The importance of corporate culture in an organization
Culture refers to the patterns of behavior, expectations, norms and values that one sees in a group of people. Corporate culture refers to those elements within a business or corporation.
Edgar Schein has described corporate culture in a model of concentric circles – outer elements visible to everyone, other elements only visible to those within the company and some not easily noticed even by those on the inside.
These elements are:
- Artifacts and symbols: These are elements visible to everyone inside and outside the organization. They include what the workplace looks like, logos, uniforms, mission statements and processes that the company uses. The meaning of these may not be immediately clear, but they are visible.
- Espoused Values and Beliefs: These are standards and rules of conduct which guide how the organization decides on strategies and objectives. A company’s value statement – for example valuing quality or innovation – is an example, but only if that value statement is consistent with how the company actually operates.
- Basic assumptions: These are deeply embedded in the organizational culture and are experienced as self-evident and unconscious behavior. The belief that the organization is like a family, with all that is associated with family – authority, boundaries, loyalty, mutual support – is an example. Sometimes the word family may be stated openly. Sometimes, it is implied by seeing the reaction when an employee is disloyal.
Peter Drucker, considered the father of modern management, famously said, “culture eats strategy for breakfast.” His point was that no matter how detailed or clever an organization’s strategy is in the marketplace, if the organizational culture does not support the strategy, then strategy will fail.
Culture is not owned by any one person no matter how important their role. Each person in the organization absorbs and transmits aspects of culture. Leaders must espouse and model the culture, especially if the leader is leading a culture change. Employees must understand the culture to work effectively. Culture affects an employee’s willingness to stay with an organization. Knowing more about culture can help future employees decide whether to accept a position within the company.
How can a person assess corporate culture?
It is difficult to assess corporate culture as a potential employee because there are so many aspects and subtleties to it. Nonetheless there are ways to get some information during an interview or a probationary period.
- Look at the company’s value statement. But consider it carefully. The public value statement may be at odds with the actual behavior of managers or of the company
- Look at the company’s strategic plan, if there is one, to see where the company is putting its priorities.
- Ask how decisions are made within the organization – who is involved in the decision making and how is the decision reached?
- Talk to other employees in the company about what they like or don’t like – if they are willing to tell you. What would they have wanted to know before they started work, that they now know?
What is a leader’s responsibility regarding corporate culture?
- The leader is often the most prominent representative of culture to others. Therefore, leaders should recognize that what they say and do (and don’t say and don’t do) sends a message about corporate culture to the organization and beyond.
- The leader should remind employees that they all have a role in representing corporate culture. The leader can reinforce that reminder by recognizing employees who demonstrate the culture well, for example recognizing employees who are particularly outstanding in their attention to quality or integrity.
- The leader must know the organizational culture intimately before leading a culture change. Change management will be most effective when the leader collaborates with others throughout the organization to gain their buy-in for the change. This is why bringing in a new leader to make a cultural change can fail unless that new leader first takes time to understand the culture and build collaboration.
Understanding your organization’s culture can help you improve your leadership and the effectiveness of your team. A review and consultation from an outsider can help you gain insights. Please contact us to discuss your needs and arrange a consultation via email@example.com or click here to Book a Free Consultation.
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