What is corporate culture?
Corporate culture refers to the beliefs and behaviors that determine how employees and management of a company interact and manage external business transactions. Often, corporate culture is implicit, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. The culture of a company will be reflected in its dress code, its opening hours, its office layout, its benefits, its turnover, its hiring decisions, the treatment of customers, customer satisfaction and all other aspects of operations.
Key points to remember
- Corporate culture refers to the beliefs and behaviors that determine how employees and management of a company interact.
- Corporate culture is also influenced by national cultures and traditions, economic trends, international trade, company size and products.
- Corporate cultures, whether intentionally shaped or organically developed, reach the heart of a company’s ideology and practices and affect all aspects of a business.
Understanding the corporate culture
Alphabet (GOOGL), Google’s parent company, is well known for its friendly corporate culture. It explicitly defines itself as unconventional and offers advantages such as telework, flexible hours, reimbursement of tuition fees, free breakfasts for employees and doctors on site. At its headquarters in Mountain View, California, the company offers on-site services such as oil changes, car washes, massages, fitness classes, and a hair stylist. His corporate culture has helped him consistently achieve high rank Fortune list of “100 best companies to work for”.
History of corporate culture
Awareness of corporate or organizational culture in companies and other organizations such as universities appeared in the 1960s. The term corporate culture developed in the early 1980s and became widely known in the years. 90. Corporate culture has been used during these periods by managers, sociologists and other academics to describe the character of a business. This included general beliefs and behaviors, enterprise-wide value systems, management strategies, employee communication and relationships, work environment and attitude. The corporate culture would then include myths about the origin of the business via charismatic CEOs, as well as visual symbols such as logos and brands.
In 2020, the corporate culture was not only created by the founders, management and employees of a company, but it was also influenced by national cultures and traditions, economic trends, international trade, size of the company and the products.
There are a variety of terms that relate to businesses affected by multiple cultures, particularly in the wake of globalization and the increased international interaction of the current business environment. As such, the term intercultural refers to “the interaction of people from different backgrounds in the business world”; culture shock refers to the confusion or anxiety people experience when doing business in a society other than their own; and the reverse culture shock is often felt by people who spend long stays abroad on business and find it difficult to readjust after their return.
To create positive intercultural experiences and facilitate a more coherent and productive corporate culture, companies often devote in-depth resources, including specialized training, which improves intercultural business interactions.
The current awareness of corporate culture is more acute than ever.
Examples of contemporary corporate cultures
Just as national cultures can influence and shape a corporate culture, so too does a company’s management strategy. In large 21st century companies, such as Google, Apple Inc. (AAPL) and Netflix Inc. (NFLX), less traditional management strategies such as promoting creativity, collective problem solving and greater freedom employees have been the norm and thought contributing to their business success.
Progressive policies such as full benefits and alternatives to hierarchical leadership – even the removal of closed offices and cubicles – are a trend that reflects a more tech-savvy and modern generation. This trend marks a change from aggressive, individualistic and high-risk corporate cultures such as that of the former energy company Enron.
Some well-known examples of alternative management strategies that significantly affect corporate culture include holacracy, which has been used by the shoe company Zappos (AMZN), and the agile management techniques applied by the company. music streaming Spotify.
Holacracy is an open management philosophy which, among other characteristics, eliminates job titles and other traditional hierarchies of this type. Employees have flexible roles and self-organization, and collaboration is highly valued. Zappos instituted this new program in 2020 and has taken up the transition challenge with more or less success and criticism.
Likewise, Spotify, a music streaming service, uses the principles of agile management as part of its unique corporate culture. Agile management, in essence, focuses on deliverables with a flexible trial and error strategy that often brings employees together in a startup environment approach to creatively address business issues.
Characteristics of successful corporate cultures
Corporate cultures, whether intentionally shaped or organically developed, reach the heart of a company’s ideology and practice and affect every aspect of a business, from every employee to the customer by public image. The current awareness of corporate culture is more acute than ever.
the Harvard Business Review identified six important characteristics of successful corporate cultures in 2020. The vision is first and foremost: from a simple mission statement to a corporate manifesto, a company’s vision is a powerful tool. For example, the modern and infamous slogan of Google: “Don’t Be Evil” is a compelling business vision. Second, “values”, while being a broad concept, embody the mindsets and perspectives necessary to achieve a business vision.
Likewise, “practices” are the tangible, ethically-guided methods through which a company implements its values. For example, Netflix emphasizes the importance of knowledge-based, high-performing employees, and as such, Netflix pays its employees at the top of their pay scale in the market, rather than through a win-win philosophy. the height. . The “people” come next, companies employing and recruiting in a way that reflects and enhances their overall culture.
Finally, “story” and “place” are perhaps the most modern features of corporate culture. Having a powerful story or story, like that of Steve Jobs and Apple, is important for audience growth and image. The “place” of business, like the city of choice, but also the design and architecture of offices, is one of the most avant-garde in contemporary corporate culture.