The Beechmont Crest Online Guide to Management Science
WHAT THE HECK IS CORPORATE CULTURE?
We usually use the word “culture” to describe differences among nationalities and ethnic groups. For example:
It is considered intolerably rude to show someone the sole of your foot in the Arab world (even with shoes on); but an American, European, or Japanese wouldn’t even notice.
Japanese bow; Americans and Europeans shake hands.
When scheduling a meeting with German clients, eight o’clock in the morning would be a good start time. (Germany is an “early riser” culture.) If scheduling a meeting in Japan or Latin America, however, eight o’clock in the morning would be considered a little on the early side. (These cultures generally operate a few hours behind the Germans—and often remain at the office later.)
Corporate culture is similar to national culture: a shared system of beliefs, rules and values. When you hear a manager or colleague talk about “the way we do things around here,” he or she is really talking about corporate culture.
We might define corporate culture by the following:
Power and Control: How empowered are employees at different levels? What is the scope of authority at each level of management? Is there a system of checks and balances?
Expectations: What are the bounds of acceptable behavior and performance? Is more emphasis placed on being a team player, or on working independently?
Reward systems: How are strong performers rewarded? How are poor performers punished?
Written codes of conduct: Similar to “expectations” but more explicitly defined, these are communicated to employees through the employee handbook and other written policy statements (email, memo, etc.). Written codes of conduct set ground rules for areas as diverse as employee internet usage, vacation policy, and sexual harassment.
Slogans: Many of these slogans were primarily developed for external consumption, but they nonetheless have an impact internally on the goals of managers and employees. “Quality is Job 1” (Ford Motor Company); “We turn on ideas.” (Seagate Technology); “Invent” (Hewlett-Packard); “THINK” (IBM).
Company heroes: These may be recent managers and CEOs, but they are often historical figures. Examples include Henry Ford at Ford Motor Company, and Kiichiro Toyoda and Taiichi Ohno at Toyota. Heroes embody the company’s ideals. For example, Taiichi Ohno is a symbol of Toyota’s commitment to manufacturing excellence.
How Organizations Define Their Cultures
Some companies go to great lengths to codify their corporate culture. One notable example in this regard is consumer goods manufacturer Procter & Gamble. P&G defines its core values as consisting of five main principles: leadership, integrity, trust, ownership, and a passion for winning.
The company even defines what each principle means in the context of Procter & Gamble’s corporate culture. For example, P&G definition of ownership includes the following verbiage: “We accept personal accountability to meet our business needs, improve our systems, and help others improve their effectiveness.”