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Meaning of Corporate Culture

Corporate culture refers to a company’s beliefs, values, rules, customs, rituals, principles, ways of operating and internal work environment. Every organization has a unique organizational culture. It has its own philosophy and principles, its own history, values, and rituals, its own ways of approaching problems and making decisions, its own work climate. It has its own embedded patterns of how to do things. Its own ingrained beliefs and thought patterns, and practices that define its corporate culture.


Where does Corporate Culture Come From?

A company’s culture comes from values and principles that management preaches and practices. A significant part of a company’s culture emerges from the stories that get told over and over again to illustrate to newcomers.

All sociological forces, some of which operate quite subtly, can originate anywhere: from one influential individual, work group, department, or division, from the bottom of the organizational hierarchy or the top. Company culture also originates from practices it follows in dealing with its stakeholder.


How to Change a Problem Culture

Changing a company’s culture to align it with strategy is among the toughest management tasks easier to talk about than do.

Changing a problem culture is very difficult because people are habituated and deeply connected with it. It takes concerted management action over a period of time to replace an unhealthy culture with a healthy culture or to root out certain unwanted cultural obstacles and instill ones that are more strategy- supportive.

Following two steps must be followed in changing problem culture:

1.            Diagnose supportive facets: The first step is to diagnose which facets of the present culture are strategy supportive and which are not.

2.            Open talk to concerned person for need of change: Then, second step is, the managers have to talk openly and forthrightly to all concerned about those aspects of the culture that have to be changed.  The talk has to be followed swiftly by visible, aggressive actions to modify the culture-actions that everyone will understand, are intended to establish a new culture more in tune with the strategy.  Neither charisma nor personal magnetism is essential. It is duty of top management to bring change in culture by changing the present menu of action.

New menu of culture changing action must consider the following:

1.            Revised policies, procedure in ways that will help drive cultural change,

2.            Replace key executives, who are strongly associated with the old culture,

3.            Altering incentive compensation (to reward the desired cultural behavior),

4.            Visible reward and recognition to people who display the new cultural traits,

5.            Appointing, recruiting and hiring new managers,

6.            Nominate employees who have the desired cultural values as role model,

7.            Hire trainer to communicate the basis for the cultural change and its benefits to all concerned and to the employees,

8.            Instill all changes as soon as possible.

However, personally talking to many departmental groups about the reasons for change is essential; organizational changes are seldom accomplished successfully from an office. Moreover, creating and sustaining a strategy-supportive culture is a job for the whole management team. Major cultural change requires many initiatives from many people. Senior managers, department heads, and middle managers have to reiterate values and translate the organization’s philosophy into everyday practice. In addition, for the culture-building effort to be successful, strategy implementers must enlist the support of first line.

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