Corporate Culture: Understanding Its Importance And Evolution

LEARNING OBJECTIVES

1. Define the concept of organization development and recognize the need for change and renewal.
2. Describe organization culture and understand its impact on the behavior of individuals in an organization.
3. Understand the expectations of the psychological contract formed on joining an organization.
4. Describe the five stages of organization development.

Problems

1. Employees drinking alcohol while at work pose liability problems to Quantum, especially when the alcohol is furnished by the company.
2. As Quantum grows, the potentially out-of-control beer busts may be only a symptom of rapid growth.
3. How to deal with motivation and esprit de corps in the face of rapid growth and change.
4. Recognize the factors contributing to the accelerating rate of change.
5. Identify the ways an organization uses renewing processes to adapt to change.
6. Determine the individual and group methods of coping with change.
7. Understand and apply the sociotechnical-systems approach to OD.
8. Recognize the importance of corporate culture to organizational success.
9. Identify the key factors used in assessing corporate culture.
10. Describe the culture and organizational factors that lead to effective organizations.
11. Describe the major ethical, value, and goal considerations of an OD program.

Basically, corporate culture is the personality of a company: the individual or group values, perceptions, behavioral characteristics and shared beliefs. It is symbolic, holistic and stable in nature.

This involves the beliefs and behaviors that indicate how an organization's employees and top management interact and enable outside important business transactions to be carried out. Mostly corporate culture develops periodically and comprehensively over time as a result of various cumulative traits of the employees that the firm hires (Cameron & Quinn,2011). A company culture will be determined by through different workers dress code, business hours, office layout, worker's benefits, turnover ratio, hiring informed decisions and customer treatment and overall satisfaction. It has effects on every aspect of the company activities and level of operations.

The history of corporate culture

Increased awareness of corporate or company culture in various set of business operations and other organization activities started in the 1960s. During this entire period, corporate culture was utilized by top managers, sociologists and philosophers to evaluate the overall character of a given organization in a company setting. The example of this aspect included participant's behaviors and beliefs, firm value systems, top management strategies, worker communication and interaction, a conducive working environment, perception and attitude of employees existing in the entire company (Denison,1990).Corporate culture would later develop its domain to also include the charisma of Chief executive officers and company symbols representing logos and trademarks of the firm's products in the target market.

Corporate culture was not only created by management and workers of a firm but also affected by state cultures and people traditions, current economic trends, international trade, organization size and the goods its dealing with. There exist several terms that influence organizations impacted by several cultures especially in the period of rising globalization and the increased country to a country interaction of the modern business environment. In such perspective corporate culture involves the positive interaction of individuals from distinct backgrounds in the business world (Eccles,Ioannou & Serafeim, 2012). There exists culture shock which basically describes the increased anxiety of an individual's experience during carrying out business activities in a society other than their own. In order to conduct a great cross-culture experience and facilitation of a more comprehensive and productive corporate culture, organizations have in-depth resources to counter such occurrences. This includes detail special training strategies that improve cross-culture business enterprise interactions.

In top-level companies such as Google, Apple Inc., there exist management strategies, for example, directing creativity, problem-solving, and high worker's freedom which have been the normal aspects that contribute to their success. There have been progressive policies like workers benefits and changes in hierarchical leadership promoting modern trend that reflects more on technological advancements and modern generation (Farndale,Scullion & Sparrow, 2010)).

Corporate Culture: Definition and Development

High profile management strategies that usually affect the corporate culture of a company includes holocracy. This a typical open management philosophy that is composed of other traits which removes job titles and traditional hierarchies (Galbreath,2010).  Employees usually have more flexible roles and responsibilities to organize and collaborate themselves individually in a high valued manner. Young companies use the strategy of agile management technique as a unique basis for its corporate culture. This is because it mainly focuses on deliverable parameters consisting of a flexible trial and error strategy. It groups workers in a start-up environment approach to promote creativity and innovativeness so as to solve arising issues and problems.

Corporate culture usually reach the optimum level of an organizations ideology and practice influencing various aspects of business operations from each worker who boost the customer image. There exists increased awareness of corporate culture in the world for example change of company vision or mission statement to a corporate manifesto.Literally,this is a  broad concept that enables advancement of the mentality and perspective of company players who achieve goals and company’s vision (Guiso,Sapienza & Zingales,2015).

It should allow tangible methods and practices which are guided by a clear code of ethics in which the firm implements its core values. For instance, Netflix always emphasizes the significance of skill and knowledge-based and highly competent employees who will achieve highly in order to be at the top of the market. Companies should hire and recruit high caliber employees in a way that reflects and conforms to their experiences which enhance overall corporate culture. Having an origin story involving a source of the vision statement is key for business growth and public brand image. The location of the business and office layout and architectural design should be specified in an efficient manner as one of the most important advents in a contemporary corporate culture (Hickman & Silva, 2018).

Why is it important to understand the corporate culture?

It is a hidden mechanism of coordination directing people towards a particular goal. The various ways of achieving a certain goal cannot be modified without proper understanding of the key culture values. The causes of the challenges involving profitability and responsiveness issues in firms are often detected in the cultures and subcultures of an entire corporation.

A proper understanding of the culture of companies facilitates the recruitment of workers who will succeed the organization enabling them to lower the cost of hiring, market development, and human resource management maintenance.

The History of Corporate Culture

It also creates crucial policies and assignments that improve the profitability level and response to increased market demands. New policies should focus on the culture and communicate effectively in a manner that depicts congruency to the work activities strategies and beliefs giving an executive huge power. In order to maximize company ability to attain strategic aims and objectives, it should completely understand the prevailing culture supports and propel the actions required to achieve the strategic goals.

Understanding the corporate culture also enables key changes to be done in the organization in response to real threats involving its continued work and existence in a specified time. This enables the management to identify the difference between failure and success in the modern rapidly changing business environment. The power of cultural change is strong as it allows employees to perform more effectively, professionally and constructively (Linnenluecke & Griffiths,2010).

It also facilitates the existence of mergers, joint ventures, and company acquisition strategies. Corporate culture plays a massive role in state and international takeovers and organizations culture merging with others dealing with a wide range of similar or distinct brand.

Understanding the corporate increases the profitability and growth of a particular corporation to the optimum levels. Shaping and nurturing significant cultural aspects improves the average nets sales growth for high culture companies.

The management can identify the corporate culture through focusing on workforce altitudes, employee behavioral preference and the external environment. The top management of a company should focus on implementing cultural change in order to mitigate positive results in a business and enable it to make informed decisions for achievement of long-term goals (Van, 2010).

References

Alvesson, M., & Berg, P. O. (2011). Corporate culture and organizational symbolism: An overview (Vol. 34). Walter de Gruyter.

Cameron, K. S., & Quinn, R. E. (2011). Diagnosing and changing organizational culture: Based on the competing values framework. John Wiley & Sons.

Denison, D. R. (1990). Corporate culture and organizational effectiveness. John Wiley & Sons.

Eccles, R. G., Ioannou, I., & Serafeim, G. (2012). The impact of a corporate culture of sustainability on corporate behavior and performance (No. W17950). Cambridge, MA, USA: National Bureau of Economic Research.

Farndale, E., Scullion, H., & Sparrow, P. (2010). The role of the corporate HR function in global talent management. Journal of world business, 45(2), 161-168.

Galbreath, J. (2010). Drivers of corporate social responsibility: The role of formal strategic planning and firm culture. British Journal of Management, 21(2), 511-525.

Guiso, L., Sapienza, P., & Zingales, L. (2015). The value of corporate culture. Journal of Financial Economics, 117(1), 60-76.

Hickman, C. R., & Silva, M. A. (2018). Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge.

Linnenluecke, M. K., & Griffiths, A. (2010). Corporate sustainability and organizational culture. Journal of world business, 45(4), 357-366.

Van den Steen, E. (2010). On the origin of shared beliefs (and corporate culture). The RAND Journal of Economics, 41(4), 617-648.