12 July 2017

Ethiopia: An Act to Follow - Duplicating Corporate or Organizational Culture


There is a tendency in duplicating a working model of some entity - be it an individual, organization, country - by other similar entities. Ethiopian Airlines has been successful for much of its existence using a 'corporate' or 'organizational' culture that has been regarded as global standard. So, can its success be duplicated by other public enterprises of the country; and also, can its working model serve as a building block for sculpting a national corporate/organizational identity?

In this intense era of globalization, coupled with unprecedented technological advancement, having an organizational or corporate culture within our public enterprises is no longer optional to sustain the intense competition that comes as a result to these variables and go toe-to-toe with the time.

Corporate culture In an effort to avoid pitfalls that comes with deeply focusing on definition given that the concept 'Corporate culture' is one of the most overused and thus complicated term, let us settle for acknowledging that it is one of the most important instrument for the success of an organization.

Given its link to culture, it can generate either good or bad outcome for a company whilst also being able to generate motivation, loyalty and responsibility or sense of purpose for organizational values all the same time.

"Corporate" or "organizational culture" is quite complex, says Ashenafi Abera, a Senior Management Consultant at Ethiopian Management Institute. "There are a number of problems and disagreements associated with conceptualization of organizational culture. However, most definitions recognize the importance of shared norms and value that guide the behavior of the participant's of the organization." He adds that organizations, like human beings, have their own personalities, and institutional culture is the personalities of organizations with their own set of values.

The concept also indicates the coalesced attitudes, values and behaviors of an organization's management and employees, whilst maintaining a close tie to their respective organization's goals, strategies, structure and approaches to business activities.

Significance of Corporate culture

Following a decade of consistent economic growth, Ethiopia has entered an almost uncharted territory that has brought its own unfamiliar characteristics along with it. One of those elements is the growth of public enterprises, which given the economic importance they have and their place within the grander scheme of Ethiopia's aspiration of entering middle income status, makes them important for the country.

Obviously, making them more effective and up to the times while making sure they stay in sync with the country's growth is important. This is where 'corporate' or 'organizational' culture can play role.

The role 'organizational culture' has in influencing organizational effectiveness has been echoed and re-echoed at length in many management studies, with success stories of organizations in the developed world being cited to make that case.

With regards to the state of 'corporate/organizational culture' in Ethiopia, Ashenafi says that it requires research using 'Organizational Culture Assessment Instrument (OCAI)' to identify its current state. However, one can deduce that there is a low level corporate culture in Ethiopia while our public enterprises and companies can use some impetus to further augment their effectiveness.

Lessons from Ethiopian

Ethiopian Airlines is lauded by many for its success, for having a world class management style, and add to that a growing brand;. the company is usually mentioned as a benchmark for the country and the continent.

It is deemed a successful enterprise on the basis that it has been profitable for almost the entire time of its existence, for the fact that its customer base is growing from time to time and for having a growing brand and reputation across the continent and global sphere. Even in recent days, the revered 'The Economist' has published a piece on the Airlines where it showered praise on it citing its continuous improvement and competitiveness in the global market even when the aviation industry was having a bad year. Different studies pointed out several factors for the exhibited success of the airline.

On her AAU Thesis paper entitled 'Why Ethiopian Airlines Becomes Successful and what are the Lessons for other Public Companies?' Selamawit Gebregziabher grant the success and profitability of the Airlines to having a culture of continuous improvement, paramount productivity growth, higher market share, among others.

She adds that several factors have contributed for the success of the airline: its working standard, overall system, dedication of workforce, safety trend, state of the art technology, autonomous management, its market strategy, visionary leadership etc

After doing an econometric analysis, she reveals that the major determinant for the success of Ethiopian Airlines are physical capital accumulation and human capital creation, which is the combination of the earlier qualitative determinants with both physical and human capital that has played a significant role for its success.

Ashenafi for his part believes the success of the airline lies in its quality management. He adds that it is not a single factor that makes Ethiopian Airlines a successful enterprise, but rather a combination of several factors, be it its managerial decisions like emphasis on human resource and capacity development, or technical decision like continuous modernization of its fleet and route expansion.

Furthermore, Ashenafi points out the Airline's organizational culture as the key ingredient for its key success, where its market culture is the dominant culture that stirs the organization towards to being more result-oriented and its leaders to being highly competitive. While acknowledging competitive pricing and market leadership as important ingredients, he shared his thought that "Ethiopian Airlines is an organization that focuses on external positioning with a need for stability and control."

There are other factors that Ashenafi added like the hard work and dedication of its manpower, external partnership, the credibility of its training facility, the utilization of Information and Communication Technology (ICT) at organizational level playing a major role for the success of the institutional business.

When talking about how to duplicate this success of an Ethiopian organization at corporate level and how other public enterprises failed to follow the Airline's successful management model elsewhere in its public sector, Ashenafi puts the big part of the blame on lack of leadership commitment and shortage of well-trained manpower. "The main reason for their failure to achieve sustained improvements seems to be because some organizations merely pretended to reform by changing how they looked rather than how they delivered actual services," he adds.

On her thesis, Selamawit concludes that there are many lessons that public enterprises can earn from the success and experience of Ethiopian Airlines: application of best practice & working standard, overall system development, business specific training, market strategy, human resource development, among others. "Public enterprises should develop working standard and overall system that fits their line of business which then enables them to control factor of production," she underscored.

She also added that on the part of the government there should be some leeway given to publicly owned enterprises to function autonomously as it might be one factor that might lead to success while the government makes sure that public interest will be meet at the same time.

"However, in order for the government to leave the enterprises independently, they should work hard so that they can persuade the government to leave them free and have an autonomous management."

They should build their capabilities through public sector capacity building programs so that they can be competitive domestically and internationally given that is the only way they can enhance their performance.

Most importantly, 'organizational culture' can bring a sense of ownership and belongingness within employees and leaders, which would contribute in improving the performance and effectiveness of such enterprises, and stay in proximity with how big companies operate in this age of globalization.

Sculpting national 'corporate' or 'organizational' brand/identity

When speaking of corporate or organizational culture, it is inevitable to upgrade the perspective to national or country level since corporate culture is all about crossing cultures and borders and there will be questions regarding the place organizational culture takes within a whole national culture of a given country. How does corporate practices like communication, protocol of business activities, and decision making play out within a specific country's national cultural values.

In regards to this, the assumption is that corporate/organizational culture is influenced by the home-base or surrounding societal and national culture, where "it is possible to identify differences in organizational behavior among organization in different countries by looking at the characteristics of the societal culture in which the organizations are 'nested'."

Europeans see performance appraisals as a forward-looking whilst Americans see it as looking-back, and while countries like China/Japan/Korea would never appraise their managers or anyone at a higher level than them, while this may not be the case in other countries.

"Does the corporate culture of Nestlé differ from that of Hershey's? And if so, is there something inherently Swiss about Nestlé and inherently American about Hershey's?", asks Dr. Geert Hofstede, who has done research on the links between corporate practices and national cultural values. He wrote extensively on what he assessed to be the link between societal/national values and 'organizational' culture, where he categorized a matrix based on the variables: collectivist/ individualist societies; masculine/feminine societies, small power distance/large power distance societies and weak or strong uncertainty avoidance societies

Coming to Ethiopia's case, can an already successfully working 'organizational' or 'corporate' culture like that of Ethiopian Airlines be used as benchmark for an Ethiopian national organizational culture? Yes, it can be.

The organization operates at global level and standard whilst maintaining its root and local culture. More than that, the Airline has received recognition and accolade for its Ethiopian flavored African hospitality in its customer service so much so the company was chosen as Service Quality Institute's 'Worldwide Customer Service Leader'. This is a good example of the Airline meshing local culture with global corporate standard to elevate its competitiveness and quality of service in the global market.

In this day and age, companies (and countries as well) will have to learn and master to walk through the very hard line between standardizing their services to the global age and maintaining local responsiveness, and the Airline has an identity that meshes these components very well. It is a model that can at the very least serve as a benchmark for other public enterprises, and as a building block in terms of sculpting Ethiopia's national organizational identity.


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