Literature Review on Corporate Culture

Management Literature Review “During the 1980s the concept of corporate culture captured the imagination of management researchers and practitioners alike. In particular, Peters and Waterman’s (1982) book entitled In Search of Excellence: Lessons from America’s Best-Run Companies proclaimed that the key to corporate success was a strongly unified corporate culture. ” Wilson (1996:87) Corporate culture has always been a part of every business since it was first introduced in the 1980’s.

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It doesn’t matter if it’s a small business or a massive company, corporate culture will always have an involvement. Corporate culture is very hard to define as one particular meaning, due to the various areas it covers. Glaser (1991:6) stated “… the folk definition of corporate culture as: “The way we do things around here”, makes a great deal of sense. It becomes possible to point to a behaviour and say: “That’s not the IBM way — but this is”, and be understood with relative precision. ” This helps to understand what the corporate culture of a business is.

It is the beliefs, the expectations, the guidelines, the company and its employee’s understanding of how the company and its employees should behave, individually and as a whole, internally and externally. “While corporate culture is an intangible concept, it clearly plays a meaningful role in corporations, affecting employees and organizational operations throughout a firm. ” Sadri & Lees (2001:853) Corporate culture has been and always will be needed to allow a business to reach its full potential. Without guidelines to follow, individual employees, or companies as a whole, would be in utter chaos.

Glaser (1991:6) states “For example, in the United Kingdom a powerful rule is that the waiting for an event (e. g. the arrival of a bus) is to be done in a form of social arrangement called a queue. The rule also says that the person at the head of that queue will gain access first. ” Imagine if queues did not exist, if that rule that everyone is eventually learnt, was never taught to anyone. Then try to board a bus. There would be arguments, possibly fights breaking out, because there is no understanding, no standard concept as to how this particular task should be carried out. It is the same with a business nvironment. “As is pointed out in Rusaw (2000, p. 249-50), “domination is rooted in an organizational ideology”. This ideology, expressed in the culture of the organization, is “a systematic set of norms, beliefs, and attitudes that people accept unquestionably as guides for everyday thinking and behaviour. ” Ogbor (2001:592). Without simple, but powerful beliefs to follow, employees would be in a constantly chaotic state of mind. By having these guidelines, it allows employees, and the company who employed them, to understand how each task should be performed and completed in an organised fashion.

Bettinger (1989:39) states “In strong culture companies, there tends to be a remarkable degree of consensus about goals and objectives. Officers and employees understand the mission and the purpose of the organization and see themselves as actively engaged in a common and worthwhile cause. ” This approach would be far more useful to a company then their employees running around the building in an unorganised manner. The business will achieve their tasks much quicker, and with relative ease than they would without corporate culture.

While every business has their own separate corporate culture, one of the universal reasons for using corporate culture is, according to Sathe (1983:11) “People feel a sense of commitment to an organization’s objectives when they identify with those objectives and experience some emotional attachment to them. The shared beliefs and values that compose culture help generate such identification and attachment. ”This is an advantage to any business because it gives its employees that sense of belonging to a group, working together to achieve a goal.

This will drive employees to work harder, work faster, while allowing them to still feel as though they belong with the company, that the company’s beliefs are something that they too believe in. Without that sense of teamwork, employees would not be able to achieve their maximum level of output, as they will feel as though they are on their own; that the work they produce will just end up as a file on the company system. Westwood & Kirkbride (1998:556) “… suggests that a corporate culture can be constructed, symbolised and engineered so as to transform employee values and behaviour, thereby enhancing individual, and ltimately, organisational performance. Corporate culture provides a “Greater Good” aspect to employees, all working together to achieve the same goal, as long as the values they work by feel right to them. An example of positive corporate culture increasing performance is Southwest Airlines. Sadri & Lee (2001:857) provides this statement “CEO and co-founder Herb Kelleher… encourages employees to be very informal and have fun at their jobs… Kelleher fosters this type of culture by engaging in unusual acts, such as arriving at shareholder meetings on a motorcycle wearing jeans and a t-shirt, or holding a 2a. . barbeque for the company’s mechanics who work the night shift (Donlon, 1999)… Kelleher also strives to value Southwest’s employees, acknowledging births, deaths, marriages, and other events in their lives by a note or card. Employees are encouraged to pitch in where needed, a fact that is evident in airports where pilots are often seen checking passengers, for example. This has allowed Southwest to have a turnaround time at airport terminals that is less than half the industry average. ” This is a perfect example of how corporate culture can have a positive effect on a business.

Rashid, Sambasivan & Johari (2003:708) state that “The pioneering work of Deal and Kennedy (1982) incited the interest of researchers and consultants to the concept of corporate culture, and how these values and philosophy guide the employees’ behavior in the organisation towards greater success. ” Ever since corporate culture became part of business management, researchers have been constantly conducting studies to understand whether or not corporate culture had a positive effect on the business environment. Lee & Yu (2004:341) used these examples “…

Denison and Mishra (1995), utilizing a more rigorous methodology, discovered that cultural strength was significantly associated with short-term financial performance while Kotter and Heskett (1992) refined the culture-performance framework. Kotter and Heskett (1992) found that firms with “adaptive values” are strongly associated with superior performance over a long period of time as compared to just short-term performance. This finding holds out the value of “adaptiveness” (sic) in determining organizational performance.

This hypothesis was given support by both Collins and Porras (1994) and De Geus (1997) in their work in long lived, financially successful companies. ” Corporate culture is a very powerful business tool, and has to focus on many areas of a company, as Chung & Haddad (2001:89) states here “Culture values refer to the extent of planning, innovation, people orientation, team orientation, and communication etc. Stronger culture values in place often leads to better performance. Following Grey and Thone (1990), a positive relationship between culture values and performance is hypothesised. As stated before, each company has their own corporate culture to follow, some may focus on employee relations, others may focus on customer service, it all depends on what each business is trying to achieve. Performance standards of a business have always been crucial, no matter what market, no matter what a business is offering to clients. Corporate culture has always been a big part of showing stakeholders, both internal and external, the ‘code’ they go by, to provide everyone involved with what they want.

Bettinger (1989:39) reinforces this by stating “One of the most powerful characteristics in companies with strong cultures is the emphasis on high performance standards, standards that are measurable in terms of quality, quantity, cost, or time. In such firms, these standards are firmly ingrained in the culture and are communicated and reinforced in everything the organization does. ” Corporate culture, since been properly introduced to the business world has had a ground-breaking effect in performance, for both individuals and companies as a whole.

This has always been the case, and always will the case; the corporate culture idea is far too valuable to forget. “An organization that is able to maintain a positive culture is likely to enjoy many benefits. When organization members identify with the culture, the work environment tends to be more enjoyable, which boosts morale. This leads to increased levels of teamwork, sharing of information, and openness to new ideas (Goffee and Jones, 1996). The resulting increased interaction among employees activates learning and continuous improvement because information flows more freely throughout the organization. Sadri & Lee (2001:856) Bibliography Wilson, A. M. (1997) The nature of corporate culture within a service delivery environment. International Journal of Service Industry Management. 8(1): 87. Peters, T. J. and Waterman, R. H. (1982) In Search of Excellence: Lessons from America’s Best-Run Companies, New York: Harper & Row. Glaser, S. (1991) A Note on Corporate Culture. Management Decision. 29(2): 6 Sadri, G. And Lees, B. (2001) Developing corporate culture as a competitive advantage. Journal of Management Development. 20(10): 853-57

Ogbor, J. O. (2001) Critical theory and the hegemony of corporate culture. Journal of Organizational Change Managemen. 14 (6): 592 Rusaw, A. C. (2000) Uncovering training resistance: a critical theory perspective. Journal of Organizational Change Management. 13(3):249-63 Bettinger, C. (1989) Use Corporate Culture to Trigger High Performance. Journal of Business Strategy. 10(2): 39 Hopfl, H. (1994) Safety Culture, Corporate Culture: Organizational Transformation and the Commitment to Safety. Disaster Prevention and Management. 3(3):50 Sathe, V. 1983) Implications of Corporate Culture: A Manager’s Guide to Action. Organizational Dynamics. (Autumn Issue) Westwood, R. I. and Kirkbride, P. S. (1998) International strategies of corporate culture change: emulation, consumption and hybridity (sic). Journal of Organizational Change Management. 11(6): 556 Donlon, J. P. (1999) Air Herb’s secret weapon. Chief Executive. (146):32-42 Rashid, Z. A. and Sambasivan, M. And Johari, J. (2003) The influence of corporate culture and organisational commitment on performance. Journal of Management Development. 22(8): 708

Deal, T. E. and Kennedy, A. A. (1982) Corporate Cultures, Massachusetts: Addison-Wesley. Lee, S. K. J and Yu, K. (2004) Corporate culture and organization performance. Journal of Managerial Psychology. 19(4):341 Denison, D. and Mishra, A. (1995) Toward a theory of organisational culture and effectiveness. Organisation Science. 6(2): 204-23. Kotter, J. and Heskett, J. (1992) Corporate Culture and Performance, New York: Free Press. Collins, J. C. and Porras, J. I. (1994) Built to Last: Successful Habits of Visionary Companies, New York: HarperBusiness.

De Geus, A. (1997) The Living Company: Habits for Survival in a Turbulent Business Environment, Massachusetts: Harvard Business School Press. Chung, S. and Haddad, K. (2001) Corporate Culture and performance: A Study of firms in Bahrain. Asian Review of Accounting. 9(1): 89 Grey, R. J. and Gelfond, P. (1990) Corporate Culture and Canada’s International Competitiveness. Canadian Business Review. (Winter Issue): 21-25. Goffee, R. And Jones, G. (1996) What holds the modern company together? Harvard Business Review. 74(6): 133-48


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