Factor Three: Corporate Culture

As stated by Jacobsen and Thorsvik (2008), a corporate culture can be used as a tool in order to create desired values and behaviors within an organization. In Petrolink’s case, the

corporate culture can be used in order to create an international mindset and commitment for internationalization among the employees. In our interviews we attempted to find out whether the corporate culture at Petrolink is internationally or domestically oriented.

As stated by Wilhelm (1992), the CEO and senior management should set the tone so that desired behaviors can develop throughout the organization. If there is an apparent lack of information sharing, then it will be difficult to create desired behaviors with regards to internationalization. In terms of CQ, the lack of information sharing can act as a negative force. A negative force is the dissonance between beliefs, attitudes or resistance to change.

The lack of information sharing may result in groups of employees not feeling an ownership to the internationalization process, resulting in an attitude of indifference towards

80 internationalization or in extreme circumstances resistance towards internationalization. One employee described information sharing concerning internationalization:

“On my level I do not feel I know very much about internationalization within Petrolink.

I know we have some divisions abroad, but not much have been said about these divisions. There is not a lot of information that is shared about our offices abroad.” – Participant 7

The apparent issue of internationalization being limited to only a small group of individuals, as discussed under expatriation and repatriation, can limit the flow of information concerning internationalization on an organization wide level. One employee remarked:

“No, I do not think they (management) have been able to communicate the importance of internationalization to the rest of the company. I personally understand the

importance of internationalization, but I have never experienced that management have gone out and explained to us the importance of internationalization for Petrolink.

Internationalization is today limited to a small group within the company. It seems as though management wants to keep internationalization within this small group and not let it spread throughout the organization as a whole.” – Participant 6

By limiting internationalization to a small group within the organization, Petrolink is creating a clear separation between domestic and international operations within the organization. The same policy may result in groups of employees not feeling ownership to the

internationalization process, but rather a feeling of exclusion. As such, since the majority of the organization focuses on domestic operations, internationalization may be considered irrelevant to themselves or unimportant to the success of Petrolink. In terms of CQ development, Petrolink may end up with some members of the internationalization team developing high CQ. However, at an organization wide basis the CQ level may be lower level than it otherwise might have been if the internationalization process was an organization wide commitment.

Through our interviews we have come across employees who have questioned Petrolink’s desire to venture abroad when there are ample opportunities to expand here in Norway.

Internationalization is viewed by some as requiring personnel and resources which could be used more efficiently in the home market. If the employees are not informed about the plans and strategies of internationalization, employees may view internationalization as a potential

81 threat rather than an opportunity for the company. One example can be seen in the following statement where one employee talked about sending employees on international assignments:

“It seems to be that it is unplanned when people are sent. The best are sent abroad, who are the ones we need here. There are simply not enough people here.” - Participant 10

At the same time, we also discovered personnel who are part of the international team tell us that they would like to have more resources. Likewise, one employee who is part of this team questioned Petrolink’s decision to internationalize, believing that resources would be better spent if they were used for projects in the North Sea:

“In one way I would say we focus too much on international operations rather than focus on our home market. There are constantly new contracts on offer locally, and these contracts are often easier to acquire than international contracts. This is again a factor of our limited resources, where we have local and international operations competing for the same resources. The fact is, however, that we can make more money of some of the customers found here in Norway than to expand internationally.” – Participant 11

The views presented above can be viewed as a general indication that management can do a better job in creating a coherent corporate culture that promotes and focuses on

internationalization at an organization wide level. It is the role of management to create the desired values and behaviors within the organization (Jacobsen and Thorsvik 2008). The importance of internationalization should be made clear to the organization as a whole. By doing so, management may reduce the risk of an internal competition for resources and build a greater understanding for international resource commitment in the future. The development of a corporate culture should not be left to itself, but should be developed by management in order to create the desired values, norms and beliefs that may improve the organization’s performance (Quappe et al. 2007).

In terms of Petrolink’s international operations, the operations abroad have been kept separate from operations at home. Interaction between headquarters and foreign entities outside of top management is very limited. One employee described the current situation with regards to Malaysia:

“In terms of Malaysia there is a clear separation between the organizations. They control themselves and perform their own tasks. They also follow their own rules and

82 regulations. But there have been instances where they (Malaysia) have asked for

procedures and the need for personnel.” – Participant 5

When international offices are involved it is important, as stated by Jacobsen and Thorsvik (2008), that the corporate culture is adapted to national laws, values and norms. However, a corporate culture should act as a unifying force for the organization as a whole and build bridges between international offices and headquarters. In terms of Petrolink’s international offices, our impression is that there is little or no operational interaction and knowledge sharing between the different entities. Interaction is primarily done at a managerial level. As one employee stated:

“Well, we have divisions in Kuala Lumpur, Qatar and with time in Ghana, but it seems like they operate as satellites who we do not deal with on a daily basis. It is not like we travel to these satellites to head or work on different operations. They control

themselves, but are under the Petrolink name and umbrella. So there is not much interaction between the offices, like one can find at other companies in this industry.

The international operations are not well integrated into what we do here so we do not see it as a clear positive thing. I feel it would be exciting if there were real cooperation between the units.” – Participant 4

As stated by Schein (2010), one of the originating factors of corporate culture is the ideas, values and beliefs brought in by new members. If the international offices are kept separate from headquarters then the ideas, values, experiences and beliefs of the international employees will not be used in creating an internationally focused corporate culture at

Petrolink. Furthermore, the inclusion of international offices into the mother organization may have the potential to act as a first step in improving individual employees’ CQ. The reason internal integration can help in improving CQ is due to the fact that it will enable two-way interaction between employees at headquarters and people of other cultural backgrounds, creating interaction and exposing them to new cultural ideas, norms and values.

The inclusion of international offices may also force headquarters to become more internationally oriented. At present, operating manuals and procedures at Petrolink are in Norwegian, leaving an impression of Petrolink being a Norwegian company. As stated by one employee:

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“I do not feel as if we are an international company, but we are on our way. For instance, all of our procedures and manuals are in Norwegian. The majority of

employees are Norwegians, but there are a few foreigners here. We have to open up our eyes a bit more and be more inclusive.” – Participant 5

As mentioned by Schein (2010) in his definition of corporate culture, the aspect of learning is central, both through external and internal sources. The lack of internal integration found at Petrolink between international offices and headquarters has limited knowledge sharing, learning and intercultural engagement between Norway and the different international offices.

It is our belief that Petrolink could improve its organizational learning capability, knowledge sharing, CQ of the employees and managerial development by improving the internal

integration of international offices with headquarters. Such improved learning capabilities will lead to more intercultural engagement between employees here and abroad, which in turn can lead to higher CQ among the employees. However, the current lack of routines related to cooperation between international offices and headquarters may be attributed to Petrolink being in the early stages of internationalization.

We also discovered that some employees have a general skepticism toward international work. For instance, we discovered that 81 percent of the participants in the CQ questionnaire stated that they would rather work with someone from their own culture, and 88 percent would prefer a job that was in a cultural similar to their own. However, Petrolink’s success in terms of international operations may reduce some skepticism towards internationalization as stated by one employee:

“At first there was a very negative attitude towards us working in Qatar and our operations there. Over the last three to four years though there has been a gradual change in this attitude as people have seen that Petrolink can successfully complete operations abroad. We have shown that we can make money worldwide and it is through such experiences that we can be international and successful.” - Participant 6

4.5.1. Corporate Culture and CQ

Through our analysis of Petrolink our view is that the corporate culture does for the most part not include the international aspect of the organization. Instead, Petrolink’s international operations are business activities that are viewed and experienced by employees as being

84 secondary compared to operations in Norway. Employees who are not included in the

international operations may feel left out of the internationalization process, and as a result some employees may have little motivation to work towards international goals set out by management. The corporate culture found at Petrolink, as described above, is in our opinion a reflection of the low CQ level found within Petrolink. First, it is due to the fact that there is only a small group working with internationalization and that the goals and strategies

concerning internationalization have not been spread throughout the organization. Secondly, as stated by Early and Ang (2003), there are three areas one can focus on in order to increase motivational CQ. Petrolink’s current corporate culture in relation to the first of these three factors can be viewed as an explanation for the current CQ score. The first factor that Early and Ang (2003) discusses is to create a positive environment for cross-cultural interaction within the company. We have shown that Petrolink currently does not have any concrete procedures and routines in place to create an environment of inclusive cross-cultural interaction, for instance between Norway and Malaysia. Because of these two factors, Petrolink’s domestically focused corporate culture has not made the majority of the employees participate in the internationalization process or exposed them to working in different cultures. Change to these two factors may improve the employees’ CQ and the organization’s overall CQ.

Another important aspect for an organization to succeed is the firm’s core competences. In the next section we will discuss our impression of Petrolink’s core competences, and how these core competences can explain Petrolink’s current CQ score.