Characteristics of the “male” and “female” culture of the organization

Uncertainty avoidance

Characteristics of crops with high and low levels

Culture parameters	Low uncertainty avoidance culture	High Uncertainty Avoidance Culture
Attitude to time	Staff willingness to live in the present day	Workers are very worried about the future
Preferred organization size	Workers prefer a small organization	Employees prefer large organizations
Age of middle managers	The youth	Middle and old
Motivation to achieve a goal	Sustainable	Low
Attitude to success	Hope for success	Fear of failure
Willingness to take risks	Big	Weak
Preferred career type	Preferring a managerial career over a specialist career	Preference for a specialist career over a managerial career
Manager's qualifications	The manager is not a management specialist	The manager must be an expert, a specialist in the field of management
Attitude to conflicts	Conflict in an organization is seen as a natural state	Conflicts in the organization are undesirable
Competition between workers	Normal and productive occurrence	Competition is not welcome
Willingness to compromise with opponents	High	Low
Willingness to face uncertainty at work	High	Low

« Masculinity - femininity." G. Hofstede defines masculinism(masculinity) as the degree to which the dominant values ​​in a society are considered assertiveness(persistence, assertiveness), getting money and acquiring things (materialism) and does not attach much importance to caring for people. He defines feminism as the degree to which the dominant values ​​in a society are relationships between people, caring for others and the overall quality of life.

According to G. Hofstede's research, masculine societies define gender roles more strictly than feminist societies. For example, it is easier for women to drive a truck or be a lawyer, and for men to be a ballet dancer or do housework in a feminist society.

Measuring “masculinity - femininity” is important for determining methods of motivation in the workplace, choosing a way to solve the most difficult problems, and for resolving conflicts.

Table 9.

Culture parameters	"Male" culture of the organization	“Female” culture of the organization
The role of men and women	A man must earn money, a woman must raise children.	A man does not have to earn a living; he can raise children
Domination	A man must dominate in any situation	The difference between the sexes does not affect the occupation of positions of power
Main value	Success is the only thing that matters in life	The quality of life
Life and work	Live to work	I work to live
What is important	Money and good material conditions	Men and environment
Pursuit	Always be the best	Focus on equality, do not try to appear better than others
Attitude to freedom	Independence	Solidarity
Feeling	Respect those who have achieved success	Sympathy for the Losers
Making decisions	Logics	Intuition

Typology of T. Dale and A. Kennedy.

1. High-risk, fast-feedback culture. A world of mavericks who constantly take risks but receive feedback quickly whether their actions are right or wrong (entertainment industry, police, military, construction, management consulting, advertising).

2. Low risk and quick feedback culture. Employees take little risk and are encouraged to engage in intense activities with relatively little risk. All actions receive quick feedback. The client rules the roost and determines everything. Customer service, the desire to please, is the essence of this culture. It is the team that matters, not the individual (sales organizations, retail stores, computer companies, high technology, consumer goods mass retailers such as McDonald's, life insurance companies).

3. High-risk, slow-feedback culture. High risk. extremely high investments, slow feedback, long decision-making processes, resilience and a long-term perspective are the characteristic features of enterprises with this type of organizational culture. Decision-making cycles often take years. The watchword here is “intentionality” and “do the right thing” rather than “action at all costs” (oil companies, architecture firms, capital goods manufacturers, airline companies, utilities).

4. Low-risk, slow-feedback culture. Low risk, slow feedback, the attention of employees and management is concentrated on technical excellence, calculation of risk, details. A feedback gap causes employees to focus their energy on how they do things rather than on what they do. Attention is given to memos, filing and filing, records and technical improvements. Status symbols are clearly visible. The slogan of such a firm might be “strive for technical excellence in your work” (insurance, banking, financial services, building societies, government departments).

Based on various combinations of these parameters, G. Hofstede conducted cultural mapping of organizations in many countries around the world.

For example, according to the parameters “power distance” and “individualism - collectivism”, it was revealed that Canada, the USA, Great Britain, the Netherlands, Norway, Sweden, Denmark, Australia have a culture type of low power distance/individualism;

Spain, France, Italy, Belgium – high power distance/individualism.

In countries such as Pakistan, Turkey, Taiwan, Colombia, Venezuela, Portugal, Mexico, Greece, Yugoslavia, India, Japan, the dominant culture is high power distance/collectivism.

Knowledge of the leading type of culture of a country and organization makes it possible to assess the compatibility of cultures of different countries of the world, predict the development of their interaction, and regulate controversial issues.

T.E. Dale and A.A. Kennedy identifies four main types of corporate culture. They chose the level of risk and the speed of receiving feedback as the parameters to be analyzed. Based on the combination of these parameters, the following types of organizational culture were identified.

1. High-risk, fast-feedback culture. A world of mavericks who constantly take risks but receive feedback quickly whether their actions are right or wrong (entertainment industry, police, military, construction, management consulting, advertising).

2. Low risk and quick feedback culture. Employees take little risk and are encouraged to engage in intense activities with relatively little risk. All actions receive quick feedback. The client rules the roost and determines everything. Customer service, the desire to please, is the essence of this culture. It is the team that matters, not the individual (sales organizations, retail stores, computer companies, high technology, consumer goods mass retailers such as McDonald's, life insurance companies).

3. High-risk, slow-feedback culture. High risk, extremely high investments, slow feedback, long decision-making processes, resilience and a long-term perspective are the characteristic features of enterprises with this type of organizational culture. Decision-making cycles often take years. The watchword here is “intentionality” and “do the right thing” rather than “action at all costs” (oil companies, architecture firms, capital goods manufacturers, airline companies, utilities).

4. Low-risk, slow-feedback culture. Low risk, slow feedback, attention of employees and management is concentrated on technical excellence, calculation of risk, details. A lack of feedback causes employees to focus their energy on how they do things rather than on what they do. Attention is given to memos, filing and filing, records and technical improvements. Status symbols are clearly visible. The slogan of such a firm might be “strive for technical excellence in your work” (insurance, banking, financial services, building societies, government departments).

Typology of R. Ackoff. R. Ackoff analyzed the culture of organizations as power relations in a group or organization. For the study, he identified two parameters: the degree of involvement of employees in setting goals in the group/organization and the degree of involvement of employees in choosing the means to achieve the goals. Based on a comparison of these parameters, four types of organizational culture with characteristic power relations were identified.

1. Corporate type of culture. Low degree of involvement of employees in setting goals, low degree of involvement of employees in choosing means to achieve set goals. Relationships of autocracy (traditionally managed corporation with a centralized structure).

2. Consultative type of culture. High degree of involvement of employees in setting goals, low degree of involvement of employees in choosing means to achieve set goals. Doctor-patient relationships (institutes of social and other services, medical and educational institutions).

3. “Partisan” type of culture. Low degree of involvement of employees in setting goals, high degree of involvement of employees in choosing means to achieve set goals. Autonomy relations (cooperatives, creative unions, clubs).

4. Entrepreneurial type of culture. A high degree of involvement of employees in setting goals, a high degree of involvement of employees in choosing means to achieve set goals. Democracy relationships (groups and organizations managed by “goals” or “results”, companies with an “inverted pyramid” structure).

Typology by M. Burke. This scientist identified eight types of organizational culture. Parameters for analysis:

· interaction with the external environment;

· size and structure of the organization;

· staff motivation.

At trainings and webinars, participants often ask:“How to understand my motives?”, “What motivates me or is the source of my judgments?". Actions are always based on values, and values ​​reflect the cultural code of society or the collective mind. Although, with a high degree of individualism, a person, on the contrary, strives to be himself. But this does not always mean that he goes against everyone.

Take the test and find out the motives of your actions

Watch the 49 second instructions to understand how to use the test.

The meaning of the test results and how you can apply the findings

The test you just took is used in G. Hofstede's method for assessing differences between national cultures. The application of the ideas of this technique is very wide. When developing an advertising message, when introducing changes, when creating models and methods. To understand personal preferences and motives. You will be able to understand how to better set up communications in a team so that team results are higher.

When I undertake consulting projects, understanding the cultural code of the organization allows me to develop the best approach to implement change. After all, culture is a collective mind. A kind of prism through which people understand the decisions they make and act in accordance with their values.

The key idea of ​​the methodology is that differences in people’s behavior depend on the value code of the environment where the person is located. A value code is 5 interconnected aspects that characterize an individual, an organization or an entire nation.

These aspects include:

• power (equality vs. inequality)
• collectivism – individualism
• uncertainty avoidance (vs. uncertainty tolerance)
• competitiveness (“male” type versus “female”)
• strategic orientation (short-term indulgence vs. long-term restraint)

In his study, Hofstede rated each aspect on a scale from 1 to 120.

To interpret your results, evaluate the gravity of the indicator value in one direction or another. In addition, all aspects should be considered on a continuum and conclusions drawn after understanding the big picture.

Power distance

This indicator reflects the perception of power by society or an individual. A high value of the indicator means that members of society with less power accept their place and agree with the inequality of power distribution. In simple terms, decisions made at the top of any hierarchy are not discussed. More faith than doubt. A low level of distance from power, on the contrary, reflects democratic approaches. Hierarchical levels perceive themselves as equal members of the community.

In some cultures, the intervention of strong authorities is seen as an infringement of the rights of the individual. In others, on the contrary, as a benefit, as a “strong hand,” protection and help.

Countries with high power distance are Russia, CIS countries, Philippines, Venezuela and India. Low power distance index in Northern Europe, Denmark, Israel, England. In the US this is below average.

Table 1. Characteristics of cultures with high and low levels of power distance

High power distance culture	Low power distance culture
Subordinates practically do not express their disagreement	Subordinates often express their disagreement
Preferred management style is directive	Preferred management style is democratic
Inequality of people	Role inequality
Subordinates view their leaders as “different” people, different from themselves	Subordinates view management as equals
Senior management unavailable	Senior management available
Orders are not discussed, might is more important than right	Right prevails over might
Organizational structure - multi-level tendency towards centralization	Organization structure - flat tendency towards decentralization
A large number of management and supervisory employees	The management team is small
Large wage differentiation	Slight salary differentiation
Low qualifications of low-level workers	Highly qualified low-level workers
White collar workers have higher status	Workers have the same status as employees
Parents place less importance on children's disobedience	Parents place a high value on children's obedience
Students highly value independence	Students value comfort highly
Employee development within the company - involvement, awareness of benefits and contribution to the development of the organization	Limited area of ​​responsibility. You don't have to like the work, you just have to do it.
In society, the words “wealth” and “power” evoke respect	In society, the words “wealth” and “power” cause a negative reaction

Case studies

General management of companies or business owners often order training on team building or development of management skills, accompanying their request with the following problem: I want people to be more proactive, so that they do not run to me for solutions, but offer several options and argue the effectiveness of the choice.

In such cases, this questionnaire works great. With statistics for the entire company, it is already possible to reach management and involve them in the process of transforming the collective mind. It is the presence of the request: “You will teach them, just so that I don’t participate in this” that precisely reflects the high indicator of distance. The main thing here is not to make a mistake and not to impose your understanding on management. It is worth changing the cultural code only if the imbalance is recognized and the problem is heard from the mouth of the general director. If the company is effective under authoritarian management, then there is no need to change it. Still, our country is still far from democratic principles.

The opposite situation also happens. When an aspiring entrepreneur recruits a team of like-minded people. His cultural code tends to be low power distance, and new team members are strong-arm oriented. The entrepreneur is trying to build an open environment, but it demotivates employees. This does not mean that you need to become authoritarian. It’s worth just working with those whose decisions and actions will be passed through a similar prism of perception.

Uncertainty avoidance

Or tolerance for uncertainty. This dimension characterizes society's response to uncertainty. Cultures with a high uncertainty index tend to avoid anxiety by establishing a large number of rules and regulations to manage every possible situation. Societies with low uncertainty are more open to changes and options for the development of events. The laws of such systems are more flexible and less strict. The rules are determined as you move in a given direction.

Important note!! Don't confuse uncertainty and risk. Risk is associated with fear, and uncertainty is associated with anxiety. Risk is always associated with a certain event or object, that is, the probability of loss or gain can be predicted. Uncertainty has no source, it is like the concentration of a substance in the air. People sometimes take risks to avoid uncertainty and anxiety.

In cultures with a high degree of uncertainty avoidance: negative attitudes towards government officials; manifestation of nationalism; the attitude towards young people is negative and promotions can only be made after a certain age; the tendency of the majority to rely on the opinions of experts and “prophets in the fatherland”, rather than on common sense and personal experience.

Countries with a low uncertainty avoidance score are England, Scandinavian countries (except Finland), Denmark, USA, Singapore. The opposite pole is Germany, Belgium, Austria, the countries of South-Western Europe, Japan, Portugal, Greece.

Russia is now in an interesting transitional state. For centuries, Russia has gravitated towards a high degree of uncertainty avoidance. And the younger generation, with its changed thinking, is gradually changing its established positions.

Table 2. Characteristics of cultures with high and low levels of uncertainty avoidance

Low Uncertainty Avoidance Culture	High Uncertainty Avoidance Culture
People's willingness to live in the present day	High anxiety about the future. Actions are aimed at possibly avoiding future problems.
People prefer to work in small organizations	Working in large organizations is preferable
Age of middle managers - youth (selected for professionalism or performance)	Age of middle managers – middle and old (selected by age)
Sustainable motivation to achieve goals	Low motivation to achieve goals
Hope for success	Afraid of defeat
High risk tolerance	Low risk appetite
A managerial career is preferable to a specialist career	The manager must be the best specialist in the field where he leads
Conflicts are perceived as a natural and necessary state of development	Conflicts are undesirable. In conflicts, an avoidance position (pretending that everything is fine)
High level of collaboration and collaboration	Low level of cooperation and collaboration
Focus on Opportunities	Procedure-oriented
Low incidence of morbidity from stress	High incidence of stress-related morbidity
Change is accepted quite easily	Strong resistance to change
Loyalty to employer is not important	Loyalty to an employer is considered a virtue
Management by goals and values	Manage detailed requirements with tight control
The value of individual achievements	The value of collective achievements

And what to do with this information?

Apply. For example, when developing an advertising campaign. If the target audience tends to avoid uncertainty, then it is worth focusing on the benefits of safety and reliability. How do car companies do it? Volkswagen advertising has a different tone in each country where it operates. In Germany, the emphasis is on the reliability and durability of the car. In England - for safety. And in Sweden, where the level of femininity is higher (feminism), advertising often depicts a woman.

Negotiations with decision makers. A website, an interview with the first manager, or any information from open sources provides insight into the company’s cultural code. Companies that tolerate uncertainty will hear you better if you speak the language of opportunity. Opposite executives will trust you if you show the details of your proposal and reflect the stability of your company.

Individualism – collectivism

Here we assess a society's propensity to form groups. A high indicator of individualism indicates the importance of individual achievements, and concern, first of all, for oneself and one’s family. In collectivism, people belong to strong and cohesive groups. These groups care for and protect “their own” throughout life in exchange for unconditional loyalty. A person who tends to be collectivist expects care and participation from community members. The writer Ayn Rand (“Atlas Shrugged,” “The Fountainhead,” etc.) in all her books worships individualism and considers selfishness the highest manifestation of creativity and the realization of purpose. Be sure to read her books.

The level of individualism is closely related to the level of wealth. This applies to both countries and companies. In general, in any organization. Countries such as the US, UK and the Netherlands have high levels of individualism. Colombia, Pakistan, Spain, Portugal, Greece, Austria – low. The maximum degree of collectivism in Japan.

How to recognize individualism: people openly express criticism to others; career growth is associated only with the individual, her merits and achievements; everyone is focused on personal success and career; high standard of living of society and a large layer of the middle class; freedom of the press.

Table 3. Characteristics of individualistic and collectivist culture

Individualistic culture	Collectivist culture
Management does not interfere in the personal lives of employees	Employees expect the organization to participate in resolving personal matters
People believe that they must defend their own interests	People expect the organization to protect their interests
Competency-based careers within or outside the organization	Career only within the organization in accordance with length of service (length of loyalty)
Motivation at the personal level	Collective motivation
In social connections - distance	Cohesion
Managers strive for leadership and diversity	Managers strive for obedience and order
Individual initiative is encouraged by society	Individual initiative is condemned by society
Life goals and values ​​- pleasures, desires and security	Life goals and values ​​– duty, experience and prestige
It is socially acceptable to pursue one's own goals without caring about others.	It is NOT socially acceptable to pursue your own goals without caring about others.

It's interesting to look at profiles in comparison. Take measurements throughout the company and assess how your management profile relates to the cultural code of the organization. A large difference in values ​​for one aspect reflects a conflict zone. And, most likely, it is the source of problems in the company. Knowing the problem allows you to determine the zone of proximal development and focus on the right points.

Masculinity - femininity

This indicator is used to evaluate the dominant values ​​in society. Masculine societies are characterized by: assertiveness, ambition, desire for power and materialism. Women's cultures are characterized by the importance of human relationships, concern for others, and overall quality of life. Competition in achieving goals versus the value of relationships.

In masculine societies, material well-being is an important criterion for success. “A real man” is a compliment that characterizes ambitious, determined and tough people. The prevailing value is to live to work, not to work to live. In feminine communities, they prefer “cozy” to “big.” Relationships are more important than results. Leaders value non-conflict and harmonious relationships in the team,

Feminine cultures in the Scandinavian countries, Denmark and Holland. The USA, Japan, Austria, Switzerland, England, Ireland, Germany, Italy, Russia and the CIS countries gravitate towards masculinity.

Table 4. Characteristics of “male” and “female” cultures

"Male" culture	"Women's" culture
A man should earn money, a woman should raise children	A man does not have to earn money, he can raise children
A man dominates in any situation	Occupying positions of power does not depend on gender
Success is the most important thing in life	Quality of life is the most important
Live to work	Work to live
Always strive to be better than others	Strive for equality
The desire for freedom and independence	Freedom is perceived as solidarity
Respect for those who have achieved success	Compassion and empathy for those who cannot afford to live a quality life
Decision Making – Logic and Calculation	Decision making - intuition

I clearly saw the clash of two cultures: female and male in Tibet. China, with its drive and pressure, and Tibet, living its values ​​based on compassion and love. A confrontation that has lasted more than 50 years and has centuries-old roots.

Feminine orientation, coupled with a high degree of individualism, is a derivative of a person’s internal freedom for good, and not against. And increasing the degree of individualism with a masculine approach increases the degree of intuitiveness when developing a strategy.

Strategic orientation

The meter reflects the time horizon of a society or an individual. What is a person or company inclined towards – adventurism or stability? A one-time feat versus stability in achieving goals. Decisions made with a low value of strategic orientation are based on traditional methods, frugality, and following proven methods. With a long-term orientation, time is viewed as a vector, and people tend to look into the future more than being interested in the present and remembering the past. A society focused on future goals and results.

Try to see patterns in the test results, not pure typology. Look at the sources of discomfort and, in any case, remain yourself. Creative selfishness produces better products and services that benefit more than one generation of people. Create! Just not in order to be cooler than anyone else, but so that what is valuable grows and seeps deeper.

P.S. Questions have arisen. Ask them in the comments. I will definitely answer.

RISK CULTURE AS AN IMPORTANT COMPONENT OF THE RATIONAL OPERATION OF THE BANK

Kudoyarov Leonid Vladislavovich
Moscow Technological University
Institute of Innovative Technologies and Public Administration

annotation
Risk culture is one of the main components of the progressive development of banking institutions. Risk culture is constantly evolving and has led to the creation of a balanced risk culture.

RISK-CULTURE AS AN IMPORTANT COMPONENT OF A RATIONAL OPERATION OF THE BANK

Kudoyarov Leonid Vladislavovich
Moscow University of Technology
Institute of Innovative Technology and Public Administration

Abstract
Risk culture is one of the main components of the progressive development of the banking institutions. Risk culture is constantly evolving and has led to the creation of a balanced risk culture.

Recently, more and more financial organizations are developing or trying to develop (develop) certain approaches to such a concept as “risk culture” in their internal structure.

Risk culture in a banking institution is a careful attitude to risk management on the part of all employees of the organization in order to maximize profits and minimize losses. Risk culture – values, beliefs, understanding and knowledge in the field of risk management, shared and applied by employees of the organization at all levels.

Risk culture is evolving and today has led to the creation of the concept balanced risk culture.

The following stages of development can be distinguished:

1. Before the 1990s: compliance with regulatory requirements - risks were considered solely in the context of compliance with regulatory requirements;

2. 1990s: maximizing revenue/market share - risks were seen as functions of control and as an obstacle to Business and senior management;

3. 2000s: profit maximization – risks were considered as part of the Bank’s expenses;

4. After 2008: a balanced culture - the Business and Risk departments have common goals to achieve, and an optimal balance of risk and profitability has been built.

1. The right attitude at the top: The supervisory board and top management set an example of the right attitude to risk and adherence to the core values ​​of the organization.
2. Accountability: Employees at all levels accept core values ​​and approaches to risk management, are aware of responsibility for their actions and disregard for risk.
3. Effective response to changes in the macroenvironment: the internal environment allows you to make effective decisions in response to external challenges and promotes open and constructive dialogue.
4. Incentives: Financial and non-financial incentives are used at all levels.

Basel identifies three key elements of a high Risk culture:

1. Risk management system: a significant role of the supervisory board in risk management, a unified risk management methodology, a “three lines of defense” system has been implemented and operates effectively, significant resources, independence and contribution of risk departments and internal audit in risk management.
2. Risk appetite: risk culture is considered as a strategic advantage of the Bank, risk appetite effectively cascades into operating limits, the Bank's development strategy and business plans are linked to risk appetite.
3. Compensation system: the risk culture is reflected in the rules and economic incentives, material motivation takes into account the level of development of the risk culture.

In banks, risk management is often dominated by either formal procedures or informal principles and beliefs. The most successful financial companies develop both, achieving the following characteristics in their work:

Risk culture permeates the organization and determines the actions of employees;

Risk-prudent behavior of Business Units;

Strengthening the methodological and expert function of the Risk departments;

Impact through communications.

But despite the global evolution of risk management, many organizations have still not created a balanced risk culture.

The following types of risk cultures remain relevant:

1. Focus on volumes and income;

2. Focus on profitability (JPMorgan, HSBC);

3. Aversion to losses at any cost;

4. “Head in the sand”;

5. Balanced culture (Goldman Sachs).

The risk culture is based on the initially partnership form of the organization and is strengthened through targeted management decisions and actions:

1. Reflection of assets and liabilities in the balance sheet at market value mark-to-market. Allows you to quickly manage risks and make “market decisions.”
2. The basis of a strong risk culture is the organizational structure. Management committees escalate issues to senior management on appropriate occasions, and management decisions are fully assessed on a daily basis.
3. The foundations of risk culture are laid in the ideology of partnership. The pre-IPO created a strong sense of ownership among management and employees about the company's performance.

An example of the best practice of a developed risk culture is the Goldman Sachs organization.

Basics	Implementation
	Risk metrics are used and controlled at all levels, a high-quality risk reporting system
	- The business unit is responsible for performance results, the collegial bodies of the Bank are collectively responsible for assessing and managing risks Scale of activity is the basis of remuneration
	- CEO or top managers - members of key risk committees Rotation of employees and management between Business and Risk departments Controlling units have the same status, prestige and compensation as Business Units
	- Continuous improvement of risk assessment systems and processes Risk committees report daily to the highest collegial body

An example of a negative risk culture practice is Bear Stearns (BS). Despite the partnership system similar to Goldman Sachs (GS), the organizational structure of BS was built from separate “closed” blocks. There was no clear understanding of the totality of risks in the company’s activities, their structure and magnitude, and there was also no understanding of the goals, objectives and powers of the Main Risk Committee. Another difference was that the risk function was aimed at detecting fraud rather than assessing and managing risks, and the use of risk management procedures was severely limited. The BS front office did not conduct a true risk assessment before entering into deals.

Its basics and implementation examples are as follows:

Basics	Implementation
Risk analysis at all levels	- Outdated or inaccurate models were used Risk analysis was limited to price verification, low quality of risk reporting
Rules and incentives are aimed at maintaining risk levels	- Lack of a clear link between the limit system and decision-making levels; limits were set by the Business Unit and frequently revised Decisions are not consistent with risk levels and limits
The style of behavior is set “from above”, the opinion of risk departments has weight and respect	- Low weight of Risks’ opinions in decision making; Risk departments were not represented in senior management bodies The functions of risk departments were reduced to monitoring and control The level of compensation, as well as the status, is significantly lower than in the Front Office
Influencing overall business strategy, communicating strategic risks	- Risk appetite is not formalized Ineffective management reporting and collegial body structure did not support strategic risk analysis and decision-making processes

Regarding the very model of building a protection system in risk management, the key role is assigned to the first line. Schematically, the system should look like this (Three lines of defense):

1. First line of defense - Business:

Risk management procedures built into business processes are applied consciously and without exception

Decision making taking into account optimization of risk and profitability

Compliance with risk appetite, limits and resource restrictions

Responsibility for taking risks.

Examples: visual assessment of the Borrower in retail lending.

In corporate lending – search for Borrowers with the best risk profile, complete identification of Borrower/transaction risks.

2. Second line of defense – Risks:

Building processes, models, tools

Independent examination of risks accepted by Banks

Education

3. Third line of defense – Audit:

Comprehensive audit of management systems for selected risk groups.

As a result of the introduction of rational approaches to achieve a high level of risk culture, the following happens:

1. Business units are not afraid to identify real risks in transactions and offer adequate measures to reduce them. Interaction between the Business block and the Risk block takes place in an atmosphere of partnership.
2. Business units are interested in real risk identification and help Risk Units set up risk models.

Business and Risk departments are not afraid to admit their mistakes and are committed to dialogue.

Bears Stearns was the fifth largest investment bank in the United States before the 2007 mortgage crisis. In March 2008, it found itself in a pre-bankruptcy state and was absorbed by JPMorgan Chase.

Options culture	High level culture power distance	Low level culture power distance
Frequency of subordinates expressing their disagreement
Management style preference	Directive	Democratic
Perception inequalities	Inequality of people	Role inequality
Attitude to managers	Subordinates view their leaders as “other” people, people different from themselves, like	Subordinates view their senior management as people just like them
Availability manuals	Senior management unavailable	Senior executives available
Attitude to law	Orders are not discussed: might precedes right	In an organization, right takes precedence over force.
Structure organizations	Multi-level, tendency towards centralization	Flat, tendency towards decentralization
Management Size	A large number of management and supervisory employees	The management team is small
Wage differentiation		Quite small
Qualifications of lower level workers
Status of workers and employees	White collar workers have a higher status compared to blue collar workers	Workers have the same status as employees

3. The desire to avoid uncertainty . The degree to which people in a given country have a preference for structured situations as opposed to unstructured ones. Structured situations are situations with clear and precise rules on how to behave. These rules can be formalized or supported by traditions. In countries with a high degree of uncertainty avoidance, people tend to exhibit great anxiety and worry, feverish work or "emergency."

In organizations with high levels of uncertainty avoidance, managers tend to focus on specific issues and details, are task-oriented, and do not like to make risky decisions and take responsibility. In countries with a high degree of desire to avoid uncertainty, the prevailing opinion is that everything “not ours and unusual” is dangerous.

Table 3

Characteristics of cultures with high and low levels of uncertainty avoidance

Options culture	Low level culture uncertainty avoidance	High level culture uncertainty avoidance
Attitude to time	Staff willingness to live in the present day	Workers are very worried about the future
Preferred organization size	Workers prefer small organizations	Workers prefer large organizations
Age of middle managers	The youth	Middle and old
Motivation to achieve a goal	Sustainable
Attitude to success	Hope for success	Fear of failure
Willingness to take risks
Preferred career type	Preferring a managerial career over a specialist career	Preference for a specialist career over a managerial career
Qualification head	The manager is not a management specialist	The manager must be an expert, a specialist in the field of management
Attitude to conflicts	Conflict in an organization is seen as a natural state	Conflicts in the organization undesirable
Competition between workers	Normal and productive occurrence	Competition is not welcome
Willingness to compromise with opponents
Preparedness for uncertainty at work

4. “Masculinity - femininity” . G. Hofstede defines masculinism (masculinity) as the degree to which the dominant values ​​in society are persistence, assertiveness, making money and acquiring things (materialism) and does not attach much importance to caring for people. It defines feminism as the degree to which relationships among people, caring for others, and overall quality of life are considered the dominant values ​​in a society.

Omarova Zimfira Nasrutdinovna, senior lecturer of ANOVO "Moscow University of Humanities and Economics" Northern branch, Koryazhma [email protected]

The concept of developing a strong risk culture

Abstract. The importance of developing a risk culture as an integral part of an integrated risk management system is substantiated. A concept for the development of a risk culture that helps improve the financial stability and competitiveness of organizations is developed. The levels of corporate risk culture have been determined. Key elements corresponding to high and low levels of risk culture are identified. Recommendations are given for increasing and developing a strong risk culture of domestic organizations. Key words: risk management, risk culture, level of risk culture, development concept, strong risk culture.

Risk management is currently becoming one of the most significant tools throughout the world for increasing economic efficiency and business stability. Modern economic conditions require domestic companies to promptly prevent, identify and manage risks in various areas of activity. We talk a lot about modern techniques, new tools and fashionable approaches to risk management in companies. But we do not notice a very important and integral element of risk management - risk management culture. All risk management approaches are effective to the extent that the risk management culture is developed in the organization and the significant role that risk managers play in the development of this culture. In order for a company to successfully develop in a constantly changing environment, it is necessary to constantly improve the risk management system and act in accordance with the principles of a strong risk culture.

The problem of developing a risk culture lies in the weak support of risk management from above, from the company’s management. Management may understand the importance of implementation, but not everyone understands that the process needs to be constantly supported, fed with resources, energy and finance.

The company's line managers are not very interested in sharing information about risks. Risk managers have to overcome the reluctance of employees to disclose such information, because the word “risk” is perceived negatively by many and they are afraid to bear responsibility if this risk manifests itself. Another problem is related to the fact that risk is perceived differently by each person: there is no uniform terminology and classification of risks. We need to go a long way for everyone to start speaking the same language. A risk management culture can and must be developed. The path to effective risk management lies through the formation of a strong risk culture. A developed risk culture is today one of the key factors in the commercial success of an organization. Culture must permeate the entire organization—risk management must involve everyone in the organization. What is risk culture? Risk culture is a system of values, beliefs, principles and knowledge in the field of risk management, shared by all employees of the organization at all levels of the hierarchy. The development of a risk culture is a very important, long and complex path. The concept of the development of a risk culture includes 5 areas of work (Table 1). Table 1 The concept of the development of a strong risk culture

Approach Direction of work Diagnostics Assessing the current level of risk culture, identifying the reasons for the weak development of risk culture Elements of a strong risk culture Determining elements corresponding to high and low levels of risk culture

Risk culture development program Recommendations for the development of risk culture, training employees in risk theory and behavioral models that are targeted for all employees, regardless of their position from the point of view of risk culture Introduction of a strong management culture of the organization Development of a system for monitoring changes in the level of risk culture

Implementation resultsIntegration of the concept of developing a strong risk culture into the company’s activities

The presented concept of developing a strong risk culture is intended to radically change, first of all, the thinking of all employees of any organization in any field without exception. As soon as every employee (from an ordinary employee to a manager at any level) begins to understand that it is he who protects the organization from risks and that the total level of risk depends on the decisions he makes, these organizations are invincible - they are not afraid of any shocks or threats. Each organizations have different levels of risk culture. It is necessary to distinguish between 2 levels of corporate risk culture: high and low. As recent studies show, only 6% of surveyed employees of domestic companies assess the level of corporate risk culture as high, noting the maximum score, 80% of respondents assess the level of development of risk culture in their company as low. “Strong culture is characterized by the main (core) values ​​of the organization, which are intensively supported , are clearly defined and widely distributed. The more members of an organization who share these core values, recognize their importance, and are committed to them, the stronger the culture. Young organizations or organizations characterized by constant rotation of opinions (concepts) among their members have a weak culture. Members of such organizations do not have sufficient shared experience to form generally accepted values. However, not all mature organizations with a stable workforce are characterized by a strong culture: the core values ​​of the organization must be constantly maintained.” Figure 1 shows the key elements corresponding to a high level of risk culture. There are 4 key elements of a high risk culture:respect, the ability to effectively and openly collaborate on risk issues;awareness to know and do what is right from a risk point of view;response to respond systematically and pay attention to emerging threats and risks;transparency to freely and quickly exchange information and ideas about risks.

Fig. 1 High level of corporate risk culture

In practice, in organizations with a high level of risk culture, risk management permeates everything: processes, systems, management decisions, models, etc. At the same time, each ordinary employee understands his role in risk management, and for each type of risk, appropriate risk management methods and technologies for modeling risk consequences are used. Employees are not afraid to openly discuss emerging risks, a collective understanding of the main risks to which the organization is exposed is maintained and monitored, and report any situations related to risks, even if it seems insignificant, since the timely detection of potential problems or the recognition of errors allows us to minimize possible negative consequences. Formation a strong risk culture of a company determines the sequence of actions of employees and making certain decisions in their daily activities taking into account existing risks. Structural units in organizations with a high level of risk culture are the owners of risks and are responsible for identifying, analyzing, managing, reducing the level of risks and generating reports on key risks .

A strong culture determines the consistency of employee behavior. Employees clearly know what behavior they should follow. Predictability, orderliness and consistency of activities in the organization are formed through high formalization. A strong culture achieves the same result without any documentation or distribution. Moreover, a strong culture can be more effective than any formal structural control. The stronger the culture of an organization, the less attention management needs to devote to developing formal rules and regulations to govern employee behavior. This will all be in the subconscious of the employee who accepts the culture of the organization. The following elements correspond to a low risk culture (Fig. 2): denial - low level of communication on risk issues; lack of motivation - poor understanding of risks at all levels of the organizational hierarchy; resistance - fear of bad news , making mistakes in the field of risk management;detachment – ​​slowness, indifference, ineffective risk control systems.

Fig. 2 Low level of corporate risk culture

In organizations with a low level of risk culture, risk management is reduced to formal conclusions and recommendations of risk managers, who often do not have the right to vote in making business decisions. In such organizations, as a rule, there is a low level of employee involvement in the risk management process, structural units are inactive or reluctant to participate and take on responsibility or do not fully understand their role in risk management. As a rule, responsibility for risk management is transferred to a separate functional service, and other business units abdicate this function. In this regard, some risks inevitably fall out of sight, which can lead to destructive consequences. To develop a strong risk culture, it is necessary to implement the following recommendations:  develop behavior in employees in which they openly discuss and respond to existing and potential risks;  create an internal attitude of intolerance towards ignoring, hushing up risks and risky behavior of others;  development and implementation of methodological approach to risk management;  coordination of the company's actions in the field of risk management;  consulting and methodological support of the company's divisions on risk management issues;  coordination and preparation of risk reports;  training employees on risk management issues;  monitoring the implementation of the risk management action plan structural divisions, coordination of work with the internal audit service;  development and implementation of measures to improve the risk management system. To summarize, we can conclude the following, the topic of risk management culture today is perhaps the most important in risk management. Risk culture is an integral part of the integrated risk management system. A strong risk management culture builds the collective ability of companies to identify, analyze, openly discuss and respond to existing and future risks.

It is obvious that in order to develop a risk culture, it is necessary to purposefully change the principles of working culture and actively implement them, as well as strengthen responsibility in terms of functions and responsibilities in the field of risk management. If an organization has a strong risk culture, its employees are not afraid to raise issues and problems that they face every day. Within such a culture, there is an understanding that the employee can benefit from his mistakes, which can often be the result of trying to do his job in a more innovative or creative way.

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