2.2. Examples of companies benefiting from the positive effects of corporate culture

• Wal-Mart. Founder Sam Walton’s concern and respect for staff from the foundation of the company creates an environment of trust that persists to this day. Walton met staff, calling them by their first name and encouraged change to maintain the competitive edge. To this day, staff think about “how Sam would have done it”.

• Southwest Airlines. Its relaxed culture can be traced back to unconventional CEO Herb Kelleher, who encourages informality and wants staff to have fun at their jobs. Employees are valued, with Kelleher acknowledging births, marriages and deaths by notes and cards. Staff are encouraged to pitch in and help out, especially at check-in, giving Southwest turnaround times less than half the industry average.

• Hewlett Packard. Problems several years ago encouraged HP to change its culture; staff are required to formulate three personal and three professional goals each year, and are encouraged to cheer those that meet them, such as getting away early to be with family. Two years into the program, HP reports no loss in productivity despite staff working shorter hours and there is an increased staff retention rate. The program has been marked by the extent to which managers bought in, and modeled it in their personal lives.[5,p.856]

It is obviously easier to model a corporate culture during a firm’s infancy, but in practice culture can be changed for the better. This can be done by surveying employees, meeting staff outside their departments and learning what they really think is going on. This helps managers identify the existing culture and identify areas of improvement.

Then, managers should institute cultural changes by modeling the behavior they wish to encourage, then reinforce the desired culture with visionary statements/slogans, celebrating employees’ successes or promotions, distributing newsletters, hiring culture-compatible staff, etc.

Positive corporate culture is now a prerequisite for success rather than a competitive advantage; it allows the hiring and retention of top-quality staff. Ideally established at a company’s infancy, it can be changed over time as the authors’ example show. If a corporate culture is lowering morale, a top-down approach is needed, setting out the vision from the top and demonstrating acceptable behavior. Improving workplace culture makes employees’ experience happier and this in turn leads to improved profitability (or, in the HP example, no reduction in profitability!).

A well-structured study, combining a sound theoretical base with three case studies involving corporate culture change in top US companies, the article is of use both to academics and managers as it charts the concept of corporate culture and its positive and negative effects on organizations.[7]

Conclusion

Corporate culture is a set of behavior models, which are got by the organisation in the course of adaptation to an environment and the internal integration.

Components of corporate culture are: the accepted system of leadership; styles of the conflicts’ resolution ; operating system of communications; position of the individual in the organisation; the accepted symbolics: slogans, organizational taboos, rituals. Key characteristics of corporate culture are: innovation and risk taking; attention to detail; outcome orientation; people orientation; team orientation; aggressiveness; stability.

Corporate culture has many definitions as it is heavily influenced by the industry in which it operates, geographical location, history, employee personalities, etc. Some formal definitions have arisen, but essentially a corporate culture has several key elements: it offers a clear corporate vision; it is supported by corporate values consistent with the aims of the company and aligned with the personal values of organization members; a high value is placed on employees at all levels and there is extensive employee interaction across many levels; and the culture is adaptable, adjusting to external conditions, and consistent, treating all employees equally and fairly.

There are known five types of corporate culture: authoritarian culture; participative culture; mechanistic culture; organic culture; sub-cultures and dominant culture.

So to work effectively any company should handle all these components and types and do it well.