What is corporate culture?

By Rahayu Ratnaningsih

This is the first of two articles on corporate culture.

JAKARTA (JP): Few terms have been so frequently defined, yet so widely misunderstood, as corporate culture. According to Jerome Want in his book Managing Radical Change, corporate culture consists of the collective beliefs that people within the organization have about their ability to compete in the marketplace -- and how they act on those belief systems.

A company's culture is revealed through the attitudes, dreams, values, and behavior of employees and management. For that reason, corporate culture is not easily manipulated or quickly redirected by memos or mission statements, but, over time, it can be developed and guided in the directions required to ensure a company's success.

This begs a string of questions: is corporate culture created? Who can create corporate culture? How to develop corporate culture? And what are the important elements in the development or change of corporate culture? What kind of corporate culture does a successful company have that sets it apart from other less successful companies?

The crucial starting point in answering these questions should be in the ability of each company to identify its own corporate culture. Often we hear employees retort that their company does not have a culture. Or many cannot even explain what the culture of their company is. The fact is every company has a culture; the difference is whether it is great, mediocre or lousy.

One thing is clear when an excellent corporate culture, i.e. a performance-driven one, exists, everybody who comes into contact with that organization can instantly see and feel it. There is a strong "palpable but invisible" force there somewhere that motivates and drives employees to be the best in whatever they are doing. Ideally in a performance-driven corporate culture, office politics can hardly take place.

Jerome Want has divided corporate cultures into a hierarchy consisting of seven major categories: predatory (punitive/ alienating), frozen (gridlock/denial), chaotic (fragmented/ unfocused), political (retaliatory/balkanized), bureaucratic (procedural/rigid/regimented/authoritarian), service (customer focus/individualizing/quality), and new age (innovative/egalitarian/consensual/changing).

Back to the question, is or can corporate culture be created and who can create it? Is corporate culture equivalent to the corporate mission statement that is pasted all over the office walls? A mission statement can easily be created, but to make it manifest in a strong culture that is deeply embedded in every employee's mind and heart is a completely different issue.

Any human resources practitioner cannot deny the "intimate relationship" between corporate culture and leadership. Employees who cannot perceive or define their corporate culture usually have a problem in one way or another with their corporate leadership. Leadership is doing the right things, as opposed to doing things right which is the definition of management.

Strong and effective leadership paves the pathway toward a performance-driven corporate culture. It represents fertile land for the growth of excellence. The downfall of this premise is leadership is not that easy to redirect or change. A change in leadership is basically a total change in the body and soul of a company. It is equivalent to a reform movement or even revolution in a country.

A change in leadership more often than not means a replacement of the old leader of a company with a new one. It is, obviously, easier for a leader to reshape his subordinate than for a subordinate to reshape a leader.

Other crucial elements, after leadership, in culture development are the system and structure of the organization. Leadership translates corporate vision through a supportive system and structure. Hence, correct leadership should be manifested in effective systems and structures. If we imagine this concept as a chart, we may visualize a pyramid with leadership on the peak while system and structure are the two legs.

Needless to say, corporate culture is a top-down process for most companies. The tail will only be willing to head for some place, if the head is facing in that direction and making a decision to move accordingly. A failed corporate culture very often becomes the source of employees' dissatisfaction and subsequently their departure.

In other words, corporate culture is very much created by effective, principle-centered leadership. The word "principles" is used here instead of "values"; principles are lighthouses; they are a point of reference and they don't budge or waver, but give a sense of direction to others who may choose to adjust their position using them as a compass. While values are relative and subject to frequent and immediate change, correct principles do not change.

The writer is a human resources and personal development consultant based in Jakarta.