tp/getwebcachedoc?webc=HRS/NLD/2007/200710/GWS_c
orereport_NL.pdf
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Solomon, M Charlene and Schell, S. Michael (2009). Managing Across Cultures: The
Seven Keys to Doing Business with a Global Mindset , McGraw-Hill
Probst, Gilbert and Raisch, Sebastian (2005). Organizational crisis: The logic of failure,
Academy of Management Executive
Saltzman, J. M. (2007). Corporate culture: The ultimate competitive advantage. Talent
Management Magazine, 18-21.
Woppman, Glenn (2010) Manager Forum: Nurturing Your Culture Goes to the Bottom
Line, ASSET InterTech
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Appendix I
Questionnaire by Nicole C. Moss
Respondent: Danny Lim
Cultural Type Question Response
Deliberative /
Traditional
Culture
1. I know how my projects contribute to the success or failure
of our organization.
2. Management here makes lots of announcements to
employees.
3. I have colleagues from a wide variety of professional and
personal backgrounds.
4. In this organization, people who are not ready to be
promoted after a certain length of time at their level are
generally encouraged to leave.
5. Departments or teams compete with each other for our
organization's resources.
1. True
2. True
3. True
4. False
5. True
Established/
Stable Culture
6. When people are not getting along here, it's a long time
before we directly address the issue.
7. When it's time for me to learn a new skill, training is readily
available at no cost to me.
8. When the boss tells us to "jump!" we ask "how high?"
9. It takes a long time for this organization to address
customer concerns.
10. Many employees expect to work at this organization for
their whole careers.
6. False
7. True
8. True
9. True
10. False
Urgent/ Seat of
the Pants
culture
11. Senior management says the door is always open -- and
they mean it.
12. It is fun to work here.
13. We have three or fewer layers of management.
14. We have performance reviews less than once a year.
15. Compensation and benefits are relatively low here.
11. True
12. True
13. False
14. True
15. False