16 Corporate culture based on values

1. Learning Outcome

2. Introduction

3. Culture

4. Characteristics of Culture

5. Corporate culture

6. Components of corporate culture

7. Types of corporate culture

8. Importance of a Healthy Corporate Culture

9. Organisational value system

10. Functions of values

11. Summary

1. Learning outcomes

After studying this module, the students shall be able to learn about the following:

Culture
Characteristics of culture Corporate culture
Components of corporate culture Types of corporate culture
Importance of a Healthy Corporate Culture Organisational value system
Functions of values

2. Introduction

Corporate culture refers to the beliefs and behaviours that determines the interaction between the company’s employees and management and also handles the outside business transactions. Corporate culture is implied and it develops with the time and it develops from the cumulative traits of the people which are hired by the company. The culture of the company is reflected in its dress code, business hours, office setup, employee’s benefits, turnover, hiring decisions, treatment of clients and every other aspect of the business. With the more and more awareness of the organisational culture concept, the term corporate culture was developed in 1980s and was made widely known in 1990s. The corporate culture was earlier used by the managers, sociologists and other academics fro describing the features of the company. But with the passage of time, the corporate culture became wider in scope. Now, the corporate culture term comprises of the management strategies, employee communication and employer employee relations, work environment, attitude of people working in the organisation and other aspects of the working environment. Values system is very important for all the systems of the society. It is presumed that in all human affairs, where there is involvement of money, there is greed and where there is greed; corruption of various types arises such as scams, frauds, cheating and other unethical plotting. The sole aim of the business is to earn profit and more and more money by any means whether ethical or unethical. In today’s competitive environment, the economic competition in globalised and liberalised business world, in the view of earning more and more profits, the mangers sometimes undermine the long cherished ethical value system and use the shortcuts in attaining the quick profits to rush forward in the competitive environment. In today’s market led competitive economy, the material well-being and wealth maximisation has to come to occupy the central stage where the values are fast growing in the back seat and it ultimately leads to the multifarious socio-economic problems of great dimensions in our socio-economic system. Corruption is widespread and all unethical means are being resorted to amass money. Moreover, the corporate affairs of the companies and business transactions are fastly becoming dusky as the business deals are following the unethical means and practices. Therefore, there is urgent need to strengthen our core value system so that ethical management of business system is protected, preserved and promoted. Corporate culture refers to the beliefs and behaviours that determines the interaction between the company’s employees and management and also handles the outside business transactions. Corporate culture is implied and it develops with the time and it develops from the cumulative traits of the people which are hired by the company. The culture of the company is reflected in its dress code, business hours, office setup, employee’s benefits, turnover, hiring decisions, treatment of clients and every other aspect of the business.

3. Culture

4. Characteristics of culture

Culture has main five broad characteristics. It is learned, shared, based on symbols, integrated and dynamic. All of these main features are explained as below:

Culture is learned: It is not biological and we do not inherit the culture. Most of the learning culture is unconscious. We learn it from or families, friends, insinuations and media. The process of learning culture is known as enculturation.

Culture is shared: Because we share culture with other members of the group, we are able to act in socially appropriate manner and also we can predict how others will react. Despite of the shared nature of the culture, that doesn’t mean that the culture is homogeneous.

Culture is based on symbols: A symbol is something that stands for something else. Symbols vary cross culturally and are arbitrary. They only have a meaning when people in a culture agree on their use. Language, money and art all are the symbols of culture.

Culture is integrated: This is known as holism, or the various aspects of culture being interconnected. All aspects of culture are related to one another and are easy to understand a culture, one must learn about all its parts.

Culture is dynamic: This simply means that the cultures interact and change. Because most of the cultures are in contact with other cultures, they exchange ideas and symbols. All culture change due to the changing environment. And because cultures are integrated, if one component in the system changes, it is likely that the entire system must adjust.

5. Corporate culture

With the more and more awareness of the organisational culture concept, the term corporate culture was developed in 1980s and was made widely known in 1990s. The corporate culture was earlier used by the managers, sociologists and other academics fro describing the features of the company. But with the passage of time, the corporate culture became wider in scope. Now, the corporate culture term comprises of the management strategies, employee communication and employer employee relations, work environment, attitude of people working in the organisation and other aspects of the working environment.

6. Components of great corporate culture

The benefits of a strong corporate culture are always supported by social science. Each culture is unique and there are numerous factors that affect the creation of the organisational culture. Some of those components are as follows:

Vision: A great culture begins with the vision and a mission statement. These simple turns of the phrase guides the values of the companies and provide with the purpose. These purposes also effect the decisions to be taken by the employees. The good and proper vision statement helps the customers, suppliers and stakeholders. A vision statement is the simple and fundamental element of the culture.

Values: The values of the company are the core of its culture. Vision communicates the purpose of the company and the values offer a set of guidelines on the behaviour and mindset needed to achieve that vision.

Practices: Of course, values are of little importance unless they are enshrined in a company’s practices. If an organization professes, “people are our greatest asset,” it should also be ready to invest in people in visible ways.

People: A company can only build a logical culture with its people who share their core values and also who possess their willingness to embrace those values.

Place: Certain cities and countries have their local culture which help the organisations in building the organisational culture also. The culture with regard to place can be geographical or architectural. It will impact the values and behvaiors of the people in a workplace.

7. Types of Corporate Culture

Corporate culture refers to the collective attitudes, beliefs and codes of behavior which prevail among the staff of the business. The culture is generated by the individuals and their relationships with each other and also by the basic goals, orientations and the context of the businesses. Culture is the most important element of the business that helps one business to be distinguished from the other one. The corporate cultures are of following types:

Traditional: This is the oldest approach to the corporate environment. A traditional culture means the employees have defined roles and relationships. They follow a proper chain of command. The orders are given from the top level management and are followed by the lower level of management. They don’t have much scope for deviations. In these types of organisations, the procedures to be followed are properly standardised and are strictly enforced.

Highly Skilled: In any organisation which has skilled culture means that the people can get the results directly from the bottom level of employees. These highly skilled companies try to be ahead in the competition and are big industrial units. The nature of this type of corporate culture involves constant, revolving-door type change and a high turnover rate.

Innovative: An innovative corporate culture is opposite of the traditional corporate culture. In innovative culture, there are creative initiatives of the employees and the employees are also allowed deviations from the standard procedures. Employees are always encouraged in the innovative culture. This type of environment is also a risky environment. The firms that attempt this type of culture must address the question of whether or not the risk gets paid by the occasional breakthrough.

Social: A social corporate culture draws its strength from collaborative efforts, teamwork, and healthy, trusting relationships among the staff. A social corporate culture often emphasizes taking care of workers. This kind of philosophy holds that it’s worthwhile to pay employees a bit more than usual, to recognize and reward accomplishments, and to encourage participation from everyone. Social businesses are often held together by a sense of meaning, identity and pride that employees derive from their jobs.

8. Importance of a Healthy Corporate Culture

Every organization has its own culture. The culture refers to the values and attitudes of employees in the business or organization. In a business with an unhealthy culture, employees act as individuals, performing their duties to meet their own needs. A healthy corporate culture values each employee in the organization regardless of his job duties, which results in employees working as a team to meet the company’s and their own personal needs. Healthy corporate culture improves the performance of a business in a number of areas. The importance of the healthy corporate culture is explained as follows:

Employee Retention: The employees of the company which values their contribution have high morale and a positive attitude. The positive attitude workers have high morale and this also helps in reducing the employee absenteeism. A healthy corporate culture can help a company retain valuable employees and reduce human resources costs.

Reputation: Companies with a healthy corporate culture gain a positive reputation among potential workers, which may attract talented and skilled workers to the organization. In addition to attracting high-quality workers, a well-regarded business reputation allows the company to charge a higher price for products and services and increases the value of the company in the financial market. Customers may prefer to conduct business with a business with a solid corporate reputation as well.

Productivity: The improved morale of workers in a company with a healthy corporate culture increases productivity. When workers increase productivity, the financial health of the organization improves, and profits increase. Increases in productivity are a measure that illustrates efficiencies and effectiveness in the company. Employees benefit from increases in productivity with higher salaries in employee benefit programs.

Quality: Healthy corporate cultures encourage workers to deliver quality products and services. Companies with cultures valuing the highest standards create an atmosphere for workers to deliver products that meet those high standards. The cultural standards for excellence are an important factor for creating a product or service with a reputation for high quality.

9. Organisational value system

An organisation is a part of the society. All organisations have developed their own value system that helps them in achieving the goals and objectives. The main features of the organisational value system are as follows:

Co-operation: Indian philosophy focuses more on co-operation and co-ordination instead of individual tough competition which is in fact a feature of the western thought.

Family orientation: The value system of India is oriented towards the family base. Even the grownups, while taking major decisions, consult their seniors about the issuers. Values are generally received through the cultural means by way of transmission from parents to children.

Humility and respect for others: Indian ethos emphasises humility and respect for others.

Respect to all: It focuses on showing the respect to others ants respect not only to fellow human beings but to objects as well.

Self management: Indian ethos believes that self management is the essence of management, before managing others effectively, a person should know how to manage himself, only then he can manage others effectively.

10. Functions of values

Values serve a lot of functions and some of them are as follows:

Values play an important role in the integration and fulfilment of man’s basic impulses and desires in a stable and consistent manner which is appropriate for his living.

Values are generic experiences in social actions made up of both individual and social responses and attitudes.

Values build up societies and integrate social relations.

Values mould the ideal dimensions of a personality and also influence the range and depth of culture.

Values influence people’s behavior and serve as criteria for evaluating the actions of others.

Values have a great role to play in the conduct of social life.

Values help in creating the norms to guide day to day behaviour.

11. Summary

Culture is the characteristics and knowledge of a particular group of people as defined by everything from language, religion, social habits and music. Culture is the system of knowledge shared by the relatively large group of people. Culture is communication and communication is culture. Culture can be defined in the broadest sense as the totality of the person’s learned accumulated experience which is socially transmitted behaviour through social learning. A culture is the sum of total of the learned behaviours of a group of people that are generally considered to be the tradition of that people and are transmitted from generation to generation. It is a collective programming of the mind that distinguishes the members of one group from another. Corporate culture refers to the beliefs and behaviours that determines the interaction between the company’s employees and management and also handles the outside business transactions. Corporate culture is implied and it develops with the time and it develops from the cumulative traits of the people which are hired by the company. The culture of the company is reflected in its dress code, business hours, office setup, employee’s benefits, turnover, hiring decisions, treatment of clients and every other aspect of the business. With the more and more awareness of the organisational culture concept, the term corporate culture was developed in 1980s and was made widely known in 1990s. The corporate culture was earlier used by the managers, sociologists and other academics fro describing the features of the company. But with the passage of time, the corporate culture became wider in scope. Now, the corporate culture term comprises of the management strategies, employee communication and employer employee relations, work environment, attitude of people working in the organisation and other aspects of the working environment.

Values system is very important for all the systems of the society. It is presumed that in all human affairs, where there is involvement of money, there is greed and where there is greed; corruption of various types arises such as scams, frauds, cheating and other unethical plotting. The sole aim of the business is to earn profit and more and more money by any means whether ethical or unethical. In today’s competitive environment, the economic competition in globalised and liberalised business world, in the view of earning more and more profits, the mangers sometimes undermine the long cherished ethical value system and use the shortcuts in attaining the quick profits to rush forward in the competitive environment. In today’s market led competitive economy, the material well-being and wealth maximisation has to come to occupy the central stage where the values are fast growing in the back seat and it ultimately leads to the multifarious socio-economic problems of great dimensions in our socio-economic system.

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Suggested readings and references

Pramod Sharma, “Business Ethics and Corporate Values: An Indian Perspective”,Ravintanaya Publications, Shimla
S.K. Bhatia, “Business Ethics and Corporate Governance” Deep & Deep Publications, New Delhi
A.C. Fernando, “Business Ethics and Corporate Governance” Pearson Publications
SB Gogate, “Human Values & Professional Ethics”, Vikas Publishing House, New Delhi.
Harris & Hartman, “Organizational Behavior” Jaico Publication House, 2002