There is a
great degree of organizational activities which proves that the organization’s
political orientation and their organizational development agents have been
advantageously practicing political activities which adapts to the national and
therefore corporate culture of the organization. In most case, organizational
development agents act as political facilitators whereby they intervene between
the organization and the different powerful members of the nation or the
community where the organization is located or belongs. At the same time, these
agents formulate techniques and strategies to place the organization in the
most advantageous position, such as protecting the organization from groups
with selfish interests.
On the other
hand, there are also disadvantages in adapting to the political or cultural
environment of the nation for an organization. First, there is a problem of
organizational agents being inept for the given task since it requires expert
knowledge of the culture of the country for one to be competent agent. Then
there is also the problem of the company becoming too politicized. In the long
run, this will hurt the growth of the organization and it may also lead to bad
reputation for the company, which again would mean long term negative effect
for the company.
In other
words, there is a certain degree of necessity for a company to be aware and to
participate in the national or corporate culture of the organization in order
for it to succeed but the organization or the company must be wary of the
negative effects of such involvement so that it can establish its own power and
overcome these negative effects. To counter all these long term negative
effects, Beer suggested that the organization must build its own power, meaning
it must assume competency and ability to withstand the negative impacts of
being cultural and political player.
All these certainly prove that there is a
great degree of connection between the national /corporate culture of an organization
and the degree of organizational politics going on. The success or the failure
of an organization may stem from many and different factors but it can be noted
that some of the most successful organizations have developed its own culture
which eventually shaped its future. For instance, IBM’s famous culture is in
itself a proof that an adaptation of certain culture can be beneficial to the
organization. When Thomas Watson, Sr. became the head of the
Computing-Tabulating-Recording Company, the name of IBM then, the company was
nothing but disorganized organizations that made weigh scales, clocks and
tabulating devices. Watson saw that there is a great deal of potential for
growth for the company in terms of supplying to large businesses, such as banks,
since its main customer then for the tabulating machine was the Census Bureau.
Taking upon the national culture at that
time, Watson insisted that the employees dress in the same way as their
customers. He also started internally the culture of sales quotas and
competition. By the crash of 1929, he capitalized on the Depression and lay the
groundwork of his expansion that by the 1930s it had already started marketing
in foreign countries. Influenced mainly by his friend, GM engineer, Charles
Kettering, he realized the importance of research and development for the
company. His R&D was the start of the company’s strong corporate culture.
It was this culture which drove the employees forward and the company to beat
its competitors. Ultimately it was the
same culture which the Japanese adapted when they were rebuilding their economy
after the Second World War.
At the same time, the same culture was
responsible for the company’s distinct organizational politics which eventually
led to its undoing. Watson’s own “Think” sign posted in throughout the company,
“sucked critical
thinking out of the company and allowed Watson to think he was always right”
(IBM, 2003). The politics of the company was that of senior managers
contributing nothing more than their agreement to Watson. Also, over the years,
as the company became more and more successful, Watson himself destroyed the
communication between himself and his people. He failed to hear anyone who
disagreed with him.
Watson
and his IBM is a perfect example of how corporate culture is directly connected
with the organizational politics going on in that same company. The culture of
capitalizing on the Depression also showed that involvement in the national
culture of the time is essential in the survival of the company. Then the
creation of the R&D also showed that the internal culture of the company
moves it to a new direction and in the creation of new and different
organizational management. In terms of organizational politics, the creation of
this department only shows that the culture of the company ultimately
challenges the traditional organizational politics of most companies.
When
it comes to national culture of the corporation or the organization, the
culture of corruption across the globe is the most common example of how the
company is affected directly by their participation. Bribery, being the
most common form of corruption, had many companies formulate their own
corporate strategies in dealing with them. In most cases, according to Wharton legal studies
professor, Philip M. Nichols, “some companies opt to pay, sometimes
damaging their public images and making it more difficult to refuse future
requests,” (How Bribery, 2002).
According to Nichols, the key is to integrate
into the company’s culture the no-bribe policy starting with a certain
corporate code for the managers and the employees and then its affiliates and
then to its business partners. This is the example of how national and
organizational culture is directly connected to the organizational politics of
the company. By starting with their own policy for specific culture, in this
case the culture of corruption of that particular country, the company is then
forced to either adapt to that culture or hold on to its own culture. Either
way, the company is forced to evolve from the employees down to its partners.
In other words, the political organization of the company is connected to the
culture itself and to how the company responds to it.
Nichols also emphasized that it is
particularly difficult for companies to say no. He also added that, “Then
there’s the reality that more than 20 nations, including the wealthiest and
most-active trading nations, have made bribe paying illegal, and the fact that
despite this there are still competitors who will pay bribes,” (How Bribery,
2002).
Thus, a company is forced to face the
challenge since the country’s officials expect them to pay, their competitors
pay and at the same time they might go to jail if they do pay the bribe like
others. It is also a common practice and an integral part for the company’s
keeping up with the competition and even its survival. Thus, according to
Nichols, the corporations must then formulate a corporate culture which
steadfastly refuses bribe requests. It must also establish its own corporate
code for the employees which included supporting the management for refusing to
pay the bribes.
Lastly, the most common example of the link
between national/corporate culture of an organization and the degree of
organizational politics in it is in doing business with the Chinese. In 2001,
it was reported that foreign investment in China is about $56.7 billion,
surpassing the foreign investment in the United States (Breaking Through,
2001). Since then China continues to experience economic growth as more and
more companies started doing business in China. However, doing business with
the Chinese is not always easy since their national and organization culture is
different from international business culture most businesses are accustomed to.
Ming-Jer Chen, founder/director of Wharton’s
Global Chinese Business Initiative and author of the book Inside Chinese
Business: A Guide for Managers Worldwide, could not have been more precise when
he said that, “The Chinese company is not just an economic entity. It’s a
socio-economic combination and many businesses are actually family owned and
managed businesses. Families’ agendas and goals are involved, a situation that
often leaves Westerners feeling frustrated and confused about what is going on.”
(Breaking Through, 2001).
Thus, in working with the Chinese, most
Western managers feel that there is a great deal of disadvantage since they
have great misunderstanding of the Chinese business due to lack of cultural
knowledge. Thus, for these businesses to function competently in China, they
must reorganize their team and approach their Chinese counterparts with a new
political organization more fitting with the Chinese government and business.
One perfect example of a political
reorganization to match the national/organizational culture of the business is
the way these companies have revolutionized their approach to the Chinese
partners. First, foreign investors in China started to understand the two most
important aspect of the Chinese commerce which is: it is a family business and
it operates under guanxi or social networking in China (Breaking Through,
2001). Hence, these foreign companies realized that for the Chinese, the family
is the driving force behind everything. This includes the social functions,
political parties and even the family business. Understanding this also
includes understanding that most business is family directed operation, which
means that the business is practically headed by the patriarch of the family.
And that all the other business of that particular family is controlled and
held by the patriarch to create the intra-family dependencies.
In this aspect alone, the organizational
chart of a particular company may be deceptive to an outsider. Companies may be
deceived into believing that the man on top of the organizational chart has all
the power when in fact there is someone outside that business who has the real
power. Thus, for most foreign companies who want to conduct business with the
Chinese company or in China, they indeed need an agent who will point them to
the right direction where the power lies and who can direct them how to
approach this person positively.
The function of the agent or facilitator is
to direct the company in the dealings with the Chinese company. One example is
the way to approach the Chinese company, whose main objective family prestige
(Breaking Through, 2001). Compared with its Western counterparts, the Chinese
company’s main objective is not profit but prestige for the family for years to
come. With this thing as its main goal, foreign companies must then be aware of
the difference in the driving force between their company and that of the
Chinese. They must therefore know what to give to the Chinese that is equal to
the long term family prestige. Any short term profit with risk on sacrificing
family prestige, no matter how big the profit is, will be turned down
immediately. On the other hand, even with not much profit, a Chinese company
may engage in a business which will provide it with additional prestige or
honor. Since this is the basis of the Chinese business, the traditional way of
conducting foreign business is cannot be simply applied to the Chinese
business. Thus the political organization of the company must conform to the
different culture of the Chinese business.
Another important aspect of the Chinese
business is that they are usually family-financed. This means that they are
independent and do not rely on banks and other financial institutions (Breaking
Through, 2001). For companies who want to partner themselves with these
companies, this allows them to be more flexible and free to conduct
international businesses. And since the family is not leally bound to any
financial institutions, they are more private about their financial books or
data. Whereas the Western companies are open in their financial audits and
reports, the Chinese companies keep their cards close to their chests. It would
be difficult for any foreign company to actually get the accurate financial
figures or books of the Chinese corporations.
In this sense, the foreign company must
devise a way to correctly assess the financial standing of their Chinese
partners. This is where the right organizational politics comes in since only
with the right politics would they be properly able to assess a company.
Another culture of the Chinese company that
is totally ingrained to all Chinese corporation is that they are all family
owned. This means that the company due to extended family obligations is never
open to mergers and acquisitions. Unlike the Western corporations, such move is
never open and undertaken by the Chinese companies.
On the operation side of the company, the
Chinese companies hire their employees and managers from within the family
(Breaking Through, 2001). The employees and even the managers are hired not on
the basis of merits but due to family relations. This is an acceptable and
quite common practice among the Chinese companies. In the same way, this is
expected in foreign investors operating in China or operating with Chinese
companies as partners. To limit the existence of conflict between the two
companies, especially if they are in China’s soil, employees must be hired
based on family relations. Nepotism, in other words, is part of organizational
politics in the Chinese companies and expected in their own partners.
Then of course the next essential aspect of
the Chinese business is the guanxi. The guanxi is nothing more than a network
of connection which is based on trust, understanding and social bonding
(Breaking Through, 2001). In Western countries companies build their own social
network of clients and business partners based on the business at hand. With
the Chinese companies these social network or guanxi is built based on social
relationship first before the business. Thus the company must first build a
strong social relationship with the company before it can actually conduct
business with them.
Part of this guanxi is the culture of
reciprocity. For the Chinese companies, exchange of favors is quite expected
among each other. This exchange of favor includes not just taking each other
out to dinner but also getting to know the family members of your associate and
vise versa.
Thus, foreign companies must then create a
political organization able to adapt specifically to the guanxi practice.
Without which, it is virtually impossible for the foreign company to conduct
successful business with the Chinese. Not only is the guanxi practice found in
the building of relationship to reciprocity, it is also found in everyday
conversations of the Chinese (Breaking Through, 2001). In almost every
conversation or interaction, the Chinese always finds out who your social
network is and at the same time informs you of whom they know or who they are
associated with. This may seem like bragging in other countries but in China
this is just a part of the guanxi culture.
Works
Cited
Breaking Through the Great Wall: Doing Business with the Chinese. 2001.
Knowledge at Wharton. Published 28 March 2001. [Online] Available
at:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=337
[Accessed 15 August 2008]
How Bribery and Other Types of Corruption Threaten the Global
Marketplace. 2002.
Knowledge at Wharton.
Published 23 October 2002. [Online] Available at:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=646
[Accessed 15 August 2008]
IBM and its Legendary Founder: Flawed Genius. 2003
Knowledge at
Wharton. Published 2 July 2003. [Online] Available
at:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=809#
[Accessed15 August 2008]
