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[W474]What Is Corporate Culture

by Janine Sergay, Jan

A basic definition of organizational culture is the collective way we do things around here. It involves a learned set of behaviors that is common knowledge to all the participants. These behaviors are based on a shared system of meanings which guide our perceptions, understanding of events, and what we pay attention to. As Sun Tzu, a Chinese military general from 3000 BC, indicated in his explanation of strategy, culture forms an integral part of any organizational strategy. It consists of Tao – the created and shared beliefs, values, and glue that holds an organization together, and it also involves the very nature of the organization. Culture is about individuals in a group sharing patterns of behavior. There is no cultural absolute. Because culture is relative, we have the power to create a culture that is the best fit for an organization's future direction.

Observing Culture

Culture plays out in a variety of ways. We can identify the specifics of it from how information is communicated, feedback is given, performance is managed, and projects are co-coordinated within the organization. It is reflected in the way the corporation or institution is structured; whether work is conducted cross-functionally or within silos, how the hierarchical levels are set up, and the types of job titles used. Culture is often defined by the systems that are used, the processes that are followed, and the rituals, symbols, and stories that abound in the organization. It is even reflected in how meetings are held in an organization.

Corporate Culture as an Obstacle

When working towards company goals or when trying to effect change in the organization, your organizational culture can be the very thing that trips you up. If insufficient effort is put towards identifying aspects of the culture that may impact on what you are trying to achieve, then insufficient actions will be taken to circumvent obstacles in a timely manner or harness the way things are done in an opportune direction. This is best explained through an example.

An organization espouses that “people are our most important asset” as part of its new philosophy. However, employees witness a senior executive being escorted off site with his belongings by security guards after being laid off. They receive an e-mail explaining where they will be sitting and who they will be reporting to in the future restructure – with no fore-warning or personal contact. Training and development opportunities for employees are stopped in order to cut costs. Actions that consistently reflect a certain core culture will more effectively emphasize to employees what the leadership's true values are than any widely publicized statement. If a direction is truly desired, then all actions that will reflect the required culture need to be considered and instituted accordingly.

Aligning Culture for Success

Once a strategy is set for the organization, the way deliverables are produced in the organization needs to be examined and challenged. This is to ensure that every process is geared towards achieving the strategy.

Every component of the corporate culture needs to underpin what is required from all stakeholders in order to realize the strategic goals. There must be a reinforcing stream of communications. All the actions in the organization need to translate into the cultural realities. A culture can be created or reinforced through the use of socialization. Avenues for socialization abound in functions like selection, placement on the job, job mastery, the measurement and rewarding of performance, and recognition and promotion. Reinforcing a culture can emerge through the stories told and the folklore propagated and, most importantly, through the adherence to chosen important values. The key to the success of the above is to ensure that the culture you wish to socialize others into is an ideal one, necessary for breakthrough performance in your work area or organization. If it is not, then you need to involve everyone in the evaluation and creation of a more suitable culture.

Strong Leadership is Required

One of the surest ways to align the culture to the organization's strategy is to apply leadership practices that are also aligned. The leaders, at all levels, need to know what the required culture is and then determine ways of establishing practices and procedures in all operations that will closely reflect the desired culture. They also need to role model the very behaviors they wish exhibited by everyone in the organization and provide the necessary support to others that will enable them to function accordingly as well. Particular attention also needs to be given to all communications.

Leadership needs to be front and center to create a corporate culture that works.

For a graphical view of the Cultural Paradigm, click here, http://www.sergaygroup.com/what_is_corporate_culture.html

There are many different and competing definitions of “corporate culture" in the organizational theory literature. On one end of the spectrum culture is simply defined as the patterns of behavior within the organization (Smircich, 1983). On the other end, some theorists have defined organizational culture as a system of shared cognitions and the human mind generates the culture by means of a finite number of rules (Fiol, 1991). Although all the theorists believe in the importance of the culture in the organizational studies but still there is a lack of consensus over its precise definition (Papers4you.com, 2006). Theorists have accepted this fact and approached the concept of culture from the most widely used definition of culture, as defined by Lismen et al (2004) “a complex set of values, beliefs, assumptions, and symbols that define the way in which a firm conducts its business".

The evolution of corporate culture within an organization has been the center of discussion for many years. Practitioners have called it the ‘way we do things around here’ (Hampden-Turner, 1990) and the theorists have called it as the ‘collective programming of the mind’ (Siew & Kelvin, 2004) which distinguishes one group from another. Culture reflects the identifiable components of practices, customs, beliefs and values:

Practices: These represents the surface level of a culture i.e. the visible elements such as language, etiquette, form of greeting, clothing, and also include the artifacts of the business i.e. the physical layout. These practices do have relevance as it greases the functionality of the organization. Such practices keep the employees motivated, concerned and even transform everyone to follow the similar path as everyone in order to achieve the common corporate objective.

Customs: These are the accepted modes or norms of behavior within the organization, reflecting the values and beliefs, which provide guidelines for the way people and groups, are expected to behave towards each other. These often shape aspects of the physical appearance of the organization, also called the artifacts.

Beliefs: The assumptions that members hold about the organization and the situation within it- about what practices work well in this business, for example how people make decisions, how teams work together and styles of problem solving.

Values: Deeply held ideas of members regarding what constitute right or wrong, fair or unfair, thus anything that has personal worth or meaning. These values are expressed in operating beliefs and norms of behavior.

The corporate culture develops as people come to share a set of beliefs and then they use these to establish norms about the way they should behave towards each other and to outsiders (Papers4you.com, 2006). If the outcomes are positive this reinforces their shared belief in the values underlying their behavior. In this way, the organizations develop deep seated values and beliefs about the way that staff should run things. However, it looks simple and straight forward case in theory, but when it is referred in the practical life then it is a big task to let it be a success story. It can be concluded by drawing upon Barney (1986) that a valuable, rare and inimitable corporate culture can be a source of sustained competitive advantage for a company.

References:

Barney, J. (1986) “Organizational Culture: Can It Be a Source of Sustained Competitive Advantage?" Academy of Management Review, Vol. 11, No. 3, pp. 656-665

Fiol, C. (1991) “Managing Cultures as a Competitive Resource: An Identity-Based View of Sustainable Competitive Advantage," Journal of Management, Vol. 17 No. 1, pp. 191-211

Hampden-Turner, C (1990), “Corporate Culture- From Vicious to Virtuous circles", The Economist books, pg 21-22

Lismen, C.; Margaret, S. and Ed Snape (2004) “In Search of Sustained Competitive Advantage: The Impact of Organizational Culture, Competitive Strategy and Human Resource Management Practices on Firm Performance," International Journal of Human Resource Management, Vol. 15:1, pp. 17-35

Papers For You (2006) "E/B/49. Review of theories on organizational culture", Available from http://www.coursework4you.co.uk/sprtbus22.htm [22/06/2006]

Papers For You (2006) "P/B/309. Why is corporate culture important?", Available from Papers4you.com [21/06/2006]

Siew Kim Jean Lee, Kelvin Yu (2004), “Corporate culture and organizational performance", Journal of Managerial Psychology; Volume: 19 Issue: 4; 2004 Research paper

Smircich, L. (1983) “Concepts of Culture and Organizational Analysis," Administrative Science Quarterly, Vol. 28, pp. 339-358

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Both Janine Sergay & Verena Veneeva are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Janine Sergay has sinced written about articles on various topics from Management, Finances. . Janine Sergay's top article generates over 1900 views. to your Favourites.

Verena Veneeva has sinced written about articles on various topics from Entrepreneurship, Health and Management. Copyright © 2006 Verena Veneeva. Professional Writer working for. Verena Veneeva's top article generates over 60500 views. to your Favourites.