August 2000 - Understanding Corporate Culture
Corporate Culture is a broad term used to define the unique personality or character of a particular company or organization. Within the company, there may be sub-cultures in departments, divisions, regions or operating units.
Corporate culture starts when the organization begins and develops as it grows. Over time, the culture changes as people come and go. Culture reflects the values, ethics, beliefs, personality and traits of the company's founders, management and employees. In a well-established company, the culture is so strong that even new top management may not be able to change it. Or, if they try, it may take 5, 10 or 20 years to change. Employees who feel comfortable and compatible with the company culture will stay; those who don't will leave or will not perform as well as they can.
Corporate Culture is the Foundation
Culture is so important that it literally underlies the way business is done in every way. Recently, there has been more attention to the influences culture, management style and personality style play in the overall success of a business venture. Where people move within narrow employment circles, there is also an industry culture, such as the banking industry or the dot.com industry.
As executive leaders become more aware of the productivity benefits of healthy corporate cultures, employees come to expect and demand healthier environments. Once an industry culture becomes seriously contaminated, it may affect many companies as people move to others within the same industry.
In a very tight employment market as we have now, many people will refuse to work in the less healthy corporate cultures. The result is that only those who tolerate them will stay and people who are aware of the difference will not accept a job with companies that do not treat people well. Eventually, companies that cannot find qualified employees will either change or suffer the consequences.
Leadership is now a popular term, moving from the theme of 'management' practices as the success factor in the 1950's and 1960's. Recognition of employee's individual needs in order to perform at their highest levels is the essence of 'leadership.'
Leaders are more intuitive and people-oriented; managers are more fact and procedure-oriented. Good leaders can often manage and good managers can often lead. However, a good manager is not necessarily a good leader, nor is a good leader necessarily a good manager.
Corporate culture is highly influenced by the individual personality styles of the company founders in the early stages. Later stages are defined by the executive management team. . Where many of the top management come from the same company or the same industry, they unconsciously bring that old culture to a new company they start.
Understanding a company culture, particularly when entering as a new employee or working as a consultant can be the difference between success and failure in that environment. Ignoring the culture or working at counter-purposes with it are almost sure to lead to failure.
There is no right or wrong corporate culture. There is a right or wrong fit for each individual person. In order to fit and be successful, the company's values, beliefs and ethics must be compatible with the employee's. If not, value clashes will inevitably occur, usually leading to failure, dismissal or resignation of the employee.
Rarely does a company become the failure in a clash with an employee. However, over the long term, companies with unethical and/or illegal business practices, or a seriously sick corporate culture, will suffer their own destruction.
So many factors enter into defining a corporate culture that it is not always an easy task to uncover. Using the tools provided on this website, books and many other resources available, asking questions and contemplating the overriding themes will provide some insight into a culture.
Corporate cultures are often described in major groupings, with predominate traits. There are as many groupings as there are authors. Some of the more popular groupings are as follows:
Jeffrey Sonnenfield's Model:
We see a movement away from a Competitive Model toward a Partnership Model in business in the past decade.
The chart shows some of the differences between the two models - their values and styles of working, how they cope with stress and pressure, and their needs.
The Competitive Model focuses on gaining the upper hand and individual power to be successful. The Partnership Model focuses on people working together to be successful.
Putting it all Together
It may seem simple or easy to place a company in one of these general groupings, yet each company is uniquely different. These models are provided to give some indication of the complexity of making generalized statements about the type of company culture that exists.
They do provide some indications of critical factors to watch for, and some guidelines to use in trying to determine the culture of a company.
Culture is influenced by the age of the company, as noted in the Adizes model. Some cultures can only survive in the early stages, for example.
Death can come in many ways. In the corporate life cycle, death comes more often than success, particularly in the beginning. It is interesting to review the top companies of 100 years ago - few of those companies exist today.
Understanding corporate culture — especially the one where you find yourself — can be a challenging exercise. By digging into how things work, you can gain a glimmer of why they work that way. If you are in a position to influence the corporate culture, by understanding where you are, you can make changes to move your company, organization or department in a different direction.
Beware of casting the corporate culture in concrete. Key people can have great influence on the culture in a very positive way if they understand how it works. And, a few very negative people can undo all the good work of many others in a short time. Monitoring the culture and making changes is an on-going process. By the time all your changes are implemented, new people will have arrived, others will have left, the market may have changed and the world political situation may have moved dramatically.
The most useful exercise for anyone interested in corporate culture is learning to assess the situations they find themselves in and compare those to what works best for them. One tool for doing that is described in the February 1998 newsletter article "Assessing corporate culture and your compatibility."
Source: In Search of Identity: Clarifying Corporate Culture, (c) 1993-2000 Barbara Taylor and Michael Anthony
A few newly defined management styles (courtesy of the Humor at Work newsletter: "Jesture # 64: Management By...?"):
Admiral Grace Hopper on advice to the young (whom she defines as "anybody half my age"):
Page updated: June 05, 2009
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