Developing Corporate Culture

INTRODUCTION
Hundreds of books and thousands of pages have been written on the subject of
corporate culture, and the danger is always that no-one is quite sure what it means.
Perhaps the best definition is‘the way we do things around here’.

Businesses are not separate entities, but collections of people. All collections of
people produce certain common and important patterns of behaviour. So the topic of
corporate culture is really about people and the way they behave when in groups
together.

Businesses have a history which consists of experiences shared by the people who
belong to the business. This shared history sets constraints to the values of the
group, the way the group thinks about things, and the way rewards operate. A shared
history is a common feature of any group of people, whether it be a business, or a
football team, or a friendship group or a family group. So you should be able to
understand exactly what is going on here. There are strengths and weaknesses to the
constraints that affect a particular group.

For example, all groups have problems and problem members. The question is how
these problems are dealt with. The danger is that they are not dealt with because
they have become taboo. For example, Sarah Smith’s bitchiness may be a well-known
problem of a social group, but no-one is prepared to tackle it because all have
agreed that the untimely death of her father is to blame, and no-one wants to upset
her by reminding her of that sad event. Similarly, Auntie Norah’s drinking may
remain undiscussable in a family group. In a business the marketing department’s
total lack of original thought may become, like the weather, just ‘one of those
things’ that have to be lived with. This may go beyond what is talked about, and
actually effect what is thought about, so a group becomes unaware of other
possibilities. This could put a business at a serious disadvantage. On the other hand,
there will be strengths to a particular group and their habits of speech and thought.
People have a powerful need to belong. A newcomer is quickly ‘encultured’ into the
way of the group, and learns to conform to the prevailing patterns of behaviour. The
reason for this is that ‘breaking the rules’ will result in ostracism to some degree.
You have to be very brave or very right to risk this. Most people will accept a
standard they know perfectly well to be daft if it avoids confrontation and exclusion
from the group. All groups reward certain patterns of behaviour, and punish other
patterns, and we all follow these patterns because the social rewards of acceptance
and peer-approval are so powerful. A business is no different. In fact, it can be more
so, because managers have power and status, and pleasing them (even by agreeing to
arrant nonsense) is even more rewarding.

It follows from this analysis that ‘Business Culture’ is all about how groups of people
that happen to be in a business together set up and follow certain rules of behaviour
and thought. Any one set of rules has advantages and disadvantages. The business
then needs to play down the disadvantages and play up the advantages. But the
prevailing culture, the ‘way we do things around here’, sets up constraints so that
some options are closed down before they have even been properly considered. So,
the business either needs to work around the constraints or remove them.

At certain times in a business’ development and growth it becomes apparent that the
business culture is completely inappropriate for the future. Often this realisation
comes when a new management team is appointed to take a business forward into a
new stage, especially if had become clear that the previous management team
wasn’t up to the job. So the business culture has to be changed. This is extremely
difficult. People don’t like change. However daft the old system, many people will
cling to the old system because it is known territory and they have spent years
learning how to manipulate it to their own advantage; they feel comfortable with it.
So convincing people that change is both necessary and desirable is very difficult,
and requires management skills of a high order. People are very good at passively
sabotaging something (as you all know very well) they don’t approve of. Sometimes
the only solution is to replace the entire work-force, but that, too, is difficult and
expensive.

All change produces winners and losers ie people who are better off under the new
arrangements and people who were better off under the old arrangements. The first
group of people can be relied upon to be broadly supportive of the change (whatever
they say to their colleagues over coffee). The question then is ‘how many of them
are there, and are they a majority? Who are they, and do they include sufficient key
staff?’ The second group need understanding, and their losses compensated, possibly
but not necessarily financially. More importantly they need winning over. So
communication is vital. When a business is going through change gossip becomes a
very damaging source of information if management don’t communicate properly.
Leadership is also vital, and too many managers are in fact administrators rather
than leaders. In a sense, it is a marketing job, as the new arrangements have to be
‘sold’ to a sceptical audience. Part of this is re-assurance, because people will
naturally fear the unknown future and assume it will be worse for them personally.
This whole area is well-researched and discussed. There are copious case-studies
showing how real businesses have tackled this difficult area and made a good job, or
a complete mess, of it. It is, fundamentally, a people issue and solving the people
problems is at the heart of solving the whole business problem. Too many businesses
spend a lot of time and energy brilliantly solving the technical and logistical
problems of re-organisation but with too little thought about the people side. The
temptation is to think that if the managers think it a good idea, everyone else will
too. In other revision notes on this topic, we look at the importance of business
culture, how businesses can build a positive culture and some criticisms of the
concept.

ORGANIZATIONAL DEVELOPMENT
INTRODUCTION
1.1 Overview
Organizational development (OD) is a change management strategy which has been in
operation for the last forty or so years. It is based on the understanding of
behavioural sciences and isconcerned with how people and organizations function and
how they can be made to function better through effective use of human and social
processes. The turbulence facing the modernman and organization is at a level that
may not have been experienced before in human history. Both man and organization
are faced by constantly mutating environments that defy any explanation or
rationale. Modern changes are more revolutionary than evolutionary as we
haveunderstood historical changes. The changes may be influenced by changing
customer tastes, competition arising from new technology, changing cultures and
processes and higher demands for efficiency, effectiveness, profitability and
sustainability. Change may also arise from government legislation or demographic
shifts in age in society and workplace. New work patterns render old knowledge and
skills redundant, new structures destroy established self – esteem and status
patterns. Abrupt lay offs impinge on human dignity and quality of life expectations.
Several questions may be asked here. What changes do we recognize in our
environment ororganizations? What strategies have we employed to cope with these
changes? Is OD model our option for dealing with change? What is our perception of
OD, a fad or a useful tool forcombating change? Is OD different from other change
models?In this paper attempts will be made to define change and illustrate change
models before making a distinction between those models and OD.

In the 1990s OD has increasingly become popular especially in resolving problems or

conflicts in local governments. The concept is not yet well understood especially in
African local government discourse. But there are indications that it is a suitable
model for resolving many problems plaguing local governments in Sub - Saharan
Africa including, poverty reduction, gender mainstreaming, HIV/AIDS response
strategies and environmental sustainability.

1.2 Definition Of Change

Change can occur in society, organization or in individuals. Change implies a
perceived difference or transformation in a situation, person, work team, a
relationship or an organization when viewed from two different points of time.
Change is part of human nature and therefore continuous. But modern change has
changed in speed, depth and complexity bringing with it a new phenomenon in
technological, social, political and economic pace adaptation to which becomes a
fundamental condition of survival for individuals and organizations. In our lifetime
we have witnessed the fall of Berlin Wall, the collapse of the Soviet Union, the
vanishing of theTwin Towers in New York. In economic terms we have seen the
overrun by globalization which has overwhelmed central planning ideologies and
dictated privatization of state owned and state controlled enterprises to facilitate
fast transition to a market economy. To Change brings with it new social values, new
ways of doing things and new possibilities. One question we should ask as we attempt
to define change is whether we see change as something external to us, to our
organizations or to our families? Do we feel change in us, around us and within us?
How many types of changes can we identify?
1.3 Organizational Change
There are many forms of planned change innovations such as technological
innovations, new product development or training and development. But the two
types of change that haveattracted analysis in the study of organizational behaviour
are organizational change and organizational development (Buchanan and Huczynski,
1997). This paper is more concerned with the latter. But a definition of both will
strengthen the understanding of each. Organization change discusses the
interrelationship between the organizational change and human change. Kubr (1996)
states that organizational changes can involve; products and service, technologies,
systems, relationships,organizational culture, management techniques and style,
strategies pursued, competences and capabilities, performances and other features
of a business.

These change further affects features in an organization which may require further
changes in structure, legal framework, ownership, sources of finance, networks and
impacts. But he arguesthat the behaviour of organizational workers at all levels
determines what organizational changes can be made and what real benefits will be
drawn from them. People must therefore understand change and be willing and able
to embrace it. This can only be done if they are willing to learnnew knowledge,
absorb more information, upgrade their skills, and modify their work habits, values
and attitudes.

This approach is preferred by organizations - including public sector organizations –

operating in a fast moving competitive environment and faced with immediate
threats that need rapidchange and improvements within tight timescales. This marks
a good point of divergence between organizational change and organizational
development which on the other hand promises improved effectiveness within the
long term. The difference between the two is thatone is described as ‘results driven
programmes’ (espoused by organizational change) and the other as ‘activity driven
programmes’ (promoted by OD). The first targets results now while thelatter aims at
gaining sustained commitment to the pursuit of intangible goals such as
attitudechange and new sets of values (Schaffer and Thompson, 1992) which are long
term.
1.4 Organizational Development
The above illustration describes vividly the OD approach. There are many definitions
that havebeen given to describe the process none of which are likely to be
understood in the context of this paper. Instead it is preferred to give the attributes
that constitute the various definitions so thatthe entire concept is deconstructed and
understood in context. But OD may simply be described as a methodology or
technique used to effect change in an organization or section of an organization with
a view of improving the organization’s effectiveness. It has the following

attributes:

• A planned process of change.

• Applies behavioural science knowledge.

• Aims at the change of organization culture.

• Aims at reinforcement of organization strategies, structures and processes for

improving organization’s effectiveness and health.

• Applies to an entire system of an organization, department or group as opposed to

an aspect of a system.

• Targets long term institutionalization of new activities such as operation of self

managed or autonomous work teams and other problem solving capabilities.

• Encompasses strategy, structure and process changes.

• A process managed from the top.

Behavioural science knowledge and practices incorporate concepts such as

leadership, group dynamics, work design and approaches such as strategy,
organization design and international relations (Cummings and Worly, 1997). OD is
not a business planning or technological innovation model but rather an easy and
flexible process of planning and implementing change.
Developing Corporate Culture As a competitive
Advantages
Abstract Defines the concept of corporate culture and shows how it affects
organizations (bothpositively and negatively). Corporations that have been successful
in establishing and fosteringpositive cultures are profiled. The authors find that an
effective culture must be aligned withemployee values and be consistent with the
environment in which the organization operates. Whileit is best to establish a
positive culture with which employees can identify during an organization’sinfancy,
it is possible to change an existing culture. Such change is best accomplished by
modelingdesired behavior at all levels of management and by planning events that
foster frequentinteraction among cross-functional employees. Concludes that a
positive culture can provide a significant competitive advantage.

Introduction
Corporate culture has become an important topic in business primarily duringthe last
two decades. While corporate culture is an intangible concept, it clearlyplays a
meaningful role in corporations, affecting employees andorganizational operations
throughout a firm. While culture is not the onlydeterminant of business success or
failure, a positive culture can be asignificant competitive advantage over
organizations with which a firmcompetes. This paper will review how the concept of
corporate culture becamepopular, define corporate culture, show how it affects
real-world organizations(both positively and negatively), and consider ways in which
cultural changemay be brought about.

The Rise Of Corporate Culture

People come from a variety of ethnic backgrounds and cultural heritages, havea
variety of personalities, and have been shaped by a diverse range ofexperiences.
When people from diverse backgrounds are brought together in awork environment,
these factors will manifest themselves in an infinite varietyof ways. Over time a
dominant set of norms will emerge, guiding the way inwhich work is accomplished
within the organization. This phenomenon givesrise to the concept of corporate (or
organizational) culture. Corporate cultureonly began to be studied and appreciated
in the USA during the last twodecades. An influential book entitled Corporate
Cultures: The Rites and Ritualsof Corporate Life (Deal and Kennedy, 1982)
popularized the notion ofunderstanding, establishing, and fostering a positive
corporate culture. In lessthan two decades since the time that this book was
published, culture has gone from a relatively unknown concept to being widely
recognized as playing a central role in corporate strategy.
Literally hundreds of books and thousands oarticles have been devoted to the subject
(a recent search for books on corporateculture through a large Internet book retailer
turned up 803 matches). It is clearthat corporate culture has become an important
consideration for topmanagement, and therefore it is worthwhile to consider the
definition ofcorporate culture in more detail.

Corporate Culture Defined

There are many ways to define corporate culture because it is influencedheavily by
factors such as the industry in which the company operates, itsgeographic location,
events that have occurred during its history, thepersonalities of its employees, and
their patterns of interaction. Some of theformal definitions offered include ``a
cognitive framework consisting ofattitudes, values, behavioral norms, and
expectations’’ the collective thoughts, habits, attitudes, feelings, and patterns
ofbehavior’’ and the pattern of arrangement,material or behavior which has been
adopted by a society (corporation, group,or team) as the accepted way of solving
problems. In moreuseful terms, a positive corporate culture typically encompasses
several keyelements. First, it is fostered not merely by a mission statement, but by a
clearcorporate vision, which is a mental picture of the company’s desired future
Corporate visions are most effective when clearlycommunicated by top
organizational leaders who exhibit strong values andhave dynamic, charismatic
personalities. Second,corporate culture is supported by corporate values that are
consistent with thepurpose of the company and aligned with the personal values of
organizationalmembers. Corporate vision and values permeate all levels of
theorganization and are consistently modeled by top management. Third,employees
are highly valued at all levels of the organization (they are oftenreferred to as
``associates’’ or ``team members’’), and there is extensive employeeinteraction
both within and across functional departments. Fourth, the culture is adaptable,
adjusting quickly inresponse to external conditions and is consistent, treating all
employees equallyand fairly. Finally, corporate culture is perpetuated in someway,
perhaps through tangible symbols, slogans, stories, or ceremonies thathighlight
corporate values. The aforementioned characteristics of a positive culture cannot
exist withoutwidespread employee support. Even within an organization that has a
strongoverall culture (the ``dominant culture’’), there will also be many
subcultures. These could form for many reasons, perhaps dueto functional
differences in the organization (finance, sales, marketing), or toethnic or geographic
differences among employees. The dominant culture inthe organization must be
strong enough for members of various subcultureswithin the organization to identify
with, accept and embrace it. Thisnecessarily requires that the values of the
dominant culture be aligned with the values of each of the subcultures as well as the
personal values of each individual.
Benefits Of A Positive Culture
An organization that is able to maintain a positive culture is likely to enjoymany
benefits. When organization members identify with the culture, the
workenvironment tends to be more enjoyable, which boosts morale. This leads
toincreased levels of teamwork, sharing of information, and openness to newideas.
The resulting increased interaction amongemployees activates learning and
continuous improvement becauseinformation flows more freely throughout the
organization. Additionally, sucha culture helps to attract and retain top employees,
evidenced bybooks such as The 100 Best Companies to Work for in America in which
culture is emphasized as a primary determinant of theattractiveness of an employer.
When considering corporate culture, it is helpfulto consider actual companies that
have demonstrated the positive effects that acorporate culture can have.

Wal-Mart
Wal-Mart’s founder, Sam Walton, showed concern and respect for hisemployees from
the company’s inception. Thiscreated an environment of trust that persists to this
day. Walton also modeledthe behavior that he desired from his employees, especially
customer service(both to internal and external customers), by visiting his stores,
meetingcustomers, and greeting employees by their first names. Walton also
embracedand encouraged change in order to remain competitive, and
developedemployees by having them work in a variety of positions. Wal-Mart
considers its culture the key to its success, and to this dayemployees continue to
think about ``how Sam would have done it’’ whenmaking decisions.

Changing Corporate Culture

The preceding examples show that a positive culture can make a
significantcontribution to organizational success while a negative one can lead to
failure.While it is easiest to establish a desirable corporate culture during a
company’sinfancy, it has been shown in practice that culture can be changed for the
better. In order to go about changing corporate culture, top management mustfirst
understand the culture, as it exists today. This can be accomplished bysurveying
employees on important topics such as their perceptions of andidentification with
the corporate values and mission, interactions with other employees both inside and
outside of their departments, beliefs about whether they are treated fairly, and so
on. This will help management to determine thetype of culture that exists and to
identify areas for change. Once the current culture is understood, management must
decide how theculture should be changed in order to improve results. For a culture
to beeffective, it should be consistent with the business environment in which
theorganization operates.
For example, high technology firms tend to operate better using a culture that
encourages sharing of information (to support research and development) and that
responds quicklyto external events. As discussed previously, sharing of information
and quickresponse to external events are fostered by frequent interaction
amongemployees across organizational functions. If management wishes toencourage
this type of behavior, they should plan events that foster moreinteraction among
employees such as social events and ceremonies.Management should seek cultural
change by modeling the behaviorthat they wish to encourage, and then reinforce the
desired culture bytaking steps such as developing visionary statements and/or
slogans,celebrating employees’ successes or promotions, distributing newslettersand
videos that reinforce the culture, recruiting new people into theorganization that
are compatible with the desired culture, changing dress codes, and so on.

Conclusion
This paper defined the term corporate culture and considered the rise inpopularity
of corporate culture in recent decades. We also looked at twodifferent ways in which
corporations can categorize their culture, andconsidered the benefits of a positive
culture to organizations such as Wal-Mart,Southwest Airlines and Hewlett Packard.
Finally, we suggested that while apositive culture should be established during a
company’s infancy, it ispossible to change a corporation’s culture should it be
necessary to do so.Today’s globally-competitive business environment has made a
positivecorporate culture a critical aspect of success for firms. No longer just
acompetitive advantage, it has become a prerequisite for success, allowingcompanies
to attract and retain top employees. We strongly recommendthat organizations of all
sizes assess and categorize their corporate cultures,looking in particular at the
impact of that culture on employee productivityand morale. Where the culture is
serving to lower morale, we recommendthat management take proactive steps to
change the corporate culture using atop-down approach, establishing a new vision
and demonstrating newbehavior consistent with the revised vision. Much like
national culture,our understanding of corporate culture and its impact on employee
behavioris still in its infancy but one thing is for sure, culture can have a
tremendouspositive impact on employees. In conclusion, we urge companies to
shapetheir corporate culture to their advantage in improving both theiremployees’
experience of the workplace and, in turn, improving their own profitability.
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