AXA How does a global insurance company create an effective corporate culture? Deciding on a name might not seem vital. AXA’s original suggestion ‘Elan” meaning ‘leap forward’ in French seemed to be an ideal name. However, it was then suggested that it referred to a moose in Canada and that name was dropped. Cultural and linguistic barriers were just some issues facing the French company Mutuelle Unis (now AXA) when creating a global culture. Today AXA employs 140,000 people across 50 countries (including the UK and Japan) after a series of acquisitions of other business. Their organizational culture needs to cross language, social, cultural and ethnic barriers. Senior executive vice president Francoise Colloch said, ‘It has been more about taking the best part of each company to try to make that part of AXA culture, rather than destroying the past of those companies and saying there is only one way- the Unis way.’ The company originally set about putting in place values representing how to treat clients, shareholders and employees. Seven values were identified, as shown in the table below. However, the business found that, because they were devised by the French company, they reflected French rather than a global culture. For example, the word loyalty in Japan could be interpreted as committing ritualistic suicide – hari-kiri., so in 2001 employees from seven countries reworked the values and five new values were identified (see table below). AXA’S OLD AND NEW VALUES OLD NEW · Loyalty · Courage · Pride · Ambition · Realism · Imagination · Integrity · Professionalism · Integrity · Team spirit · Innovation · Pragmatism Was this enough to create a global culture? To make it work, staff had to ‘live’ the values. So, staff were recruited against behaviour linked to values. These values were explained at interviews and induction. Appraisal is also based on behaviour of staff and whether they fit in with the values. Staff that do not meet the values are helped with a development plan and performance is reviewed regularly. Those that cannot adapt are asked to leave. It’s a slightly ‘big brother’ approach, underlined by the fact that people have been let go over behaviour and replaced by others with the same values as the company. Some analysts believe that AXA has done a great job in creating a uniform culture across all businesses. However, others point out that there may still be problems if businesses are acquired in non-western countries. For example, China has largely removed the idea of professionalism after its cultural revolution. So, AXA has tried to let individual countries interpret the values. It has also tried to use graphic representations (such as pictograms) rather than words to show values. (Hall, Dave et al. 2007. Business Studies. Causeway Press Ltd.) QUESTIONS: Explain how AXA has tried to sustain its culture. Use evidence from the case to support your explanation. 2. AXA is likely to grow and expand into other countries. ( A)Using THREE (3) reasons, discuss the extent to which it will be able to keep its corporate culture in the same form or why it might need to be changed. (B)With the use of examples, discuss THREE (3) ways in which national culture of these countries is likely to impact the corporate culture of AXA.
AXA
How does a global insurance company create an effective corporate culture? Deciding on a name might not seem vital. AXA’s original suggestion ‘Elan” meaning ‘leap forward’ in French seemed to be an ideal name. However, it was then suggested that it referred to a moose in Canada and that name was dropped.
Cultural and linguistic barriers were just some issues facing the French company Mutuelle Unis (now AXA) when creating a global culture. Today AXA employs 140,000 people across 50 countries (including the UK and Japan) after a series of acquisitions of other business. Their organizational culture needs to cross language, social, cultural and ethnic barriers. Senior executive vice president Francoise Colloch said, ‘It has been more about taking the best part of each company to try to make that part of AXA culture, rather than destroying the past of those companies and saying there is only one way- the Unis way.’
The company originally set about putting in place values representing how to treat clients, shareholders and employees. Seven values were identified, as shown in the table below. However, the business found that, because they were devised by the French company, they reflected French rather than a global culture. For example, the word loyalty in Japan could be interpreted as committing ritualistic suicide – hari-kiri., so in 2001 employees from seven countries reworked the values and five new values were identified (see table below).
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AXA’S OLD AND NEW VALUES |
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|
OLD |
NEW |
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· Loyalty · Courage · Pride · Ambition · Realism · Imagination · Integrity
|
· Professionalism · Integrity · Team spirit · Innovation · Pragmatism
|
Was this enough to create a global culture? To make it work, staff had to ‘live’ the values. So, staff were recruited against behaviour linked to values. These values were explained at interviews and induction. Appraisal is also based on behaviour of staff and whether they fit in with the values. Staff that do not meet the values are helped with a development plan and performance is reviewed regularly. Those that cannot adapt are asked to leave. It’s a slightly ‘big brother’ approach, underlined by the fact that people have been let go over behaviour and replaced by others with the same values as the company.
Some analysts believe that AXA has done a great job in creating a uniform culture across all businesses. However, others point out that there may still be problems if businesses are acquired in non-western countries. For example, China has largely removed the idea of professionalism after its cultural revolution. So, AXA has tried to let individual countries interpret the values. It has also tried to use graphic representations (such as pictograms) rather than words to show values.
(Hall, Dave et al. 2007. Business Studies. Causeway Press Ltd.)
QUESTIONS:
- Explain how AXA has tried to sustain its culture. Use evidence from the case to support your explanation.
2. AXA is likely to grow and expand into other countries.
( A)Using THREE (3) reasons, discuss the extent to which it will be able to keep its corporate culture in the same form or why it might need to be changed.
(B)With the use of examples, discuss THREE (3) ways in which national culture of these countries is likely to impact the corporate culture of AXA.
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