COMMERCE DEPARTMENT

DEC 2015

PB 603: ORGANIZATIONAL BEHAVIOUR

CHAPTER 8: ORGANIZATIONAL STRUCTURE AND CULTURE

REFLECTIVE JOURNAL 2 (PLO1, CLO2)

Questions:

Students are required to get information on corporate culture from a selected

organization via online. In the reports students must explain the cultures that are
being practices in the organization.

Your report must also include the information below:

a) What is the culture and what are its common characteristics?

b) What are the functions of organizational culture?
c) What are the functional and dysfunctional effects of organizational culture?
d) How does management create and sustain an organizations culture?
e) How employees can learn organizational culture?

Answer

Organizational culture is a system of shared meaning held by members that

distinguishes the organization from other organizations. Culture is a descriptive
term, that is, it is not evaluative. Organizational culture is concerned with how the
characteristics of the company or organization are perceived not if they are liked
or disliked. It is not about job satisfaction.

Key Characteristics of an Organizational Culture:

a) Innovation and risk taking. The degree to which employees are encouraged to
be innovative and take risks.
b) Attention to detail. The degree to which employees are expected to exhibit
precision, analysis, and attention to detail.
c) Outcome orientation. The degree to which management focuses on results or
outcomes rather than on technique and process.
d) People orientation. The degree to which management decisions take into
consideration the effect of outcomes on people within the organization.
 e) Team orientation. The degree to which work activities are organized around
teams rather than individuals.
f) Aggressiveness. The degree to which people are aggressive and competitive
rather than easygoing.
g) Stability. The degree to which organizational activities emphasize maintaining
the status quo in contrast to growth.

b) The key role and function of a work culture are enlisted below:
Organization culture goes a long way in creating the brand image of the
organization. The work culture gives an identity to the organization. In other words, an
organization is known by its culture.
The culture shapes the way employees interact at their workplace. A healthy culture
encourages the employees to stay motivated and loyal towards the management.
Additionally, the work culture promotes healthy relationship amongst the employees.
The culture goes a long way in promoting healthy competition at the workplace. It
is the culture of the workplace which actually motivates the employees to perform.
The organization culture helps build an emotional attachment to the enterprise. The
culture cultivates a sense of belonging and commitment towards the corporation and
develops a sense of unity at the workplace.
Every organization must have set guidelines for the employees to work accordingly. The
culture of an organization represents certain predefined policies which guide the
employees and give them a sense of direction at the workplace. Every individual is
clear about his roles and responsibilities in the organization and know how to accomplish
the tasks ahead of the deadlines.
Additionally, such policies help mole positive habits into individuals which make them
successful professionals. It is the culture of the organization which extracts the best
out of each team member.

c) Functional and dysfunctional effects of organizational culture :

Functions:
1. The first function of culture is that it has a Boundary-Defining role which means that culture
helps to create distinctions between one organisation and others.
2. Culture helps to create a sense of identity for the organisation members.
3. Culture facilitates the generation of commitment to something larger the than ones individual
self-interest. Culture encourages the members of the organisation to give priority to
organisational interests over and above their personal interests.
4. Culture enhances the Social System Stability. Culture is also known as the social glue that
helps to hold the organisation together by providing appropriate standards for what employees
should say and do. It provides a list of social dos and donts for the employees.
5. Culture finally, serves as a sense making and control mechanism that guides and shapes the
attitudes and behaviours of employees. This function is particularly important in the study of
organisational behaviour. Every organisation has its own set of assumptions, understandings and
implicit rules to guide the day to day behaviour of the employees. The newcomers will be
accepted as fully fledged members of the organisation only when they learn to obey these rules.
Conformity to the rules is generally the primary basis for rewards and promotions.

Thus, culture is beneficial to the organisation as it enhances organisational commitment

and increases the consistency of employee behaviour. Culture is beneficial to the employee also
as it reduces ambiguity. Employees become very clear as to how things are to be done and what
is more important for the organisation.

Dysfunctions of Culture:
Impact of culture on organizations effectiveness is both functional as well as dysfunctional.

1. Barrier to Change:
Consistency of employee behaviour is an asset to the organisation, when it has a stable
environment. When the organisation is dynamic, it will prove to be a liability as the employees
will try to resist changes in the environment. Companies such as IBM, Xerox and General
motors have very strong cultures which worked well for them in past, but these strong cultures
only become barriers to change when business environment changes. Therefore, organisations
which have strong cultures which proved successful in the past can lead to failure in future, when
these cultures do not match with the changing environmental needs.
2. Barrier to Diversity:
Strong cultures put a lot of pressure on the employees to conform to the accepted values and
styles of the organisation. Even the new employees who belong to different race, religion etc. are
expected to conform to the organizations core cultural values, otherwise they are deemed to be
unfit for the organisation.
Strong cultures do not acknowledge the fact that people from different backgrounds bring unique
strengths to the organisation. Strong cultures can also prove to be barriers to diversity when these
support organisation bias or when these become insensitive to people who are different in one
way or the other.

3. Barrier to Mergers and Acquisitions:

Culture can act as barrier to mergers and acquisitions. Historically financial matters and product
synergy alone were considered to decide which company should acquire which company or
which unit should merge with which firm. But in the recent years there has been a change in the
trend. Cultural compatibility has become a primary concern while deciding about acquisitions
and mergers. Favourable financial statement or product line are, of course, the initial attractions
at the time of acquisition, but another important factor to be considered is how well the cultures
of the two organisations match with each other.

d) Five Ways to Build and Sustain Organizational Culture

Company Culture Builder #1 Have a clear Vision, Mission and Values statement: This is
where you define the culture of the company. It is critical that every employee knows and
understands the vision of the organization and the values that it stands for. It needs to be simple
enough or made simple enough that everyone in the company can understand them and get
aligned to them. The idea here is to get people really involved and committed to the culture
logic and reason have their place, but in initiatives like this the emotions of people have to be
tapped and a clear mission, vision and values statement serves as a great way to bring everyone
on the same page.
Company Culture Builder #2 Hire people who embody these Values: No matter how talented
a person is, if you dont think that the person would be a cultural fit in the organization, resist the
temptation and dont make an offer. The people you hire are your ambassadors for culture, they
will be the examples for the next set of hires. As they say, one bad apple spoils the basket not
only do you need to ensure that you hire, promote and reward people not just for skills or
performance but for attitude and behaviour that aligns with the culture that you want to foster but
also help people who are not aligned to be aligned or move them quickly out of the organization.
When valued behaviours are not demonstrated, no matter where he or she is in the hierarchy,
there should be consequences that show that such behaviour is no longer acceptable in the
organization. This is important to establish accountability.

Company Culture Builder #3 Understand Culture is not just Top-down: It is side-wise too.
Yes, it does start at the top but it happens together built through everyones behaviour and
interactions in the team or company. Culture is everyones responsibility. Every person in the
company should be walking the talk, walking it together, and knowing enough to course correct
if some action in the day-to-day operations of the organization does not fit the culture.

Company Culture Builder #4 Bring Culture in when solving Business Problems: This is the
best way to bringing the theories to practice, to reducing the whole mystery about culture. When
you have an irate customer or a profitability issue or a collaboration issue, thats the time to do a
root cause analysis that also assesses the problem based on what value was or was not used. Such
as did we follow our culture? Were any of our values ignored? Based on what we stand for, what
is the right thing to do now? Do we need to change anything in our culture so that this problem
does not appear again? These discussions really help in reinforcing the message (and solving the
business problem).

Company Culture Builder #5 Focus less on Perks and more on building Trust and
Respect: A cool office, a world-class gym, free food are all good but not at all the main factors
that will make a company an employer of choice or build a culture that makes both customers
and employees happy. These are short-term motivators only. Enough studies have been done to
show that people want to work in an environment where they feel valued, respected and are
making a significant contribution to a purpose larger than themselves (meaning). Therefore,
creating a strong and healthy organizational culture is more than providing a few services that
give a nice shiny surface gloss. Build trust and respect so that when one digs below the surface,
one finds a strong and healthy foundation for a great culture.

e) How Employees Learn Culture

Culture is transmitted to employees in a number of ways. The most significant are stories, rituals,
material symbols, and language.

a. Stories: Organizational "stories" typically contain a narrative of significant events or people

including such things as the organization's founders, rule breaking, reactions to past mistakes,
and so forth. For instance, managers at Nike feel that stories told about the company's past
help shape the future. Whenever possible, corporate "storytellers" (senior executives) explain
the company's heritage and tell stories that celebrate people getting things done.

b. Rituals: Corporate rituals are repetitive sequences of activities that express and reinforce the
values of the organization, what goals are most important, and which people are
important. The "Passing of the Pillars" is an important ritual at Boston Scientific's facility
near Minneapolis, for example. When someone has a challenging and tough project or
assignment, they're "awarded" a small two-foot high plaster-of-Paris pillar to show that
they've got support from all their colleagues.

c. Material Symbols: Material symbols convey to employees who is important, the degree of
equality desired by top management, and the kinds of behavior that are expected and
appropriate. Examples of material symbols include the layout of an organization's facilities, how
employees dress, the types of automobiles provided to top executives, and the availability of
corporate aircraft. At WorldNow, a provider of Internet technology to local media companies, an
important material symbol is an old dented drill that the founders purchased for $2 at a thrift
store. The drill symbolizes the company's culture of "drilling down to solve problems."
d. Language: Many organizations and units within organizations use language as a way to
identify and unite members of a culture. By learning this language, members attest to their
acceptance of the culture and their willingness to help preserve it. For instance, Microsoft
employees have their own unique vocabulary: the term work judo is used to mean "the art of
deflecting a work assignment to someone else without making it appear that you're avoiding it.

Corporate Culture of organization

Hong Leong Bank Berhad ("Hong Leong Bank" or "Bank"), a public listed company on
Bursa Malaysia, is a member of the Hong Leong Group Malaysia ("the Group"). Headquartered
in Malaysia, the Group has been in the financial services industry since 1968 through Hong
Leong Finance Berhad and since 1982 through Dao Heng Bank Ltd. in Hong Kong. Hong Leong
Bank started its humble beginning in 1905 in Kuching, Sarawak, Malaysia under the name of
Kwong Lee Mortgage and Remittance Company and later in 1934, incorporated as Kwong Lee
Bank Ltd.. In 1989, it was renamed MUI Bank, operating in 35 branches.

In 2004, the finance company business of Hong Leong Finance Berhad was acquired by
Hong Leong Bank. With more than 100 years of banking knowledge and experience, Hong
Leong Bank today has a strong heritage, leading market positions and a well-recognised business
franchise and brand.

In 2011, Hong Leong Bank completed the merger with EON Bank Group. The merger
effectively transforms the Bank into a banking group of more than RM145 billion in assets and
an expanded network of 329 branches nationwide. With an extensive distribution network of
over 300 branches, sales and business centres in Malaysia, Singapore, Hong Kong, Vietnam and
Cambodia along with a comprehensive range of alternate and electronic channels including self-
service terminals, Hong Leong Call Centre, Hong Leong Online Banking and Hong Leong
Mobile Banking, Hong Leong Bank reaches out to its customers in all of the communities in
which it operates. Following its commitment to stay relevant, Hong Leong Bank also launched
Mach by Hong Leong Bank in 2012, a sub-brand that brings together bricks and clicks to offer
a range of life starter products and services targeted to meet the needs of the Gen-Y community.
 Reaching out beyond the shores of Malaysia, in 2008, Hong Leong Bank was the first
Malaysian bank to enter the Chinese banking sector with a 20% strategic shareholding in Bank
of Chengdu Co., Ltd. In December of the same year, Hong Leong Bank became the first and only
Malaysian and Southeast Asian bank to be granted a license to incorporate and operate a 100%
wholly-owned commercial bank in Vietnam. In 2013, Hong Leong Bank proudly launched its
100% wholly-owned commercial bank in Cambodia. The Bank has also established a
representative office in Nanjing in February 2014.

HLB Malaysia is one of the largest business groups in Malaysia and internationally. The
strong foundation and solid growth of the Group is attributed to the Power of Vision - the Vision
of its Chairman and Chief Executive Officer, Tan Sri Quek Leng Chan. Today, the vision is
manifested and entrenched in the group's corporate culture, which is firmly rooted on the group's
core values of quality, entrepreneurship, innovation, honour, human resource, unity, progress and
social responsibility.

Outcome orientation of HLB Group is "Reaching Out to You" which is embeds the
organisation in the country and community within which it operates. Through its financial
services arm Hong Leong Financial Group Berhad, which consists of Hong Leong Bank, Hong
Leong Assurance and Hong Leong Investment Bank, the Group is well positioned as an
integrated financial services provider. HLB believe that employees are greatest assets. In efforts
to continuously develop human capital, HLB offers an inclusive work environment for
employees to develop their full potential and give back to the communities where they operate.
Working with HLB gives you the opportunity to do things that make a real difference in peoples
lives.

Attention to detail. Through HLB Graduate Trainee Program provides opportunity for
fresh graduates to gain experience and knowledge in consumer, commercial and corporate
banking. It aims to provide a comprehensive learning experience to young talent keen to pursue a
career in banking, which is tailored to their career orientation. HLB strive to build competencies
around strengths, through actual work related challenges and continuous learning opportunities.
They believe in developing future entrepreneurs. Stability. Organization activities such as
benefits working with HLB including competitive entry level salary scale, sponsorship for
selected professional certification, mentorship with industry leaders, opportunity to contribute to
community through HLB social responsibility efforts and association with one of the largest
financial group in Malaysia. Others activity, HLB Structured Internship Program is a challenging
and dynamic program designed for final year undergraduate Malaysian students who are
currently pursuing their first degree in institutions of higher learning in Malaysia. This program
provides opportunities for students to gain experience and knowledge related to their field of
study and confirm their career aspiration. It is an experiential learning program consisting of
classroom and on-the-job training. Students will be working on real projects which allow them to
test their abilities on genuine business challenges while gaining valuable banking experience. It
will be an educational and rewarding experience. Students will develop valuable soft skills such
as business communication, time management and workplace etiquette, which they can take into
their career after university.

Team Orientation. Continuous quest for sustainability. HLB Group remains steadfast
towards building long-term, sustainable value for all its stakeholders. Towards this end, efforts
for the year continued to evolve around strengthening key business drivers, embedding excellent
customer service, integrating multiple distribution channels, and leveraging on technology to
offer first-class digital solutions. People orientation and aggressiveness of HLB Group are
managing director has been a challenging year for the banking industry amidst volatility and
uncertainties in the commodity, financial markets as well as global economies coupled with a
highly competitive operating landscape. Despite the prevalent headwinds, the HLB Group has
made meaningful strides in delivering a commendable set of financial results whilst ensuring that
we continue to focus on creating long-term value for all our stakeholders.

Strategic priorities. HLB remain committed towards driving operational excellence in

business execution to deliver sustainable profitability and long-term value. Following through
from the momentum built from last years initiatives, the Bank focused primarily on four
strategic pillars in FY2015:
 1. Strengthen business drivers by focusing resources on target market segments, improving
efficiency and productivity .
2. Entrench service excellence at every step of the customers journey.
3. Deepen community embedment and integrate multiple distribution channels.
4. Leverage on Best in Class technology platforms to offer digital solutions and e-payment
capabilities aligning all our key action plans to these four pillars, we made good progress over
the year and are pleased to highlight some of major achievements.

HLBB endeavours to identify and minimise the negative environmental impacts of our
products and business activities. HLB take steps to reduce environmental impact wherever
possible. HLB environmental initiatives include smart and careful consumption of resources,
water, emissions to air, waste generation, energy use and procurement processes. They are
committed to minimising our environmental impact and encouraging greater sustainability
throughout our business. In January 2015, HLBB participated in the HLFG Energy Conservation
Campaign. Following HLFGs Do Good Week campaign rolled out during financial year 2014,
the Do Good Week -Energy Conservation initiative was introduced to change energy-using
behavior and develop an energy-management work culture amongst employees by introducing
valuable energy efficiency measures. The year-long initiative, which kicked off in January 2015,
aims to inculcate a shared sense of responsibility towards the environment, besides developing a
corporate image of a responsible business which cares for the environment.
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Page

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