Organizational Culture and Diversity Within the Modern MNC


Management of culture in HSBC Hong Kong has resulted to improved organization performance (Raduan, Naresh, Haslinda & Goh, 2008), and it has both financial and non-financial implications to the company (O’Donnell, & Richard, 2008). Diversity management at HSBC Hong Kong has also yielded similar results. However, there is evidence that some ambiguity exist in managing culture at HSBC Hong Kong, as far as accessing the impact of its culture on all aspects of organization change is concerned (O’Donnell, & Richard, 2008). HSBC Hong Kong diversity management and organizational culture must be interlinked in order to maximize the benefits of each. An inclusive culture at HSBC Hong Kong should also support a long-term diversity management for the organization. This paper seeks to investigate the case study of HSBC Hong Kong in view of such literature, theory, and models.

Introduction to HBSC

HBSC was established with the aim of providing funds to enhance trade exchange between Europe and China. It has grown to be one of the greatest world’s financial institutions. It has its headquarters in London. Hong Kong and Shanghai Banking Corporation has operated for more than 140 years in the Greater China. The bank was founded in 1865 in Hong Kong. It then expanded to Shanghai and then to other places. In Hong Kong, it is the largest incorporated bank. It serves customers seeking personal and business banking services (HSBC, 2010). HSBC has presence in 87 countries and territories around the world, where it has about 8000 offices. These countries are located in America, Africa, Asia-Pacific, Europe, and Middle East. In addition to personal and private banking, the bank also offers corporate and investment banking services.

HBSC Hong Kong Organizational Culture Management

Organizational culture at HSBC Hong Kong comprise of visible and invisible elements. Invisible elements include values and beliefs held by employees such as need for teamwork. Visible elements include behaviors exposed at the workplace, as well as practices of accomplishing teamwork together and consulting leadership. There are also traditions such as outdoor activities and employee training. Organizational culture at HSBC Hong Kong manifest through use of leaning and employee development programs, as well as proper culture leadership.

Leadership fosters and establishes organizational culture beliefs and values in HBSC Hong Kong through use of change program as well as continued improvement of the existing cultures. An example of a program that was important to changing culture of HBSC took place in 2000-2001. HBSC Holdings Hong Kong introduced a program in 2000-2001 to enhance change in its culture to a strategic organizational culture. In addition, this program – known as Together, We Win! , was implemented in five subsidiary companies of HSBC. This program would introduce changes that were necessary for the bank’s success. The program focused on satisfying customers and workers, as well as building shareholder value. There were core elements of the program recognized, including focusing on continual improvement and learning, need to embrace changes and take personal responsibility, emphasize further achievements and need for improving delight for customers, according to (O’Donnell, & Richard, 2008).

Analysis of this program revealed that the organization was concerned, or focused on the ‘control’ type of organizational culture. Indeed, the bank has worked out this very well as revealed in the program. This program was essential to developing the necessary culture among employees through on-spot practical involvement in order to helping achieve future and present organizational goals. It also communicated to employees very important visible aspects of what the management and leaders of the organization wanted and expected from the employees. This program also involved team learning for employees and line-managers. It also involved changes in workplace policy. Through this program, the organization was able to foster employee innovation and risk engagement in activities. It established a culture where employees were involved and participated in material design and evaluation, as well as other processes (O’Donnell, & Richard, 2008).

Leaders were able to transfer their skills to the lower level management and work with them. The program ended up with financial benefits of 634% for each HK$, according to O’Donnell, & Richard (2008). This means that culture change programs have financial benefits altogether. This encouragement to leaders of some organizations sees culture change programs as costly and not carrying direct benefits. For the case of HBSC Hong Kong spent HK$ 6.3 million for the two phases. The company also gained in terms of increased revenue and more satisfaction of teams and customers (O’Donnell, & Richard, 2008). The program also helped the company record profits despite difficult market and economic times. The company recorded an increase in opened new accounts by the end of 2001. Other benefits included giving employees a safe time to make changes where necessary for example through discussing with their colleagues about the change actions to take, as well as getting the necessary tools for change (O’Donovan, 2006).

There is also evidence that organizational culture at HSBC has focused on improving organizational flexibility. Culture change program played a role of adapting the organization to its internal and external environment. The change program was itself spontaneous in nature, purposely employed for the reason of changing culture. The program also helped the company to gain awards, leading to improved company brand image. Excellence in Practice Award went to the company in 2005 in addition to winning the Best Practice Award in 2003 because of the aforementioned program (O’Donnell, & Richard, 2008). The company was able to come up with measures for getting feedback from customers and employees, for instance through the attitude survey. The company was able to track customer satisfaction through telephone surveys. Through teamwork improvement, the company recorded a decreased overtime requirement by 32%.

Organizational culture at HBSC has also made sure that there is investment on employees. This helps the organization achieve its objectives too. This helps not only to meet present but also future objectives. This supports the fact that HBSC sees employees as part of the resources of the organization (HBSC, 2011). An employee satisfaction effort features through taking care of results of the company’s annual Global People Survey acts. 91% of employees in the company respond to these surveys. The survey also helps in revealing employee engagements (HBSC Holdings Plc2011).

Diversity Management at HBSC Hong Kong

Hong Kong has a high power distance of 68 and therefore, it is expected that HSBC diverse management with incur weaker impacts from usage of an involvement culture. This is because a diverse workforce would meet more barriers relating to their diversity at the workplace. However, HBSC appears to have been set to overcome these barriers through involvement programs. Diversity management in HBSC ties with the organizational culture established.

The company identifies with the fact that appreciating workforce diversity helps to create group dynamics and foster full potential performance for teamwork. This is through the creation of a viable environment for teamwork through diversity management. In addition, market diversity has helped them have insight to market variation. The company has identified more areas of diversity apart from only those it is required to observe in law of employment (HBSC, 2011). These areas include personality differences, education, regional and physical ability differences. This helps them identify more areas in which they can deliver more value for employees (HSBC Holdings Plc, 2011).

HBSC group recognizes that it can benefit from diversity management. These benefits include ending up with a more balanced organization as well as an organization that is all-inclusive in nature. Diversity at HBSC can also help the organization to adapt to new environments (HSBC Holdings Plc, 2011). HBSC organization also recognizes that it can have employees and customers who are more loyal and this would help the organization achieve its goals more easily or better.

A big step made by the HSBC organization is to first understanding of the diversity of the people it is handling. The second step towards effective management of diversity is to value the diversity. In order to make use of the opportunity presented by diversity management and gain a competitive advantage in this area, HBSC recognizes that it needs to go beyond compliance issues. For HBSC, service quality and the manner of treating employees are very essential competitive differentiators for diversity management strategy (HSBC Holdings Plc, 2011).

The company recognizes that an organization that is sensitive to diverse management will have all its levels responsible for diversity management and not only their HR. HSBC recognizes that such an organization will build an environment where there is respect for each and everyone’s dignity. This kind of environment does not neglect or alienate people based on their differences. It puts into consideration of working practices that are flexible in terms of manners and the times of working.

In HBSC, diversity management has helped the organization through gaining attention from customers, to understand them and have them continue purchasing from the same organization. Identifying changing demands and profiles of their customers helps the company to improve on diversity management where necessary. This is also crucial to improving their positions in the market. In addition, the company has gained talented employees, thanks to diversity management. This is important to helping achieve their company goals. Diversity management can help the organization discover and utilize (exploit) underutilized or unutilized potentials among employees. Proper diversity management is also necessary for the organization to meet the established labor laws in Hong Kong, which requires observation of diversity in employment practice, such as requirement that organizations should not discriminate based on gender, age, or physical ability while employing people.

Like other MNCs, HBSC also benefits through improved value for their brand and image when people recognize that they care to offer the demands and needs of the various customers and employees through diversity management (HSBC Holdings Plc, 2011). Diverse customer base of about 125 million across the world and these being of different ethnic and cultural background shows how diversity is important to the bank (Reed Business Information, 2008). Reputation is also a benefit for the company through diversity management. In addition, the company has its results affected through strong relations with stakeholders.

Diversity management at HBSC does not only help the company to sole present challenges or handle current situations, but also future situations. Managers and leaders at HBSC are able to become decision-makers who can see opportunities for exploitation. In addition, they are prepared to innovate and bring about desired change in the organization. In addition, diversity management helps leadership at HBSC to think differently as well as become open-minded.

For proper implementation and communication of diversity, the top-level organization management makes sure that all leadership is practicing and showing an example to other employees as far as diversity management is concerned. Company diversity management starts at the top with a director responsible for global operations of managing diversity (HBSC, 2011). Others are able to see the commitment and easily follow the example. Employees are also able to learn from each other though diversity management at HBSC (HSBC Holdings Plc, 2011). Diversity management features by having staff that are culturally sensitive (Reed Business Information, 2008).

HBSC as a whole has a diversity policy that affects its local Hong Kong outlet. The policy recognizes that the bank is equal opportunity employer. In addition, HBSC identifies with principles of affirmative action employer.

Ensuring an Inclusive Organization Culture and Diversity Management in HBSC Hong Kong

There is indication that one of the challenges in management of organizational culture at HSBC Hong Kong involves transferring the knowledge about organizational culture to the practice, where performance indicators guide the day-to-day organizational activities, organizational budget, and choice of organizational policy (Cowen, 2008). Although HSBC Hong Kong has established practices and conditions for handling employees and customers, as well as other parties affecting their businesses, such as the shareholders, it is yet to achieve maximum benefits because it has not completely linked its organizational culture with its aspects of diversity management. Hence, not all aspects of culture feature in the company’s culture management initiative. Ensuring that all aspects of culture feature can occur by establishing an inclusive model of culture management as seen latter in this paper.

HSBC Hong Kong culture involves the handling of people through certain established practices and conditions within the organization (Schein, 2004). The various beliefs, values, language, and norms practiced in HSBC Hong Kong have been necessary towards creation of a healthy culture in the company (O’Donnell, & Richard, 2008). Culture in HSBC Hong Kong manifest through personnel characters, behaviors, and activities by the various employees. HSBC Hong Kong has established a number of behaviors for employees and practices such as training, discussions among employees and leadership, in order to establish positive behaviors among employees. Employees in HSBC Hong Kong have ways of discussing matters with leaders and among themselves, which do not exist, necessarily in the company’s regulations. These aspects discussed above are mostly visible aspects/elements of HSBC Hong Kong’s culture.

Although HSBC Hong Kong culture comprise of visible and invisible aspects of its culture, where visible aspects comprise of things that are visible, such as dress, symbols, and ceremonies (Schein, 1990; Deal and Kennedy, 1982), the company should ensure that it maximizes on the invisible elements as it does with visible elements of culture. The company should strengthen ceremonies such as company annual meetings and employee tours and travels to foster strong beliefs in teamwork and foster a teamwork culture. Invisible aspects in HSBC Hong Kong culture comprise things that are invisible such as attitudes and beliefs of the employees and partners. For example, as part of strengthening the invisible aspects of their company culture, HSBC Hong Kong should instill in employees’ minds and make them have beliefs that they can solve a variety of problems by talking to other employees or leadership as well as leveraging on individual preferences to job conditions and rewards.

HSBC Hong Kong culture should established a more inclusive model of culture and it focuses on “accessible” versus “inaccessible”, “behavioral versus interpretive”, as well as “conscious” and “unconscious” aspects of organizational culture (Rousseau, 1990; cited in O’Donnell, & Richard, 2008, p. 6). This inclusive model will help the organization to feature all aspects of diversity and culture management.

For example, some behaviors such as interactions among employees and leaders in HSBC Hong Kong are unconscious while others are conscious, and all should be efficiently managed together to achieve the benefits. In this company, members can discuss outcomes with fellow employee, a non-requirement by organizational rules. Such behaviors are inaccessible or accessible.

HSBC Hong Kong has focused mainly on the control/flexibility strategy for managing its culture and diversity. HSBC Hong Kong should also focus on external/internal relations in developing an inclusive culture (O’Donnell, & Richard, 2008). This will help the organization to manage and support all aspects of culture and diversity. In seeking to achieve ‘control’, HSBC Hong Kong seeks to become stable or enhance their internal cohesion, while it is also seeking flexibility by aiming to become adaptable or spontaneous. In the external/internal organizational culture practice, HSBC Hong Kong should seek to become more internally integrative, manage their internal information channels, or improve their communication channels. Therefore, HSBC Hong Kong is more of an internally oriented organization but should include or foster an external orientation where they would aim at growing, acquiring more resources as well as expanding interaction with outside world.

HSBC Hong Kong has competing demands to external and internal environments, as well as competition between organizational demands to become more stable or flexible (Bradley and Parker, 2001; Harris and Mossholder, 1996). This makes it necessary to have an all-inclusive culture management plan. HSBC Hong Kong organizational culture should represent all demands by various internal and external groups such as employees and customers, thus it links to the diversity management.

HBC Hong Kong needs to adopt a mixed type of culture. This encourages management of internal controls and information, as well as seeks to integrate with organizations in the outside environments. HSBC Hong Kong has sought for further growth, both in the service sector as well as physical presence by opening more branches in Hong Kong and therefore, an inclusive culture is necessary. Clearly, HSBC Hong Kong is competing between maintaining stability by leveraging on internal strength (managing and integrating its internal resources) with the need to expand. These environments require an inclusive culture for better management of diversity.

HSBC Hong Kong leadership has a crucial role of defining, implementing a successful organization culture (Watson, 2006), as well as achieving the necessary changes to cultures. HSBC Hong Kong leadership has been central to organizational change in the past. A major change was through a program for culture change adopted by the company leadership in 2000-2001. This program was an initiative that showed that the company leadership recognizes the need to link culture with organizational needs in order to achieve the organizational goals.

HSBC Hong Kong has also achieved an intertwining between its leadership and culture (Schein, 2004). Leaders of HSBC Hong Kong can form and destroy the company culture whenever they deem it necessary for the benefit of the organization. Leaders in HSBC Hong Kong seek to understand workable culture, as well as work with it. Leaders at HSBC Hong Kong seek to understand the organizational cultures that benefit the organizations at particular time and situation and then they define necessary change steps and then seek to change past practices. HSBC Hong Kong leadership has proven competent in identifying organizational culture change needs and instilling positive change for the organization through efficient culture change programs. For instance, the organizational culture change program launched by HSBC Hong Kong leadership in 2000 had financial benefits to the organization. HSBC Hong Kong value statements and codes of practices requires leadership role to be realistic (O’Farrell, 2006). This reality comes through establishing actual programs such as culture change programs. Leaders must aim to develop organizational cultures that support diversity management by including various stakeholders, employees, suppliers, and customers. HSBC Hong Kong organizational change program brought together employees, leaders and outsiders.

By minding to manage its diversity among their employees, HSBC Hong Kong achieves benefits than those organizations which do not, or which focus mostly on individualism (e.g. Dwyer, Richard & Chadwick, 2003). This diversity management at long-term in HSBC Hong Kong would be supported by establishment of an inclusive culture. Thus, there would be a linkage between HSBC Hong Kong organizational culture and diversity. Identity within HSBC Hong Kong can come by fostering teamwork through management of employee diversity. Employees in HSBC Hong Kong form relationships with departments and leaders, and these relationships develop based on deep-level personal differences (Guidroz, Lindsey & Daniel, 2009).

HSBC Hong Kong is one of the organizations developing organizational cultures that are need to be more inclusive for different categories of employees and this would help it to managing diversity better than the organizations that are employing a weaker involvement culture. HSBC Hong Kong organizational culture should influence the company’s diversity management programs. For instance, the power distance values in Hong Kong affect diversity management beliefs in the organization (Hofstede, 1980). Although organizations in the countries that have low scores on power distance as Hong Kong may experience more effects of involvement culture on their diversity management programs (Guidroz, Lindsey & Daniel, 2009), it does not mean that management of diversity in these organizations is not important. This is because diversity manifests in many other aspects such as intellect and employee preferences.

Hong Kong is in a country having low score of individualism (25) and HSBC Hong Kong is likely to have minimal problems with managing its diversity as far as cultures are concerned, since leaders/people/ (if they come from one community) communities would mind the interests of several other people (other than just their selves) (Guidroz, Lindsey & Daniel, 2009). HSBC Hong Kong therefore, exists in a collectivistic society in terms of culture. However, HSBC Hong Kong is under pressure to manage other aspects of diversity manifesting through employee attitudes, preferences, and intellect aspects. Leadership in HSBC Hong Kong should identify these aspects of diversity in areas where they operate and seek to manage them. In addition, they try to reduce problems in diversity management by having inclusive cultures.

Employees in HSBC Hong Kong undergo training and have diversity management policy made known to them. The training programs must also educate people about differences that are invisible such as employee preferences and leaders should be trained how to identify them. In addition, employees should have information on the consequences of deviation from these policy requirements. The policy at HSBC Hong Kong however, needs to define the behaviors for employees as regards diversity management, as well as expectations for its management. The organization seeks to communicate culture and diversity principles through culture programs, employee training and development, as well as through use of appropriate forum.

Conclusion and Recommendations

As can be seen, a strong organizational culture and diversity management strategy exist in HSBC Hong Kong. The leadership ensures strong culture through program training and development of the employee. The paper reveals that although the company makes necessary efforts to manage diversity and culture, it needs an all-inclusive culture management and focus. This means focusing on internal and external forces that influence its culture. This will be possible through adopting both the control/flexibility and external/internal relations in developing an inclusive culture as proposed by O’Donnell, & Richard, 2008. Such a focus will also be important to help the organization to manage invisible culture and diversity components such as employee preferences and beliefs. In addition, an all-inclusive culture management and focus would help the organization to link both the diversity and culture management strategies. Finally, this would improve the benefits involved in managing culture and diversity.

One of the strategies used in HSBC Hong Kong for culture management and change is a culture change program. The company needs to put in place more programs from time to time. It is a recommendation for this research that the company ensures continuous updating and improvement of culture and change through more programs carried from time to time. For instance, the company can schedule such programs after every five years. Needs identified for culture change should drive implementation of these programs.

Monitoring the impact of organization culture can help the company to identify and adopt strategies such as changing the style of leadership and leadership itself. The company should also manage its external relationships such as with suppliers, which is part of organization culture and diversity management. This also needs further exploration in future research. Such research would investigate the impact of relationships between company suppliers and company on culture and diversity management. Another recommendation is that the companies monitors the impact for its organizational culture and diversity management from time to time, and link it with management of its partners and suppliers.

Monitoring performance of culture programs and diversity management initiatives is somewhat neglected by the organization. This would help to identify needs for culture change, and lead to adoption of more effective change programs. It can help identify various challenges associated with management of culture and diversity in the organization. This spurs effective change programs. This is necessary because the business environment is changing because of impact of forces such as technology, which is very dynamic. HSBC Hong Kong need to inform the impacts of technology changes in the business environment on their organizational culture. It can identify how these changes affect management of their societies such as employees. The cost of managing cultures and diversity in HSBC Hong Kong should be justified by the benefits of them.


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