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COMPARISON OF CORPORATE CULTURE OF THE TWO LARGEST BANKS IN RUSSIA AND SOUTH KOREA
A.R. Davletshina, D.E. Mityurnikova
Financial University under the Government of the Russian Federation, Moscow E-mail: [email protected]; [email protected] Scientific advisor: Staroverova N.P., Associate Professor Financial University under the Government of the Russian Federation, Moscow
E-mail: [email protected]
Abstract. The paper is based on the research devoted to the comparison of corporate cultures of the two largest international banks in Russia and South Korea, Sber and Woori. The research has revealed similarities in terms of adherence by both of the banks to the core internationally recognized values - trust of clients, conducting honest business, the atmosphere in the team, combating illegal activities. Both of the banks are focused on creating friendly relationships within their teams and customer-centric approach in relations with their clients. It has also been found out that there is a direct relationship between culture and performance in the areas of shared identity, values and commitment of employees to the corporate objectives in both of the banks. The company's values are the guiding principles that help both of the banks make the right decisions in maximizing the wealth of both customers and shareholders. The differences are mostly related to a clear distinction between the two countries' national cultures.
Keywords: corporate culture, international bank, similarities, shared values, commitment of employees, common corporate vision, customer-centric approach
СРАВНЕНИЕ КОРПОРАТИВНОЙ КУЛЬТУРЫ ДВУХ КРУПНЕЙШИХ БАНКОВ РОССИИ И ЮЖНОЙ КОРЕИ
, Russia
, Russia
Давлетшина А.Р., Митюрникова Д.Э.
Финансовый университет при Правительстве Российской Федерации, Москва, Россия E-mail: [email protected]; [email protected] Научный руководитель - Староверова Н.П., доцент Финансовый университет при Правительстве Российской Федерации, Москва, Россия
E-mail: [email protected]
Аннотация. В статье представлены результаты исследования, посвященного сравнению корпоративных культур двух крупнейших международных банков в России и Южной Корее, Сбер и Woori. Исследование выявило сходство с точки зрения приверженности обоих банков основным международно признанным ценностям -доверию клиентов, ведению честного бизнеса, атмосфере в команде, борьбе с незаконной деятельностью. Оба банка сосредоточены на создании дружеских отношений внутри своих команд и клиентоориентированном подходе в отношениях со своими клиентами. Также было установлено, что существует прямая взаимосвязь между культурой и эффективностью в таких областях, как общая идентичность, ценности и приверженность сотрудников корпоративным целям в обоих банках. Ценности компании являются руководящими принципами, которые помогают обоим банкам принимать правильные решения для максимального повышения благосостояния как клиентов, так и акционеров. Различия в основном связаны с особенностями национальных культур двух стран.
Ключевые слова: корпоративная культура, международный банк, сходства, общие ценности, преданность сотрудников, общее корпоративное видение, клиентоориентированный подход
INTRODUCTION talent, increasing employee engagement and
Corporate culture has become increasingly productivity, as well as promoting innovation and important to businesses since the end of the previous adaptability in an increasingly competitive and century. It is necessary for the company because it dynamic business environment. creates a unique identity, fosters a sense of belonging Corporate culture plays a vital role in any type of and directs the actions of employees. Corporate business; however, it is especially significant for culture influences decision-making, work ethic and huge corporations strengthening their position in overall productivity, contributing to the success of ratings and boosting the image in the eyes of all the company. This topic is especially relevant stakeholders. The study of corporate culture in nowadays as organizations realize the importance of countries with different cultures is considered to be a positive culture for attracting and retaining the best most interesting and valuable, especially now in the
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period of newly appearing multipolarity. Thus, the purpose of the article is to identify the differences and similarities of corporate cultures of the two largest international banks in Russia and South Korea. The Russian bank Sber is the largest bank in Russia, Central and Eastern Europe. Woori, a Korean commercial bank, is one of a hundred largest banks in the world.
LITERATURE REVIEW
By corporate culture we understand "the values, beliefs, and behaviors that determine how a company's employees and management interact, perform, and handle business transactions" [1].
Originally, the concept of corporate culture appeared in 1970. Ten years later in 1980 Geert Hofsteed, a Dutch management researcher, put forward his well-recognized Cultural Dimensions Theory, which encompassed over 100,000 employees from 50 countries across three regions [2]. The approach developed by Geert Hofstede has become the most widespread in the study of the influence of national cultural characteristics on the formation of corporate culture. His concept is based on a major research project studying the peculiarities of national cultures using the example of 64 countries. Many researchers investigated this concept, however, Hofsteed's theory is still "a framework for understanding the differences in culture across countries and the ways that business is done across different cultures" [2].
In 2018, Martin Owusu Ansah and Lynette Low continued the ideas in their study "The influence of national culture on organizational culture of multinational companies" [3]. The main conclusion is that the culture of avoiding uncertainty and distancing from power has had a significant positive impact on the organizational culture of companies, while collective and masculine cultures have had a positive but insignificant impact on the culture of companies. Under the influence of globalization, many researchers are developing the idea of the need to globalize corporate culture.
One of such studies is an article by A.V. Unylova on the impact of globalization on the Russian banking sector [4]. A great contribution in the development of the theory of corporate culture was made by Millman (2007), Ng & Kee (2013), Behery and Paton (2019),
Kotter and Heskett (1992), Uttal (1983), Robbins (1986), Trice and Beyer (1993), to name just a few.
In 2018 Quy investigated the association existing between the organisational culture, job satisfaction and firm performance in organisations and proved that innovative and supportive culture had positive and significant effects on job satisfaction and firms' performance.
In 2019 the theory introduced by Pathiranage proved that organisational culture deeply influenced "various dimensions of organisational processes, performance, employees and other relevant areas of the organization" [5].
The role of corporate culture and its influence on the efficiency of the performance in the banking sector has also been investigated in the works of Russian researchers - V.V. Kozlova, V.V. Tomilova, V.A. Spivak and others. METHODS
As corporate culture is heavily influenced by the industry in which it operates, geographical location, history, employee personalities, etc., there is a host of definitions of the concept. Our study is based on understanding of corporate culture "as the collective behaviour of people using common corporate vision, goals, shared values, beliefs, habits, working language, symbols and safety rules that govern the behavior of people within an organization" [5].
To understand the specifics of corporate cultures in Russian and South Korean banks, compare and determine similarities and differences, the following methods of research were used: scientific literature review on the topic, analyzing websites of both of the banks, articles in mass media and clients' feedback.
RESULTS AND DISCUSSION
The corporate culture of Sber is based on honest and open relationships with internal and external parties. The basic principle of its corporate culture is being an efficient employee who is striving for change and self-improvement, which leads to a strong organization through low cost and high efficiency. The main document regulating corporate culture is the Code of Corporate Ethics and Business Conduct designed to guarantee an open, honest, and impartial approach in accordance with the values of the bank for all parties including team members,
clients, competitors, government authorities, business partners, contractors, and other persons.
Sberbank's mission states, "We give people confidence and security, and we make their lives better by helping their dreams and aspirations come true". The values of Sberbank shared by all employees boil down to the following statements:
Table 1. The values of Sberbank [6]
I am a leader Each of the employees improves themselves, Sber and the environment by doing everything in their power.
We are a team We are working together to accomplish a common goal and are always ready to help each other.
All for the customer Sberbank's entire activity is centered around customers meeting their needs and expectations.
The first of the key principles of corporate culture is team spirit which results in creating a productive working and business environment, valuing teamwork in which everyone's voice is heard, ensuring high quality operations, encouraging personal and collective growth.
The second principle is customer relations. Sber employees are trying to improve customer experience, take into account the needs of their clients and constantly improve the quality of services provided. Customers are a foundation of the business.
The third key principle is being honest with counterparties. The Bank's activities with business partners and competitors are based on the principles of equality, fairness, good faith, and a respectful attitude. Sberbank strives to cooperate with counterparties with an impeccable business reputation, building their activities on the principles of strict compliance with applicable legislation, business ethics requirements and honest partnership, taking care of the occupational safety and health of their employees, demonstrating a careful attitude to the environment. The company's values are the guiding principles that help Sberbank make the right decisions in maximizing the wealth of both customers and shareholders.
Woori bank is a Korean multinational bank headquartered in Seoul. Being one of the four largest domestic banks in South Korea, it is showing a strong
presence not only for commercial banking but also for corporate finance in the Republic of Korea. As far as the vision of the Bank is concerned it states, "Innovate Today, Create Tomorrow", with the slogan being 'The First Choice in Finance" [7]. Woori Financial Group's symbol mark expresses the dawn, symbolizing pioneering and hope, as well as a pledge to become a new leader in opening a new horizon of finance for Korea [8].
Doing business in a rapidly changing banking environment the company promoted OneDo strategy to remain globally competitive. Woori Financial Group thus attempted to reach world-class productivity through a corporate culture aimed at eliminating waste factors. An appropriate standard for removal involved continuous improvement through problem solving. This system could only work if employees felt respected, challenged and positively reinforced.
The objective of OneDo is to systematically create an organizational culture grounded in individual participation and productivity. When mission-oriented employees perform their jobs, they are reminded to keep in mind four action principles of OneDo which are the following:
Table 2. Principles of corporate culture in Woori [8]
Principles Content
Ask questions Find waste factors in day-today operations
Change perspectives Find causes of problems through shifting paradigm
Gather ideas Collect wisdom to solve problems
Eliminate waste Remove non-value-added work
Previously, the principle of the bank's efficiency was in reducing extra costs and savings, now the most critical one is "improving the business process through innovation". The integration of cutting-edge technology, spurred by innovation, propels productivity to new heights reducing the number of human errors. Members of Woori Financial Group believe that the heart of their philosophy centers on the idea that "changes start with me". The main reason why OneDo is successful accounts for the input of its workforce. Employees have always been bringing up fresh ideas to reduce inefficient business processes and deliver greater value and convenience to its customers [8].
Criteria Sber Bank Woori Bank
Hierarchy Abandoning hierarchy in the team, a coach instead of a head A strict hierarchy, a clear delineation of positions
Staff turnover Rapid staff turnover, active replacement of employees Slow staff turnover, employees rarely changing jobs
Planning Short- and medium-term planning, solving current problems Long-term planning, a look into the future
Type of company culture Progressive Conventional
Core values Trust of clients, conducting honest business, compliance with laws, combating corruption and other illegal activities
Attitude to customers Customers are the main priority, excellent customer experience
The atmosphere in the team Friendly atmosphere, employees are the foundation of the business, every employee is important and has an impact on the company
As for the differences, they are undoubtedly present. The biggest gap is in the "power distance" dimension: the relationship between subordinates and authority in Korea is closer and more open than in Russia, with a strict hierarchy being present. It is explained by Confucianism which glorifies respect for the elderly, loyalty to superiors, and harmonious relationships. Besides, in Korea, as in Japan, it is not likely for employees to change their place of work, they stay in one place almost for the whole live. According to OneDo principal Woori Bank focuses on the so-called reduction of all kinds of waste meaning opening the way to innovation, whereas Sber has many formal documents regulating corporate culture and relationships at workplace.
CONCLUSION
To sum up, the research has shown that many indicators of corporate culture of Korean and Russian banks - Sber and Woori - are at a close level. Since the banks are international, the emphasis is equally placed on creating a favorable atmosphere in the office, friendly relationships in the team, with special attention being paid to a customer. As we can see, there are no radically different issues in the corporate culture of both of the banks. Both of them have a high reputation among clients and continue evolving and attracting more stakeholders. As for the differences, they are mostly related to a clear distinction between the two countries' national cultures.
REFERENCES
1. Investopedia. - URL: https ://www.investopedia. com/terms/c/corporate -culture.asp (accessed: November 10, 2023)
2. Hofstede's Cultural Dimensions Theory. - URL: https://corporatefinanceinstitute.com/resources/manag ement/hofstedes-cultural-dimensions-theory/ (accessed: November 10, 2023)
3. Martin Owusu Ansah & Lynette Louw the influence of national culture on organizational culture of multinational companies, Cogent Social Sciences. -2019. - 5:1, D0I:10.1080/23311886.2019.1623648
4. Унылова A.B. Современная модель российской корпоративной культуры банковской деятельности// Гуманитарные, социальноэкономические и общественные науки. -2014. - № 1 2.
5. Yasas L. Pathiranage Organizational Culture and Business Performance: An Empirical Study SSRG International Journal of Economics and Management Studies - 2019, - Vol. 6, No. 6, pp. 1-12. - URL: https://doi.org/10.14445/23939125/IJEMS-V6I6P101 (accessed: January 5, 2024)
6. Code of Corporate Ethics and Business Conduct. -URL: https://www.sberbank.com/sustainability/ethics (accessed: January 12, 2024)
7. Park Hun-Joon, Jung Dong-il, Schmitt Bernd Case study Series. Woori Financial Group: Becoming a World-Class Organization through OneDo - Columbia Business School. - 2013/ - URL: https://business.columbia.edu/globalbrands/research/c ase-studies (accessed: March 3, 2024)
8. Woori Financial Group/ - URL: https://www.woorifg.com/eng/social-contribution/ethical-management/code-of-ethics/contentsid/513/index.do (accessed: February 21, 2024)
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