Corporate Culture – The Economist reports.Tags: corporate culture, culture, employee engagement, erik vermeulen, history, performance
A company’s culture is the environment created by the priorities it sets.
Sometimes those priorities are made explicit: in a company’s formal mission statement, for example, or in the structure of the organisation and the power given to different departments and functions. Sometimes they are implicit: what the Financial Times once called “the large number of unspoken assumptions and beliefs which managers in the organisation share about ‘the way we do things around here’”.
Tom Tierney, a consultant and author of “Aligning the Stars”, says: “A corporation’s culture is what determines how people behave when they are not being watched.”
Several things shape a corporation’s culture:
• Its employees’ behaviour. New recruits in any business usually do what they see, not what they are told. This can range from dress codes to such things as respect for technology and for standard working hours. It can also include the importance given to symbols; for example, to exclusive parking spaces, or to the way that senior managers are addressed.
• The employee selection process. The type of person recruited by an organisation reflects and reinforces its culture. Some companies recruit people of a particular kind because they believe that kind is best for the job. Charles Handy (see article) once recounted the unusual selection process of the Brooke family, who effectively ran Sarawak for many years. They wanted:
[Men who] had been educated at any of the public schools in the West Country—west, that is, of the town of Oxford. This was the background of the Brooke family and therefore provided a kind of tribal bonding. Secondly, they must be over six feet tall (the Dyaks, the native people, were small and would it was thought, be impressed by taller rulers).
• The nature of the business. Certain industries, such as the movies or banking, foster a particular culture. New high-technology firms also foster their own (often Silicon-Valley-influenced) culture. Computer maker Hewlett-Packard, for instance, has for a long time been conscious of its culture (The HP Way) and has worked hard to maintain it over the years.
• The external environment. Companies need to take into account the culture of the society in which they are operating. American multinationals, for instance, cannot transpose the methods of Milwaukee straight into downtown Mombasa and expect to have a harmonious operation.
One of the few areas of management study that has been dominated by Europeans rather than Americans is cross-cultural management. Europeans have a natural advantage. Fons Trompenaars, an authority in the field, once wrote that his Dutch father and his French mother gave him “an understanding of the fact that if something works in one culture, there is little chance that it will work in another”.
As long ago as 1527, the unusually perceptive Niccolo Machiavelli had something to say about mixing cultures:
When a conqueror acquires states in a province which is different from his own in language, customs and institutions, great difficulties arise, and excellent fortune and great skill are needed to retain them.
Machiavelli hit upon two things that brought about the 1990s revival of interest in the subject:
• Globalisation. The princes of the business world have been spreading their affairs more widely than ever before.
• Mergers and acquisitions. The princes have also been devouring new businesses at a rate that made Machiavelli’s masters, the Borgia family, look anorexic.
**Erik Vermeulen speaks on, and conducts full culture audits for large and small organisations and then helps them develop behaviourally driven cultures.
Coupland, Douglas., “Microserfs”, ReganBooks, New York, 1995; Flamingo, London, 1996
Hofstede, G., “Cultures and Organisations: Software of the Mind, Profile Books”, London, 1994; 2nd edn, McGraw-Hill, New York, 2005
Schein, E., “The Corporate Culture Survival Guide”, Jossey-Bass, 1999
Trompenaars, F. and Hampden-Turner, C., “Riding the Waves of Culture: Understanding Cultural Diversity in Business”, Nicholas Brealey, London, 1993; 2nd edn, McGraw-Hill, 1998