Understanding & “Managing”
Corporate Culture
BA 152
Characteristics of Organizations
Environment
Cultures
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
Strong
Culture
Few
Some
Many
Few
Some
Many
Few
Some
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
Adaptability/
Entrepreneurial
Culture
Mission
Culture
Clan
Culture
Bureaucratic
Culture
Strategic Focus
External
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.
2.
3.
4.
5.
Hiring/socializing new employees
(Re)moving current employees
Communicating cultural values
Modeling appropriate behavior
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