Master Thesis Spring Semester 2007 Supervisor: Per Nilsson Authors: Sabine Helou 830508-T062 Timo Viitala 790922-T017 How Culture and Motivation Interacts? - A Cross-Cultural Study ~ Acknowledgements ~ ACKNOWLEDGEMENTS We would like to thank the respondents of Sasken Finland Oy and SYSteam for their participation in our study. Without their involvement this thesis would have never seen the light of day. In addition, we thank our supervisor Per Nilsson for his guidance and advices and Anders Söderholm for his helpful suggestions. Last but not least, we would like to express our gratitude to John Matthews, Jakub Mulac, and Robin Katoen for their supportive contributions and our friends and family for their support and encouragement. Sincerely, Sabine Helou & Timo Viitala Umeå, May 25, 2007 i ~ Summary ~ SUMMARY Motivating employees is essential for any organization aspiring to succeed. However, the process of motivating is not a straightforward one due to the diversity of individual’s needs. The task has been made even more difficult by the fact that personalized needs have altered in recent years. For instance, in many circumstances financial compensation is not considered as the main motivational factor of employees. Due to its innovative and youthful nature, the Information Technology (IT) industry has been considered to be at the forefront of dealing with organizational issues, such as how to motivate employees. Organizations that lie within this industry have adopted various innovative motivational practices. Examples of those include opportunities to work from home, used in parallel with traditional motivational practices, such as pay-for-performance. In general, not all industries have adopted innovative practices in a broader scale, despite the fact that numerous studies have proven their success. This can be due to issues such as general unawareness of their benefits or unsuitability with the current corporate culture. Therefore, corporate culture plays a significant role in providing a framework where different motivational issues can act. These issues led to the examination of the influence that corporate culture has on motivational practices and whether there are differences in motivation management practices between the Swedish and Finnish IT industry. A further notice was set on the concern whether the managers of the studied organizations were aware of these so-called innovative motivational practices. For the empirical part of this thesis a cross-cultural study was conducted. Two IT organizations were chosen. Sasken Finland Oy was selected from Kaustinen, Finland and SYSteam from Umeå, Sweden. Using qualitative interviews, data was collected from the organization. The results were then analysed and compared with each other with the intention of disclosing possible differences and testing against the theories gathered into the conceptual framework. Our main conclusion is that culture does influence motivational practices. How culture affects depends whether the culture is task-orientated or person-orientated. We found that the person-oriented culture emphasizes the use of innovative motivational practices, with the aim of developing individuals and their work. The task-oriented culture promotes the use of traditional motivation tools. The fact that the corporate cultures are a mix of cultures explains the use of both types of motivational practices. Keywords Motivation, Corporate Culture, Finland, Sweden, IT Industry, Traditional Motivational practices, Innovative Motivational Practices ii ~ Table of Contents ~ TABLE OF CONTENTS 1. INTRODUCTION____________________________________________________ 1 1.1. BACKGROUND OF THE STUDY ___________________________________________ 1 1.2. RESEARCH QUESTION __________________________________________________ 3 1.3. RESEARCH OBJECTIVES ________________________________________________ 3 2. RESEARCH CONSIDERATIONS ______________________________________ 4 2.1. CHOICE OF SUBJECT ___________________________________________________ 4 2.2. THEORETICAL PRECONCEPTIONS ________________________________________ 4 2.3. THEORY OF KNOWLEDGE ______________________________________________ 5 2.4. SCIENTIFIC APPROACH ________________________________________________ 6 2.5. CHOICE OF RESEARCH METHOD_________________________________________ 7 2.6. BIAS OF THE RESEARCH METHOD________________________________________ 7 2.7. COLLECTION OF THEORIES AND SECONDARY SOURCES ______________________ 8 2.8. CRITICISM OF SECONDARY SOURCES _____________________________________ 8 3. THEORETICAL FRAMEWORK ______________________________________ 9 3.1. NATIONAL AND REGIONAL CULTURE ____________________________________ 10 3.1.1. REGIONAL CULTURE__________________________________________________ 11 3.1.2. NATIONAL CULTURE IN ORGANIZATION ____________________________________ 12 3.2. INDUSTRY CULTURE __________________________________________________ 14 3.2.1. INFORMATION TECHNOLOGY INDUSTRY / CULTURE __________________________ 15 3.3. CORPORATE CULTURE ________________________________________________ 15 3.3.1. PAST AND PRESENT___________________________________________________ 15 3.3.2. DEFINITION AND DISCUSSIONS __________________________________________ 16 3.4. WORK MOTIVATION__________________________________________________ 20 3.4.1. MOTIVATION AND INDIVIDUALS _________________________________________ 21 3.4.2. MOTIVATIONAL THEORIES _____________________________________________ 22 3.4.4. INNOVATIVE MOTIVATIONAL PRACTICES ___________________________________ 25 3.5. JOB SATISFACTION ___________________________________________________ 26 4. CONCEPTUAL FRAMEWORK ______________________________________ 28 4.1. DEVELOPMENT OF THE CONCEPTUAL FRAMEWORK _______________________ 28 4.2. ENVIRONMENT ______________________________________________________ 29 4.2.1. NATIONAL & REGIONAL CULTURE ______________________________________ 29 4.2.2. INDUSTRY CULTURE _________________________________________________ 29 4.3. CORPORATE CULTURE ________________________________________________ 29 4.4. WORK MOTIVATION__________________________________________________ 30 4.5. JOB SATISFACTION ___________________________________________________ 30 5. DATA COLLECTION _______________________________________________ 32 5.1. DESIGN APPROACH___________________________________________________ 32 iii ~ How Culture and Motivation Interact? A Cross-Cultural Study~ 5.2. SELECTING RESPONDENTS_____________________________________________ 33 5.3. THE DATA COLLECTION APPROACH ____________________________________ 33 5.4. THE SAMPLE ________________________________________________________ 34 5.5. GUIDE DESIGN_______________________________________________________ 35 5.6. BIAS _______________________________________________________________ 36 5.7. CRITICISM OF PRIMARY SOURCES ______________________________________ 37 5.8. LIMITATIONS TO THE EMPIRICAL STUDY_________________________________ 38 6. PRESENTATION OF THE EMPIRICAL DATA_________________________ 39 6.1. PRESENTATION OF THE COMPANIES _____________________________________ 39 6.2. INTERVIEW WITH THE MANAGER(S)_____________________________________ 40 6.2.1. CORPORATE CULTURE________________________________________________ 40 6.2.2. WORK MOTIVATION _________________________________________________ 42 6.2.3. MOTIVATIONAL PRACTICES ___________________________________________ 43 6.2.4. JOB SATISFACTION __________________________________________________ 45 6.3. INTERVIEW WITH THE EMPLOYEE ______________________________________ 46 6.3.1. CORPORATE CULTURE________________________________________________ 46 6.3.2. WORK MOTIVATION _________________________________________________ 47 6.3.3. MOTIVATIONAL PRACTICES ___________________________________________ 48 6.3.4. JOB SATISFACTION __________________________________________________ 49 7. ANALYSIS ________________________________________________________ 50 7.1. OVERVIEW__________________________________________________________ 50 7.2. SASKEN FINLAND OY _________________________________________________ 50 7.2.1. ENVIRONMENT _____________________________________________________ 50 7.2.2. CORPORATE CULTURE _______________________________________________ 51 7.2.3. MOTIVATION AND MOTIVATIONAL TOOLS________________________________ 54 7.2.4. JOB SATISFACTION __________________________________________________ 55 7.3. SYSTEAM___________________________________________________________ 56 7.3.1. ENVIRONMENT _____________________________________________________ 56 7.3.2. CORPORATE CULTURE _______________________________________________ 57 7.3.3. MOTIVATION AND MOTIVATIONAL TOOLS________________________________ 59 7.3.4. JOB SATISFACTION __________________________________________________ 61 7.4. FINAL CONSIDERATIONS ______________________________________________ 62 7.5. LESSONS LEARNED ___________________________________________________ 65 8. CONCLUSION _____________________________________________________ 67 8.1. RESTATEMENT OF THE RESEARCH QUESTIONS ____________________________ 67 8.2. FINAL STATEMENT AND DISCUSSIONS ____________________________________ 67 8.3. SUGGESTION FOR FUTURE RESEARCH ___________________________________ 68 9. TRUTH CRITERIA _________________________________________________ 69 9.1. MEASUREMENT IN QUALITATIVE RESEARCH _____________________________ 69 9.2. RELIABILITY AND VALIDITY ___________________________________________ 69 9.2.1. RELIABILITY _______________________________________________________ 69 9.2.2. VALIDITY__________________________________________________________