HR assignment essay: Strong corporate culture 

Introduction

Corporate culture became a matter of study and research in 1980s and 1990s when American company’s started facing failure in competing against their Japanese counterparts (Ojo, 2010). Corporate culture has been defined as a specific set of norms and values which are being shared by groups as well as individuals in the organization (Robbins and Sanghi, 2007). That is why today’s global trend amongst organizations is to create support and maintain strong corporate culture. The reason being strong culture affects the organizational performance along with the stakeholders like government, customers and the shareholders (Douglas, 2010).

Definitions of Corporate Culture

 Corporate culture is also defined as the set of very vital assumption which is mostly unstated which are shared between the members of organisation in common manner (Alvesson, 1989). Some of the manifestations of corporate culture are:

•  Shared Things, like the way people get dressed
•  Shared Actions,  like the service-oriented approach
• Shared Sayings, for example “ let’s get down to work”
•  Shared Feelings, such as “ hard work is not rewarded here” (Kazmi, 2005)

According to Brooks (Brooks, 2006) an intimate knowledge and creating awareness about culture will help in enhancing the ability of the organization in analysing the organizational behaviour which in turn helps in leading and managing the organization.

Thus corporate culture can be said as a broad term which is being used to define the unique characteristics or the personality or any particular organization for the company. Thus the corporate culture reflects the ethics, personality, values, belief and traits of not just The Company’s management but also the company’s founder, and employees of the well-established company. This illustrates that corporate culture is so much important that it mainly underlines the manner or the way in which the business is done in the society.

 Thus it is very clear from the above definitions of corporate culture that it is at the de position of any organizational culture, whether it is strong or weak, which helps in determining the organization performance.

 Strong and Weak Corporate Cultures

 A strong corporate culture is the one where staff is able to respond to the stimulus because it is well aligned with the organizational values (Martin, 2002). This means in case of strong corporate culture employees do the things which they believe are the right or correct things to be done. It has been noticed and discovered by Martin (2002) that the companies which have strongest cultures possess values and norms which have been shared in wide manner and are strongly held too and they outperform their peers too.

 Rather the companies with strong organization culture have been inclined towards getting higher net income growth, better return on investments and more increase in the share price than the company’s with weak culture. The performance benefits of strong culture have been extracted from three results of widely shared as well as very strongly held norms and values. These three consequences are:

• Enhanced and advanced goal alignment between the organization and its members.
•  Progressive employee efforts, and
• Better control and coordination existing within any organization

This argument gets a strong support from the quantitative analysis which depict that firms which possess stronger organizational or corporate culture always outperform the firms with weak cultures (Martin, 2002).

 On the other hand weak corporate cultures depicting firms do not show consistency in behaviour over the period of time. A weak corporate culture means that the members of the organization do not depict shared values, norms and beliefs. Moreover weak corporate culture shows negative impact on its employees because they are directly linked to enhance turnover (Harrison 1993).

Characteristics of Corporate Culture

 Rational assets are supposed to be maximisation of values of employees  which are needed to support the culture’s logical participation in case of both organizational and individual learning, readiness to share with others and  new knowledge formation (Dasanayake and Mahakalanda, 2008). Some of the basic characteristics of Organizational culture as defined by Hodgetts and Lufthansa (Hodgetts and Luthans, 2003) are:

•  Norms are being measured through things for example the amount of work being done and the level of cooperation existing between employees and management of organization.
• Clear-cut rules being framed regarding employees behaviour which are related to the staff’s productivity, customer relationship and intergroup cooperation?
• Integration as well as coordination between various organizational units in order to enhance the efficiency of work, manufacturing of products and services and quality and speed of designing.
•  Observed behavioural regularities for example the illustrated formal procedures and common language etc.

Dimensions of Corporate Culture

 Data gathered from the IBM employees from various countries has been classified into four dimensions of organizational culture by Hofstede (Hofstede, 1981) which are listed below:

POWER DISTANCE:  The degree through which the management and employees share a distinct relationship in formal or informal form.

•   UNCERTAINITY AVOIDANCE:  The level at which the people are ready to mitigate the tolerance level of ambiguity and uncertainty.
•  INDIVIDUALISM:  The degree through which the people are able to give rise to difference between self interest and the interest of the organization.
•  MASCULINITY:  The level where the success is being defined through parameters like challenge, ambition and insolence instead of promotion and caring.

Concept of Performance

 The degree of achievement which is being used for measuring the mission accounted at the work place which helps in building the employees job is called performance (Cascio, 2006). In order to express the range of various transactional efficiency measurements along with the input and output efficiently many researchers have used the term performance (Stannack, 1996).

 For organizational researchers the term performance has always been a controversial issue (Barney, 1991). Thus organizational performance is not just the term for defining any problem rather it is being used for finding a solution for the problem (Heffernan and Flood, 2000). The organizations capability which is used for accomplishing the organizational goals in an effective and efficient manner through the organizational resources is defined as organization performance (Daft, 2000).

 Strategic Performance Measurement System

That is why many organizations design the performance measurement systems which are used effectively for evaluation of the performance of the employees. Which is turn helps a lot in measuring the achievement levels of the organizational goals. It also helps in framing strategic plans for the organization (Ittner and Larcker, 1998). Strategic Performance Measurement System (SPMS) is a completely fresh approach which is used for measuring the performance and better than traditional methods. This is helpful in measuring both financial as well as non-financial performance (Chenhall, 2005).

Researches on Impact of Corporate Culture on Organizational Performance

 A research done by Eastman Kodak, a copy products company which is also a vital part of Kodak depicted that any changes in its organizational or corporate culture caused improvement in its performance. By imparting a culture of excellence, Chuck Trowbridge the general manager of the organization dramatically changed the downwards trending performance of organization (Roskin, 1986). Through the program implemented called ‘Dialog Letters’ everyone in the organization knew what was going and could ask any questions or  with a guaranteed reply from the top  executives in Kodak .

Further research on corporate culture has shown that the culture of the firm is said to be the predictor of the long-term as well as mid-term performance of organization than any of its numbers (S.H., 1994). This phenomenon has helped leading airline company like Southwest Airlines devote considerable amount of human resources in the form of “ 96  Member Culture Committee” in order to safeguard the  corporate culture of Southwest Airline which helped it in becoming the topmost and successful airline in the history of aviation (Ojo, 2009).

 In an article it has mentioned that the organizations have entered a complete new era of values where the most important currency of commerce can be gained through development of responsible corporate conduct (Katongo, 2006) . Organizational culture as well as the  Individual character is the two supporting pillars based upon which the reputation of the organization can be built as well as maintained over the time (Katongo, 2006).

Conclusion

 Thus every person working in the organization has his/her own beliefs and values and while joining any organization the person first needs to internalise with the organizational culture. The organizational culture has very deep impact on the performance of the employees which in turn helps in enhancing the productivity and enhancing the organizational performance on the whole. Between 1990 and 2007 more than 60 research studies have been conducted which cover more than 7600 small business units as well as the organizations in order to find out the impact of culture on the organizational performance (Aragon-Correa, 2007). The outcomes have been positive for most of the studies conducted depicting that there is positive association between strong cultures in company with the performance improvement (Gallagher, Brown and Brown, 2008).

The adoption of the culture of organization by the employees helps in making them efficient and effective at the same time. This leads to enhancing and increase in the net profit of the organization as shown in the study conducted by Gallagher in the year 2008 (Gallagher, Brown and Brown, 2008).

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