Defining Corporate/Organizational Culture
Every organization, whether small or big, has an organizational culture. This culture can be defined variously. It involves a collection of common values, practices, symbols, assumptions (Bryson 34), and beliefs that influence members of an organization.
Organizational culture is a company’s practices and beliefs that determine how the entity is ran and operate on a daily basis. Employees of an organization share common beliefs and practices, values, norms, systems, symbols, and working language.
New employees and other entrants into the organization are socialized into these collective behaviors, attitudes, and assumptions that form part of the entity’s cultural framework.
Organizational culture is what shapes the organization’s history, current assumptions, experiences, and key viewpoints that hold it together. Culture is a way of thinking. It is the unwritten or unspoken ways of working together in an organization.
Corporate culture shapes the organization’s key strategies and their implementation. As such, it plays a major role in influencing the success of an organization (Zabid, Murali and Johari 711).
Importance of Corporate Culture
Organizational culture provides a shared platform that ensures that members of an organization are operating from the same page. It provides a basis for integration and coordination of operations in an organization thus guiding behavior and change.
Organizational culture helps employees have a common goal and stay united thus providing an organization with a well-networked work setting that is vital for the communication, understanding, and implementation of key organizational strategies (Bryson 752).
Corporate culture influences the behavior and social interactions among employees. It establishes or sets standards of acceptable behavior in an organization.
Culture links organizational strategies and policies to everyday’s organization activities. This equips the organization with a competitive advantage, thus helping it to achieve its goals and objectives (Zabid et al. 712).
Organizational culture reflects and contributes to the brand image of the organization. It shapes how the outside world will view the organization.
An organization with a good company image is likely to be viewed by external stakeholders as a better and strong business entity. It makes them view the organization as one that has the capacity to deliver quality goods or services.
This enhances the relationship between the external stakeholders and the organization. It boosts efficiency, effectiveness, profitability, and overall performance of the organization (Bryson 751).
It promotes efficiency in an organization. Corporate culture influences the standard of behaviors and the kind of goals that members should pursue.
This affects change of behavior and attitudes among employees thus aligning them with organizational goals and objectives.
When the activities and attitudes of employees and members of the organization are well aligned with the organizational goals and objectives, they can deliver much more and more efficiently.
This translates to overall improvement of organizational efficiency and performance (Bryson 750, 756).
Organizational culture focuses more on human resource in the entity. It helps build lasting cordial relationships among employees. This relationship of mutual respect and understanding helps members of an organization to bring about needed changes in the firm.
Since organization culture changes over time, new ways of doing things are adopted. This supports creativity and innovation in an organization which are vital components of success in today’s competitive global market.
Organizational culture is the glue that holds the entity together. It helps the internal mechanisms and practices remain intact and effective. Culture binds members of an organization to certain expectations and approved patterns of behavior.
This enables the organization to effectively maintain its internal positive working practices and internally handle employees’ grievances (Zabid et al. 711).
Organizational culture is vital to the improved performance of both the employees and the organization. It helps increase efficiency among employees which in turn increases performance of the organization. It helps members of the organization to understand key organizational objectives, processes, and events.
This enables the members of the organization to understand their role in these processes, thereby increasing their knowledge and performance as well as that of the organization (Zabid et al. 712, 713).
Corporate culture is a key influence of decision-making processes among employees in an organization. Good corporate culture enables members of the organization to make informed and guided decisions that inform the direction taken by the organization.
Effective decisions and decision- making mechanisms are key components of success in an organization. They facilitate efficiency and effectiveness among employees at the workplace, thus leading to enhanced organizational performance.
Strong organizational culture enhances commitment and self- confidence among employees. It facilitates and promotes ethical behaviors among members of the organization.
When employees and members of an entity are committed to the organization’s activities, they become motivated and this increases their productivity (Zabid et al. 720, 721).
Determinants of Corporate Culture
There are several factors that determine organizational or corporate culture. These are analyzed below:
These are the actions and attitudes of individuals and groups towards one another and towards the organization as a whole. It determines organizational culture.
Behavior that reflects the values of the organizations is often rewarded and becomes the general, acceptable, and dominant behavior. On the other hand, behavior that does not reflect the organization’s values is not rewarded; it is punished.
Behavior plays a vital role in influencing the organizational culture. It includes the way individuals respond to certain conditions. It forms a major component of culture since the latter is the overall set of behavior standards expected of individuals or group of individuals.
Culture cannot exist without behavior; it determines the kind of culture an organization has at a particular period (Zabid et al. 720).
These are developed among the employees and the organization over time. It encompasses mutual understanding among individuals or members of an organization.
Interaction among employees determines the acceptable and unacceptable norms, behaviors, and assumptions that shape organizational culture.
An organization with poor relationship among its members cannot sustain a healthy organizational culture. Corporate culture is dependent on the interrelationships among employees in the organization.
Communication and social interaction forms the basis of analyzing acceptable and unacceptable norms and behavior patterns. Therefore, corporate culture is more or less determined by relationships (Hellriegel, Slocum and Woodman 529).
Individual attitudes influence behavior patterns of these individuals, thus influencing the culture of an organization. The attitude of employees determines the kind of corporate culture that exists in an organization (Balthazard, Cooke and Potter 715, 727).
The value system among individuals or employees in an organization is paramount to the behavior patterns of these employees. They may be different due to upbringing, religion, and educational levels.
However, the organization adapts these many and different value systems to come up with acceptable organizational values that shape the culture of the organization.
A change of values by employees leads to a change in the values of the organization, leading to change in organizational culture in extension (Balthazard et al. 715, 727).
This is another important aspect when it comes to organization culture. Internal and external factors of a business entity may affect its culture variously. External factors such as political, social, economic and physical environmental may influence the operations of the organization.
Organizational structure is a factor within the business entity that informs its cultural framework. When the structure fails to support transparency, this may lead to poor communication, relationships and culture in the organization (Balthazard et al. 710, 714).
Organizational culture is expressed through the external and internal practices of the entity. It is seen in the degree of freedom given to employees in decision-making, contributing to new ideas, innovativeness, creativity and personal expression. It is reflected in how well an organization treats its employees and customers as well as the community.
Organizational culture is also influenced by the organization’s structure. This is how an organization distributes power and information throughout its various levels. Employees’ commitment and dedication to the job and goals of the company is also a key indicator of the culture of an organization.
When employees are more committed and dedicated to the organizational activities, they provide a corporate image that defines the kind of culture an organization has at a particular period (Zabid et al. 721).
Healthy Organizational Culture: Characteristics
A healthy organizational culture is characterized by the following key aspects:
Employees of an organization that has a healthy organizational culture take pride in their work. They feel as part of the organization. This makes them feel more obligated to their work.
It also motivates them to work more effectively and efficiently. Organizational pride among members of an organization also boosts the image of the entity to its external stakeholders (Balthazard 716).
Effective Teamwork, Communication, and Employee Relationships
A healthy and strong organizational culture is highly characterized by the presence of highly effective teams. The flow of information and the understanding of this information within an organization is an indication that a healthy corporate culture is present.
This allows for effective exchange of information, behavior patterns, norms, and attitudes in an organization (Rothman 220).
Organizations with healthy corporate culture have an effective leadership structure that influences the organizational culture and change.
Quality leadership is vital for every organization’s success. It plays a major role in the implementation of key strategies in the achievement of organizational objectives (Balthazard 715).
Positive Client-Customer Relations
Strong and positive relationship between employees, employees and managers and employees and customers exists in a company with a healthy corporate culture.
Innovativeness and Creativity
A healthy corporate culture stimulates innovativeness and creativity at the work place. Employees are accorded the right training and suitable working environment to effectively come up with better products and services.
This cutting-edge thinking in an organization stimulates the growth of employees as well as that of the organization.
Types of Corporate Culture
Every organization has a type of organizational culture that is different from that of another organization. However, there are similarities and indicators of corporate culture that can be used to classify different organizational cultures. The following are some of the dimensions applied in defining different organizational cultures:
Deal and Kennedy’s Model of Defining Corporate Culture
This classification of organizational culture was developed by researchers Deal and Kennedy. They first identified the subcultures, strong cultures, and weak cultures in an organization.
A subculture exists where differences in departmental goals within an organization exists. It is the segments or sections of the main organizational culture that show different individual values, norms, behaviour and beliefs different from the main culture.
It may arise due to difference in job requirements, different departmental goals and geographical area within the organization (Terrence and Deal 34). It can be within the organization or formed for social interactions outside the organization by members of the entity.
Strong corporate culture is highly characterized by employees’ common aspect and sharing of beliefs, norms, behaviours, and values in the organization.
An organization with a strong corporate culture is characterized by recognition, respect and strong social relationship among its employees and managers.
It makes them feel more proud to be associated with the organization. Employees deliver quality services and goods under a strong organizational culture that recognises them and rewards them accordingly (Terrence and Deal 15).
A weak organizational culture is not strongly knit within the organization. It does not fully affect change of behaviour, norms, and work patterns among members of an organization.
Communication and implementation of key organizational strategies is not well understood and executed in the organization due to its loose nature. This creates diversity of expected behaviour patterns.
Lack of congruence in these organizations is highly associated with the influence of individual’s objectives and culture on the organization (Terrence and Deal 15).
Dean and Kennedy came up with the following four types of corporate cultures:
Tough Guy Culture
According to Terrence and Deal (15), a tough guy culture exists in an organization that has effective feedback mechanisms and which is characterized by high risk. It is more prevalent among large financial service sectors where quick responses are barely a luxury but a necessity.
In a tough guy organizational culture, the long term aspects are not considered as much as the short term or present aspects due to the high risk of the organizational activities.
This is for example in the police force, sports and emergency response surgeons (Terrence and Deal 111).
“Work Hard, Play Hard”
Work hard, play hard culture is characterized by rapid feedback and rapid reward as well as low risks. Organizations with a work hard play hard culture are involved in taking few risks and receiving fast feedback. Most software companies are characterized by this work hard, play hard culture (Terrence and Deal 113).
This is another form of cultural framework found in various organizations. It is characterized by significant decisions touching on high stake undertakings.
It is more common in companies performing experimental projects and research such as oil exploration companies (Terrence and Deal 117).
Process culture is often found in organizations that have slow or no feedback mechanisms. This culture is characterized by procedures that are overly cautious in following the laws, rules and regulations.
Consistency of results of the process culture makes it good for public service, insurance companies and the banking sector (Terrence and Deal 119).
Market Oriented Cultures
There are four types of market oriented organizational/corporate cultures. These are:
- Entrepreneurial corporate culture
- Competitive corporate culture
- Consensual corporate culture, and
- Bureaucratic corporate culture
Entrepreneurial Corporate Culture
In entrepreneurial corporate culture, issues of profitability, market superiority, competitive advantage, and profits are more emphasized. In this type of organizational culture, the entity supports values, attributes, and behavior patterns of the employees that lead to profitability.
The presence of certain characteristics that supports and enhances the organization’s capability to achieve market superiority that leads to competitive advantage and profitability are key indicators of entrepreneurial corporate culture.
In entrepreneurial corporate culture, less emphasis and attention is given to other factors such as predictability and employees’ wellbeing. More emphasis is placed on profitability of the organization (Zabid et al. 715).
Competitive Corporate Culture
The competitive corporate culture emphasizes on risk taking, high levels of dynamism, creativity, and innovation. In a competitive corporate culture, some aspects of an organization are given priority over others.
Issues of competitiveness in an organization or industry are paramount and more important than any other aspect of the organization (Balthazard et al. 719). This corporate culture supports creativity and innovativeness among members of an organization.
This is encouraged in order to facilitate a working environment that is conducive for the breeding of competition-oriented employees that are able to produce more competitive products for the market (Zabid et al. 715).
Consensual Corporate Culture
The consensual corporate culture lays more emphasis on loyalty, tradition, self-management, personal commitment, teamwork, and social influence.
It is more evident in family- owned businesses where loyalty, tradition, personal commitment, and social influence play a vital role in the success of the organization in the society. It is not however limited to family businesses.
Other organizational structures that support and encourage personal commitment, teamwork, and social influence are characterized by this consensual corporate culture.
Members of an organization with a consensual corporate culture feel as part of the organization and are more motivated to bring their share of experiences and skills to the workplace (Zabid et al. 715).
Bureaucratic Corporate Culture
The bureaucratic corporate culture focuses more on predictability, stability, and efficiency. Bureaucratic culture does not promote creativity and innovations among employees.
The employees in such organizations are often subjected to certain set standards and predictable ways of doing things in the organization. This limits adoption of changes in an organization.
Procedures, work, and behavior patterns are aligned to be predictable, efficient and stable. Organizations with bureaucratic corporate cultures are more concerned with the effectiveness and predictability of results rather than the profitability and competitiveness of their products (Zabid et al. 715).
Best Buy Co. Inc. is a US electronic retailer giant. Best Buy has increased its presence in many countries due to its strong organizational culture. This is a customer focused and employees’ wellbeing culture.
Best Buy responds quickly to customer needs through its efficient customer service. As one of the leading electronics’ retailer in the world, it strives to deliver the best electronic gadgets and equipments to its dozens of stores across national borders.
With a competitive culture that encourages results oriented work environment among its employees, Best Buy has continued to perform better in the electronics industry.
The company is also much involved in building long lasting and beneficial customer relationships. For example, there are some stores with shopping assistants to help customers in their shopping as well as take them on a shopping trip.
This customer- oriented and competitive culture is good for the company since it is involved in a fast changing electronic market.
Founded in 1962 by Sam Walton, Wal-Mart is an American multinational retailer. It has stores in 27 countries, 2.2 million employees worldwide and with expected approximate sales of $444 billion in 2012.Wal-Mart has a strong organizational culture.
It has a ‘cult-like’ strong culture. Employees of Wal-Mart exhibit organizational pride; they are very proud to be associated with Wal-Mart. They take pride in their work. They are commonly referred to as ‘Walmartians’ or associates.
This is a sign of quality leadership in the organization. Employees and managers are motivated to work better and most of them have high ambitions. Wal-Mart has dedicated team players at all levels as a result of an effective communication system and mechanism.
This strong culture has helped Wal-Mart sustain an entrepreneurial spirit throughout. It has made the company to be more innovative, profitable and continue to grow expansively.
For example, Wal-Mart is one of the leading private employers and among the few existing trillion dollar companies.
Toyota Motor Company which was founded in 1937 by Kiichiro Toyoda and headquartered in Toyota, Japan, is a multinational automobile car manufacturer.
Toyota’s growth as one of the leading and most profitable companies in the world is based on its strong entrepreneurial and competitive corporate culture. Its culture focuses more on quality product development and strong, mutually beneficial customer relationship.
Toyota is also strongly engaged in the use of innovative technological and advanced mechanisms in its production of automobiles. The much visible efficient customer and employees’ relationship in Toyota has also helped the company to come up with highly competitive products.
IKEA which was founded in 1943 by Ingvar Kamprad is Swedish international furniture and home products retail company. IKEA is widely associated with product development and lower prices.
It portrays a customer oriented corporate culture that focuses more on the customers and product competitiveness.
Apple Inc. which was founded in 1976 is an American consumer electronics and computer software manufacturer and retailer giant.
The company is strongly based on a flat organizational structure that encourages mutual customer and employee relationships that also encourage an open entrepreneurial corporate culture to thrive in the company.
The entrepreneurial culture enables the company to strategically align employees to their areas of expertise. This helps the company in the development of its innovative and highly creative and successful products in the market.
Corporate culture is an important aspect of every organization. It influences the standard of behaviors and the kind of goals that members should pursue. This affects change of behavior and attitudes among employees in the organization, thus aligning them with organizational goals and objectives.
When members of the organization are aligned with organizational goals and objectives, they perform better. This leads to the overall improvement of organizational performance. Organizational culture that stimulates creativity and innovation influences success in an organization.
It increases organizational performance. There is therefore the need for organizations to embrace a favorable organizational culture that motivates the employees.
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