Hofstede Analysis Of Hsbc

An analysis of the culture of HSBC Introduction Increasing trend of the globalisation has compelled organisations to seriously consider the cultural aspects of the Human Resource (HR) practices. Hofstede and Bond, (1988) asserted that organisational culture help to develop human resources’ behavioural skills in an organisation. The understanding regarding the values and beliefs of the employees from different cultural backgrounds holds the utmost importance for management, in order to achieve organisational goals by effectively managing their behaviour. Oxford Dictionary explains culture as the customs, ideas, behavioural characteristics, and attitude of a particular group of people or society (Scott and Marshall, 2009). According to Geert Hofstede (2001), culture can be defined as “the collective programming of the mind that distinguishes the member of one category of people from others”. Gellner (1997) proposed the biological characteristics and explains that people belong to a particular culture often have identical age, skin colour, gender, or body type attributes such as weights or heights (Gellner and Breuilly, 2008). . HSBC Company Background The HSBC group is regarded as one of the world’s largest financial institutions with 300,000 employees serving 50 million customers in more than 70 countries around the world through four global businesses, viz. Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. The Hong Kong and Shanghai Banking Corporations (HSBC) headquarter office is located in London and is a public limited company registered in the United Kingdom (Huppatz, 2005). Although accounting practices of the HSBC are significantly influenced by the western principles, because it was founded on the Scottish and English culture; but, the effect of Chinese culture is also entrenched in the bank. HSBC was founded in 1865 initially with the focus to finance trade between Europe and Asia. But for last 150 years, the management continue to connect customers internationally and enable global businesses to grow and prospering the economies. They have staff members from different cultural backgrounds who collaboratively contribute to the

bank’s success. In the similar fashion, HSBC was started with the phenomenon of a local bank serving international needs. HSBC’s case analysis The organisational culture of HSBC reflects professionalism with healthy and ethical business principles. The corporate values of HSBC involve equality, respect and responsibility towards investors (HSBC's history, 2016). The following diagram depicts the scores of five dimensions with reference to the UK and Hong Kong culture as measured by Hofstede. For the UK, the lower power index (PDI) explains to have more democratic people who believe in equality. The high score of individualism (IDV) illustrates more importance of individual than group performance and more presence of self-orientated people in the UK. The higher masculinity (MAS) ranking indicates higher confidence and assertiveness with the focus on money, power, control, competition, and aggression to win at any cost. In the masculine culture, people separate the sex role and attach importance to money and other material gains over comfort and quality of life. Britain is a Masculine society with highly success-oriented and driven culture. In comparison to Feminine cultures such as the Hong Kong, people in the UK live to work and have a clear performance ambition. Moreover, with higher uncertainty avoidance (UAI) index, British people are conservative and hesitant towards the unknown situation and they avoid risk. Because of uncertainty avoidance, most of the people in the country are more concerned about security and a constant source of income. However, there are generally lesser rules in British society. Furthermore, the lower long-term orientation (LTO) reflects more respect of their traditions and more focus on the present interests instead of worrying for future (Franke, Hofstede and Bond, 1991). Hong Kong is known as a financial city and the national culture characteristics correlate with the HSBC’s organisational values and beliefs. Both the national culture traits as derived from Hofstede analysis and the HSBC organisational values give importance to the responsibility and respect for people. Therefore, relocating Hong Kong, HSBC would be able to maintain their image; also, the higher long-term orientation is another factor in favour of Hong Kong as a home for HSBC. To remain competitive and firm in testing times, determination and cautious steps become important to consider for an organisation. The critical decision of moving from London to Hong Kong for HSBC will certainly prove to be successful for the

company. The financial reports of HSBC (after the decision was proposed) are indicating annual incremental of profits; hence, are giving a hint of acceptance by public at large. HSBC culture is centred on responsibility, respect and futuristic ideas which will positively help them to retain their leading position in the market as well as to remain profitable (Jao, 2003).