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Corporate Culture
Ondrej Castek
castek@econ.muni.cz

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What can you expect
1.
1.What is corporate culture
2.Cultural typology
3.Culture and corporate performance
4.Cultural change

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What is corporate culture
nOrganizational culture can be understood as:
1.set of basic assumptions, beliefs, values, attitudes and norms of behavior
2.which are shared in an organization
3.which show itself in thinking, feeling and behavior of members of organization and in material
and non-material artifacts.

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Basic assumptions, beliefs
nBasic assumptions are our long-learnt, automatic responses and established opinions. We are,
ourselves, almost always unaware of the nature of our own basic assumptions, but they are enacted
through our behavior - what we say and do. Basic assumptions are usually rooted in our infancy,
early family life and social context. More widely, assumptions shaping our behavior relate to
cultural context.
nBeliefs are the assumptions we make about ourselves, about others in the world and about how we
expect things to be. Beliefs are about how we think things really are, what we think is really true
and what therefore expect as likely consequences that will follow from our behavior.

It is normal to smile at people you do not know (x it is normal to keep neutral face)
It is normal to answer the customer ASAP (x answering the customer right away might look like you
are not busy enough)

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Values
nValues are about how we have learnt to think things ought to be or people ought to behave,
especially in terms of qualities such as honesty, integrity and openness.
1.
1.

What is important for us.
i. e. customer satisfaction, employees satisfaction.

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Attitudes
nAttitudes are the established ways of responding to people and situations that we have learned,
based on the beliefs, values and assumptions we hold. Attitude become manifest through our
behavior.

The relation to a certain person, thing, event or problem. Results in an behavior or behavioral
intention.

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Norms of behavior
nNon-written informal rules of behavior in varying situations. Not formal rules officially set by
the organization. Failing to abide these rules results in punishment, abiding them results in
rewards. Punishment can have a form of unfriendly behavior of others, reward would be friendly and
cooperative behavior of others.

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Artifacts
1.Architecture
2.Equipment
3.Products
4.Annual reports
5.Advertisement materials
6.
1.Language
2.Stories
3.Heroes
4.Habits
5.Rituals
6.Ceremonies

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Elements of culture (Lukášová, 2010)
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Basic assumptions
Values
Norms of behavior
Artifacts
Customer satisfaction influences the firm’s success
Customer satisfaction
Accommodate customers` needs
Quickly respond to customers` demands
Actively solve customers` problems
Team work in customer benefit
Pleasant meeting rooms
Christmas cards for customers
Regular meetings with customers

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Elements of culture (Lukášová, 2010)
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n
Basic assumptions
Values
Norms of behavior
Artifacts
Customer satisfaction is possible to reach through quality
High-quality products or services
Assess quality from the customer` viewpoint
Accept responsibility for customer satisfaction
Care about customer needs
Monitor customer satisfaction
Continuously improve processes
Keep eye on details and perfection
Regular information about customer satisfaction measurement
Regular information about problems with reaching customer satisfaction
Stories about distinct achievements with customer satisfaction

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Schein’s model of organizational culture
•Artifacts
•Espoused values
•Basic Underlying Assumptions

1. Artifacts – evident, most visible layer.
2. Values and norms – partially conscious and partially visible layer. Strategies, goals,
philosophies
3. Unconscious, taken for granted beliefs, perceptions, thoughts and feelings – sources of value
and action.

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Levels of Culture

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n

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Other approaches to organizational culture
nKotter, Heskett (1992):
n1. patterns (style) of behavior
n2. values
n
nHofstede (1991):
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Hofstede: „onion diagram“

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Denison’s model of corporate culture
n
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Hofstede: „onion diagram“

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Other approaches to organizational culture
nHall (1995):
n1. Level A: Artifacts and etiquette
n2. Level B: Behaviors and actions
n3. Level C: Core morals, beliefs, values
n
nDenison (1982, 1990):
n1. values and beliefs (preconditions)
n2. patterns of behavior, reflecting and strenghtening the values
n3. sets of conditions (artifacts and the environment in which members of organization work)
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Content and Strength of the Organizational Culture
nContent:
nWhat particular basic assumptions, beliefs, values, attitudes and norms of behavior are shared.
n
nStrength:
nTo what extent are these elements of culture shared.
n
nSubcultures:
nDistinct different cultures in one organization.
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Strength: if the culture is weak, the individual beliefs, values etc. prevail over the
organizational beliefs, values, etc.
Subcultures: reasons might be geografic location, size of the company, different functions
(marketing x controlling), hierarchical differences. More likely where the overall organizational
culture is weak.

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Sources of Organizational Culture
nInfluence of:
1.the environment: national culture, type of market, culture of profession, customer demands and
bargaining power, type of industry,
2.the founder, dominant leader, owner or manager,
3.size and maturity of the organization,
4.technologies used.
n
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Type of market: free price system x central planned economy, very competitive market (automotive) x
not much competitive market (utilities)…
Profession: marketing or accounting
Industry: agriculture x automotive
Size and maturity: identity crisis
Technologies: state-of-the-art or obsolete (both can be found in retailing…)

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Harrison, 1972 and Handy, 1976
nOne of the first typologies, still very known.
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1.Power culture – power concentrates with individual or individuals, they are in the middle of the
net, this cannot grow much, otherwise it tears off, only possibility is to start up another net
(subcompany). Common in family businesses, small trade or financial firms and in criminal
organizations.
2.Role culture – rational, formal, rules creating and abiding, high degree of job formalization.
Usually public administration, army and very large companies.
3.Task culture – task oriented, matrix or net structure. Flexible. Typically advertising agency.
4.Person culture – couple of independent people, all very and equally important, relationships are
horizontal, no one dominates. Lawyers, doctors.

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Trompenaars, 1993
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Deal and Kennedy, 1982
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Risk
Low
High
Feedback and reward
Rapid
 Work-hard,
play-hard
 culture

Tough-guy macho
culture
Slow
 Process
 culture


Bet-the-
company
culture

•
•

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Deal and Kennedy, 1982
nWork-hard, play-hard culture
nThis has rapid feedback/reward and low risk, leading to:
nStress coming from quantity of work rather than uncertainty.
nHigh-speed action leading to high-speed recreation.
nEg. Restaurants, software companies.
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•Tough-guy macho culture
•This has rapid feedback/reward and high risk, leading to:
•Stress coming from high risk and potential loss/gain of reward.
•Focus on the present rather than the longer-term future.
•Eg. police, surgeons, sports.
•Process culture
•This has slow feedback/reward and low risk, leading to:
•Low stress, plodding work, comfort and security. Stress may come from internal politics and
stupidity of the system.
•Development of bureaucracies and other ways of maintaining the status quo.
•Focus on security of the past and of the future.
•Eg. banks, insurance companies.
•Bet-the-company culture
•This has slow feedback/reward and high risk, leading to:
•Stress coming from high risk and delay before knowing if actions have paid off.
•The long view is taken, but then much work is put into making sure things happen as planned.
•Eg. aircraft manufacturers, oil companies.
•

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Quinn et al, 1999
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Corporate Culture and Corporate Performance
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•Most authors tried to verify the influence on corporate performance of:
•
1.strong cultures
2.participative/involved cultures
3.contextual and strategically suitable cultures
4.adaptive/flexible cultures
•
•

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Strong Corporate Culture (Denison, 1990)
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•Strong corporate culture has these positive consequences:
1.creates harmony in perception of reality and thinking of workers,
2.guides their behavior,
3.means sharing of values and goals.
4.
•The minuses:
1.binds organization to past experience,
2.stops thinking in alternatives,
3.is resistant to changes.

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Content of Corporate Culture – participative and involved culture (Denison, 1990, 2001)
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•The signs of participative and involved cultures are:
1.active, initiative, involved behavior,
2.autonomous decision making and problem solving,
3.loyalty.
•
•To create such culture, this contributes:
1.continuous knowledge and skill development,
2.empowering,
3.cooperative and team environment,
4.customer orientation, which is manifested each day,
5.creating and communicating misions and visions.

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Adaptibility and Flexibility (Denison, 1990, Kotter and heskett, 1992)
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•Main characteristics of adaptive culture:
1.ability to perceive signals from external environment, interpret them and react to them = ability
to learn,
2.ability to understand the needs of internal and external customers, react to them and foresee
them = customer focus,
3.ability to change processes and behavior in order to adjust = readiness for change.
•

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Quinn, Rohrbagh, 1983
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39 indicators measuring corporate performance (set by Campbell et al in 1974)
asked experts for similarities and reduced them into 17 more general
by statistical procedures identified two main dimensions: flexibility-control dimension and
internal-external focus dimension.
each quadrant represents set of indicators, but also a set of assumptions, beliefs etc.
this means, the quadrants represent also 4 basic types of organizational cultures as important
determinants of organizational performance. For different environments different cultures are
suitable.

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Contextual and Strategic Adequacy (Scholz, 1987, Cameron and Quinn, 1999)
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•Contextual adequacy – the content of the culture is aligned with the environment`s needs.
•
•Strategic adequacy – the content of the culture is aligned to the strategy.
•
•Strategy vs. culture – if in confict, then:
1.ignore the culture,
2.bypass the culture,
3.change strategy,
4.change culture.
•

contextual adequacy i.e.: only the companies with adeqate culture will survive.
1. risky
2. choosing ways, which are not in contradiction with the culture, but still leads to the desired
goal. Case of promising, but not profitable (at present) customers.
3. might not be possible.
4. the most difficult way.

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How to change culture?
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nChange the artifacts (easiest, but not sufficient)
nChange the values: use symbols, slogans, emotions, motivation system,
nChange the norms: use motivation system
n
•For all goes: walk the talk.
•
•Also, choose new employees to fit the desired culture (person-organization fit), do the same with
promotions.
•
•Provide education and training.

organizational culture profile
training: both for current and new employees

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Mergers - How can be culture important
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•Daimler-Benz – German, strong in Europe
•Chrysler – most profitable american carmaker
•
•In 1998 merger DaimlerChrysler announced as „merger of equals“
•In 2001 Chrysler 3 bilion $ loss, loss of 9 % of market share
•
•Cause: gradual replacement of Chrysler`s culture by Daimler`s culture

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Mergers - How can be culture important
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nOne year after the merger only 1/3 of Chrysler`s original managers still in place.
n
nBoard of directors shrank to 13 members – 8 Germans and 5 Americans.
n
n2 years after the merger no top manager from original Chrysler, CEO of Chrysler division was a
German.
•

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Mergers - How can be culture important
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•Daimler:
nformal and strict hierarchy
ntop management had more function staff and higher spending
nsuit compulsory, used titles
nsmoking, wine and beer allowed
ncommon overtimes
•Chrysler:
nproject structure, middle management took decision from its own initiative
nmanagement had greater responsibility and salaries
ncasual dressing, non formal communication
nsmoking and alcohol forbidden
novertimes rarely
•
•Results: key employees quit from managerial posts, R&D and others; lower employees satisfaction of
the remaining employees, therefore lower productivity.
•How do you pronounce Daimler Chrysler? Daimler – Chrysler is silent.

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Zdroje
nDEAL, T. E., KENNEDY, A. A. Corporate Cultures. Reading : Addison Wesley Publishing Company, 1982.
ISBN 0-201-10277-3. nDENISON, D. R. Corporate Culture and Organizational Effectiveness. New York :
Wiley and Sons, 1990. ISBN 0-471-80021-X. nDRENNAN, D. Transforming Company Culture. London :
McGraw-Hill Book Company, 1992. ISBN 0-07-707660-5. nHALL, W. Managing Cultures: Making Strategic
Relationships Work. Chichester : Wiley and Sons, 1995. ISBN 0-471-95571-X. nHOFSTEDE, G. Cultures
and Organizations: Software of the Mind. London : McGraw-Hill book Company, 1991. ISBN
0-07-707474-2.
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Zdroje
nKOTTER, J. P., HESKETT, J. L. Corporate Culture and Performance. New York : Maxwell Macmillan,
1992. ISBN 0-02-928467-3. nLUKÁŠOVÁ, R. Organizační kultura a její změna. Praha : Grada Publishing,
2010. ISBN 978-80-247-2951-0. nLUKÁŠOVÁ, R.; NOVÝ, I. Organizační kultura: Od sdílených hodnot a
cílů k vyšší výkonnosti podniku. 1. vyd. Praha : Grada Publishing, 2004. 176 s. ISBN 80-247-0648-2.
nNOVÝ, I. Interkulturální management: Lidé, kultura a management. 1. vyd. Praha : Grada Publishing,
1996. 143 s. ISBN 80-7169-260-3. nSCHEIN, E. Organizational culture and Leadership. San Francisco :
Jossey Bass Publishers, 1992. ISBN 1-55542-487-2. nTROMPENAARS, F. Riding the Waves of Culture:
Understanding Cultural Diversity in Business. London : The Economist Books, 1993. ISBN
0-85058-428-0.
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nThanks for your attention
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