August 2000 - Understanding Corporate Culture

Definitions; Models of Corporate Culture; Influences and Trends; Resources (Books, Articles, Internet, The Lighter Side)
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Definitions

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.

Models of Corporate 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:

Blake/Mouton Model:

Country Club Style:
thoughtful attention to needs of people for satisfying relationships; comfortable, friendly organization atmosphere and work tempo.
Authority-Obedience Style:
efficient operations where human elements interfere to a minimum degree.
Impoverished Style:
exertion of minimum effort to get required work done.
Organization Man Style:
balancing concern for people with concern for production.
Team Style:
work accomplishment is from committed people; 'common stake' leads to relationships of trust and respect.

Jeffrey Sonnenfield's Model:

Academies:
for steady climb through the organization; IBM is the classic 'academy' where employees think of themselves as "IBMers" for the rest of their life; constant training to reinforce the culture.
Clubs:
group consensus and the good of the organization comes first; employees tend to have substantial equity in their company and expect to stay throughout their career.
Baseball Teams:
entrepreneurial style; people are rewarded for their individual contributions; great emphasis on personal freedom and flexibility.
Fortresses:
concerned with survival; many are struggling to reverse their fortunes; no promise of job security or reward; often turn-around or crisis situations.

Adizes Model:

Courtship:
pre-organization birth; as in "falling in love," courtship may or may not lead to marriage and family; people are committed to developing an organization; entrepreneurism is pre-dominant.
Affair:
courtship leading nowhere.
Infancy:
very early stage company; performance is predominant.
Infant mortality:
death in the early stages.
Go-Go:
performance of the company and entrepreneurism are predominant traits.
Founder/family trap:
death due to lack of the development of administrative and integration functions.
Adolescence:
administrative roles and entrepreneurism are balanced as pre-dominant, with performance and integration less prominent.
Unfulfilled entrepreneur:
entrepreneurism high, but other styles can't develop.
Premature aging:
performance and administration high, entrepreneurism low, integration never develops.
Prime:
performance, administration and entrepreneurism are balanced as pre-dominant; integration is less prominent.
Stable:
performance, administration and integration are all balanced as pre-dominant; entrepreneurism is less prominent.
Aristocracy:
administration and integration are balanced as pre-dominant; performance and entrepreneurism are less prominent.
Early Bureaucracy:
administration is the pre-dominant trait; performance and integration is less prominent; entrepreneurism is non-existent.
Bureaucracy:
administration is it; performance, integration and entrepreneurism are non-existent.
Death:
limited or no functionality, the organization cannot survive without emergency measures.

Trends and Influences

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.

Competitive Model	Partnership Model
VALUES AND STYLES OF WORKING
Competing against others Winning against opponents Individual power / control Individual goals Accomplishing objectives Impersonal management Giving orders Hierarchal / structured	Relationships / team power Common, shared goals Communication / understanding Working with others Empowering people Personal bonds / empathy Building unified teams Leadership by example
COPING WITH STRESS
Tendency to FIGHT or DENY:	Tendency to PITCH IN and RESOLVE:
Taking the offensive Blaming / judging others Trying to change the situation Justifying themselves Intimidating others Withdrawing / denying Refusing responsibility	Doing whatever is necessary Facing the problems Taking care of priorities Bending to meet the situation Acknowledging emotions Stepping forward to help Assuming responsibility
NEEDS
Admiration Expression of power Appreciation Validation Success / conquest Reassurance of power	Understanding Respect Acceptance Mutual trust Caring / authenticity Encouragement

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."

Internet Resources

Humor at Work: Laughing Nine to Five - http://www.teleport.com/~laff9to5/
Satire: "Man in the Basement" http://www.missioncreep.com/mw/basement/
Leaders Direct - a wealth of articles about Leadership and Management, including a Leadership Style Quiz
W.L. Gore & Associates Corporate Culture Statement http://www.gore.com/corp/about/culture.html (includes a link to a PDF document describing their unique culture).
Resources: Thinking Outside the Box http://www.isixsigma.com/tt/out_of_the_box/ (lots of related articles on this site).

Books - Disclosure: We get a small commission for purchases made via links to Amazon.

Corporate Lifecycles: How and Why Corporations Grow and Die and What to Do About It, Ichak Adizes, Prentice Hall, Englewood Cliffs, NJ, 1988 (rather detailed and academic, but offers great information) Prentice Hall Press; (May 1990) ISBN: 0131744267
Blake/Mouton Model from Harvard Business Review Business Classics, 1991. Reprint of �Breakthrough in Organization Development� Harvard Business Review November-December, 1964.
Book list - Corporate Culture http://www.millcitymarketing.com/mcpub01/stuff/lib-culture.htm

Articles

Article "Corporate Culture" http://www.auxillium.com/culture.shtml (lots of other articles on their HR Manager page)
Article "Corporate Culture: What Would It Be Like to Work There?" http://www.employmentspot.com/corpculturefeature.htm
Article "Growing the Corporate Culture" http://www.smartbiz.com/sbs/arts/ste9.htm
Article "Corporate Culture: Understanding and Assessment" http://www.hcgnet.com/html/articles/understanding-Culture.html

The Lighter Side

A few newly defined management styles (courtesy of the Humor at Work newsletter: "Jesture # 64: Management By...?"):

MBB: Management by Brainstorm (This could either be a sudden clever plan or a sudden violent disturbance of the mind).
MBD: Management by Divestiture (This will be a spin-off of all corporate units acquired in the nineties).
MBM: Management by Monologue (Two way communication never really worked).
MBOST: Management by Old School Ties (The management gang working together with ideas from their college athletic department).
MBO: Management by Over-correction (It is sometimes necessary to correct above and beyond to get employee attention).
MBPW: Management by Piece Work (Paying for work done will eliminate coffee breaks and unnecessary rest room trips).
MBSC: Management by Space Craft (Top management will be in space looking for new places to benchmark).
MBV: Management by Vortex (This is a whirling mass of air from headquarters that will suck everything near it to the central vision).