The Ericsson Company’s Organizational Culture

Topic: Culture Words: 1674 Pages: 6

Table of Contents

Introduction
Mission Statement
Stories and Language
Physical Layout
Rules and Policies
Rituals
Conclusion
References

Introduction

The essay describes Ericsson, a Swedish multinational company, and its organizational culture. Notably, Ericsson was chosen for the study because it is one of the leading companies in the telecommunication industry. Moreover, it has an attractive corporate culture that deserves to be examined. Therefore, the paper includes discussions on Ericsson’s organizational values and history.

Significantly, organizational culture can be described as an organization’s individuality and demonstration of its differences, for instance, values and competitive advantages. Carpenter et al. (2011) suggest that organizational culture impacts the members’ behaviors, thoughts, and interactions. Organizational culture includes five fundamental components, namely mission statement, stories and language, physical layout, rules and policies, and rituals. According to Carpenter et al. (2011), organizational culture is a complex structure that includes shared values, beliefs, and assumptions in order to demonstrate what behaviors are appropriate for the company. Additionally, corporate culture is one of the vital business assets because it influences a company’s performance and ways of doing business, including ethics and environmental challenges’ adaptation. Consequently, organizational culture can be characterized as a set of traditions, symbols, common approaches, the worldview of company members that have stood the test of time.

Ericsson has a long history of existence and is an excellent example of a successful organization. The company has been operated since the 19th century and primarily manufactured telephones and telephone exchanges (Sund, n.d.). Nowadays, Ericsson is well known globally as a prominent supplier in the telecommunication industry. Sund (n.d.) states that Ericsson achieved success primarily due to the cooperative work of the organization’s members and their culture, namely Ericsson’s culture. The unique spirit, hard work, strong values, and innovative ideas became the company’s foundation.

Mission Statement

An organization’s mission statement is a formulated statement that presents the company’s philosophy and illustrates how the company makes the world a better place. Carpenter et al. (2011) define a mission statement as “a statement of purpose, describing who the company is and what it does” (p. 217). Ericsson’s mission statement is “to enable the full value of connectivity for our customers, the telecom operators” (Ericsson Annual Report, 2020, p. 4). Moreover, Ericsson’s mission is divided into three essential areas.

First, the company aims at capturing new revenue streams and opportunities through the Internet of Things (IoT) and 5G. Consequently, Ericsson aim at providing a high-quality end-customer experience, which differentiates the company from competitors. It includes coverage, performance, and reliability through which telecom operators can deliver a superior value to customers (Ericsson Annual Report, 2020). Finally, the company is focused on “relentless efficiency improvements to lower the cost of delivering the increasing traffic in the networks” (Ericsson Annual Report, 2020, p. 4). For instance, they offer 5G, fifth-generation wireless, enabling connection efficiency, reducing cost, and maintaining environmental goals. According to the Ericsson Annual Report (2020), 5G will help move beyond connecting people to utilize IoT, introduce innovations, and create unique revenue opportunities for customers and telecom operators. Currently, Ericsson is a world-known leader in 5G technologies. It is crucial for the company to understand the needs and capabilities of customers and provide them with communication solutions that are more innovative and of better quality than those of competitors.

Stories and Language

Stories and language are effective ways through which companies show their organizational culture. Carpenter et al. (2011) state that stories emphasize important events that the company faced or members’ efforts that illustrate the organization’s values. Language refers to the company’s acronyms and buzzwords that help to differentiate the company’s employees from others (Carpenter et al., 2011). The official Ericsson website has plenty of exciting stories about people working there (People, n.d.). Thus, Ericsson’s members can read about the founder, managing directors, industry leaders, and employees. The stories describe the experience of working at Ericsson, innovations, and adventures.

In addition, Ericsson demonstrates a list of stories written by current members and employees. For instance, Tatiana Zander, a Director of Technology Innovation, claims that Ericsson is a great place to work because employees always have opportunities to obtain new skills and explore various locations (Meet Our People, n.d.). Julen Kahles, the Product Owner, informs that Ericsson follows people-first philosophy because the company provides a chance to be a part of a decision-making process and experience a multicultural atmosphere (Meet Our People, n.d.). He states that he is lucky to work with colleagues from all over the world, ranging from Sweden to California. Consequently, Ericsson has many engaging stories that motivate employees and make them proud of the working place.

Moreover, the company has its language and particular buzzwords, such as 5G, IoT, and innovation. Buonfiglio (2017) acknowledges that the telecommunication industry is acronym and abbreviations dense, especially Ericsson. Thus, Ericsson has a long list of abbreviations and acronyms. For instance, EBS stands for Ericsson Blade System, and ERS is Ericsson Radio System (Ericsson Abbreviations, 2021). Specifically, the knowledge of Ericsson’s language distinguishes the company’s insiders from outsiders.

Physical Layout

Significantly, the physical layout of the workplace characterizes the organizational culture. Carpenter et al. (2011) suggest that the offices and building’s layout, as well as the office environment, communicate a crucial message about the company’s culture. Ericsson aims at improving the working environment by providing all the necessary facilities. Based on the Sustainability and Corporate Responsibility Report (2020), Ericsson’s headquarters is situated in Stockholm, Sweden, and “employees located in geographies consistent with its Market Area and Business Area operating model” (p. 9). Besides, the company encourages professional growth; thus, it is easy to move from one location to another if the employee is willing to relocate.

Thus, the company ensures that employees feel comfortable at offices. In addition, Ericsson offices usually have cafes, where employees can meet for a coffee break, and gyms to improve employees’ general health. According to the Annual Review (2020), the company initiated a furniture program that allows employees to receive office furniture from working from home. Thus, during the COVID-19 pandemic, Ericsson concentrates on employees’ well-being and stress resilience.

Rules and Policies

Rules and policies are vital aspects of the organizational culture. Thus, Carpenter et al. (2011) highlight that organizations introduce rules and policies to inform about appropriate and inappropriate behavior in the company. Rules and policies regulate employees’ activities and formulate the company’s values. According to the Sustainability and Corporate Responsibility Report (2020), Ericsson highly values sustainability which is displayed in its policies and rules. The company annually publishes its ambitious sustainability targets to inform employees, partners, and other company members.

One of the most critical policies is the code of business ethics. Ericsson’s code, namely CoBE, establishes the company’s rules, requirements, and expectations of conducting business (Sustainability and Corporate Responsibility Report, 2020). Consequently, the CoBE should be followed strictly by Ericsson’s workforce. Thus, the code indicates fundamental principles on business, privacy, and human rights. Ericsson has vital policy and rules for global management, namely EGMS. EGMS stands for the Ericsson Group Management system and includes “Group policies, directives, and instructions as well as Group-wide processes” (Sustainability and Corporate Responsibility Report, 2020, p. 4). Hence, the policy ensures that stakeholders and managers adhere to legislation and customers’ requirements. Significantly, EGMS highlights the company’s key decision-making processes, rules, and values.

Furthermore, Ericsson implemented a crucial policy, which is focused on corruption issues. Anti-bribery and corruption, namely ABC, policies enhance the company’s members’ training on ABC themes and explain how to avoid corruption and bribery acts at Ericsson (Sustainability and Corporate Responsibility Report, 2020). Ericsson actively raises “responsible business topics and encourages employees and stakeholders to report compliance concerns through the Ericsson Compliance Line” (Sustainability and Corporate Responsibility Report, 2020, p. 8). Thus, the policies are crucial for creating high company values and improved corporate culture.

Rituals

Since Ericsson has a long history, it also has its rituals. Carpenter et al. (2011) describe rituals as the company’s routine activities that have their roots in its history. Usually, rituals have a symbolic meaning and create employees’ identification with the company. Sund (n.d.) claims that many of the company’s employees remain in Ericsson for a long time. That is why there is a reward ritual for faithful service in the form of a medal. Medals are usually awarded at special ceremonies organized by the company. Another old tradition that has existed since 1914 is Ericsson’s employee store (Sund, n.d.). The store was initially set up to provide food aid during the First World War. Now it has turned into an online shop, where employees can purchase not only the goods they need for free or at a considerable discount, such as office supplies and furniture, appliances, but also training courses.

The tradition of maintaining the health of the company’s employees has a long history. The first health department, according to Sund (n.d.), had opened by 1917 and included nurses, physical therapists, and several doctors. Over time, the company began to pay more attention to preventive care. Thus, Ericsson began opening gyms, treadmills, and various sports. Employee health, sports, and disease prevention have become one of Ericsson’s most important rituals. In addition, Ericsson hosts various corporate parties and celebrations every year. For instance, the company celebrates Children’s Day and invites employees and their children to celebrate this holiday together (Sund, n.d.). This ritual helps to unite the workers and give them a sense of belonging to Ericsson.

Conclusion

To conclude, the paper illustrates Ericsson’s corporate culture, focusing on various aspects, such as mission statement, stories and language, physical layout, rules and policies, and rituals. Corporate culture is a system of values and manifestations that interact with each other, inherent in a company, reflecting its individuality. Therefore, the corporate culture is reflected in the members’ behavior and perception of the organizational atmosphere and environment. Significantly, Ericsson’s rich corporate culture and history include certain rituals, policies, and rules. Additionally, Erickson’s organizational culture fosters a sense of belonging of Ericsson employees to the company. For instance, for Ericsson, employees’ comfort and professional growth come first, which is why the company does everything it can to provide an excellent working environment by guiding its members in the right direction.