The Effects of Corporate Culture. A Study of Three Swedish Multinational Corporations

Abstract

Operating in a global environment carries with it a range of opportunities but also challenges. While organizations have their own unique culture, they must also be aware of and adapt to the norms of the environment in which they are operating. This study considers the effects of corporate culture in Swedish multinational corporations (MNCs). Specifically, the study focuses on three facets: the relation between corporate culture and the national origin of the MNC, how corporate culture is dispersed and used as a tool for unifying the MNC, and finally, whether corporate culture can provide a basis for decision making in both mundane as well as more ethically-loaded contexts. In order to investigate this we looked at three Swedish MNCs; CellMark, Elof Hansson and Stena Bulk. Interviews were conducted with eleven senior managers from eight different countries. The data generated was codified through a grounded theory approach and meshed together with a variety of different theoretical frameworks such as Hofstede's (1984) cultural dimensions model. From the interviews, five main themes were derived: foundation and communication of corporate culture, perception of corporate culture, decision making, culture as unifying tool and employee-organizational coherency. The study found that while many of the cultural attributes within the three MNCs could be perceived as being inherently ‘Swedish’ under Hofstede (1984), there were some attributes which had arisen on their own accord, suggesting the impact of globalization and the responses of organizations to this. Furthermore, the study concludes that corporate culture contributes to unifying a MNC around shared values, whilst also maintaining the benefits of cultural diversity. In terms of dispersion of corporate culture, the practices implemented by the three MNCs differed to suit their own agendas. Finally, the empirical data strongly indicated that a shared mindset and culture for all three MNCs was adopted by living it, rather than being of constraint by rigid frameworks. This allowed the employees as well as the companies to be flexible and agile in the different markets. As globalization and technology advances, so must organizations. The main implications for practitioners from this study is therefore to be careful in making assumptions regarding national culture as well as acknowledging benefits of local knowledge and allowing employees to inherit the corporate culture in a personal way. Suggestions for future research would be to further investigate the role of culture as it pertains to online and digital communities in comparison to face-to-face encounters.