Corporate Culture: An Increasing Emphasis On Culture

CORPORATE CULTURE
Corporate culture refers to the shared values, attitudes, standards, and

beliefs that characterize members of an organization and define its nature.
Corporate culture is rooted in an organization's goals, strategies, structure,
and approaches to labor. As such, it is an essential component in any
business's ultimate success or failure. "[It] is an unwritten value-set that
management communicates directly or indirectly that all employees know
and work under," stated John O'Malley in Birmingham Business Journal. "It
is the underlying soul and guiding force within an organization that creates
attitude alliance, or employee loyalty. A winning corporate culture is the
environmental keystone for maintaining the highest levels of employee
satisfaction, customer loyalty, and profitability."
Every company has a culture, though not every culture is beneficial in

helping a company reach its goals. A healthy corporate culture is one in
which employees are encouraged to work together to ensure the success of
the overall business. Developing and maintaining a healthy corporate culture
can be particularly problematic for entrepreneurs, as the authoritarian
practices that helped establish a small business often must be exchanged for
participatory management strategies that allow it to grow.
AN INCREASING EMPHASIS ON CULTURE
Since the 1980s, several factors have led American businesses to evaluate
corporate culture alongside such traditional "hard" measures of corporate
health as assets, revenues, profits, and shareholder return. One such factor
is the transition from a manufacturing-based to a service-based economy,
with the corresponding shift in emphasis from the quality of a material
product to the quality of business relationships.
Another factor is the need for American businesses to compete in a global
marketplace against international rivals whose corporate cultures are distinct
but demonstrably effective. A related factor is the need for many businesses
to successfully adapt to technological advances in the marketplace or
acquisitions/mergers that require assimilation of previously separate
business entities.
Corporate culture affects many areas of a firm's operations. One broad area
of corporate culture involves corporate citizenship—the company's
relationship to the larger environment. In this area, a company's culture
helps determine its overall ethics and attitude toward public service. A
second broad area of corporate culture involves human resource
management. A company's culture affects a variety of human resource
policies and practices, including the nature of interaction between managers
and employees, the responsiveness to diversity issues in the workplace, and
the availability of flextime and telecommuting options, safety and training
programs, and health and recreation facilities. In a smoothly functioning
organization, all such policies and practices foster an internally consistent
corporate culture.
CULTURE IN SMALL BUSINESSES
Culture can be a particularly important consideration for small businesses. A

healthy company culture may increase employees' commitment and
productivity, while an unhealthy culture may inhibit a company's growth or
even contribute to business failure. Many entrepreneurs, when they first
start a new business, quite naturally tend to take on a great deal of
responsibility themselves. As the company grows and adds employees,
however, the authoritarian management style that the business owner used
successfully in a very small company can become detrimental. Instead of
attempting to retain control over all aspects of the business, the small
business owner should, as consultant Morty Lefcoe told Nation's Business,
strive to "get everybody else in the organization to do your job, while you
create an environment so that they can do it."
In a healthy culture, employees view themselves as part of a team and gain

satisfaction from helping the overall company succeed. When employees
sense that they are contributing to a successful group effort, their level of
commitment and productivity, and thus the quality of the company's
products or services, are likely to improve. In contrast, employees in an
unhealthy culture tend to view themselves as individuals, distinct from the
company, and focus upon their own needs. They only perform the most
basic requirements of their jobs, and their main—and perhaps only—
motivation is their paycheck.
Since every company is different, there are many ways to develop a culture
that works. Following are several main principles that small business owners
should consider in order to create a healthy corporate culture:
Prevailing corporate culture begins at the top. Entrepreneurs need to explain

and share their vision of the company's future with their workers. "Let your
vision for the company become their vision for the company," stated
O'Malley. "A company without a vision is reactive in nature, and its
management is seldom confident addressing competitive threats and
stepping into the future." In addition, small business owners should be
aware that their own behavior and attitudes set the standard for the entire
workforce. Small business owners who set poor examples in areas such as
lifestyle, dedication to quality, business or personal ethics, and dealings with
others (customers, vendors, and employees) will almost certainly find their
companies defined by such characteristics.
Treat all employees equally. Entrepreneurs should treat all employees

equally. This does not mean that business owners can not bestow extra
rewards on workers who excel, but it does mean that interactions with all
employees should be based on a foundation of respect for them. One
particular pitfall in this area for many small business owners is nepotism.
Many small businesses are family-owned and operated. But bloodlines
should be irrelevant in daily operations. "Successful …businesses constantly
place 'you are no different' expectations on family members they employ,"
noted O'Malley. "Doing otherwise quickly undermines employees'
morale….Showing favoritism in the workplace is like swimming with sharks—
you are destined to get bitten."
Hiring decisions should reflect desired corporate culture. The wise small
business owner will hire workers who will treat clients and fellow employees
well and dedicate themselves to mastering the tasks for which they are
responsible. After all, "good attitude" is an essential component of any
healthy corporate culture. But entrepreneurs and their managers also need
to make sure that hiring decisions are not based upon ethnic, racial, or
gender issues. Besides, businesses typically benefit from having a diverse
workforce rather than one that is overly homogeneous.
Two-way communication is essential. Small business owners who discuss

problems realistically with their workforce and enlist employees' help in
solving them will likely be rewarded with a healthy internal environment.
This can be an important asset, for once a participatory and engaging
culture has been established, it can help propel a small business ahead of its
competition.
On the other hand, problems with the corporate culture can play a major
role in small business failures. When employees only perform the tasks
necessary to their own jobs, rather than putting out extra effort on behalf of
the overall business, productivity declines and growth comes to a halt.
Unfortunately, many entrepreneurs tend to ignore the developing cultures
within their businesses until it is too late to make needed changes.
In an article for Entrepreneur, Robert McGarvey outlined some warning signs

of trouble with the company culture, including: increased turnover; difficulty
in hiring talented people; employees arriving at work and leaving for home
right on time; low attendance at company events; a lack of honest
communication and understanding of the company mission; an "us-versus-
them" mentality between employees and management; and declining quality
and customer satisfaction. A small business exhibiting one or more of these
warning signs should consider whether the problems stem from the company
culture. If so, the small business owner should take steps to improve the
culture, including reaffirming the company's mission and goals and
establishing a more open relationship with employees

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CORPORATE CULTURE

Corporate culture refers to the shared values, attitudes, standards, and

Every company has a culture, though not every culture is beneficial in

AN INCREASING EMPHASIS ON CULTURE

CULTURE IN SMALL BUSINESSES

Culture can be a particularly important consideration for small businesses. A

In a healthy culture, employees view themselves as part of a team and gain

Prevailing corporate culture begins at the top. Entrepreneurs need to explain

Treat all employees equally. Entrepreneurs should treat all employees

Two-way communication is essential. Small business owners who discuss

In an article for Entrepreneur, Robert McGarvey outlined some warning signs

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