Understanding & Managing Corporate Culture BA 152

Characteristics of Organizations
Environment Goals Strategies Structures Technologies Systems People

Cultures

What is Corporate Culture?

An organizations 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 organizations founder A strong leader Reactions to a crisis Strategic decisions

Corporate Culture
What are the components?

Cultures Content
1. Assumptions about what is important 2. The ordering of those assumptions

Cultures Content: KFBS

Achievement Responsibility Family-like Friendliness Team work Support

Family-like Team work Support Friendliness

Friendliness Achievement

Corporate Culture
What are the components?

Cultures Content
1. Assumptions about what is important 2. The ordering of those assumptions

Cultures Strength
1. Number of shared assumptions 2. How many employees share these assumptions? 3. How many employees share the ordering of these assumptions?

Cultures Strength
Characteristics
# of shared assumptions # of employees sharing these assumptions # of employees sharing ordering of assumptions

Weak Culture

Moderate Culture

Strong Culture

Few Few Few

Some Some

Many Many

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
External

Stability

Strategic Focus

Adaptability/ Entrepreneurial Culture

Mission Culture
Bureaucratic Culture

Clan 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. 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. Cultures 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