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Organizational and National Culture in Banking

Organizational culture comprises norms and principles of behavior, observing which ones move the organization towards success (Felipe, Roldán & Leal-Rodríguez, 2017). National culture is a set of specific traditions that determine the methods and means of management. Its primary influence is manifested in the value systems, ethics, interpersonal relationships, principles of leadership, and behavior (Herath & Carlis, 2017). In the context of a commercial bank, most of the processes are based on the organizational culture, while the national management culture partly regulates only the relationship between the manager and employees and approaches to customers (Schedlitzki & Edwards, 2017). Moreover, the loyalty of bank employees and their job satisfaction is governed by the efficiency of the internal information apparatus that notifies employees about the life of the company, their possible privileges, and benefits (Elsbach & Stigliani, 2018). Consequently, the importance and agreement of employees are achieved by the organizational culture, so it is more relevant. National culture is an essential regulator of relations within the work collective, and the main task of management is to resolve all conflict situations and reduce their possible negative impact.

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Organizational culture regulates employee engagement, while national culture only indirectly affects commitment to work. With the help of organizational culture tools, it is possible to involve employees in general meetings, adjusting the main issues of the company, and so on (Sarhan et al., 2020). National culture dictates the traditions and ways of thinking of its representatives and, as a rule, it cannot be regulated. Critical leadership skills tend to be consistent with accepted human positive qualities (Warrick, 2017). The leadership should focus on the bank’s organizational culture, as it is the driving mechanism in making a profit; however, complete ignorance of the national culture can lead to negative consequences (Shapira-Lishchinsky & Litchka, 2018). As a result, the national culture relies on the individual characteristics of a person, while organizational culture reflects all the internal collective processes in the company. In the current conditions of the pandemic and the economic crisis of most of the bank’s clients, national culture is increasing its influence (Spicer, 2020). However, the positive impact of organizational culture has already been repeatedly proven in research. For example, the quality application of the strengths of the organizational culture approach in an Indonesian bank allows all departments to focus on a common goal and mobilizes employee initiative to achieve better results (Kaban et al., 2021). Thus, organizational culture is the most important strategic tool; the qualitative application must necessarily include knowledge of the national culture when managing a commercial bank.

Reference List

Elsbach, K. D., & Stigliani, I. (2018) ‘Design thinking and organizational culture: A review and framework for future research’, Journal of Management, 44(6), pp. 2274-2306.

Felipe, C. M., Roldán, J. L., & Leal-Rodríguez, A. L. (2017) ‘Impact of organizational culture values on organizational agility’, Sustainability, 9(12), p. 2354.

Herath, S. K., & Carlis, E. (2017) ‘Organizational and national culture and the direct effects on accounting standards and procedures: A literature review’, The Business & Management Review, 8(4), p. 260.

Kaban, J. H. M., Purba, M. I., Prasetio, D. W., Manurung, I. P. S., & Haloho, M. D. L. (2021) ‘The Influence of Organizational Culture, Leadership Style, and Training on Employee Performance at Pt. Rural Bank Pijer Podi Kekelengen’, International Journal Economic and Business Applied, 2(1), pp. 84-94. Web.

Sarhan, N., Harb, A., Shrafat, F., & Alhusban, M. (2020). The effect of organizational culture on the organizational commitment: Evidence from hotel industry. Management Science Letters, 10(1), 183-196.

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Schedlitzki, D., & Edwards, G. (2017) Studying leadership: Traditional and critical approaches. 2nd edn. London: Routledge.

Shapira-Lishchinsky, O., & Litchka, P. R. (2018) ‘The relationship between teachers’ perceptions of transformational leadership practices and the social ecological model: Universal vs national culture’, International Journal of Educational Management, 32(3).

Spicer, A. (2020) ‘Organizational culture and COVID-19’, Journal of Management Studies, 57(8), pp. 1737-1740.

Warrick, D. D. (2017) ‘What leaders need to know about organizational culture’, Business Horizons, 60(3), pp. 395-404.

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