4 Evolvement, Measurement and Managment of a Corporate Culture Flashcards
How does corp. cult. develop?
Three main sources of corp. cult.
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- the society in which the company is situated
- vision, personality and style of management of the founder or an important leader
- form and characteristics of the business model and the environment
society
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- National cultures or regional cultural differences are the basis for any organizational culture to grow
- Other aspects of society may be the political or demographic setting an organization is operating in
Hofstede’s dimension of culture
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approaches to measure regional differences
Hofstede’s dimension of culture:
- Power Distance
- Individualism vs Collectivism Masculinity vs Feminity
- Long vs Short Term Orientation
- Indulgence vs Restraint
- Uncertainty Avoidance
Leaders
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-Organizations do not form accidentally or spontaneously but are initiated by individuals (often the founder) or groups –> Steve Barmer CEO of Microsoft “Monkey Boy”
-commercial organisations usually involves a vision of how a group of people can create and successfully market a new product or service
-During the early phase of an organization’s existence founders are in an extremely privileged position to determine
what mission is to be pursued and in what business context
who is recruited
what rules, systems and procedures will be instigated
what constitutes acceptable behavior in the workplace
-In building their organization founders tend to impose their beliefs and values about the nature of the world, organizations and human nature on
other organizational participants
Stakeholders
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People who have a stake or interest in organization´s success
Customers
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have proved powerful in shaping the organization’s culture,
e.g., by demanding a “quality culture”
Government
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shape culture by regulations, legal frameworks, rulings on monopoly and mergers, etc.
Public
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have proved powerful in shaping the organization’s culture,
e.g., by demanding a “quality culture”
Government: shape culture by regulations, legal frameworks, rulings on monopoly and mergers, etc.
Public: pressure to enforce “equality of opportunity”, e.g., for women and minorities; environmental campaigns
Shareholders: have surprisingly little actual influence on cultural developments of an organization; mainly only if when ownership is mainly held by an individual or a family
Professional associations
Similarly trained professionals tend to induce similar cultures
Business strategic factors
E.g., degree of risk and speed of feedback in a business context
Shareholders
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have surprisingly little actual influence on cultural developments of an organization; mainly only if when ownership is mainly held by an individual or a family
Professional associations
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Similarly trained professionals tend to induce similar cultures
Business strategic factors
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E.g., degree of risk and speed of feedback in a business context
How is culture Preserved?
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-Self-selection
Personnel with ”fitting” preferences will apply more often
-Recruiting
Companies will try to actively recruit employees with ”fitting” preferences
-Socialization
Preferences are affected by the work experience in the company
-Integration or rejection
During collaboration it becomes apparent whether preferences fit to the culture
Possible measurements
Possibilities:
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- Employee surveys with standardized questionnaires
- Interview of selected persons in the company, e.g. top management
- Direct observation of employees‘ behavior
- Managers of one firm are asked about culture of other firm and own firm, e.g. Kotter/Heskett
However:
- Very different concepts of corporate culture
- No generally agreed definition of parts of a culture
- Difficulties when comparing companies
four dimensions by Denison
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Involvement (Empowerment, Team Orientation, Capability
Development)
Consistency (Core Values, Agreement, Coordination and Integration)
Adaptability (Creating Change, Customer Focus, Organizational Learning)
Mission (Strategic Direction & Intent, Goals & Objectives, Vision)
Measurement:
Strength of Corporate measured with a questionnaire consisting of 60 items
Degree of agreement on 5 point scale, for example
“People work like they are part of a team”
“It is easy to reach consensus, even on difficult issues”
“New and improved ways to do work are continually adopted”
“Our vision creates excitement and motivation for our employees”
Schein‘s Ten Step Culture Assessment Approach
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Culture-deciphering process is based on ten steps:
1. Obtaining leadership commitment
Why do you want this?
2. Selecting groups for interviews
Groups that are representative for the culture (3 to 30 persons)
3. Selecting an appropriate setting for the group interviews
Large, comfortable room with flipcharts and breakout rooms
4. Explaining the purpose of the group meeting
Leadership explains purpose openly, process consultant is introduced
5. A short lecture on how to think about culture
Culture as the tacit assumptions in group
6. Eliciting descriptions of the artifacts
Ask newcomer, write down on flipchart, suggest categories What is going on here?
7. Identifying espoused values
Pick artifact of interest and discuss reasons Why are you doing what you are doing?
8. Identifying shared tacit assumptions
Do the explained values really explain all artifacts?
9. Identifying cultural aids and hindrances
Split into smaller breakout groups of around 10 Subgroups should explore own assumption set
10. Reporting assumptions and joint analysis
Reach consensus on important shared assumptions and the implications for the organization
Managing corp. cult.
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-Role modelling
Managers should personally demonstrate their ideas, i.e. leading by
example, walk the talk
-Positive reinforcement
Good examples of desired attitudes or behavior should be reinforced, e.g.
by recognition, salary increase, awards
-Communication
Articulate for employees the desired norms and values from glossy
brochures to workshops
-Recruitment and promotion
Hire and promote people who fit into the desired culture
-Organization and physical design
Formal structure, compensation, control systems but also work environment
can reinforce cultural norms and values
Role of HR
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Measures are rarely evaluated:
-Does a certain measure change the culture?
-Does a change of culture lead to a better performance?
-Does a change of culture lead to higher employee loyality and engagement?
But:
Systematic and regular employee surveys can be very useful
Statistical analysis of the impact of certain measures on survey results important
However
Correlation ≠ causality!
Control groups allow identification of causal effects
Implementing a Corporate Culture – Business Case
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In 2003 a multinational company faced these challenges:
Integrate different companies under one brand following various
mergers and take-overs
Be well equipped for international competition and to become the number one
Fulfill (high) expectations of financial markets
Therefore, the CEO launched a group-wide corporate culture initiative
pursuing the following objectives:
merge the cultures of all subsidiaries into one corporate culture while respecting individual excellence
add value and lead the way for the company to become stronger than the competitors
position the group as attractive employer
enhance corporate citizenship
Implementing a Corporate Culture – The Process
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Project 1: Implementation Projects (Execute and monitor agreed subprojects to close the gaps between desired and actual behavior)
Project 2: Measurement (Measure and monitor cultural change)
Project 3: Engagement and Involvement (Engage management levels and prepare employee involvement)
Project 4: Communication (Communicate the values and the implementation process)
Implementing a Corporate Culture – Close the Gaps
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Behaviors: Defining desired behaviors
Gaps: Prioritizing the desired behaviors and identifying the gaps between desired and actual behavior
Actions: Developing actions to close the gaps
Projects: Setting up subprojects to close the gaps
Implementing a Corporate Culture – Engagement
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Objective: The objectives are to:
make executives/managers and employees familiar with the values
identify and discuss business-/function-specific behaviors which support values and identify gaps between these and current behaviors
achieve commitment by teams and individuals of how to live the values in day-to-day business behavior
Process: The process is based on local workshops using conducted in local business units, addressing local and business specific issues and how they relate to the values.
Implementing a Corporate Culture – Communication
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Objective: Communication plays a critical role in implementing the values. Its objectives must be:
Develop and distribute consistent messages/material throughout the group aligned with the progress of the implementation process as described
Establish a communication strategy to ensure that the values are perceived by external stakeholders as part of group’s corporate branding
Align internal communication with the values
Process: All communication is initiated and executed by the central corporate communication unit but can be aligned to local and functional requirements.
Implementing a Corporate Culture – Success Factors
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Success may depend on:
Board member commitment
Linking strategy with values and implementation process
Interactive engagement of local management
Fit to local business requirements and leveraging existing experience
Focus on individual behavior at all levels of the organization instead of distributing glossy brochures
Implementing a Corporate Culture – Problems
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Problems can be due to:
Time lag in implementation/communication process
Incomplete communication of projects
Lack of commitment of managers
Language barriers
Traditional conflict between headquarter and line operations Cultural differences between countries and divisions
Insufficient involvement of works councils and unions
