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Corporate culture

Illuminating the black hole

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Even when not ignored, corporate culture is a mystifying subject for employees, managers, and leaders of most companiesCompany’s culture is “ like a black hole”Few are able to define it in a way that directly relates to business performanceIn reality, a company’s culture has everything to do with bottom-line business performance based on the performance of its people.Work climate and ethical conduct are certainly contributors, but the culture is much more than that

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Corporate culture and performance

Ultimately, the importance of corporate culture is linked directly to the ability of a company to effectively compete in a radically changing business climate

Many corporate leaders fail to take a hard look at the company’s culture to see if it is capable of measuring up to the new strategy

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Corporate culture and the bottom line

Few business leaders understand how corporate culture impacts bottom-line performance

Kotter and Heskett ( 1992) study demonstrate the direct relationship between business culture and financial performance

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Components and characteristics of corporate culture

In reality, corporate culture reflect the behaviors, values, dreams, assumptions, hopes, commitments, performance, knowledge, competence, recognition and rewards system, innovation, and communication that exist within a company, It is best to look at a company’s culture through ten different indices that have real meaning to a company’s management and workforceInclude:1.mission and strategy2.Leadership and management effectiveness3.Communications and decision making4.Organization design and structure5.Organizational behaviors ( including values, ethical conduct, and standards for behavior)6.Knowledge and competence7.Business and organizational interventions8.Innovation and risk taking9.Performance10.Change readiness and management

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Mission and strategy

Are critical issues for corporate culture

Understood, accepted, and acted upon by employees

Primary components of a company’s corporate culture mission should consists of:

- purpose and assumptions ( vision)

- principal business goal

- corporate identity

- overriding policies of the company

- values and standards for behavior

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Leadership and management effectiveness

A major responsibility of management at all levels is to continually build and maintain a common, performance-driven culture with which all employees can identify all around the businessInclude : conducting business on behalf of the company in manner that represent the highest ethical standard and best professional practiceUnfortunately, most companies today are managed in a way which emphasizes top-down decision making , rigid control, and little feedback from the bottom to the top

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Leadership and management effectiveness…

In culture, called new age business culture, management emphasizes:- innovative thinking and critical feedback from all levels- leading vs controlling- broad consensus building for moving forward vs Lone ranger management- 360° evaluation vs top-down evaluation- courageous leadership- reasonable risk taking- proactive vs reactive stance- Unassailable ethical conduct

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Communications and decision makingFormal and informal communication system in any organizationInternal Formal communication tend to be managed through newsletter, e-mail, intranets, and formal memosTo outside world, managed by corporate communications departmentMgt frequently ignore the informal communications that undermine formal system of communicationsTendency of separation of the issues of communication and decision making, nevertheless, the two are linked within the context of cultureDirections of communications within company tells about its culture. Top-down reflect a controlling, authoritarian, command- and control type of cultureCompanies with free flow of communications between functions and departments as well as from the bottom up are usually better performing companies

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Organizations design and structure

Corporate restructuring is the most common intervention employed in the business world

Relationship between culture and organization design: organization design and structure have everything to do with “goodness of fit” with markets, mission and strategy, and culture and operations.

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Organizational behavior and conductPositive and productive behaviors serve as the glue that holds an

organizations together while supporting the performance of the business through:Effective team building and collaboration vs the need to play Lone rangerResponsiveness to customer and suppliers vs treating the customers as a botherCandor and openness vs covert behaviorTaking responsibility for mistakes as well as successes vs denying responsibility and casting blame onto othersAllowing and learning from failures vs zero tolerance for failuresEngaging in best professional practice vs doing what is easy and convenientValuing team victories over individual success vs the need to be a hero and indispensable saviorOpenness to change and new learning vs slavish commitment to the tried, true, and familiarTaking appropriate risks vs playing it safeEthical conduct that serves all the stakeholder vs self-serving ethical standards for a select few within the business

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Knowledge and competence

From in-house training to Learning center – develop skills to be more efficient and to promote a safe work environment --- seems do little to build competence into the cultureOn the surface, knowledge and competence seem to be separate issues, and they are treated as such by organizationsPeter senge made popular the idea that organizations need to continually engage themselves in education and learning. Unfortunately, there seems to be a great void between acquiring knowledge and actually applying it to drive performance within organizations

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Business and organizational intervention

Business organization must engage in effective problem solving and make the right course corrections at the right time Management must demonstrate the ability to correctly appraise internal needs and problem in many areas and then implement the most effective course correction.With the issue of a failing corporate culture, very few organizations recognize the need, while failing, to employ a highly individualized approach that is appropriate to their unique business and the competitive conditions that are challenging the company

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Innovation and risk taking

Innovation and risk taking become scarce commodities in the business worldTrend toward larger corporations created increased needs for control by management as well as rigid and complex bureaucraciesThis trend diminish innovation and make it more difficult to engage in risk takingPeople also feel constrained from providing critical feedback to colleagues and supervisors within larger and more authoritarian work environmentOpportunities for innovation and risk taking must be a major component of any culture

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performanceMeasuring the performance of people

Many “People accountability” measures have been instituted within companies, 360 degree evaluation as the most prominent one

Unfortunately, companies rarely understand how to translate people performance into organizational performance which ultimately drives bottom line performance. The missing links is culture.

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Change readiness and management

A common characteristic among failed and failing companies is their inability to accept and prepare for change — change readinessThe best performing companies are able to create change in the marketplaceCompanies that compete effectively are able to understand changing business conditions around them while responding in ways that allow them to take advantage of the changed business climate

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Change readiness and management…

Five key requirements for effective change management:

1. Close the gap between business planning and organization planning

2. Create a corporate culture that embraces change

3. Identify alternative critical success factors for managers

4. Keep innovative people and their ideas 5. Continually audit the organization