Victoria Odnosum
Yaroslava Fedoriv
Academic Writing
11 April 2013
The
Importance of the
Corporate Culture
This research
is dedicated to the question
of the corporate
culture and its
importance for the
organizational performance. This aim
will be achieved
through the consideration
of the brief
history of the
corporate culture investigation, different tries
to determine the
meaning and essence
of this phenomenon, classifications and
categorizing, the reasons and
conditions of the
influence of the
corporate culture on
organization’s success.
At the 1930s
the investigation in the
field of the
corporate behavior was
begun. For the first
time organizations were
studied in terms
of culture. The famous
Hawthorne studies at
the Western Electric
Company was the
first scientific attempt
to combine the
idea of the
culture with the
environment in the
organization. The first experiment
studied how the different
levels of lightning
influence on the productivity. The conclusion
was made as
follows: the lightning had
not big influence
on productivity. Another experiment
was established for
a nine-men group
that assembled terminal
banks for telephone
exchanges. The workers were
given an aim to
work as hard
as they could
in order to
maximize their personal
income. This experiment
showed that the
workers who wanted
to be accepted
by the group
tried not to
produce too much, or
too little. The opportunity
to earn more
money became the second
priority. After a follow-up
interview program with
thousand workers, the Hawthorne
researches discovered that
the human element
in the workplace
was considerably more
important than previously
believed (Kotter and Heskett
37).
The Hawthorne
studies was the
important step forward
in qualitative research, though the
understanding corporate culture
stayed quite primitive. Most mid-century
the researches of
the corporate culture
implemented quantitative psychology and sociology, but lately
in 1970s they used
the anthropological theories
and methods. The biggest
interest in this topic
was caused by the
appearance on the American market
of the successful
foreign companies. Specifically,
the steep progress
of the Japanese
companies in totally
different industries made
many people to
muse about the
connection between corporate
values, attitudes, and behavior
with the organization’s success.
During these
years of investigations and
defining the corporate
culture there were
created numerous quantity
of different definitions
of this phenomenon. For example, a 1998
study identified 54
unique definitions in
academic literature that
was written between
1960 and 1993.
Edgar Schein, professor at the
MIT Sloan School
of Management, offered quite
general, but helpful definition (232):
a pattern
of shared basic
assumptions that the group learned
as it solved
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.
Most discussions
of corporate
culture (Cameron and
Ettington 357 ; O’Reilly and
Chatman 163; Schein 253) comes to the idea
that corporate culture is a socially constructed attribute
of organizations which serves
as the “social
glue” uniting members of an organization together, or
the “compass” that
provides direction. There
exist more interesting
metaphors (e. g. magnet,
lighthouse, exchange-regulator, affect-regulator, need satisfier, sacred cow), which
shows that corporate
culture is very
important, but has very
slippery definition.
The
majority of scientists
agreed that the
notion of the
corporate culture refers
to the taken-for-granted values, underlying assumptions, expectations, and definitions
present which characterize
organizations and their
members. This culture influences
on the way
the members of
the organization think, feel, and behave. All
the definitions, regardless the
fact that they
were created by the
scholars from different
scientific spheres, like sociology, psychology, anthropology, and
management science, contain three common attributes. The first
one concerns the
concept that shared
meaning is critical; the
second one states
that corporate culture
is socially constructed and
is influenced by the environment
and history; the
third attribute lies
in the fact
that corporate culture
has many symbolic and
cognitive layers.
To
understand better these
symbolic and cognitive
layers, Schein has categorized
corporate culture into
three fundamental categories: observable artifacts, espoused values, and basic
underlying assumptions (233).
Observable artifacts are
visible, sometimes material stuff
that represent organization’s attitudes,
and believes. That can be the architecture and
physical surroundings; its products; its technology; its style,
which can be
noticed in clothing,
publications, etc.; its published values
and mission statement; its language, gossips, jargon, humor, myths and
stories; its rituals, practices, and
ceremonies. Espoused values are
the values and rules of
behavior that are
stated by the
organization in official philosophies
or in public
statements of identity. Also
it can be
a projection for
the future. Basic assumptions
are the deepest
layer of the
corporate culture because
they belong to
the unconscious sphere. These
values form for
a long period
of time, that is why they
are taken-for-granted. Basic
assumptions become so
integrated that they
are hard to
be discovered from
the inside of
the corporate culture.
As far
as the notion
“corporate” culture is
determined, and its essence
is revealed, there appear
a question of
the corporate culture
influence on the
organization’s performance.
This question began
to trouble experts
in 1970s when
the competition between
companies had grown
very fast due
to the emergence
of new strong
players on the
market. To reveal the
reasons of the
success of one
companies, and the failure
of the other, many researches
were conducted. Despite the
differences in the
research goals and
methodology, their
conclusions were quite
similar: all companies have
corporate cultures, although some
of them have
more strong culture
than the others; these
cultures can influence
greatly on individuals
and on performance, especially in a
competitive environment; this
effect may be
even greater than
all those factors
that traditionally considered
to be important
for the organization
to achieve success (strategy, corporate structure, management systems, financial analysis
tools, leadership, etc.); the
best American and
Japanese executives often
spare much time
to creating, shaping, or maintaining
strong corporate culture (Kotter and Heskett
9).
Considering
the results of
these researches, such conclusion
can be made: strong
corporate culture determines the
effectiveness and success
of the organization. One of the most
important advantages of
having a corporate culture is
the presence in
the organization common and
consistent values and
methods of doing
business that are
shared by almost
all managers. New employees
adopt these values
very quickly. Corporate culture
helps to correct
new executives, if they
violate the organization’s norms.
The other important
thing about strong
corporate culture is
goal alignment. In a company
with a strong culture,
employees tend to work
for achieving one goal,
that means that they move
in one direction. Corporate culture
create an unusual
level of motivation. Commitment and
loyalty that appear
due to the
culture make people
strive harder, whereas, shared
values and behaviors make
people feel good
about the company
they work in. Also, corporate culture
can create the
system of control
that do not
rely on formal
bureaucracy (Kotter and Heskett 16).
However, one of the researches
among those that
were conducted in
1970s showed that
the strength of
the corporate culture
not always leads
to strong performance. There was
found out the
range of companies
that had relatively
strong corporate culture
and relatively weak
performance: General Motors,
Sears, Citicorp, Godyear, etc.
Actually,
strong corporate culture
can be named
good only if
it is strategically appropriate. It
should fit its
context. For example, culture characterized by rapid
decision making and no bureaucratic behavior will enhance
performance in the highly competitive
deal-making environment of a mergers and acquisitions
advisory firm but
might hurt performance in a traditional life insurance
company. A culture in which people value stable and tall hierarchical structures might not work
well in a slow-moving environment but be totally inappropriate in a very
fast-moving and competitive industry. That
is why scholars
(Cameron and Quinn
45) distinguish four types
of corporate culture: control (hierarchy), compete
(market), collaborate (clan), and create
(adhocracy). But before proceed
to comparison of
these types, it is
important to remind
that none of
them is better
than another. Some cultures
in certain companies
may be more
appropriate than others.
The
first, control type has
some similarities with
the bureaucratic corporation. Values of this type
is defined by
stability and control, internal
focus and integration. The structure
of the authority
and decision making
is well defined. The
effectiveness of leaders
in hierarchical cultures
depend on their
ability to organize, coordinate, and monitor
people and progress. Good examples
of companies with
such type of
corporate culture are
McDonald’s, Ford Motor Company.
The
second, compete type similarly
to the control
culture value stability
and control, however, they have
some differences. Market companies, unlike hierarchical ones, have
an external orientation
and they value
differentiation over integration.
Therefore, such companies make
an emphasis on the
relationship with suppliers, customers, unions, legislators,
consultants, etc. They look for
their success in
external relationship,
whereas control type
is based on
stability which is
supported by rules, standard operating
procedures, and specialized job
functions. General Electric –
is one
of the best
examples of compete
type.
Next type
which is collaborate
type is similar
to control type
in inward focus
with concern for
integration. Though, the emphasize
on flexibility and
discretion makes difference
between collaborate organizations, and
control and compete organizations. Collaborate type
can be also
named as Japanese
model, because Japanese companies
traditionally have such
type of corporate
culture. They structure their
companies as semi-autonomous groups
that look like
family. The example in the
American business is
Tom’s of Maine, the
producer of all-natural
toothpastes, soaps, and
other hygiene products.
The last create type
has the same
values as collaborate
type. These are
flexibility, and discretion. Nevertheless, they do not share
the inward focus.
Success for such
companies lie in
terms of innovation
and creativity. They try
to find new
opportunities to develop
new product, new services, and
new relationship; they value
flexibility, and adaptability.
Create type of
corporate culture is
preferred by high-tech
companies such as
Google (Cameron and Quinn
45-49).
To sum up, corporate
culture is the
notion that is
hard to define. In
this case metaphors
like “social glue”, “compass”, “affect regulator” neatly
convey the meaning and
the importance of
the corporate culture. It
is obvious that
corporate culture has a great
influence on the
organizational performance.
But it
is important to
choose appropriate corporate
culture according to
the organization’s strategy.
Works cited
1.
Cameron,
K.S. and Ettington, D.R. “The conceptual foundations of organizational
culture”. Higher Education: Handbook of
Theory and Research. Ed. Smart J. C. New York: Agathon, 1988. 356-396. Print.
2.
Cameron,
S. and Quinn, E. Diagnosing and Changing
Organizational Culture. New York: Addison-Wesley, 1999. Print.
3.
Kotter,
J. and Heskett J. Corporate Culture and Performance.
New York: Simon and Schuster, 2008. Print.
4.
O’Reilly,
C. A. and Chatman, J. A. “Culture as social
control: Corporations, cults, and commitment.” Research in Organizational Behavior. Ed. Staw, B.M. and Cummings,
L.L. Greenwich, CT: JAI Press, 1996. 157-200.
Print.
5.
Schein,
E. “Culture: The missing concept
in organizational studies”. Administrative
Science Quarterly 41.2 (1996): 229-240. Print.
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