Corporate Culture

CORPORATE CULTURE

[(]

Introduction

Corporate culture, at times called organizational culture, refers to the shared values, attitudes, standards, codes, and behaviours of a company's management and employees. Corporate culture extends to the broader circle of relationships a business maintains, such as with customers, vendors, strategic partners, and so forth. Corporate culture is rooted in an organization's goals, strategies, structure, and approaches to business activities.

Organizations' cultures, emanate largely from the mix of individuals—especially leaders—who are or were part of the organization and from the diverse personal histories and experiences they bring. A simplistic example, a business led for years by an impersonal, hierarchy-oriented owner or chief executive would be expected to have a different culture than one led by a very informal, nontraditional leader. Corporate cultures are also influenced by organizational history and the processes, market conditions, and other business factors specific to the company. Thus, a relatively new company that has fought bitterly for its slim share of the market would be expected to possess a culture unlike that of its well-established, industry-leading competitor. Finally, when considering multinational enterprises, corporate culture is also dictated in part by the broader values and customs of the country or region in which it is located.

The dictionary defines culture as "the act of developing intellectual and moral faculties, especially through education." This writing will use a slightly different definition of culture: "the moral, social, and behavioural norms of an organization based on the beliefs, attitudes, and priorities of its members."

Every organization has its own unique culture or value set. Most organizations don't consciously try to create a certain culture. The culture of the organization is typically created unconsciously, based on the values of the top management or the founders of an organization.

The House of Tata had progressive and nationalistic outlook right from the very beginning. Jamsetji Tata, the founder of House of Tata wrote in 1902, five years before the site of the Steel Plant was selected to his son Dorabji Tata :

“Be sure to lay wide streets planted with shady trees, every other of a quick-growing variety. Be sure that there is plenty of space for lawns and gardens. Reserve large area for football, hockey and parks. Earmark area for Hindu temples, Mohammedan mosques and Christian churches……”

“We do not claim to be more unselfish, more generous or more philanthropic than other people. But we think, we started on sound and generous business principles considering the interest of the shareholders as our own and the health and welfare of the employees, the sure foundation of our prosperity.”

Dorabji Tata, who brought his father’s dream to fruition, said in 1917-

“The welfare of the labouring classes must be one of the first cares of every employer. Any betterment of their conditions must proceed more from employers downwards rather than be forced up by demands from below, since labour contented, well housed, well fed, well brought up and generally well-looked after, is not only an asset and advantage to the employer, but it also serves to raise the standard of industry and labour in the country. In looking after the labour of today. We are securing a supply of healthy and intelligent labour for the future.”

The statement of objectives of Tata Steel sets out the parameters and guidelines in the following words : “the fundamental objective of steel company is to strengthen India’s industrial base through increased productivity, effective utilization of material & manpower resources, continuing application of scientific and managerial method, and through systematic growth in keeping with national aspirations.”

“Infosys” was the first Indian IT Company to establish a company office to manage and drive all company initiatives dealing with diversity and inclusion. Today, they have employees from over 70 countries. Woman constitute more than 32% of the workforce. They are proactively developing human capital with the aim of lifting people out of poverty, increase employability through the transfer of skill. The Infosys Leadership Institute is the hub of Infosy’s talent development programmes. The institute trains new recruits and grooms the next generation irrespective of their age or work experience.

Hewlett-Packard is a company that has, for a long time, been conscious of its culture (The HP Way) and has worked hard to maintain it over the years. Hewlett-Packard's corporate culture is based on 1) respect for others, 2) a sense of community, and 3) plain hard work (Fortune Magazine, May 15, 1995). It has been developed and maintained through extensive training of managers and employees. HP's growth and success over the years has been basically due to its culture.

In the aforesaid examples, the top management of companies were vigilant to maintain their cultures. The behaviour, rules and boundries are relatively clear and communicated often. However, this is not typical. Most organizations operate with diversity of cultures. This is specially true considering the increasing worldwide mobility of people, cultures and value.

A popular trend for companies is to "reengineer" themselves, which involves an attempt to change their culture, usually to a team orientation. As reported in the ACA News (September 1995), studies indicate that the following are necessary for a company to change to a "team culture:"

·  Common and consistent goals

·  Organizational commitment

·  Role clarity among team members

·  Team leadership

·  Mutual accountability with the team

·  Complementary knowledge and skills

·  Reinforcement of required behavioural competencies

·  Power (real and perceived)

·  Shared rewards

Applying the term culture to organizations is rather new; most people think of it as a characteristic of ethnic or national populations. However, a number of theorists have defined and applied it more specifically to organizations as:

·  "patterned communication" (Hall, 1959)

·  "a common frame of reference for interpreting and acting toward one another and the world in which they live" (Bormann, Howell, Nichols, & Shapiro, 1982)

·  "a pattern of basic assumptions—invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and internal integration—that has worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems" (Schein 1985)

·  "the way we do things around here" (Burke and Litwin, 1989)

In many ways, culture is an organization’s "look and feel", to borrow a term from the software industry. Today, when employees consider prospective employers, they look not only at salary, benefits, and location, but at the organization’s total work environment and philosophy. A large part of the culture is communication; it is not just what the organization communicates, but how it does so.

A common culture makes it easier to communicate. One of the ways in which many new quality initiatives within organizations strive to improve functionality is providing various departments with a common "language" or set of terms with which to share their ideas and request information.

Many aspects of an organization need to be examined and brought into consistency if a strong, identifiable culture is to be created. These include:

·  socialization (recruiting, orienting, and mentoring employees)

·  the physical setting (what the environment says about the company’s values and the role of people within it)

·  graphic identity (the look of the logo, print materials, etc.)

·  communication channels (how people can communicate with each other including aspects of formality and accessibility)

As work life becomes increasingly symbolic, and as reality is indeed being constructed within people’s minds, the ability of trainers and performance consultants to shape an organization through communicating the right messages through the right channels has never been needed more.

STUDIES OF CORPORATE CULTURE

An early and well-known examination of corporate culture was offered in William Hollingsworth Whyte's 1956 book The Organization Man. Its contribution was in taking a close look at how individuals shape and are shaped by the companies they work for. The book chronicled the lives of suburban middleclass employees—all men—of large corporations. The book was a ambivalent documentary about individuals who based a significant part of their identity on the companies they worked for and the surrounding social milieu. Perhaps with a hint of irony, Whyte labelled himself an organization man, too.

In the wake of The Organization Man, business scholars and social scientists alike have focused their attention on the nature and problems of corporate culture. There is general agreement that -

·  corporate culture helps determine an organization's effectiveness from a business stand-point

·  employees may be alternately motivated or disillusioned depending on the prevailing corporate culture

·  organizational cultures change over time and in response to various events

·  general patterns of power structure, interpersonal relations, and human-centred processes can be observed in different types of corporate cultures

Many of the writings on corporate culture have searched for a system that explains the main variations between different corporate cultures. As a result, numerous typologies or schemes of "culture types" exist, identifying several broad categories into which the different cultures fit. Although all of these classification schemes are open to interpretation and none may be considered comprehensive, they can provide a useful framework for understanding corporate culture.

Classifying Organisational Culture

Several methods have been used to classify organisational culture. Some are described below:

Hofstede

Hofstede identified four characteristics of culture in his study of national influences:

·  Power Distance - The degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.

·  Uncertainty Avoidance reflects the extent to which a society accepts uncertainty and risk.

·  individualism vs collectivism - individualism is contrasted with collectivism, and refers to the extent to which people are expected to stand up for themselves, or alternatively act predominantly as a member of the group or organisation.

·  masculinity vs femininity - refers to the value placed on traditionally male or female values. Male values for example include competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions.

·  Long vs short term orientation

Deal and Kennedy

Deal and Kennedy defined organisational culture as the way things get done around here. They measured organisations in respect of:

·  Feedback - quick feedback means an instant response. This could be in monetary terms, but could also be seen in other ways, such as the impact of a great save in a soccer match.

·  Risk - represents the degree of uncertainty in the organisation's activities.

Using these parameters, they were able to suggest four classifications of organisational culture:

The Tough Guy Macho Culture. Feedback is quick and the rewards are high. This often applies to fast moving financial activities such as brokerage, but could also apply to policemen or women, or athletes competing in team sports. This can be a very stressful culture in which to operate.

The Work Hard/Play Hard Culture is characterised by few risks being taken, all with rapid feedback. This is typical in large organisations which strive for high quality customer service. They are often characterised by team meetings, jargon and buzzwords.

The Bet your Company Culture, where big stakes decisions are taken, but it may be years before the results are known. Typically, these might involve development or exploration projects, which take years to come to fruition, such as oil exploration or aviation.

The Process Culture occurs in organisations where there is little or no feedback. People become bogged down with how things are done not with what is to be achieved. This is often associated with bureaucracies. Whilst it is easy to criticise these cultures for being over cautious or bogged down in red tape, they do produce consistent results, which is ideal in public services.

Charles Handy

Handy (1985) popularised a method of looking at culture which some scholars have used to link organizational structure to Organizational Culture. He describes:

·  a Power Culture which concentrates power in a few pairs of hands. Control radiates from the centre like a web. Power Cultures have few rules and little bureaucracy; swift decisions can ensue.

·  In a Role Culture, people have clearly delegated authorities within a highly defined structure. Typically, these organisations form hierarchical bureaucracies. Power derives from a person's position and little scope exists for expert power.

·  By contrast, in a Task Culture, teams form to solve particular problems. Power derives from expertise so long as a team requires expertise. These cultures often feature the multiple reporting lines of a matrix structure.

·  A Person Culture exists where all individuals believe themselves superior to the organisation. Survival can become difficult for such organisations, since the concept of an organisation suggests that a group of like-minded individuals pursue the organisational goals. Some professional partnerships can operate as person cultures, because each partner brings a peculiar expertise and clientele to the firm.

Elements of Culture

Johnson (1988) described a cultural web, identifying a number of elements that can be used to describe or influence Organisational Culture:

·  The Paradigm: What the organisation is about; what it does; its mission; its values.

·  Control Systems: The processes in place to monitor what is going on. Role cultures would have vast rule books. There would be more reliance on individualism in a power culture.

·  Organisational Structures: Reporting lines, hierarchies, and the way that work flows through the business.

·  Power Structures: Who makes the decisions, how widely spread is power, and on what is power based?

·  Symbols: These include the logos and designs, but would extend to symbols of power, such as car parking spaces and executive washrooms.

·  Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary.