GLOBAL CORPORATE CULTURE:

AN IMPORTANT FACTOR IN INDUSTRY COMPETITIVENESS

DR. FERMIN G. CASTILLO, JR.

ASSOCIATE PROFESSOR-PHILIPPINES
fgcastillojr@yahoo.com / fgcastillojr@gmail.com

ABSTRACT

Every major industry was once categorized as a nicher industry. Some survives and other
fails, the growth of electronics industry in the world can be attributed to the high demand of
this product/commodity. We are now in the 21st century and this era is known as the “Asian
Invasion”. The global environment that surrounds the electronics industry favors the Asian
countries as they show the world what they’ve got. The Philippine electronics industry is one
of the Asian countries who benefited from this global movement of technology and
resources. Being the front liner in the export industry, a good corporate culture provides
favorable and marketable climate in the global scene. The research are based on historical,
investigative and descriptive analysis of the global corporate culture of electronics industry in
the Philippines. As dominated by multinational corporations carrying different international
flavor mixed together and applied in the Philippine settings for global perspective.

And lastly, the lesson of success and story of electronics industry serve as a historical era to
any industry in the world as they climb the leverage of success.

Key words: Global Corporate Culture, corporate culture, corporate commitment,

electronics industry
INTRODUCTION

The development of global corporate culture is for most corporations the last step in
the integrated approach to globalization. It is not just a matter of doing business
internationally or even having subsidiaries abroad.1 It requires process and
mechanism that will create a successful global corporate culture. Many strategies and
framework have been develop thru the years to determine what paradigm is applicable
to any industry.

Different industries all over the world have their own unique and distinct culture
possess as the result of globalization. In a global perspective the industry must
understand their competitive advantage they have. Those advantage will serve as their
passport to higher perspective in a changing world.

Most companies begin their globalization effort with changes in strategy and structure
and some initial training of people for intercultural assignments.2 But international
corporations can only “decompose” their structures, as Kenichi Ohmae calls it, if they
have a deeply and universally held set of values to put in its place (Ohmae, 1989, p.
46). 3All organizations need some form of structure within which to operate. If this
structure is not physical, then it needs to be based on shared values, beliefs, behaviors
then that is, a strong corporate culture.

Establishing a global corporate culture for an industry is recommended because it

benefits the whole industry as well as the culture that the host country have. Creating
a global corporate culture is a long process and requires dedication from companies
engaged in this industry. In the end the fruit of their labor will be harvest in its success
in the ever-changing world.

Model of an Industry based Global Corporate Culture

In studying the diversity and complexity of culture the framework model must be
established in order that each firms must be guided in their actions and output. It serve
as a paradigm that will direct the industry on how to arrive that certain global culture
that they intend to achieve. To begin the paradigm it begin with STEP or PEST as
they called it in Wikipedia as PEST analysis stands for "Political, Economic, Social,
and Technological analysis" and describes a framework of macro-environmental
factors used in environmental scanning. 4

The study uses the acronym STEP to serve as a guide for the corporations in
establishing their core group in order to arrive to the global corporate culture they
intend to achieve. First and foremost we have to identify the environmental factors
that affect the industry both internally and externally. Then SWOT analysis will help

1
A Manager’s Guide to globalization –Six Keys to Success in a Changing World, Stephen H.
Rhinesmith, American Society for Training and Development, IRWIN 1993
2
Ibid
3
Ohmae, Kenichi, Beyond National Boarders. Homewood, Ill: DowJones-Irwin, 1987
4
http://en.wikipedia.org/wiki/PEST_analysis 2007, Armstrong. M. (2006). A handbook of Human
Resource Management Practice, 10th, London
them to identify the hidden opportunities that will make the industry more
competitive.

Globalization also opens the door to the electronics industry which makes the
export industry becomes the country’s front liner. In the modern trade practice, an
apparent picture of global interrelationships and interdependent has emerged. Factors
of production like land, labor, capital and market are becoming interdependent as
business entities increasingly consider their marketplace area as global trend rather
than local. As globalization exists corporate culture must be adept with the current
trends in the global market because now a days everything happened here has its
correlation with other parts of the world.

Culture is the set of important undertakings that members of a community

share in common… These shared undertakings consists of ethics, perception, norms,
values, standards, attitudes, beliefs and the community in question may be as wide as
a society or industry, or as narrow as a company departments/units or particular work
unit to be applied with.

Every industry has its own culture; in fact, every organization has a culture. A
corporate culture is similar to an individual’s personality. Because of the very unique
identity of such industry and or organization that particularly culture which will lead
to a higher production output and even industry competitive advantage. We cannot
deny the fact there are a lot of assumptions, beliefs, values, norms within the company
itself as its distinct personality of the individual influences a person. Figure 1 explains
and suggested a model paradigm of an Industry based Global Corporate Culture.

Global Corporate Culture

S S Corporate Setting Organizational

Characteristics
T W Shared Values
Innovation Corporate
E O Beliefs People Oriented Commitment
Team Oriented
P T Behavior Quality Emphasis
Customer focus

Industry Corporate Culture

Figure 1: Model of an Industry based Global Corporate Culture

A well-built culture is an influential stage for guiding behavior, it assist

employees do their work better, and as highlight by Deal and Kennedy, culture has
two functions:
 “A strong culture is a system of informal rules that spells out how people are
to behave most of the time. A strong culture enables people to feel better about what
they do, so they are more likely to work hard.”5

In this case it really point out that organizational culture is a dominant power
in any organizational and it can outline the firm’s overall effectiveness, efficient and
long range triumph.

Electronics industry is in its maturity and we must establish a good reputation

for the industry since it has been known to be the country’s front liner. A good culture
for an industry serves as advantageous on part of any investors since it creates a
favorable climate to them as well as attractive area for the organization which
provides materials, financial investment, including technology and other useful
resources that favor the electronics industry. The growth of electronics industry can
also be attributed to the growth of microelectronics (Castillo, 2006). 6

In a study conducted by F. Castillo about the corporate settings of the

electronic firms, when he surveyed 325 firms and 263 of it responded to his question
on” What is the shared values, beliefs and behaviors of the firms in the electronics
industry?

There is a 82.40% similarity in terms of their shared values, beliefs and

behavior based from the answers of the 263 respondents which is account to 80.92%
similarity rate. This study anchors that in the electronics industry the shared values,
beliefs and behaviors of the employees engaged in this aspect is highly significant.
Furthermore, the study suggested a key role of HR in the process of a corporate
culture in the electronics industry.

Organizational characteristics

Since electronics industry has diversified organizational setup the prototype

and typical set up of this manufacturing business are identified based from historical,
observation, and data provided by corporate firms. Innovation, people oriented, team
oriented, quality emphasis, customer focus are the most common characteristics
which are so common to this MNCs.

Given that variables the corporate settings are highly important because it
corresponds and contributes to the electronics industry’s characteristics. While it is
clear to understand that organizational characteristics requires serious commitment
and participation by the employees. Their input will serve as contributory element for
development and success of each firms. And in the long run as contributory factor to
the industry’s organizational characteristics.

Corporate commitment
5
Deal, T. E. , Kennedy, A. A. Corporate Cultures, Perseus, 2000
6
Castillo, F.G. Jr. The Philippine Microelectronics Industry: Strategies for ASEAN Competitiveness:
DBA dissertation, Pamantasan ng Lungsod ng Maynila, November 2006, Manila, Philippines
There are a lot of studies in corporate and organizational commitment where it can
defined as “the relative strength of an individual’s identification with and involvement in
a particular organization” (Steers,1977, p. 46). Research in the organizational
commitment has shown that there is a positive relationship between corporate ethical
values and Organizational Commitment (Hunt, Wood and Chonko, 1989). Some studies
showed a positive relationship between the congruence of corporate and employee value
and organizational commitment (Posner et al., 1985; Balazas, 1990; O’Reilly et al.,
1991), and an inverse relationship between such congruence and employee turnover
(O’Reilly et al., 1991). However, Posner (1993) found that clear personal values were
more important in relation to attitudes about work and ethical practices than clarity about
organizational values.

In the electronics industry, the corporate commitment extends their dedication

thru corporate social responsibility. In fact in the study conducted by (Castillo, 2007)
100% of the respondents strongly believe that corporate culture will improve the
Philippine society and economy. In fact they are accounts to more than 100,000 jobs
yearly. Some of the biggest and largest multinational companies in this industry is a
member of different social organization/foundations.

Industry Corporate Culture

Once the corporate commitment is identified and recognized the whole
industry can be viewed into one. That corresponds to the commitment they have as
observed by the employees, top management, customer and the world. It is very
important to have an industry corporate culture because underlines the totality of the
whole industry. The Philippine electronics industry can be viewed as a promising
industry in the export industry. In fact, in a news clip” When China entered to the
World Trade Organization in 2001, many economic analysts predicted that the
Philippine electronics industry's days were numbered. But now surprisingly Philippine
electronics still competing in the Global stage.” From nicher to leader the success story of
electronics industry serve as a historical lesson to any industry in the world as they climb the
leverage of success. “As quote and explain in a news item years back.

In order to prepare the Industry Corporate Culture, a road map of issues that
confronts the industry as well as activities, time table must be established in order to
attain the global corporate culture.

Table no. 1: Road Map of Corporate Culture of Electronics Industry

Issues General Activities Specific Activities Priority
Level/Time Table
1. Accelerate 1. Introduce the 1. To encourage High
Value: concept /model open On Going
Theory to Practice communication and (2007-2012)
suggestion.

2. Adding Value: 1. Promote quality 1. Encourage Medium

Local to Global assurance and employees to On Going
improvement. undergone (2007-2012)
schooling, attend
trainings and
 seminars.
3. Assessing Value: 1. Promote 1. Participate in the High
Employee to corporate CSR expo, promote On going
Consumer citizenship and social change and (2007-2012)
social sustainable
responsibility. development.
4. Change Value: 1. Partnership with 1. Adopt a college/ Medium
Corporate settings educational community that will On going
to national institution and link industry and (2007-2012)
development NGOs. academe.

Accelerate Value: Theory to Practice

It is strongly suggest that management theory will be practice in the corporate

level. It is the benchmark for their growth and success in the future. Open
communication between the top management and employee plays a vital role for its
effect. Idea generation in this stage is very important before conclusion will takes
place. Brainstorming in each department/unit is highly suggested before
recommendation to the management will takes place.

In this portion the role of HR and quality managers will be test as to their
ability on how to convince their subordinates. By providing committees that will take
charge of each activities is strongly advocates. This will put the electronics industry
in a good human resource and quality management practice that will benefit the whole
industry in the 5 years span. The HR and Quality managers must disseminate the
information within the organization and to their affiliations relative to the industry.

Adding Value: Local to Global

Since this industry work in a globalized perspective, it advocates to tap and

use of domestic sources. We have many SMEs who are among the best in the region
but lack exposure in the international market. I strongly suggest to the MNCs to
please provide assistance and support. The shift from local to global can be viewed in
a higher perspective as they assist them in building their own quality products and
services. Considering that they also have the necessary quality output.

Manpower resources also plays important role in this category as they

introduce new methodologist and management style. It also underline the value of
continuous R& D including training, seminars and schooling as well. I foresee also
that we might need many scientist and engineers that will soon lead the culture of
electronics industry. In shaping the culture it’s the technology who dictates on what
we should do in order to be identify. The corporate culture of electronics industry is
highly competitive in any perspective. It is important that we must protect the current
position we have in the world. That culture it possess will make it be on top in the
near future once the activities perform with precision.
Assessing Value: Employee to Consumer

Since Philippine manufacturing captures to more than 60% of the manpower

resources, it is significantly suggest that each corporation to be keen in dealing with
their employees. As we all know that labor is an asset to any organization. It is
sometimes called the success and failure of any organization or entity lies in the
employees hands. Management should take in consideration that human dimension of
quality as they are the one who works hard for the company. They are consider to be
internal customers hence, the management must value and treat them just like
customer of their products and services. This will lead to global corporate culture as
the full grown topics of loyalty and drive mechanisms of the corporate culture.

It also undertakes it responsibility in the society in general as they are

involved in the activities related to social change. As a practice they established some
foundations and adopt a community service. Thru their helping hand in promoting
employment and sustainable development, this will definitely encourage many related
industry to follow their foot prints.

Change Value: Corporate settings to national development

For the Betterment of All" is the common values and goals that surround the
electronics industry. To realize it in the community, in-house community service
committee/ teams carry out professional community share-care programs, while
employees volunteer at various social services and activities but not limited to the
following:

• social sponsorship
• educational/scholarship grants
• charitable/orphanage
• rescue and volunteerism
• trainings/seminars local/abroad

Based on a commitment to the community which establish the highest

standard the same values and ethical mindset are their contribution in the society and
economy as well. They contributes to the well being of society by helping them to
improve the quality of people’s lives and serving cross border community services
both local and worldwide.

Charter for social contribution and nation building

This will be the role of electronics industry in the society and economy as a
whole.

• To take part in the well-being of society with all activities based on humanity,
social responsibility and social ethics.
• To improve the quality of people’s lives and to usher more affluence and
happiness in our society.
• To facilitate and activate cross-cultural exchanges with global communities
and preserve global ecology to make the world a more pleasant and healthy
place to live.
 • To devote ourselves to volunteering in social welfare services and share our
benefits with society.

Building the right Global Corporate Culture

Building the right global corporate culture is a very long process in terms of its
success and application. It requires support, sacrifice, dedication and most important
contribution of each firms in the industry for their future success and operations. Its
very difficult to create a culture that is dominated by a foreign firms, however the
operation is conducted locally then there is a big chance that the local and foreign
culture can be restructured in the local set up. Just like in the case of Japanese
management style, when they introduce Just in Time as the philosophy of JIT is
simple - inventory is defined to be waste. JIT inventory systems expose the hidden
causes of inventory keeping and are therefore not a simple solution a company can
adopt; there is a whole new way of working the company must follow in order to
manage its consequences. The ideas in this way of working come from many different
disciplines including statistics, industrial engineering, production management and
behavioral science. In the JIT inventory philosophy there are views with respect to
how inventory is looked upon, what it says about the management within the
company, and the main principle behind JIT.7

This Japanese management style is also being done across the world as its
superb application of quality management. In the Philippine managements style we
have the so called “JIC” or Just in Case. This Filipino philosophy in the work place
remind us to be ready in things that might be needed instantly and quickly. This style
also reflects the philosophy of alertness and keen to details of Filipino in the work
place.

Steps to build a Global Corporate Culture

First and foremost step in building the global corporate culture is to begin the
purpose and aims of each firms in the industry on ”How they can be united as one?”
this question is a challenge for them in order to understand that “collaboration is
better than competition”.

Building a global corporate culture is a complex and an on going task.

Collaboration and unification of the existing associations is very important in laying
the strategies that will benefit the whole industry.

● A globally inspiring vision and aspiring mission

● Global information and access
● Facilities and resources
● Networking and integration mechanism
● Global Industry Council

7
http://en.wikipedia.org/wiki/Just_In_Time_(business)
Let’s examine each.

A Globally inspiring vision and aspiring mission

It is very difficult to construct a unified vision and mission of an industry.

Because different corporation have their own diverse culture and reputation to protect
with. In order to prevent disagreement and differences among industry firms, they
must established a guidelines as well as rules and regulations in order to prevent such
scenario in the future.
The bottom line for this is that they must establish a common criteria that will
align the industries vision and mission that is applicable to the changing world.

Global Information and Access

We live in a cyber world and all information is just a click away. Electronic
firms are doing their trade business in the web. For most, all the information that you
need about the companies background, products and services are all in their websites.
In this industry the use of electronic transaction is not unusual in fact majority of their
supplier, buyers, producers prefer the transaction to be in this medium. It is suggested
to have a global information and access to the whole electronics industry. They have
the capability in doing and engaging into this activity.

Facilities and resources

As part of the investment capability of multinational corporations engaged in a

business of holding a parent company and regional branches, facilities and resources
is one of the most important aspect to be consider. This multinational corporations
will not established their business in a country that they can’t benefit from it
strategically and financially.

In the case of electronics industry, they already established an association that

can ask the help of this multinational corporations to please extend their help in
providing the necessary assistance for the whole industry. This is possible because
this multinational corporations are using and maximizing our resources. Its about time
that we ask them to please contribute for the betterment of the industry. In the long
run they will benefit from this as partners in trade and nation building.

Networking and Integration Mechanism

In a globalized economy, industry must be flexible in terms of their network.

They must have the capability to shift from local to global. Each firms in the same
industry have their own established networks and contacts. If you notice the suppliers
and buyers of this firms have almost the same materials, supplies and the like.
Because of that identical and similarity those networks are only revolving around this
industry, its more easier to integrate a common mechanism.
 We understand that each firms have their requirements and specification needs
however, they are just in the same industry and same line. It is more difficult to
integrate a network who has a lot of sub groups. In the case of electronics industry
they already identified such sub groups as part of the industry.

Competitive Benefits of a Global Corporate Cultured Industry

● Global flexibility and mobility

● Global Management
● Knowledge-based industry
● Industry Identification

Global flexibility and mobility

Given the complexities in the global aspect. The tendency to shift from local
to global is very significant in their operation. In terms of materials, products and
services and even to technical support, its more easier for them to move. As
multinational corporations engaged in a global mechanism of trade, the flow of
technology transfer and movement of goods benefits the local industry(electronics)
because they are the recipient of this breakthrough. Also in the aspect of global
management, multinational corporations are establishing multiple headquarters(HQ)
positions on the regional aspect where they can maximize their trade business.

For the industry, it will benefit them thru employment and knowledge
management. Since the establishment is in the local set up, the industry is the direct
recipient of the information that later on can be converted into R&D including new
products and local demands.

Global Management
It provides new management style and modern approaches in dealing with the
global leadership in the industry. It manages the gap between local and international
sensitivity. By providing changing responsibilities, modifying relationships, diverse
viewpoints as combined with a structure that simplified the complexity of
management cross-country aspect. Thru this the local industry management
practitioner will be able to learned the multiple perspective, global mindset and lastly
how global managers think the global way.

Knowledge-based Industry
Knowledge management is now a worldwide development elsewhere. As the
newest and highly advanced products from highly advanced technology are develop,
any industry will prosper and perish if they can’t adjust to this modern economic
process.
In order to convert the advantages into output, it is suggested to identify what
industry and or sub-industry has the possibility of its success locally and
internationally. In dealing with the modern competition in a global complexities, it is
suggested to study the life cycle of the industry including its worldwide perspective.
Knowledge-based industry working in a global perspective encourage to conduct a
series of checks and balances internationally. It will provide the industry the
reputation as the knowledge based-industry in a global view as a an application of
modern business strategy.

Industry identification

In a globalized corporate culture, it is suggested to have an industry

identification. The global corporate culture it has is something to be distinguish from
other industry both local and international. Having a distinct and unique industry
identification, it will highlight the countries reputation in the global aspect where the
investors and other financers will be investing more in this sector of industry. As
global competition is going to more competitive elsewhere the industry identification
will capture and break the avenue of competition as it facilitates longer industry
outlook and enhance global competitiveness.