Chapter 1-Introduction Introduction Origin of the report: As a partial requirement of M.com (Management) we are required to study the “Organizational Behavior” In the classroom we get the opportunity to know the theoretical part of the subject. But without practical orientation it is somewhat difficult to grasp the core concept. Organisational Behavior is entirely based on practical situation. So in order to enhance the understanding of the core concept, we are required to prepare a report on practical situation to understand how to implement and practice the theoretical part in real life situation. Objectives of the study: General Objective: The general objective of preparing this report is to know about the “Corporate Culture in India” & fulfill the requirement of the subject 'Organizational Behavior”. Specific Objective: The specific objective of preparing this report is - To get a general idea about the Corporate Culture . To gather practical knowledge about Corporate Social Responsibility . 1
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Chapter 1-Introduction
Introduction
Origin of the report:
As a partial requirement of M.com (Management) we are required to study the “Organizational Behavior” In the classroom we get the opportunity to know the theoretical part of the subject.
But without practical orientation it is somewhat difficult to grasp the core concept. Organisational Behavior is entirely based on practical situation. So in order to enhance the understanding of the core concept, we are required to prepare a report on practical situation to understand how to implement and practice the theoretical part in real life situation.
Objectives of the study:
General Objective:
The general objective of preparing this report is to know about the “Corporate Culture in India” & fulfill the requirement of the subject 'Organizational Behavior”.
Specific Objective:
The specific objective of preparing this report is -
To get a general idea about the Corporate Culture .
To gather practical knowledge about Corporate Social Responsibility .
To analyze the how Corporate perform social Responsibility.
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Scope of the study:
Corporate in India plays a pivotal role in the economy of any country. They provide necessary instrument and employment to setup different industries essential for a nation to build strong economy. This report has been done basically on analyzing the theoretical and practical practices of Corporate Culture.& how employee employees get effected from it.
Methodology:
The report in this study is basically an inductive one. Two different types of systems have been selected here based on convenience. The report is based on both primary and secondary information.
Primary Information: The primary data have been collected from our class lecture, various types of individual professionals.
Secondary Information: The secondary information has been extracted from various textbooks of Entrepreneurship Development. Other notable information that was used for this report was the information gathered from websites which is mention in bibliography
Limitation:
In spite of having the wholehearted effort, there were some limitations, which acted as a barrier to conduct the program and for doing an empirical research work, such as:
Time Constraint:
The study is based on the analysis of Corporate Culture But this allocated time is not enough for a complete and fruitful study.
Lack of Experience:
Due to lack of experience, there is a chance of having some mistake in the report though best effort has been applied to avoid any kind of mistake.
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Corporate Culture & C.S.R.
Whether written as a mission statement, spoken or merely understood, corporate culture
describes and governs the ways a company's owners and employees think, feel and act. Your
own business's culture may be based on beliefs spelled out in your mission statement. It could
consist in part of a corporate symbol, like the rainbow-colored apple that symbolizes Apple
Computer. Whatever shape it takes, your corporate culture plays a big role in determining how
well your business will do.
If you're not happy with your current culture, there are things you can do to start changing it
now. Look for a symbol, story, ritual or other tool you could use to bring out the values and
practices you want for your company. Your cultural tool might be a new corporate logo
symbolizing your company's personality. Or you could choose a story to embody your approach
and make it part of your culture. If you can't find a tool, make one. For example, you can turn an
admired former employee into a symbol by giving an award named after that individual,
complete with ritual ceremony.
The beliefs and behaviors that determine how a company's employees and management interact
and handle outside business transactions. Often, corporate culture is implied, not expressly
defined, and develops organically over time from the cumulative traits of the people the
company hires. A company's culture will be reflected in its dress code, business hours, office
setup, employee benefits, turnover, hiring decisions, and treatment of clients, client satisfaction
and every other aspect of operations.
Related Corporate culture refers to the shared values, attitudes, standards, and beliefs that
characterize members of an organization and define its nature. Corporate culture is rooted in an
organization's goals, strategies, structure, and approaches to labor, customers, investors, and the
greater community. As such, it is an essential component in any business's ultimate success or
failure.
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Closely related concepts, discussed elsewhere in this volume, are corporate ethics.which
formally state the company's values) and corporate image (which is the public perception of the
corporate culture). The concept is somewhat complex, abstract, and difficult to grasp.
A good way to define it is by indirection. The Hagberg Consulting Group does just that on its
Web page on the subject. HCG suggests five questions that, if answered, get at the essence:
What 10 words would you use to describe your company?
Around here what's really important? Around here who gets promoted? Around here what behaviors get rewarded?
Around here who fits in and who doesn't?
As these questions suggest, every company has a culture—but not all cultures (or aspects of
them) help a company reach its goals. The questions also suggest that companies may have a
"real culture," discernible by answering these questions, and another one which may sound better
but may not be the true one
The concept of corporate culture emerged as a consciously cultivated reality in the 1960s along-
side related developments like the social responsibility movement—itself the consequence of
environmentalism, consumerism, and public hostility to multinationals. Awareness of corporate
culture was undoubtedly also a consequence of growth, not least expansion overseas—where
corporations found themselves competing in other national cultures.
As corporations became aware of themselves as actors on the social scene, corporate culture
became yet another aspect of the business to watch and to evaluate—alongside the "hard"
measures of assets, revenues, profits, and shareholder return.
Corporate culture by definition affects a firm's operations. It is also, by definition, something that
flows from management downward and outward. In many corporations, the "culture" was set
very early on by the charismatic activity and leadership of a founder. But as major tendencies
become deeply institutionalized, corporate culture also becomes an institutional habit that
newcomers acquire. In actual practice "reinventing" the corporation from the top down,
therefore, is difficult to achieve, takes time, and happens only under strong leadership.
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Observers and analysts of the phenomenon tend to subdivide culture into its various expressions
related either to major constituencies (employees and workers, customers, vendors, government,
the community) or to methods or styles of operation (cautious, conservative, risk-taking,
aggressive, innovative). A corporate culture may also, by overstepping certain bounds, become
suicidal—as the case of Enron Corporation, the energy trader, illustrates. In the Enron culture an
aggressive, creative, high-risk style led to fraud and ultimate collapse. Analysis is helpful in
understanding how a corporate culture expresses itself in specific areas. However, the concept is
social and culture, as the phrase itself implies. It does not lend itself to reorganization by a
rearrangement of standard building blocks.
Corporate Social Responsibility:-
Corporate Social Responsibility or CSR has been defined by Lord Holme and Richard Watts in
The World Business Council for Sustainable Development’s publication ‘Making Good Business
Sense’ as “…the continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the workforce and their families as
well as the local community and society at large". CSR is one of the newest management
strategies where companies try to create a positive impact on society while doing business. There
is no clear-cut definition of what CSR comprises. Every company has different CSR objectives
though the main motive is the same. All companies have a two point agenda- to improve
qualitatively (the management of people and processes) and quantitatively (the impact on
society). The second is as important as the first and stake holders of every company are
increasingly taking an interest in “the outer circle”-the activities of the company and how these
are impacting the environment and society. Social responsibility is an ethical ideology or theory
that an entity, be it an organization or individual, has an obligation to act to benefit society at
large. Social responsibility is a duty every individual or organization has to perform so as to
maintain a balance between the economy and the ecosystem. A trade-off always exists between
economic development, in the material sense, and the welfare of the society and environment.
Social responsibility means sustaining the equilibrium between the two. It pertains not only to
business organizations but also to everyone whose any action impacts the environment. This
responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by
performing activities that directly advance social goals.
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INDIAN CORPORATE CULTURE:-
India’s success in entering and building a strong presence in the information technology
and business process outsourcing markets has often been attributed to the fact that a majority of
India’s educated workers speak English. This has been characterized as a unique advantage of
the Indian economy relative to other low cost areas in Asia, South America, and Eastern Europe.
However, language is one of just many factors that shape the corporate culture within a country.
Will India’s broader corporate culture become a source of competitive advantage in the way that
the widespread ability of Indians to speak English .other research indicate that corporate culture
does have the potential to become a source of competitive advantage for the Indian economy.
There are robust signs of emerging entrepreneurialism, professionalism, and strong governance
within India’s corporations. These traits are similar to those that the American economy has
exhibited over the last fifty years through rapid company formation, the growth of professional
managers, and good (though improving) governance through boards and public shareholders.
This contrasts with slower growing European economies where entrepreneurialism has been
dampened due to cultural and legal factors and some Asian companies where poor governance
has resulted in some large companies with hidden and deep financial problems.
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Corporate Culture and its Historical Context in India
The corporate culture in India from three perspectives:
How entrepreneurial are the business leaders within their organizations and how likely
are they to become entrepreneurs on their own? This characteristic of India’s business
culture will likely determine the rate of innovation and new company information.
Historically, while India has had a class of active entrepreneurs, government regulation
and bureaucracy has impeded such efforts. In addition, a business that ends in failure and
debts often leaves the founders of the business with a permanent stigma.
How professional, ethical, and dedicated are employees within organizations? This
characteristic will likely influence the ability for Indian companies to compete against
multi-national corporations and to enter global markets. Historically, some business
people have engaged in bribery and other corruption to advance their businesses due to
the pervasive bureaucracy of the Indian government. In addition, many large family
conglomerates have traditionally given preference to family members in promotion to
key positions.
What is the quality of the governance within the organizations? Good governance has
been identified as a key driver of economic success by firms such as McKinsey and is
likely to be crucial to many Indian firms that have traditionally been family owned and
run. Historically, governance in Indian firms has been a mixed bag ranging from tightly
controlled family conglomerates to state owned companies with bureaucratic oversight.
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Entrepreneurialism in India:
a strong culture of entrepreneurialism is emerging in India and has the potential to become a
source of competitive advantage. First, it was clear that employee mobility is rapidly becoming
accepted within India. Companies such as Wipro talked about maintaining employee turnover
rates of 20-30% as positive which indicates a mobile workforce that leaves for appropriate
opportunities. In addition, executives at companies such as Godrej were not just lifelong Godrej
employees, but recent hires as well. Employee mobility is critical to entrepreneurship – it means
that employees are willing to leave to join new ventures and also that they have the ability to
seek employment if the venture fails. The employee mobility is similar to that seen in America,
but is different from countries such as Japan or Germany where employees tend to have a longer
relationship with their employers. Second, Indian employees from overseas are starting to return
to India. executives at companies such as GE and Intel who had returned to India after working
for a number of years in the U.S. These workers bring capita but more importantly a familiarity
with the process of company formation, raising venture capital, and acquiring early customers
for new products. Finally, India is a diverse and fragmented market, which makes it challenging
to do business in and also creates more opportunities for entrepreneurial activities particularly in
areas such as consumer products and services. For example, executives at Godrej talked about
the difficulties of distributing and developing products for the very diverse consumer needs
across India. This is a challenge for Godrej, but also indicates that local entrepreneurs will have
an edge in understanding local needs for certain kinds of products and may be able to compete in
some segments against Indian conglomerates and multi-nationals. This is the opposite of markets
such as the U.S. where consumer products are fairly standardized across the country and thus the
barriers to entry for new consumer products are extremely high.
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Professionalism in India:
Meetings with a wide range of executives from mid-level managers at Wipro to editors at
the Times of India revealed a strong professional class that speaks perfect English,
communicates in the international language of Powerpoint, and that appear dedicated to
advancing the interests of their organizations. These professionals are aware of global
management frameworks and are conscious of the role that their organization can and must play
in India’s economic development. American executives would feel just as comfortable in an
Indian boardroom as they might in a boardroom in the America. This comfort level may be one
of the factors explaining the rapid development of research and other facilities by MNCs in
India.
However, is this apparent professionalism only skin deep? Are Indian corporations truly
adopting best practices in managing and promoting employees and in encouraging appropriate
employee behavior? There appear to be structural forces that are raising the level of
professionalism in India. First, foreign multi-nationals have rapidly become the employer of
choice for top graduates from business and engineering schools in India. These multi-nationals
are bringing their global human resources practices to India in terms of selecting, developing and
advancing employees as well as in their expectations of legal behavior by employees. Labor
mobility means that these practices are spreading across Indian businesses. However, more than
labor mobility, the market for talent is driving change throughout Indian companies. The Vice
President of Human Resources discussed the value proposition of working for Godrej. He talked
about how Godrej offers Indian employees a professional work environment with more latitude
than a multi-national corporation may offer. His presentation was tailored to answering the
question a graduate of India’s top university may ask: “Why should I work for a family run
conglomerate when I can join GE (or Infosys)?” India’s mobile labor markets are requiring all
Indian companies to evaluate their management practices to ensure that they have access to the
best talent.
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Governance in India
The issue of governance and its impact on India’s corporate culture is primarily relevant
to Indian companies as multi-national companies have global governance structures. Within
India, governance can be considered for three sets of companies:
Indian public companies with foreign ADR listings such as Infosys or Wipro. These
companies face the broadest and deepest set of legal requirements regarding governance
since they must comply with SEC regulations. However, what is impressive is that
companies such as Infosys have gone beyond typical requirements in promoting a higher
level of transparence in their governance and reporting. Infosys has a board with a
majority of outside directors, reports results in compliance with eight different accounting
standards, and discloses its compliance with ten external governance codes. Infosys’
premium valuation is providing a clear signal to other India companies that good
governance has tangible benefits. In fact, a McKinsey survey revealed that Indian
investors are willing to pay a 23% premium for companies with good governance
structures.
Indian public companies. These companies need to comply with Indian regulations
which were described by ICICI executives as being fairly robust. A McKinsey analysis
also found that India’s regulations and enforcement of accounting standards for Indian
companies are fairly strong as they were ranked fourth in Asia and ahead of countries
such as China. In addition, the incentive of being able to list shares overseas acts as a
motivator to ensure good governance. However, as state owned enterprises are partially
privatized, it is possible that the role of the government in the governance structures of
such companies could act as an impediment to executing certain business strategies.
Indian family controlled conglomerates such as Godrej and Tata. These conglomerates
are often a mix of private and public holding structures. Some of these conglomerates
have been well managed, but the quality of governance may still be low due to tight
control by family members. The need to raise public capital will clearly enhance the
governance of some of these organizations. However the competition for Indian
management talent that will lead these companies to improve governance to be perceived
as attractive places for long-term career relative to other opportunities in India.
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Indian business culture
India is a culturally rich and diverse country where one can see varied array of language,
religion, caste and regionalism. While doing business in India, every organization has to consider
all these factors before formulating their business plans and take necessary actions accordingly.
The India Business Culture is an extension of the common culture of the society. It is unique in
its own way. However, in Indian business culture, the behavior, etiquette and approach of
organizations and its professionals change according to the addressee and the context of address.
Language: India is a multilingual country with each of its states having different official
languages. However, Hindi is the only officially recognized language in the country. While
talking on India business culture, English is the most preferred language, which is followed
religiously in every industry.
Meetings, Greetings and Courtesies: In India, people greet each other by saying 'Namaste',
while conjoining the palms together below the chin (position of fingers would point up) and
nodding the head. One can also do this while saying good-bye. Use of the Namaste will show
that you have understandings of Indian culture. While greeting superiors or showing respect to
someone, a slight bow is added. In Indian business culture, people also greet each other by a
handshake. In a one-to-one meeting with a male counterpart, a woman usually initiates a
handshake. If the woman doesn’t, the man will smile and nod slightly.
While greeting an individual, people use appropriate formal title. One can also add ‘ji’ after the
title to show respect for the person he/she is greeting. While meeting a person or client for
business purpose, always exchange business cards at the first meeting. You must exchange the
cards with your right hand only. Cards must be put away with due respect.
Relationship Building
In India business culture, business development largely depends upon relationship building.
Indians tend to give favorable deal to those whom they know and trust. Hence, a good way to
earn business is to earn the trust of the customers first. You can earn the trust of people by
demonstrating strong business insight, showing honesty and respect.
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Meetings
Any business meeting has to be arranged well in advance. These have to be fixed in writing and
confirmed by phone. It is better to avoid fixing meetings on or near national holidays like
Independence Day, Republic Day, Gandhi Birthday or either of the two Eids. People often club
their leaves to enjoy extended holidays during this time.
Time
Indians value punctuality in others, but they often lag behind the schedule themselves. A
10-minute late is acceptable in most of the cases. It can also be seen that family responsibilities
getting preferences over business, which leads to last minute cancellation of meetings, though
not quite often.
Inside the Meeting Room
After entering into the meeting room, one must approach and greet the senior-most figure first.
Every meeting usually has some 'getting to know you' process, where the meeting starts with
some initial conversation. The favorite topics are business news, how stock market is doing, or
the game of cricket. It is good to avoid discussing personal matters. If you are new to India, it is
always better to refrain from commenting on volatile issues like poverty or beggars.
Process
If your business meeting involves negotiation, be prepared for a slow process. In India business
culture, decision is taken at the highest level and may take more time than one would have
expected. You can’t get a favorable decision unless you can establish the trust of the client. Until
the trust is not established, you should concentrate on building a rapport with the client. As the
decision is taken at the highest level, absence of the any higher-position holder like Director or
owner indicates that it is only the early stage of negotiation.
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Decision
Statistics, empirical data or commendable PowerPoint presentation cannot solely influence the
business decision. Indians tend to reckon the intuitions, feelings and faiths before they reach at
any decision. You must show your patience and good character before any final verdict comes
out. You cannot afford to show frustration or anger.
Negotiation
One should refrain from putting high pressure tactics while negotiation with the clients. Do not
confront or be forceful. If you are to disagree or criticize, you need to do it in the most
diplomatic language. Indians do not say "no" directly, as it is often considered rude. If during the
negotiation process, you come to the terms like "We'll see", "possibly" or "We'll try", there is
every possibility that they are indicating a 'no'.
Business Attire
Business culture in India demands formal attire. Men usually wear formal shirts and pants. Suits
or Blazers are also quite worn, often during the winter. Women wear saris or suits. On the last
working day of the week, people often wear casuals. However, that has to be a decent one.
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CULTURE IN SMALL BUSINESSES
Culture can be a particularly important consideration for small businesses. A healthy company
culture may increase employees' commitment and productivity, while an unhealthy culture may
inhibit a company's growth or even contribute to business failure. Many entrepreneurs, when
they first start a new business, quite naturally tend to take on a great deal of responsibility
themselves. As the company grows and adds employees, however, the authoritarian management
style that the business owner used successfully in a very small company can become detrimental.
Instead of attempting to retain control over all aspects of the business, the small business owner
should, as consultant Morty Lefcoe told Nation's Business, strive to "get everybody else in the
organization to do your job, while you create an environment so that they can do it."
In a healthy culture, employees view themselves as part of a team and gain satisfaction from
helping the overall company succeed. When employees sense that they are contributing to a
successful group effort, their level of commitment and productivity, and thus the quality of the
company's products or services, are likely to improve. In contrast, employees in an unhealthy
culture tend to view themselves as individuals, distinct from the company, and focus upon their
own needs. They only perform the most basic requirements of their jobs, and their main—and
perhaps only—motivation is their paycheck.
Since every company is different, there are many ways to develop a culture that works.
Following are several main principles that small business owners should consider in order to
create a healthy corporate culture:
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Prevailing corporate
Prevailing corporate culture begins at the top. Entrepreneurs need to explain and share their
vision of the company's future with their workers. "Let your vision for the company become their
vision for the company," stated John O'Malley in his article "How to Create a Winning Corporate
Culture." He goes on to say that "a company without a vision is reactive in nature, and its
management is seldom confident addressing competitive threats and stepping into the future." In
addition, small business owners should be aware that their own behavior and attitudes set the
standard for the entire workforce.
Small business owners who set poor examples in areas such as lifestyle, dedication to quality,
business or personal ethics, and dealings with others (customers, vendors, and employees) will
almost certainly find their company Treat all employees equally. Entrepreneurs should treat all
employees equally. This does not mean that business owners cannot bestow extra rewards on
workers who excel, but it does mean that interactions with all employees should be based on a
foundation of respect for them. One particular pitfall in this area for many small business owners
is nepotism. Many small businesses are family-owned and operated. But bloodlines should be
irrelevant in daily operations. "Successful ' businesses constantly place 'you are no different'
expectations on family members they employ," noted O'Malley. "Doing otherwise quickly
undermines employees' morale'. Showing favoritism in the workplace is like swimming with
sharks—you are destined to get bitten.es defined by such characteristics
Treat all employees equally. Entrepreneurs should treat all employees equally. This does not
mean that business owners cannot bestow extra rewards on workers who excel, but it does mean
that interactions with all employees should be based on a foundation of respect for them. One
particular pitfall in this area for many small business owners is nepotism. Many small businesses
are family-owned and operated. But bloodlines be irrelevant in daily operations. "Successful '
businesses constantly place 'you are no different' expectations on family members they employ,"