Understanding & “Managing”
Corporate Culture
BA 152

Characteristics of Organizations
Environment Goals
Strategies
Structures
Technologies
Systems
People

What is Corporate Culture?
• An organization’s and/or work units’
– Personality;
– Set of shared assumptions about the way things are done; and/or
– Shared values, norms, and beliefs about the ways things are done.

Corporate Culture:
Why should we be concerned?
• Performance implications?
• Organizational guidance systems?
– Nature of cultures at Enron, Arthur Andersen,
Tyco, HealthSouth,?
• Impact of differences on mergers and/or acquisitions?

General Culture
Work Unit Cultures Work Unit Cultures

Corporate Culture:
What should we examine?
1.
Visible events, actions, and/or behaviors
2.
Rules, language, symbols, and/or things
3.
Public norms/justification for the above
4.
Hidden values/assumptions for the above

Corporate Culture:
Where does it come from?
• The organization’s founder
• A strong leader
• Reactions to a crisis
• Strategic decisions

Corporate Culture
What are the components?
• Culture’s Content
1. Assumptions about what is important
2. The ordering of those assumptions

Culture’s Content: KFBS
• Achievement
• Responsibility
• Family-like
• Friendliness
• Team work
• Support
• Family-like
• Team work
• Support
• Friendliness
• Friendliness
• Achievement

Corporate Culture
What are the components?
• Culture’s Content
1. Assumptions about what is important
2. The ordering of those assumptions
• Culture’s Strength
1. Number of shared assumptions
2. How many employees share these assumptions?
3. How many employees share the ordering of these assumptions?

Culture’s Strength
Characteristics
# of shared assumptions
# of employees sharing these assumptions
# of employees sharing ordering of assumptions
Weak
Culture
Moderate
Culture
Few Some
Few
Few
Some
Some
Strong
Culture
Many
Many
Many

Corporate Culture
Why is it important?
• Impact on behavior and control?
– Greater predictability of behavior
– Provides control in the absence of controls
• Impact on performance?
– Is it better to have a strong culture or a weak culture?

Culture and Performance
STRATEGY
ENVIRONMENT STRUCTURE
PERFORMANCE

Environment, Strategy, and Culture
Needs of the Environment
Flexibility Stability
External
Adaptability/
Entrepreneurial
Culture
Mission
Culture
Clan
Culture
Bureaucratic
Culture
Internal

Changing Your Culture
How should you start?
TOP DOWN?
BOTTOM UP?

Leadership and Culture
“. . . the only thing of real importance that leaders do is to create and manage culture, and the unique talent of leaders is their ability to work with culture.” (italics in the original)
(From Edgar Schein, Organizational
Culture and Leadership, 1997)

“Maintaining/Changing” a Corporate Culture
1.
Hiring/socializing new employees
2.
(Re)moving current employees
3.
Communicating cultural values
4.
Modeling appropriate behavior
5.
Rewarding appropriate behavior

“Managing” a Corporate
Culture
1.
Culture is not a simple concept.
2.
Culture’s influence is pervasive.
3.
Manipulating culture is not any easy task.
4.
There is no one best ( permanent ) culture for an organization.

Next Time
Implementing Change at National
Industrial Products