Corporate culture is much talked about, often bemoaned, and rather seldom actively managed. This brief will explore the concept and its potential impacts in different organisations. It will then offer some basic guidelines for executives wishing to understand and manage culture more actively in their own organisations.

What do we mean by Corporate Culture?

- There are a number of interpretations of this term, the majority focus on “the way we do things around here”. Whilst this well known phrase does indicate an important part of the field it is insufficient to describe the complexity of the whole notion. Furthermore to take action purely on the basis of this description is to invite problems.

- Ed Schein (Emeritus Professor of Management, MIT) offers a thoughtful yet simple model

Artefacts are considered to be the everyday manifestations of culture that we (either consciously or unconsciously) meet during each working day. They will include concrete examples such as: badges of office; uniforms; quality of office furniture. Schein also uses this category to include behavioural items such as modes of address; rituals (who makes coffee for whom) etc

These are observable indicators of culture, whilst they indicate the values and assumptions underlying them they are not clear links, free of the need of interpretation. Thus it is extremely dangerous to infer the values of a corporate culture on the evidence of its artefacts alone.

The artefacts of a corporate culture may be considered to be analogous to the surface structure of spoken language (Chomsky), which necessarily has a large degree of deletion of the deep structure i.e. the total experience which a speaker brings compared to that portion which it is practical to transmit.

- Espoused Values are the openly articulated mission, rules, expectations and (sometimes) explicitly values.

- The congruence between this level and the artefacts level will begin to indicate the uniformity and ‘strength’ of the culture under observation.

- Significant disconnects between the first two levels (e.g. EV= “we are a single status firm” A= ‘shop floor staff wear overalls; office staff wear suits’ or even ’office staff remove their overalls in the office environment’) are important indicators. Dissonances such as this suggest that although there may exist a value-based intent; the culture which is actually being displayed is built on a very different assumption to that of the Espoused Value.

i.e. assumption1 all employees contribute to corporate success assumption2 shop floor staff should be differentiated from office staff.

- Underlying Assumptions are the foundations upon which the edifice of a firm’s culture is built. Again for a culture to be fully robust a large degree of congruence is required between this and the other levels of cultural definition. The fundamental assumptions may be deeply moral – about human equality, hierarchical structure or they may be profoundly practical – about routes to solutions which have evolved over a long period of the firm’s life.

In summary then, Corporate Culture is that set of behaviours, signs, values and assumptions which form the usual working framework within which staff make their decisions and alliances.

Why does Corporate Culture matter?

Organisations use energy to achieve their ends. In this day and age it is unthinkable that an organisation does not ensure the efficient use of electricity or gas as energy sources. Just as to waste gas is to waste money; to waste human energy is also to waste money – usually as the opportunity cost of lost purposeful activity.

- Where culture is clear, behaviour is largely congruent with both the stated values and the underpinning assumptions. Under such circumstances the energy input from staff is more focussed on company-desired outcomes than on finding acceptable methods or avoiding unacceptable ones.

- If we accept the premise that most staff wish to do a good job, then enabling them to do their job in an environment where they understand and are fundamentally aligned with organisational values and expectations maximises their propensity to deliver. The inference is therefore that to gain maximum value from our staff’s contribution we should invest in making sure that they understand and can sign up to our corporate culture.

- Case law indicates that organisation’s responsibility for the health and safety of their staff is not confined to physical health. Individuals who find themselves strongly at odds with organisational values may suffer significant added stress levels.

- External stakeholders of a firm probably do not consciously analyse the corporate culture with which they are interacting. There is, however, an impression given with every transaction – this builds up into a sense of relationship of one type or another. Managing culture is the way to determine that impression from root cause rather than at purely superficial level.

How important is culture in the context of organisational change?

Some cultures are more open to changes than others. In general, cultures (once developed) tend towards homeostasis. This means that they have a tendency to revert to a steady state rather than to fluctuate. There is substantial inertia to overcome in order to alter culture at any level deeper than that of the Artefacts of culture.

- Much modern management effort and activity is concerned with introducing and dealing with change. So much so that the very term ‘Change’ has itself become a threat and for some an obstacle.

- When exploring this area it is important to avoid the (all too common) nominalization of ‘Change’ and instead to focus the effort and resources available on that which is to be changed. ‘Developing a more efficient way of making our product ‘;’Reducing levels of scrap and rework’ are the sorts of new activities that many employees can happily embrace. To trail them as ‘change programmes’ will be welcomed in some cultures and shunned in others.

- At times of strong change pressure on an organisation – what of the essential core activities which must be continued for the organisation to survive? The metaphors are many – the baby and the bathwater; taking our eyes of the ball etc. There is a legitimate tension between change and stasis, the trick is to spot when one pole or the other is being appropriated by a pressure group.

- Language and languaging are manifestations of culture. Bernstein’s work on coding and social class developed ideas that language not only reflected the culture which generated it, but that it was significant in shaping (i.e. changing) cultures. In major organisational change programmes, effort must be given to true communication planning. Communications need to project the new world; comfort, stir and even enthuse; above all they must be congruent with leaders actions.

Conclusions for Managers

The active management of a corporation’s culture allows fundamental changes to be made in working practices.

Capturing the underlying assumptions of your corporate culture will enable you to articulate missions and values which are genuinely congruent with those of the majority of your staff.

This in turn will allow you to suggest or introduce artefacts which will portray these values both to external and internal stakeholders.

Managing culture is economically sound practice: helping to maximise the efficient deployment of human resources by reducing the energy dissipated in avoiding uncomfortable ways of working.

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