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9.1 What Is Corporate Culture?

Learning Objectives

  1. Define the concept of corporate culture or, more broadly, organizational culture.
  2. Learn to recognize and distinguish specific organizational cultures.
  3. Consider ways that a culture may be instilled in an organization.

I’m a Mac, and I’m a PC

“I’m a Mac, and I’m a PC” is the first line from a set of advertisements produced for Apple.“‘Get a Mac’ Collection,” YouTube video, 9:39, posted by “Aploosh,” February 26, 2007, http://www.youtube.com/watch?v=siSHJfPWxs8. Two guys stand in front of a white screen, a step or two apart. The one pretending to be an Apple Macintosh computer looks a lot like you’d expect the typical Apple computer user to look: casual, young, and cool; he’s not stressed but certainly alert and thoughtful. He hasn’t had a haircut in a while, but the situation isn’t out of control. He speaks up for himself without being aggressive. His t-shirt is clean, his jeans reliable, and his tennis shoes stylish. The PC, on the other hand, can’t relax in a polyester suit that’s a half size too small, especially for his inflated waistline. Bulky glasses slide down his greasy nose. Short, parted hair glues to his head. He’s clean, shaven, and very earnest. In one of the commercials, the PC man talks about the things he does well: calculation, spreadsheets, pie charts. The Mac responds that he feels more comfortable helping users make their own movies and organize their music collections.

Underneath these ads there are two very different corporate cultures, two very different kinds of companies making two very different products even though both sell their machines in the store’s computer section. Now, because this is advertising and it’s paid for by Apple, we should take the claims being made with a grain of salt. And, obviously, Apple didn’t air these spots because they wanted to exhibit their corporate culture. They wanted to sell computers (and hammer the competition in the process). None of that, however, changes the fact that the commercials do a good job of displaying what a difference between corporate cultures looks like. It looks like these two guys. They’re both capable and dedicated, but everything about each of them makes the other one squirm; it’s hard to imagine they could work well together because their habits and comportments—everything from how they dress to the way the talk—is so completely different.

The same can be said about workplaces. It’s easy to imagine a kind of office where PC fits nicely. People there would wear ties and skirts. They’d be punctual. Their days and working styles would be regimented and predictable. Employees would have their own cubicle offices, and anyone proposing an “informal Friday” break from the dress code would be looked on with suspicion. By contrast, Mac would function well in an open, warehouse-like space with a bike rack out front. Flextime would be common—that is, people arriving earlier or later in the morning depending on their preference and on the circumstances of their lives (whether they have children, when they can avoid rush-hour traffic). Regardless of when they show up, they take responsibility for making sure they log a full workday. The attire would be casual and diverse. Maybe the boss wears jeans. Some people would probably be annoying others with their loud music, but everyone would force smiles and be tolerant.

One of the reasons the Apple ad works well is that it resists the temptation to simply say Apple is superior. Yes, PC is dorky and Apple is cool, but Apple does admit that PC really is better at analytic-type activities like producing clean spreadsheets. The same mixed findings apply to corporate culture. At the PC office, the clothes aren’t nearly as comfortable as the ones you find at the Mac place, but at least there aren’t any guys wearing jeans that fall a little too low over their back end. And the flextime scheduling at Apple may make for a happier workforce, but only until it happens that a project suddenly arises and needs to be executed immediately, and one of the key participants has flex-timed and already left for the day. The other team members are left, that means, to do his share of the work. What about the bike racks outside? Everyone agrees that it’s great that the Mac people are peddling to work, but only until a morning thunderstorm pops up and no one can make it to the office. The point is there are advantages and drawbacks to every corporate culture. It’s hard to say that one is better than another (just like Macs work for some people while others prefer PCs), but it’s certainly true that there are different value systems beneath the distinct cultures.

Anyone who has a management role in any organization will be expected to have a grip on what values guide the enterprise and how they reflect in the day-to-day life of people on the job. Further, some managers—and all entrepreneurs—will not only need to apply guiding values; they’ll have to select and create them.

Definitions of Corporate Culture

Corporate cultureThe constellation of beliefs, customs, habits, and values determining how a business or organization acts in the world. is easier to get intuitively than put into words. Because you can’t touch it, measure it, or take its picture (even though you can show two people in an advertisement who obviously belong to different corporate cultures), it’s not surprising that there’s no consensus definition attached to the term. Here are three attempts to put the idea in words. A corporate culture is

  • “the shared beliefs top managers have in a company about how they should manage themselves and other employees, and how they should conduct their business”;“Can this Man Save Labor?” BusinessWeek, September 24, 2004, 84.
  • “the pattern of shared values and beliefs that gives members of an institution meaning and provides them with rules for behavior in their organization”;Robert Kuttner, “Labor and Management—Will They Ever Wise-Up?” BusinessWeek, May 9, 1994, 16.
  • “a general constellation of beliefs, mores, customs, value systems and behavioral norms, and ways of doing business that are unique to each corporation, that set a pattern for corporate activities and actions, and that describe the implicit and emergent patterns of behavior and emotions characterizing life in the organization.”Simon Head, “Inside the Leviathan,” New York Review of Books, December 16, 2004, 88.

There are common threads to these cited definitions and some points that may be added:

  • Corporate culture is shared; it’s not like a regulation or a code that’s imposed from some specific place outside the organization. The culture may begin that way, but once installed, it belongs to all those participating in the workplace.
  • Corporate culture provides guidance. It’s not a potted plant to be looked at; corporate culture tells an employee that the Daffy Duck necktie is too far out there and should be left in the closet. The pumpkin necktie, however, is OK as long as we’re coming up on Halloween. Analogously, though more significantly, it tells a salesman whether it’s OK to flagrantly lie to a customer, to stretch the truth a little, or only to play it straight.
  • Corporate culture provides meaning in the organization; it tells members why they are there. At Goldman Sachs, the bottom line really is the bottom line: people are there to make money. At Greenpeace, by contrast, people arrive in the morning to protect the planet, and while it’s true that many receive a paycheck for their efforts, that’s not the reason they show up for work.
  • Corporate culture is top heavy; management carries the heaviest burden. Unlike simple office codes—such as turning in your expense reports within a week of terminating travel—that apply to people more or less uniformly, the burden of understanding and promulgating the organization’s culture falls heavily, though not exclusively, on the leaders.
  • A corporate culture is a constellation of values, a set of ways of seeing the business world.
  • The constellation of cultural values is dynamic; everyone involved every day stretches and pushes the organization’s culture.
  • An organization’s culture is organic; it’s born and grows with the organization. It dies there too.
  • The organization’s culture includes life values, ones that cross beyond purely business concerns to touch questions including, “Is it OK to date someone from work?” “Can I cry at my desk?” “Will anyone object if I have a shouting match with my wife from the telephone in my cubicle?”

This list isn’t exhaustive. It does, however, show how thoroughly corporate culture penetrates the workday.

What’s My Organization’s Culture?

Managers’ job responsibilities include protecting and promoting their organization’s culture. Fulfilling the responsibility requires determining exactly what culture lives in the workplace. There’s no secret decoding mechanism, but there are a number of indicating questions that may be asked. One of the most natural is to brainstorm associated words. For example, imagine visiting two offices, one filled with people who look like the Apple Mac from the commercial, and the other with those who’d fit naturally into the office where PCs are bought and used. Just looking at the commercial and jotting words as they flow might lead to lists beginning this way:

  • On the Apple side: sloppy, fun, warm, loose, careless, resigned, informal, smart, creative, soft-spoken, controlled, cool, and haughty.
  • On the PC side: uptight, formal, reliable, demanding, uncomfortable, determined, perfectionist, detail oriented, disciplined, unconcerned with appearances, and geeky.

These are short, rapidly composed lists, but they’re developed enough to observe two profiles of work-life peeking out. You can see that that the Apple office is going to fit closely with values including comfort, innovation, and independence, while the PC office will be more compatible with values including reliability and responsibility. You can count on the PC office to get things done, but if you’re looking for something outside the box, you may be better off going the Apple route.

Other questions getting at the heart of an organization’s culture and basic values include these dealing with the workplace timeAs an aspect of organizational culture, the way time is understood and valued in the workplace.: How many hours are expected at work each week? Is there flextime? Is there telecommuting? Is there a punch clock or some other kind of employee time-in-the-office monitoring? Is it more important that the employee be present or that the work gets done? In some offices it’s the former; in others, the latter.

Then there are questions about employee interactionAs an aspect of organizational culture, the way members relate to each other on the job.. Is each worker situated in a private room or a more open, common space? Do people tend to compete with each other or is teamwork a higher value? To the extent there’s individual competition, how far does it go? Is it a good-natured jousting, or closer to hostile blood sport? Of course different kinds of organizations are going to recommend themselves to one side or the other of the spectrum. For example, a doctor’s office, an archeological dig, a construction company are relatively good places to value teamwork. A stockbroking office, a pro basketball team, and an actors’ studio are spots where you may want to encourage individuals to outdo those around them.

What’s the workplace moodAs an aspect of organizational culture, the mood at work on a typical day.? Fun? Somber? Energetic? Modern? Traditional? Many Volkswagen dealerships are remarkable for their huge windows and sunlight; it’s a kind of work environment for the sales staff meant to encourage an open, airy feel conducive to car buying. Elevated heating and cooling costs go along with all that glass, however, and different workplaces where money is valued more than ambience may choose to cut operating costs with a drabber space. Going beyond the architecture, different offices have different moods. It’s pretty rare that you see practical jokes or trash-basket basketball games going on at the dentist’s office. On the other hand, anyone who’s ever operated a call center telephone knows there’s a solid chunk of each workday dedicated to high jinks.

Is the workplace personalizedAs an aspect of organizational culture, the extent to which an organization’s members make their physical space at work their own space.? Some office cubicles burst with family snapshots and personal memorabilia. Most assembly lines, on the other hand, are practically devoid of individual touches.

Are employees workers or people doing workAs an aspect of organizational culture, the degree to which an organization’s members are valued as integral people with aspirations beyond those of the organization.? If the former—if the value the organization attributes to those receiving paychecks is limited to what they do to earn the check—then few resources will be dedicated to supplementals and benefits. On the other side, a corporate culture valuing its employees as people may provide extra vacation time, health insurance, and retirement plans. Branching out further, you can get an idea of a workplace culture by checking to see if a gym or exercise room is provided. Day care for those with young children is another sign of the corporate culture that values workers as integral people.

Dress codesAs an aspect of organizational culture, a set of rules—explicit or implicit—distinguishing what garments may and what may not be worn in the workplace. reflect the organization’s values. Is uniformity or individuality more highly prized? If uniformity is the rule, what kind is it? In some advertising agencies, for example, the people who work in the creative department conceiving the commercials at first appear to be a diverse collection of independent-minded dressers, but get a few together and you’ll immediately perceive a uniform that’s as binding as the most traditional office—it’s just that ratty jeans replace slacks and clever t-shirts replace neckties.

Another cultural indicator runs through the employees’ leisure timeAs an aspect of organizational culture, the leisure time habits and preferences of an organization’s members.. Where do people hang out? Do they go to football games, the opera, church? Do they spend their weekend mornings on family excursions because they have spouses and children, or are they still in bed, sleeping off the night before? More, is leisure time spent with coworkers? Do employees get together just because they enjoy each other’s company? If they do, the social outings are more likely to occur in connection with organizations seeking a harmonious workforce and expending resources to foster camaraderie on the job. They’re less likely to occur at organizations where everyone is fiercely competing with everyone else, as sometimes happens, for example, at stockbrokerages.

Healthy community interactionAs an aspect of organizational culture, the degree to which an organization and its members participate in local, nonwork endeavors. is a value emphasized in some corporate cultures. Everyone has seen the “adopt a highway” signs indicating that a local firm or group has taken responsibility for keeping a stretch of highway litter-free. The professional sports leagues have traditionally asked players to dedicate some season and off-season time to community outreach. Other kinds of organizations, by contrast, may not even have a local community. Telecommuting and cloud computing mean employees can easily form a functioning organization with members living in different states, even different countries.

Social cause activismAs an aspect of organizational culture, the degree to which an organization and its members participate in social causes not directly related to work endeavors. is another marker of corporate culture. The shoemaker TOMS Shoes fights rural poverty in developing nations by donating shoes. Other companies focus entirely on doing well in the for-profit marketplace.

Political actionAs an aspect of organizational culture, the degree to which an organization and its members participate in partisan political activities not directly related to work endeavors. may (or may not) infuse a corporate culture. Many companies steer clear of overt or even hints of political partisanship for fear of alienating one or the other half of the electorate. This is especially true for larger enterprises spread across the entire country, drawing consumers from liberal corners of San Francisco, conservative bastions of north Dallas, and the libertarian towns of New Hampshire. Local businesses, however, especially those catering to relatively homogenous communities, may find no downside to flipping the switch on political activism and breeding partisanship as a guiding value. The company Manhattan Mini Storage provides (obviously) storage for household items in Manhattan. Their big competition comes from warehouses in New Jersey. The Manhattan Mini Storage billboard ads read, “If You Store Your Things in New Jersey, They May Come Back Republican.” This appeal may work pretty well in central New York City, but it won’t seem very funny most other places.

Like politics, religious beliefAs an aspect of organizational culture, the degree to which an organization and its members embody a faith not directly related to work endeavors. and doctrine are rarely set at the center of the largest corporations, but smaller outfits operating in a narrow social context may well embody a particular faith.

Conclusion. Taken together, these categories of values begin shaping the particular culture defining an organization.

How Is Organizational Culture Instilled?

A specific culture may be instilled in an organization through a set of published rules for employees to follow or by the example of leaders and employees already working inside the organization.

Instilling a culture through established rules typically means publishing an organizational codeA set of written rules defining an organizational culture and indicating how individuals ought to act within the organization. governing behavior, expectations, and attitudes. The multinational firm Henkel—the company that invented laundry detergent and today produces many cleaning and health products sold under different brand names around the world—has published this kind of code. It’s quite long, but here’s an edited section:

Shared values form the foundation of our behavior and our actions throughout Henkel. Every single person plays a key role here. It is the sum of our actions that makes Henkel what it is—a lively corporate culture in which change is embraced as opportunity and everyone is committed to continuous improvement.

Our Values

  1. We are customer driven.
  2. We develop superior brands and technologies.
  3. We aspire to excellence in quality.
  4. We strive for innovation.
  5. We embrace change.
  6. We are successful because of our people.
  7. We are committed to shareholder value.
  8. We are dedicated to sustainability and corporate social responsibility.
  9. We communicate openly and actively.
  10. We preserve the tradition of an open family company.Henkel North America, Vision and Values (Düsseldorf, Germany: Henkel AG & Co., 2008), http://businessethicsworkshop.com/Chapter_9/images/HenkelNorthAmerica_ Vision_and_Values.pdf.

This statement sounds good in general. The stubborn problem, however, with trying to capture a corporate culture with a string of dictates and definitions parallels the ones constantly faced in ethics when trying to make decisions by adhering to preestablished rules and duties: frequently, the specific situation is far more complicated than the written code’s clear application. So, in the case of Henkel, we learn that they embrace change, but does that mean employees can change the dress code by showing up for work in their pajamas? Does it mean managers should rank and yank: should they constantly fire the lowest-performing workers and replace them with fresh, young talent in order to keep turnover going in the office? There’s no way to answer those questions by just looking at the code. And that creates the threat of an at least perceived cultural dissonanceA conflict between the values the organization publicly promotes as essential to its functioning, and the values guiding an organization’s workers in their day-to-day activities. within the organization—that is, a sense that what actually happens on the ground doesn’t jibe with the lofty principles supposedly controlling things from above.

Social Conditioning

The second form of instilling a culture doesn’t work through rules but through social conditioningA set of social cues and pressures provided by the actions and habits of an organization’s member that guide new members toward how they are to act within the organization.; it’s not about written codes so much as the cues provided by the customs of the workplace, by the way people speak and act in the organization. New employees, in other words, don’t read handbooks but look around, listen, and try to fit in.

In his book Business Ethics, O. C. Ferrell lists some of the social ways a culture infiltrates the organization.O. C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics, 7th ed. (Boston: Houghton Mifflin, 2008), 181. Selecting a few of those and adding others yields this list:

  1. The founder’s ethical legacy to the organization may contribute to its living culture. Walmart’s founder Sam Walton was a legend in austerity; he industriously minimized costs so in-store prices could be lowered correspondingly. This is a continuing aspect of Walmart’s cultural legacy, though it can be controversial on other fronts. Some complain that Walmart is in essence encouraging third world sweatshop labor by ruthlessly granting contracts to lowest-cost providers.
  2. Stories and myths embedded in daily conversations may indicate culturally appropriate conduct. Warren Buffett, leader of the Berkshire Hathaway investment group is a kind of Yogi Berra of the finance world, a highly skilled professional with a knack for encapsulating pieces of wisdom. Here’s a paraphrase of one of Buffett’s thoughts, “I’m rich because I’ve always sold too early and bought too late.” Conservative investing, the lesson is, yields value for shareholders. It’s also a high ethical value within the corporate culture he tries to nurture.
  3. Heroes or stars in the organization may consistently communicate a common message about the organization’s guiding values. There’s a difference between lists of values written up in a handbook and a group of leaders who together consistently talk about guiding values and live by them.
  4. The dress, speech, and physical work setting may be arranged to cohere with the organization’s values. The United Nations threw a wrench into its own efforts to reduce global carbon emissions by scheduling its thirteenth annual global warming meeting in Bali. The weather was nice there, but since most participants came from the United States and Europe, it became difficult not to notice that the values of the organization’s handbook (control of carbon emissions) didn’t jibe with the values of the organization’s members (burn tons of jet fuel to work in a place with sunny beaches). On the other hand, the UN Foundation—which advocates reduced greenhouse gas emissions and similar—recently moved into an environmentally friendly building with cubicles formed from a biodegradable product and many similar, environmentally friendly features.“UN Foundation Green Building,” YouTube video, 2:23, posted by “unfoundation,” February 14, 2008, accessed May 25, 2011, http://www.youtube.com/watch?v=15_MdcSUlSY.
  5. An organizational culture may reinforce itself through self-selective processes. A self-selective processA process where individuals effectively select themselves into a group as opposed to being selected by others. is one where individuals effectively select themselves into a group as opposed to being chosen by others. Hiring presents a good example. Presumably, when an organization hires new employees, certain filters are constructed to reduce the applicant pool to those most likely to succeed. The process becomes self-selective, however, when job interviews are conducted as they are at Google. There, perspective employees are faced with bizarre questions that have nothing to do with the typical “Why do you want to work at Google?” and “Why would you excel at this job?” Instead, they get the following:

    • You have five pirates, ranked from five to one in descending order. The top pirate has the right to propose how a hundred gold coins should be divided among them. But the others get to vote on his plan, and if fewer than half agree with him, he gets killed. How should he allocate the gold in order to maximize his share but live to enjoy it? (Hint: One pirate ends up with 98 percent of the gold.)
    • A man pushed his car to a hotel and lost his fortune. What happened?
    • Explain the significance of “dead beef.”

    In response, some applicants will dive into the challenges excitedly, while others will find the whole process really weird and prefer not to be caught within a mile of a place where job interviewers ask such bizarre questions. In the end, those who enjoy and want to continue with the job application process are precisely those who will fit in at Google. Perspectives, that means, select themselves.

Conclusion. Two ways a corporate culture may be instilled and nurtured in a workplace are a list of codes to be followed and a set of social techniques that subtly ensure those sharing a workspace also share values corresponding with the organization.

Key Takeaways

  • An organizational culture is the set of values defining how and why members live at work.
  • Distinguishing an organizational culture requires observing a range of values from the way people dress to the degree of cooperation and competition in the workplace.
  • An organization’s culture may be instilled through codes and rules.
  • An organization’s culture may be instilled through social cues and pressures.

Review Questions

  1. List five aspects of a corporate or organizational culture.
  2. Describe two workplace decisions that may be determined by a corporate culture.
  3. List some questions you could ask about a workplace that would start to give you a sense of its culture.
  4. What are five ways that an organization may attempt to instill a culture through social conditioning?
  5. In your own experience in a job or any organization, what’s an example of social conditioning that enforced the place’s culture?