Defining a corporate culture

There is no set definition of corporate culture. Some authors treat it as a system of opinions and values, shared by all employees, as a distinctive feature that makes a company different from others.

One of the most profound researchers into corporate culture, Edgar Schein, defines it as ‘a model of behaviour norms, shared by all employees that was tried out in the past and recognized as correct and therefore must be passed on to new company’s members as the only right way to perceive, relate and think’. Schien believes that culture is seen on the behavioural level and in conventional values but the essence of culture lies in covert feelings and ideas, peculiar to a group.

According to E.Schein, the term ‘corporate culture’ includes basic assumptions and beliefs, shared by all employees. These assumptions and beliefs are activated subconsciously and are expressed through attitude (that seems to be natural) to a company itself and the world in general. These assumptions and convictions influence behaviour models, acquired by a group in order to survive and solve internal and external problems. These models are perceived as natural since they have stood the test of time and helped to tackle problems. This is a deep, inherent level of corporate culture that should be distinguished from a superficial one (made up of artefacts and values).

Thus, E.Schein defines corporate culture as a set of main assumptions, created, discovered or invented by a certain social group while solving problems of external adaptation and internal organization that have worked out in the past and proved to be correct and reliable that makes them worth teaching to new members. Schein sees corporate culture as ever-developing, corporate culture is passed on to new members, changes and adapts to new circumstances due to internal and external factors. Schein sees corporate culture not so much a by-product of a company but as its inseparable part that influences its members’ behaviour and their company’s performance.

Many authors define corporate culture as a set of conventional models of behaviour, artefacts, values, assumptions, beliefs and concepts that are elaborated while a company ‘learns’ to manage internal and external problems to be successful and survive. Here, there are two layers distinguished: internal and external. The external layer is created by artefacts, behaviour models, language patterns, formal rules, technical know-how, ways to produce and use goods. The internal layer is not visible: it is in minds of employees and includes ways of thinking, ideas, beliefs, values, relations, patterns of world perception.

Some authors (e.g. L.Smircich) in 1983 systematized definitions of corporate culture and deduced three approaches according to which corporate culture can be seen as

1. independent external component, brought from outside into a company;

2. internal component;

3. essence of a company.

Within the first approach, corporate culture is treated as a very broad category, as a background factor, almost synonymous to the notion of country. Culture is created by values and assumptions that a society, social practices and social relations (family, friends, work for other companies etc) form in an individual. This approach considers a company as a context where variables of national cultures come to the fore. From this point of view, a company is passively influenced by pre-conceived assumptions of its employees.

The second approach (M.Louis, J.Martin, M.Powers and A.Kennedy) claims that companies create their own culture. Proponents of this approach focus their attention on unique ‘rituals, legends and ceremonies that are activated in an environment formed by a company’s management through set rules, structure, norms and goals’. The supporters of this approach admit that a company may combine a dominant culture with subcultures with a possible confrontation/contradictions.

The third approach deals with corporate culture as with an essence of a company, its distinctive feature. Some researchers note that a company should be viewed as culture, i.e. a company IS a culture. They refuse to see culture as something that is typical of a company and insist that culture is something that a company is. Therefore, culture cannot be taken as a component of a company.

The majority of corporate culture functions are important both for a company and for its member. Corporate culture is important since it consolidates and brings agreement into relations. Corporate culture helps to choose a correct type of behaviour necessary to work in a company.

Still, corporate culture has a dark side as well. Corporate culture may start contradicting the external situation (market circumstances, etc.). thus, if the environment is extremely changeable, corporate culture, elaborated for years, stops corresponding to these changes and the company, in order to adapt to new circumstances, has to form a new corporate culture and reconsider its system of relations.

Corporate culture is a complex component of any production process. And though there is no unanimity as to what corporate culture is and how it influences a company’s performance, all the researchers are unanimous that corporate culture exists and influences.

Finally, summing up the definitions mentioned above, we can define corporate culture as

‘a complex of behaviour norms, artefacts, values, assumptions, concepts and beliefs, shared by all members and created by a company in order to overcome internal and external obstacles.’ Components of the complex interact, reflect a company’s specific features, its self-perception and its image to the world.

Researchers in business communication have offered several models and taxonomies of features that help to define the culture of an organization. Robbins and Barnwell (2002), for example, distinguish the following as key elements in analyzing business culture:

• Individual initiative: how much and what kind of responsibility, freedom and independence do individuals have?
• Risk tolerance: are employees encouraged to take initiatives and engage in risk-taking behaviour?
• Direction: are the organization’s objectives and performance expectations clearly communicated and implemented?
• Integration: is it easy for groups within the organization to operate in a coordinated manner and are they motivated to do so?
• Management contact: are managers accessible, supportive and helpful to their subordinates?
• Control: what is the extent and nature of the rules and supervision regulations which the organization employs to oversee employee performance?
• Identity: does the organization encourage employees to identify with the company and the company’s public image?
• Reward system: how and to what degree are employees rewarded for their performance (i.e.through promotion, salary increases, bonus schemes, etc.)?
• Conflict tolerance: is there a mechanism and/or procedure that allows employees to communicate conflicts and criticisms?
• Communication patterns: are communication channels restricted to the formal hierarchy of command, or are they diverse (i.e.do junior employees have any access to senior managers, can members of one section co-operate with members of another)?

Answers to these questions would come from surveys of company employees, an examination of formal company procedures, and case studies involving particular situations where action and decision-making reflect the company’s structure and value system, i.e. its culture.