Corporate culture is a vital component of the achievement of a company’s mission and strategies, the improvement of organisational effectiveness, and the management of change.
But what is it?
It will encompass the dominant ideologies of the company. It can be defined as a pattern of shared attitudes, beliefs, assumptions and expectations. They probably have not been written down or stated but will shape the way people behave and interact within a company and underpin the way things get done.
Why is it significant?
It is essential to learn to live with corporate culture; managers can play a part in shaping it. There will be established norms and values governing behaviour. In a highly structured organisation, these norms are likely to be strong and difficult to ignore. In a start-up or more loosely formed firm standards will be flexible, but they will exist. If the norm is to behave informally, it takes courage and strength of character to deviate from it.
Corporate culture is important because it affects much of what is done in a company. If you don’t fit into the culture or the culture does not fit you, there will be problems. If you are not aware of the culture of your company and how it manifests itself or ignore the culture, then ideas, contributions and your decisions may seem irrelevant. Equally, if you do not appreciate that a change or a threat to an existing culture may cause alarm and despondency, you may blunder into situations which rapidly get out of control.
“Corporate culture is important because it affects much of what is done in a company. If you don’t fit into the culture or the culture does not fit you, there will be problems.”
How does corporate culture manifest itself?
It manifests itself in organisational behaviour – how managers and staff, or groups behave in the context of the organisation. The culture is expressed in five areas:
- Norms – the tacit rules of behaviour, which strongly influence how people act, and how things get done;
- Corporate Values – the beliefs in what is good for the company, and what should or ought to happen.
- Organisational Climate – the atmosphere in the workplace as perceived and experienced by all the employees.
- Management Style – the way that managers behave and exercise authority. They may be autocratic or democratic, strict or easy-going, formal or informal.
The style adopted by managers will be affected by the organisation’s culture and values. It will also depend on an individual’s attitudes, but will also be affected by leadership situations, and most important, by the example of the senior leadership, in particular, the CEO, which can exert significant influence on the style of management throughout the whole company.
Management style is more likely to encourage commitment and cooperation and will tend towards being democratic, relaxed, friendly, informal, and open. It does not mean that it should not be tough and direct when he situation demands. It should always be decisive.
- Structure and Systems – including such aspects as the degree of flexibility in the structure and the extent to which a bureaucratic approach is adopted.
What is the relevance of Corporate Culture?
Culture can have a significant effect on behaviour. These can be fundamental if incorrect assumptions about the market and the company’s position in it lead to an unsuitable strategic plan. Even when the correct strategies have been adopted their implementation can be hindered if the wrong assumptions have been made about how to sell the product or service, how to organise the people in the business, or how to manage, motivate, develop, reward and communicate with the team. Cultural change programmes may be required if the wrong assumptions have created an inappropriate culture that is affecting performance.
Is it possible to manage Corporate Culture?
It is a critical factor in achieving success but not easy to obtain. It has probably evolved over the years through a number of learning experiences. A deeply rooted culture could be difficult to change – old habits die hard…
Can it be managed? – yes, but with difficulty.
Should it be managed? Alternative approaches to culture management are:
- Ignore it;
- Manage around it;
- Change only certain elements, to fit strategy;
- Change the strategy.
It is best to adopt the existing culture and maintain what is right while attempting to change counter-productive elements. The only reasons to justify large-scale cultural changes are:
- If the strong values of the company no longer fit the changing environment;
- If the industry is fast-paced and highly competitive;
- If the company is mediocre or worse;
- If the company is joining the ranks of larger successful companies;
- If the company is small but growing rapidly.
If none of these reasons applies, then do not do it! It will cost a lot in performance, cost, and time, and it will take a long time.
How should Corporate Culture be managed?
Culture management involves the following steps:
- Identify and challenge underlying assumptions and beliefs;
- Define or redefine core values;
- Analyse the corporate climate;
- Analyse the management style;
- Plan and implement changes to what aspects of culture are defined by assumptions, values, climate and management style, and what elements should be maintained or reinforced.
Who must act?
The central role in this process is played by the CEO, supported by the leadership team. Excellence is achieved by communicating the vision and defining the company’s mission. This means exercising leadership and getting across what the CEO believes to be the right values. The CEO will be required to motivate all in the company to ensure that they are involved and committed to achieving the objectives.
What will be the results?
Belief in values and adoption of a thriving culture will be developed if something is worth doing is being done well. Pride in product or service and in the company can exist because of a long tradition of achievement and quality.
But identification and loyalty are not inevitable; they must be nurtured.
Emotional commitment cannot be purchased; however, a company cannot afford not to have it. The cost associated with building culture can be high, but it facilitates the personal evolution of each person who contributes to the company. And, the result is retention.
If a company can learn, and quickly convert what is absorbed into action the company’s employees will believe that the management is concerned about them as a whole, not just as individual employees they become more productive as a group, individually satisfied and fulfilled. A satisfied team mean satisfied customers, which leads to competitive advantage and profitability.
Barry ET Harris MBE is a consultant for Proelium Law LLP, he is a British Army veteran, he combines operational experience with extensive commercial consulting, executive, and management expertise gained in complex environments and high-risk jurisdictions worldwide.
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