September 22, 2023

Epic Law

The Law Folks

Understanding Corporate Culture

“All companies have a culture. In order for employees to
function and succeed, it is essential they understand and
believe in the culture.”

– Bryce’s Law

INTRODUCTION

The subject of “corporate culture” seems to be on everyone’s
mind these days; from the college graduate entering the job
market, to the IRM executive who is trying to improve management
and productivity in his organization. It is the topic of
interest at social and professional gatherings.

The perceptive manager understands the importance of
establishing and controlling the work environment, including both
logical and physical considerations. Unfortunately, many
managers do not appreciate the concept of corporate culture and
how to use it to their advantage.

Corporate culture pertains to the identity and personality
of the company we work with, either in the private or public
sectors. All companies have a culture; a way they behave and
operate. They may be organized and disciplined or chaotic and
unstructured. Either way, this is the culture the company
has elected to adopt. In order for an employee to function and
succeed, they must be able to recognize, accept and adapt to the culture.

MEMBER VS. ALIEN

Have you ever noticed how people react to foreign visitors;
whether an exchange student or a visiting professional? The
stranger may be welcomed, but may never be accepted unless that
person can adapt to the norms of their new environment. If they
do not, the members will shun the stranger and reject the alien
from their culture. The same is true in business. If the new
employee, consultant or visitor cannot adapt to the corporate
culture, their chances for success are slight. The members of
the culture will reject the person outright and will work against
them.

The reason for this phenomenon is because people tend to prefer
conformity in their culture. Conformity represents a harmonious
environment where the behavior and actions are predictable. Most
people have a deeply rooted desire for a sense of order and
stability in their lives, which is what conformity provides. A
stable environment promotes self-confidence in the members of the
culture and allows them to concentrate on their work.

HUMAN PERSPECTIVE

Corporate culture deals with how we see ourselves and
others. We act on our perceptions, not necessarily what occurs
in reality. The culture greatly influences our perceptions and
behavior. For example, our values and beliefs may distort what
happens in fact. Gossip, propaganda, and a sensational press,
deals with what people want to hear, not necessarily what happens
in reality.

DEFINING CULTURE

Before we can alter the culture, we must first understand
it. Culture is defined as the characteristics of the members of
a civilization. Ultimately, culture defines the quality of life
for a group of people.

Culture doesn’t appear suddenly, it evolves over time as
people grow and learn. The older the heritage, the more
ingrained the culture is in its members.

There are essentially three parts to any culture: Customs,
Religion and Society. Each influences the others.

CUSTOMS

Webster defines custom as a “long-established practice
considered as unwritten law.” Custom dictates the expected
manner of conduct for the culture. It prescribes the etiquette
to be observed in dress, speech, courtesy and politics
(gamesmanship). Several companies, most notably IBM, have long
understood the power of customs. These norms are established to
project a particular image the company wishes to convey.

RELIGION

Religion is the philosophy of life and the basis for our
values. It influences our judgement in terms of what is ethical
and what is not. Although uniform morality sounds attractive to
executives, it can be quite dangerous if unethical practices are
allowed to creep into the moral fiber of the company.

SOCIETY

Society defines our interpersonal relationships. This
includes how we elect to govern and live our lives. Society
defines the class structure in an organization, from Chairman of
the Board to the hourly worker. It defines government, laws and
institutions which must be observed by its members. More often
than not, the society is “dictated” by management as opposed to
“democratically” selected by the workers.

INFLUENTIAL FACTORS

Obviously, it is people, first and foremost, that influence
any culture. In terms of corporate culture, the only external
factor influencing the enterprise is the “resident culture,”
which is the culture at any particular geographical location. The
resident culture refers to the local customs, religion and
society observed in our personal lives, outside of the workplace. The
resident culture and corporate culture may differ considerably
in some areas but are normally compatible.

Anthropologists have long known the physical surroundings, such
as geography and climate, greatly influence the resident culture. The
resident culture, in turn, influences the corporate culture. The
corporate culture, which affects the behavior of its members, will
greatly influence the resident culture.

SUB-CULTURES

Within any culture there are those people exhibiting special
characteristics distinguishing them from others within an embracing
culture; this is what is called “sub-cultures.” In a corporate culture,
sub-cultures take the form of cliques, special interest groups, even
whole departments within a company. This is acceptable as long as the
sub-culture does not violate the norms of the parent culture. When the
characteristics of the sub-culture differ significantly from the main
culture, it becomes a culture in its own right. This situation can be
counterproductive in a corporate culture, a company within a company. For
example, we have seen several IT organizations who view themselves as
independent of the companies they serve. They “march to their own
drummer” doing what is best for the IT Department, not necessarily what
is best for their company. Conversely, we have seen management regulate
the IT department as a separate, independent group as opposed to a vital
part of the business.

CHANGING THE CORPORATE CULTURE

Changing the corporate culture involves influencing the three elements
of the culture: Customs, Religion and Society. This is not a simple
task. It must be remembered that culture is learned. As such, it can
be taught and enforced. However, the greater the change, the longer
it will take to implement. It should evolve naturally over time. A
cultural revolution, such as the one experienced in communist China, is
too disruptive for people to understand and accept. As a result,
they will resist and rebel.

A smaller company can change its culture much more rapidly than a
larger company, simply because of communication considerations. In
addition, an organization in the private sector can change faster than
one in the public sector (such as a government agency), only because a
commercial company isn’t encumbered with government regulations. This
is an instance where a “dictatorship” works more effectively than a
“democracy.”

To change the corporate culture, one must begin by defining
the current corporate and resident cultures, including the
customs, religion and society observed. There are several indicators
for measuring the pulse of the culture: Absenteeism, Tardiness, Turnover,
Infractions of Rules, Employee Attitudes, Productivity, etc. All of
these can be used to gauge how people behave within the corporate
culture. To this end, we offer the “PRIDE” Survey on Corporate
Culture to assist in this analysis:

http://www.phmainstreet.com/mba/pride/eespcc.htm#survey

This is followed by a set of requirements for the culture
and a plan to implement them. In a corporate culture, a policy
and procedures manual can usually stipulate the customs and
society to be observed. Developing a corporate consciousness is
far more difficult to implement and involves considerable
training and demonstration. Great care must be taken to avoid
the “do as I say, not as I do” situation.

It is one thing to enact legislation, quite another to
enforce it. Without an effective means to monitor and control
the culture, it is quite futile to establish any formal policies
or guidelines.

SUMMARY

Management is much more than just meeting deadlines. It is
a people-oriented function. If we lived in a perfect world,
there wouldn’t be a need for managers. People would build things
correctly the first time and on schedule, on costs. The fact of
the matter is that we live in an imperfect world. People do make
mistakes; people do have different perspectives, etc. Management
is getting people to do what you want them to do, when you want
them to do it. The corporate culture is a vital part of the art
of management. Failure to recognize this has led to the demise
of several managers. But for those managers who take it into
consideration, the corporate culture can greatly influence the
productivity of any organization.

Within the “PRIDE”-Enterprise Engineering Methodology (EEM),
Corporate Culture is defined in Phase 3, Activity E, “Prepare
Organization Analysis”: http://www.phmainstreet.com/mba/pride/eespcc.htm#survey