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CORPORATE CULTURE. Corporate Culture. Corporate culture is key means to communicate the goals of the organization and the appropriate behaviour in attaining those goals. Observable and Non Observable Culture.
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Corporate culture is key means to communicate the goals of the organization and the appropriate behaviour in attaining those goals.
Observable and Non Observable Culture • Corporate culture consists of the key values and benefits that are shared by organizatonal members. • As such, culture may not be readily observable. • There are, however, signs and symbols of culture that can be observed.
Three Dimensions of corporate Culture 3. Artifacts and behaviors 2. Values and beliefs..which support 1. Underlying assumptions..which support
The most noted writer are core to the definition of culture is Edgar Schein, who argues that there are both observable and non observable levels of culture. • Schein speaks of values and beliefs and of the underlying assumptions in the non observable part of culture.
The values and beliefs are core to the definiton of culture and are the center of corporate culture. • Values and beliefs are not necessarily observable. • However, in some organizations they may be written and widely communicated.
Assumptions • One aspect of culture that is not observable are the assumptions underlying the values and beliefs. • The assumptions are the very foundation of the corporate’s culture. • Indeed, the assumptions may be so widely shared by corporate members that they are unaware of them.
In many corporate cultures, one finds a series of common assumptions known to most everyone in the corporation: • “We are different.” “We are better at….” “We have unrecognized talents.” “We are practical innovators.” • Like values, such assumptions become reflected in the organizational culture.
Values • Values refer to what is regarded as important. • They are expressed in beliefs on what is best or good for the organization and what sort of behaviour is desireable. • The value set of an organization may only be recognized at top level or it may be shared throughout the organization so that it could be described as being “value driven”.
Clearly, the more strongly based on the values, the more they will affect behaviour. • Implicit values, which are deeply embedded in the culture and are reinforced by the behaviour of the management, can be highly influential, while espoused values which are idealistic and are not reflected in managerial behaviour may have little or no effect.
Value Areas: • Care and consideration of people • Care for customers • Competitiveness • Enterprise • Equity in the treatment of employees • Excellence • Growth • Innovation
Market/consumer orientation • Priority given to organizational needs rather than people needs • Performance orientation • Productivity • Provision of equal opportunity for employees • Social responsibility • Teamwork
Values and Organizational Culture • Shared common values lie at the very heart of organization culture. • Shared values help turn routine activities into valuable, important actions. • In organizations, what works for one person is often taught to new members as the correct way to think and feel.
Values and Organizational Culture • Organizations with “strong cultures” possess a deeply shared value system. • Unique, shared values can provide a strong corporate identity, enhance collective commitment and reduce the need for formal and bureaucratic controls. • A strong culture can be a double-edged sword. • If dramatic changes are needed, it may be very difficult to change the organization. • General Motors may have a “strong” culture, but the firm faces enormous difficulty in its attempts to adapt its ways to a dynamic and highly competitive environment
Values are translated into reality through norms and artefacts. • They may also be expressed through the media of language (organizational jargon), rituals, myths and stroies.
The observable part of culture in all organizations consists of the artifacts and the behavior of its members. Artifacts are the signs and products of culture. • The artifacts and behaior may take several noteworthy forms: symbols, awards, stories, hereos, slogans and ceremonies that signify corporate values.
Generally, speaking symbols are objects that convey meaning to others. • Corporate awards are usually symbols of the behavior that the organization is trying to reinforce. • Stories are descriptions of actual orgazitional events that characterize the values of the organization.
Observable Aspects of Organizational Culture • Some aspects of the culture help make it unique and may well provide a competitive advantage for the organization. • Some may be directly observed in day-to-day practices. • Others may have to be discovered—for example, by asking members to tell stories of important incidents in the history of the organization. • By observing employee actions, listening to stories, and asking members to interpret what is going on, one can begin to understand the organization’s culture
Levels of Cultural Analysis • Observable culture, or “the way we do things around here.” • The methods the group has developed and teaches to new members. • Unique stories, ceremonies, and corporate rituals.
Stories, Rites, Rituals, and Symbols • Organizations are rich with stories of winners and losers, successes and failures. • The founding of the organization. • The lessons learned from the heroic efforts of a victorious entrepreneur, whose vision may still guide the firm. • The story of the founding may be so embellished that it becomes a saga—a heroic account of accomplishments.
Nike, History • Nike was founded in the year of 1968 by Philip H. Knight • Phil Knight completed his education from the University of Oregon and the Stanford Business School by 1962. • As a young business man, he decided to travel to Japan and speak to the president of "Tiger shoes." • He presented himself as an American distributor of athletic equipment when he actually had nothing. • He got what he wanted and began selling running shoes under the name of Blue Ribbon Sports (BRS). • Once he became bored with selling shoes at sporting events from the back of his truck, he began producing his own athletic apparel • He renamed his so-called company Nike and hoped for the best to happen • After some time, Knight turned to his old coach from school, Bill Bowerman, for advice on what to do next. • Phil Knight wanted Nike to stand out above the rest.
Nike, History • Once Bill Bowerman came up with the idea for having traction on the bottom of shoes • The Nike Waffle Trainer stood out and made Nike the most unique shoe company of the 1970s. • By the year of 1979, Nike was the most well-known shoe company in the world. • They no longer just sold shoes but sporting equipment as well. • Nike continued to rise in success throughout its prosperity by signing famous sports players ( ex. Michael Jordan) and using intelligent advertising tactics • A graphic design created by Caroline Davidson in 1971. It represents the wing of the Greek Goddess NIKE. • A student at Portland State University in advertising • She handed him the SWOOSH, he handed her $35.00.
Stories, Rites, Rituals, and Symbols • Common story topics • How will the boss react to a mistake? • Can someone move from the bottom to the top of the company? • What will get me fired? • Provide valuable hidden information • How organizational members view the world and live together.
Stories, Rites, Rituals, and Symbols • Rites are standardized and recurring activities that are used at special times to influence the behaviors and understanding of organizational members. • Rituals are systems of rites. • Japanese workers and managers to start their workdays together with group exercises and singing of the “company song.” • Separately, the exercises and song are rites. • Together, they form part of a ritual. • Mary Kay Cosmetics company • Used regularly to spotlight positive work achievements and reinforce high performance expectations • Awards, including gold and diamond pins and fur stoles.
Stories, Rites, Rituals, and Symbols • Often, the language of a subculture, and its rituals and rites, emerge from the group as a form of jargon. • The special language may start to move outside the firm and begins to enter the larger society. • An ad for a Hewlett • “All the features you need are built right in. MSDOS, Lotus 1-2-3…and a 512 K RAM version of the HP 95LX.” • A user-friendly ad?
Stories, Rites, Rituals, and Symbols • A cultural symbol is any object, act, or event that serves to transmit cultural meaning. • Corporate uniforms worn by UPS delivery personnel.
The HP Way - An Example Of Corporate Culture For a Whole Industry • The two founders have developed a management style which had never occurred in a large company before. • “The HP way." • “Hire and fire" mentality: employ many workers for a single big order and to dismiss them afterwards. • “Almost perfect job security.") • Even in 1974, HP avoided layoffs by a four-day workweek. • The two founders trusted in the "individual's own motivation to work" and treated their employees as family members • The custom to call each other by the first name - even the two chiefs were only known as Bill and Dave. • The HP workers were participated in the company with stock options and were even paid additional premiums when HP was successful - today known as profit sharing. • Served to identify the employees with their work and to encourage them. • Benefits such as scholarships for the employee's children. • At the end of the 1950s Bill and Dave decided to write down the company's objectives, which were to serve as guidelines for "all decision-making by HP people since the company had grown ever larger. • With some changes, those objectives are still valid today. • Informal communication within the company, and "Total Quality Control" which aims at producing highly qualified products. • The HP way is seen as model for corporate culture in many countries.
Managerial Reinforce Actions To reinforce the desired corporate culture, managers need to know the key levers and mechanisms to use. Schein offered the following bases for managerial actions to reinforce corporate culture: • The behaviour managers measure and control. • Managers’ reactions to crises. • Modeling and coaching of expected behaviors. • Criteria for allocation of rewards. • Criteria for selection, promotion and termination of employees.
These actions send powerful signals concerning what is valued by the organization. • The levers relating to the reward system and to the hiring and termination system send powerful and durable signals about the organization’s culture.
Just as individuals have personalities, so, too, do organizations. • Organizations, like people, can be characterized as, for example, ridig, friendly, warm, innovative, or conservative. • These traits, in turn, can then be used to predict the attitudes and behaviors of the people within these organizations.
Characteristic of Corporate Culture • Distinctive • Stable • Implicit • Symbolic • Integrated • Accepted • A reflection of top management
Corporate culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations. • This system of shared meaning is a set of key dimensions, in aggregate, capture the essence of an organization’s culture.
Individual Initiative --- the degree of responsibility, freedom, and independence that individuals have. • Risk Tolerance--- the degree to which employees are encouraged to be aggressive, innovative and risk-seeking. • Direction --- The degree to which the organization creates clear objectives and performance expectations.
Integration --- The degree to which units within organization are encouraged to operate in a coordinated manner. • Management Support--- the degree to which managers provide clear communication, assistance, and support to their subbordinates. • Control--- the number of rules, and regulations, and the amount of direct supervision that are sed to oversee and control employee behavior.
Identity--- the degree to which members identify with the organization as a whole rather than with their particular work group or field of professional expertise. • Reward System--- the degree to which reward allocations (i.e. Salaryincreases, promotions) are based on employee performance criteria in contrast to seniority, favoritism and so on.
Conflict tolerance---the degree to which employees are encouraged to air conflicts and critisms openly. • Communication patterns--- the degree to which organizational communicatio are restricted to the formal hierarchy of authority.
Appraising the organization on these 7 characteristics, then, gives a composite picture of the organization’s culture. • This picture becomes the basis for feelings of shared understanding that members have about the organization, how things are done in it, and the way members are supposed to behave.
Culture Is a Descriptive Term • Corporate culture is concerned with how employees perceive the seven characteristics, not whether they like them.
That is, it is a descriptive term. • This point is important because it differentiates the concept of corporate culture from that of job satisfaction.
Research on corporate culture sought to measure how employees see their organization: Are there clear objectives and performance expectations? • Does the organization reward innovation? Does it encourage competitiveness?
In contrast, research on job satisfaction seeks to measure affective responses to the work environment. • It is concerned with how employees feel about the organization’s expectations, reward practices, methods for handling conflict and the like.
Although the two terms undoubtedly have characteristics that overlap, keep in mind that the term corporate culture is descriptive, whereas job satisfaction is evaluative.
