Dissertation > Economic > Fiscal, monetary > Finance, banking > Finance, banking theory > Financial organizations, banks

A Comparative Study on Power Distance of HSBC and Bank of China

Author LiPing
Tutor ShenSuPing
School University of Foreign Trade and Economic
Course Foreign Linguistics and Applied Linguistics
Keywords Culture Corporate Culture Power Distance Power Distance Index
CLC F830.3-03
Type Master's thesis
Year 2007
Downloads 630
Quotes 3
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Culture plays an important role in shaping human behavior, and corporate culture has been proved to affect organizational performance through shaping people’s behaviors in organizations. In modern business, the essence of competitions between enterprises ultimately lies in the competition of corporate culture.As China has opened its banking industry granting foreign banks access to the same business operations as Chinese banks, Chinese banks have to compete with foreign banks in all areas, such as competing for customers and talents. In this case, Chinese banks can resort to the strength of corporate culture, which helps to achieve greater performance.According to Hofstede, the power distance between a boss B and a subordinate S in a hierarchy is the difference between the extent to which B can determine the behavior of S and the extent to which S can determine the behavior of B. The thesis aims to study the differences and similarities of power distance dimension of Chinese bank culture and British bank culture. The study takes Bank of China and HSBC as representative bank for respective country. The data was collected through anonymous questionnaire survey on staffs from the two banks.Based on the data, Power Distance Index for Bank of China and HSBC is 69 and 46 respectively. This proves that Chinese banks have greater power distance than British banks. Other aspects that constitute the questionnaire such as communication and promotion also support this finding.Power distance is undoubtedly influenced by national culture and specific organizational attributes. It also defines certain patterns of behavior in organizations, for example, empowerment, knowledge sharing, and participation and so on. Consequently, in order to get aligned with British bank culture, Chinese banks are suggested to establish a sense of equality, build a favorable working environment, adopt reasonable suggestions from subordinates and provide timely promotion opportunities.

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