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Creating
and Re-Creating
Corporate
Entrepreneurial
Culture
Alzira Salama

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Culture and Behaviour:


What are the Links?

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This chapter discusses how entrepreneurial culture can be nurtured and


developed. It further analyses how an appropriate corporate culture can trigger
entrepreneurial behaviour within organizations. Although this is predominantly
a practical chapter exploring examples extracted from the world of firms, it
also develops a few theoretical ideas in order to clarify different concepts and
their interrelationships. The important lesson that I have learned throughout
my consultancy projects with organizations over the years is that: to change
peoples behaviour and attitudes it is fundamental to deal with peoples ways
of thinking, their ideas and values first.

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What is Culture?

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This chapter aims to explain how different groups of people think


differently, and why. It provides an overview of the literature on culture per se,
on corporate culture and on corporate culture change.

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E.B. Tylor, in 1871, was probably the first to use the word culture in English (Laraia
1986, Kroeber and Kluckhohn 1952, Hofstede, Neuijen, Ohayv and Sanders 1990).
He emphasized the human beings capacity to learn and transfer their knowledge
to others. Unlike the biological attributes of mankind, culture is the result of a
learning process. The ideas of continuity, creation, accumulation and transmission
of culture independent of biological heredity were the key issues for Tylor (Kroeber
and Parsons 1958). The anthropologists, Kroeber and Kluckhohn (1952) considered
that, although some aspects of culture are nearly universal (such as child care,
smiling, crying), groups differ culturally according to their specific history and
learning experiences. For example, different cultures, such as the American and
the Japanese, place different emphases on time (Hick and Gullet 1981).
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Creating and Re-Creating Corporate Entrepreneurial Culture


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In summary, culture means all forms of collectively learned human


behaviour. It varies from group to group. For instance, what is accepted within
one group can be considered absurd within another group. Hence, culture
influences what behaviour is approved or disapproved. This is illustrated by
Laraia (1986):

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Culture is a great source of security that frequently tells us what is


right or wrong in a particular group or society. (p.15)

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There are two major schools of anthropology that have influenced the
current concept of culture: the adaptionists and the ideationists. The first
is based on what is directly observable about the members of a community
(speech, language, dress). The latter school prefers to look at what is shared in
the community members minds (aspirations, values, beliefs and other ideas
people have in common). This book deals with corporate culture under these
two perspectives, that is, analysing the directly observable and the values,
beliefs and assumptions of the members of different organizations.

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The concept of culture is usually reserved for societies, but can be applied
equally to other human collectivities: organizations, professions, religions or
families. In a very simple and general way, the current use of the term culture
refers to the specific way of life of a group of people.

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Culture and Social Systems

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Kroeber and Parsons (1958) tried to explain the confusion among the concepts
of culture and social systems. According to them, for a considerable period,
there was a condensed concept of culture and society. This condensed concept
was perhaps a consequence of Durkheim (1953) speaking of society as meaning
essentially the same thing as Tylor (1871) meant by culture. Nowadays, however,
it is believed that further distinctions need to be made in the use of these two
concepts: culture and social systems. The following paragraphs explain these
differences.

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Kroeber and Parsons (1958) refer to culture as transmitted and created


content and patterns of values, ideas and other symbolic meaningful systems
as factors in the shaping of human behaviour and human artefacts. They
suggest that the term social systems be used to designate relational systems of
interaction among individuals.
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Culture and Behaviour: What are the Links?


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From all this, I concluded that the distinction between culture and social
systems is a matter of levels of understanding. Systems of social interaction
can be superficially observed and also described. However, they are rooted
in culture, that is, rooted in the transmitted and created patterns of values
and ideas (see Figure 2.1). The image of an iceberg may represent my way of
seeing them:
Social systems: It is like the visible part of the iceberg and it is easy
to observe.

Culture: It is like the hidden part of the iceberg, it is larger, stronger


but invisible.

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As with an iceberg, in order to effectively deal with the social systems, it is


necessary first to deal with culture.

Culture and social systems

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Figure 2.1

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What is Corporate Culture?

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This section is devoted mainly to different concepts of corporate culture. While


there are multiple definitions, they tend to be vague and overly general. This
situation stems from the many disciplines interested in this topic, which increases
richness, but does not necessarily increase clarity. Anthropologists, sociologists,
psychologists and others bring with them their particular paradigms. This
creates difficulties in reaching a consensus on construct definitions as well as
on making them operational.

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Creating and Re-Creating Corporate Entrepreneurial Culture


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Much attention has been paid to either simple descriptions of corporate


culture, ignoring its ambiguities (Watson 1963, Harrison 1987), or to exploring
ways of manipulating, changing and reshaping cultures (Kilmann et al. 1986).
This present review, however, aims first to devote some time to clarifying this
complex concept, second to explore the mechanisms that create and maintain
corporate culture, and third to explore the idea of cultural change.

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The concept of corporate culture has been widely applied by organizational


theorists and researchers to explain mainly those patterns of behaviour which
differentiate one organization from another. The emphasis has been mainly on
showing how each organization is unique.

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Nevertheless, some authors, the typologists, tend to use the concept of


corporate culture to classify the similarities among organizations. For example,
Harrison (1987) classified organizations into four different groups: the power
culture, the role culture, the achievement culture and the support culture.
Although he has explained how each of these types of culture functions, he
fails to link them to each organizations history. Therefore, Harrisons approach
to culture seems to be static (based on real time data analysis), rather than a
processual one (based on both historical and real time data analysis). Through
avoiding historical analysis, his study lacks information about how these types
of culture were created and developed.

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Definitions of corporate culture vary from author to author in the available


management literature. Nevertheless, some common definitions are shown in
Table 2.1.

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Jaques (1951) was perhaps the first to use the concept of culture for studying
organizations. He speaks of the superficial level of culture the way of doing
things and relates this to the history of an organization.

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Van Maanens (1977) definition of corporate culture emphasizes its role in


the socialization process, especially of newcomers. Harrison (1987) refers to
culture as a combination of the social norms, values and preoccupations of an
organization. Deal and Kennedy (1982) refer to culture also as social norms,
but they emphasize the power of those norms or rules as a managerial control
system. Pascale and Athos (1981), in turn, see culture as a philosophy concerned
mainly with human resources and marketing issues.

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Definitions of corporate culture

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Table 2.1

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Both Sathes (1985) and Scheins (1985) definitions of corporate culture refer
to a hidden part of the iceberg (see Figure 2.1). They both consider culture as
a set of assumptions, often unstated and pre-conscious. For them, in order
to decipher these assumptions, it is not enough to carry on observations
(a technique used by ethnomethodologists): probing interviews are necessary
in order to uncover the assumptions and taken-for-granted values, that is, how
people think instead of just what people do. This is the approach adopted by
this present research book.

Van Mannen 1977

The rules of the game for getting along in the organization, the ropes that a
newcomer must learn in order to become an accepted member (p.35).

Pascale and Athos


1981

The philosophy that guides an organizations policy towards employees


and/or customers (p.43).

Deal and Kennedy


1982

A system of formal and informal rules that spell out how people ought to
behave most of the time (p.78).

Schein 1985

A pattern of basic assumptions developed by a given group as it learns to


cope with its problems of external adaptation and internal integration (p. 8).

Sathe 1985

The set of important assumptions (often unstated) that members of a


community share in common (p.44).

Harrison 1987

A combination of values, preoccupations, social structure, norms and mores


(p.11).

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Jaques 1951

The culture of the factory is its customary and traditional way of thinking
and doing of things, which is shared to some degree by all its members, and
which new members must learn, and at least partially accept, in order to be
accepted into service in the firm (p.251).

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How Corporate Culture Differs from One Organization


to Another

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Morgan (1988) stated that we now live in an organizational society;


organizations share many common attributes and influence most of our waking
hours in a similar way. However, studies of corporate culture do not focus
primarily on those attributes of culture which are similar among organizations.
They concentrate on understanding those which distinguish one organization
from another.

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To understand culture and grasp it requires an integrative mind set; this


differs from that required for dealing with other organizational issues such
as profits and amount of sales. Culture seems to result from a combination of
interlinked elements. These are discussed below.

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The Influence of National Values

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McClelland (1961) in his studies suggested that attitudes toward achievement


and work vary quite widely from society to society. For example, according
to him, society influences organizations and people through the educational
system and other social institutions. If we believe that McClelland is right, we
consequently believe that national values affect organizational culture. People
in organizations reveal previous conditioning by society and many instilled
attitudes and beliefs a prior culture already in place (Adler 1983).

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The Influence of Industry Dominating Values

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Different industries reveal distinctive norms and particular values. They


have developed different cultural patterns to suit their business demands.
Thackray (1986) holds that to gain credibility, the corporate culture movement
must somehow build bridges between the culture of society and that of the
industry. It is observed that there are some industries where there is little
variety in corporate culture; oil and gas, for instance, or steel and chemicals. In
other industries there might be more latitude for firms to evolve distinctively:
retailing, fast-foods and air transport, for instance. The culture of a small
business and a conglomerate will have obvious differences. These dominant
values in an industry affect norms about secrecy, political actions, dress and
acceptable moral behaviour.

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The Influence of Founders

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Strong links that exist between corporate culture and founders and past
leaders values have been highlighted by different organizational theorists, in
particular, by Schein (1985). Based on his consultancy experience, he concluded
that leaders create and manage corporate cultures. As he states:

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Founders put their imprint on the culture by bringing in people who


share certain beliefs and values with the founder and those people will
eventually share them with others as they identify increasingly with the
founder and the enterprise. (Schein 1985, p.18)
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Culture and Behaviour: What are the Links?


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For example, if a company is created with its founders belief that the
way to succeed is either to provide good service to customers or to treat
employees as the organizations major resource or always to sell the
lowest priced product in the market place, and if action based on that
belief succeeds in the market place, then the group will learn to repeat
whatever worked and gradually to accept this as a shared view of how
the world really is, thereby creating its own culture. (p.32)

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Schein (1985) highlights the process of learning culture. He says that people
in organizations repeat what works and give up what does not. He argues:

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Gordon (1985) also reinforces the influence of leaders values in creating


culture. He considers that if a Chief Executive Officer (CEO) is strongly
committed to the concept that profitability is driven primarily by cost control,
and is further committed to the stability and growth of quarterly earnings, it is
unlikely that a single unit, department or division will develop a culture that
values programmes that are innovative, long-term, expansive and risky.

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In order to sum up the important elements which seem to be responsible


for the creation of culture in organizations, a framework is appropriate
(see Figure 2.2). Contrary to many introspective approaches on corporate culture
(see Schein 1985 and his emphasis on leaders values), this framework reveals
a wider perspective. Besides the influence of top leaders values on creating
corporate culture, it also considers the dominating values of the industry and
of the nation in this process.

Corporate Culture

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National values

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Founders and leaders values

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Type of industry (technology)

Figure 2.2

How managers are expected to behave


How corporate culture forms
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What is Corporate Culture Change?

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This book analyses one aspect of the process of change within organizations,
namely culture change from a bureaucratic to an entrepreneurial culture.

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Any organizational change is a culture change. (Deal and Kennedy


1982, p.15)

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That quotation implies that any modification occurring in the way firms
operate will always require new working related values. Thus organizational
change is synonymous with culture change.

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According to Tichy (1982), strategic organizational changes are divided


into three distinct areas as shown in Figure 2.3.
The technical area: The way how work is organized and products
are sold. This involves assessing the environment, aligning structure
to strategy and fitting people to roles.

The political area: Distribution of power, balancing power across


groups and managing successful policies.

The cultural area: Selection of adequate people to build or


reinforce culture, development to mould organizational culture
and arrangement of rewards to shape culture.

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Figure 2.3

Strands of strategic change


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Culture and Behaviour: What are the Links?


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As Tichy (1982) suggests, an effective organizational strategic change


should ideally include an alignment of all three areas. However, to understand
the process of change, it is necessary to concentrate upon the individual strands
as shown in Figure 2.3.

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This book is limited to looking at the last aspect of strategic organizational


change, as classified by Tichy, namely corporate culture change. The
investigation of culture change in this book basically involves the analysis of
how the organization goes through the process of modifying some of its values,
beliefs and assumptions and ultimately altering how managers are expected
to behave: from bureaucracy towards entrepreneurism, from inertia towards
renewal and internal innovation.

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References

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