Factors Influencing Corporate Cultures

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Introduction

Corporate culture underscores the way things are done within an organization. Corporate culture involves a set of behaviors that occurs naturally amongst all participants in an organization.

It includes the mode of communication within the organization, management of performance, the set-up of hierarchy levels, and the coordination of projects coupled with how meetings are conducted among other activities within the organization.

Corporate culture is acquired with time, it differs from one corporate entity to another, and it is subject to various factors. This paper considers some of the various factors that lead to the development of what is considered as corporate culture.

Factors influencing corporate culture

Factors influencing the corporate culture in the different organizations are numerous and they vary from one corporate entity to another. They include

Leadership

Leadership is one of the factors that form the foundation of a positive and successful corporate culture in an organization. A positive leadership, despite the hierarchy level in an organization or a firm, will influence a positive culture (Hartman, 2005). On the contrary, poor leadership leads to weak corporate culture.

The leadership has to be strong, visionary, passionate, disciplined, and supportive in a bid to instill a positive culture in the firm. The leadership of a firm is a reflection of how the firm should be. In addition, the leadership is a reflection of what is expected of all the other participants in a given organization.

The leadership should be highly concerned with walking the talk as opposed to playing a supervisory role. This aspect will ensure that other participants learn from watching and not from hearing. Visionary leaders lead by example, and thus they influence the culture of an institution.

Vision and mission

The vision and mission influence the corporate culture of an organization. The basis of a great corporate culture is a vision and a mission. These two elements outline the values of the organization by giving it a sense of direction and purpose. It would be useless to establish an organization that has no mission and whose visions can only be guessed.

Vision and mission statements orient all participants in the organization in the different levels to what is expected of them and as such, they influence the stakeholders’ activities. A vision statement might be very simple, but it is a foundational element in the establishment of a corporate culture.

For example, the vision of ‘The Alzheimer’s Association,’ is to see the elimination of the Alzheimer’s disease in the world. Therefore, every strategy will be geared towards achieving this goal, which ultimately shapes the corporate culture. Such a statement is short, but it highlights clearly the purpose of the association.

Values and practices

The values and practices of an organization are the basis of the corporate culture in that entity. In a company, the vision enunciate the organizational purposes and objectives, while values outline the mental outlook and demeanor that the involved stakeholders should have in a bid to realize the vision. Values are enshrined in the organizations’ practices (Schein, 2010).

The values and practices include the way the organization vows to treat its employees, serve its clientele, and uphold its professional standards. Most values revolve around employees, the clientele base, and other stakeholders. They offer guidance on what is expected of these groups in the course of their interactions. The originality of the values is not as important as their authenticity.

On the other hand, processes reinforce the organization’s values and vision. They are a reflection of how the organization conducts itself. Whatever an organization values must be reinforced in its policies and incorporated in its daily practices. Organizations normally take disciplinary actions against employees who violate its values.

People

People within an organization are integral in the establishment of a culture. An organization cannot purport to have built a coherent culture without having involved people. People influence the development and observation of a culture within an organization. Therefore, individuals that share the organization’s values and mission and are willing to embrace the values are important in the establishment of the corporate culture.

According to Ellis (2013), the best firms in the world have the most stringent recruiting policies. This assertion holds because talent is not only enough in the success of a firm, but also suitability to that particular culture. Ellis (2013) further argues that culturally fit employees bring with them the right ‘cultural carriers’ that reinforce the organization’s culture.

Therefore, positive support staff members about an organization’s culture are key in the observance and sustenance of the corporate culture. Support staff members that view their organization’s culture as inefficient will do everything in their capacity to kill it or contravene its principles.

Founders and owners

The founders and owners of an organization also play a key role in the development of an organization’s culture. They exert influence on the activities of the company, as they are the groundbreakers in the establishment of the organization.

They are the vision and mission bearers of the organization and as such, they set the basics of the culture in the workplace. Mostly, the proprietors come up with the basic principles that should be observed in the organization, which ultimately shapes the corporate culture.

Environment

The surroundings within which an organization is established influences the corporate culture in different ways. The environment could be juridical, economic, technological, or cultural. When the elements of a juridical environment contradict those of the organization, the resulting influence is said to be negative.

The economic culture of an organization is derived from the national culture of the nation where the organization is situated. Therefore, the environment of an organization shapes the ultimate corporate culture adopted in a given entity.

The market

The market or industry within which an organization operates influences its corporate culture. Companies like Apple are in the industry of innovation and as such, their activities revolve around innovation. A company in the fashion industry will concentrate on a culture that favors its market. This principle applies to any industry.

Size of business

The size or organizational characteristic of a business will influence the corporate culture of an organization. In most cases, the prevalent corporate culture in SMEs is uniform, while in large and multinational corporations it is heterogeneous. The organizations’ history and background play a critical role in shaping the ultimate corporate culture.

Management structures

The structure of the management and reward of employees influence the culture of an organization. For instance, how an organization pays bonuses, dividends, salaries, and commissions to its employees among other packages influences how such activities are conducted in the future whether there is a change of leadership or not.

The processes and procedures that are followed when hiring, firing, or granting leaves to employees set a precise culture that can be used as a reference in the future. The organizational structure of a business also influences the culture of an organization. The organizational structures include the hierarchy levels. Such structures provide clear processes for the communication of information and allocation of tasks.

The CSR

The corporate and social responsibility of an organization is also another factor that determines the corporate culture of an institution. Corporate and social responsibility refers to the commitment of an organization to develop and ensure a sustainable economy by working together with its employees and the local communities in a bid to improve the quality of life.

The organization does so by creating opportunities such as employment for the local communities, the introduction of new technologies, and creating a competitive environment.

Conclusion

Culture in the corporate world dictates how organizations conduct themselves. It can be identified from how information is communicated, the mode of giving feedback, coordination of activities within the organization, and the observance of processes and procedures put in place. These activities are established over time. Corporate culture cannot be established in boardroom meetings.

On the contrary, the involvement of all stakeholders shapes the ultimate corporate culture in an organization. Culture can be depicted from the structural organization of a corporation be it the type of job titles, the hierarchy level in place, and the way business is conducted.

Ultimately, different elements shape the organizational corporate culture and they include leadership, the set vision and mission statements, the environment, and all stakeholders together with the shareholders.

References

Ellis, C. (2013). What it takes: Seven secrets from the World’s Greatest Professional Firms. New York, NY: Wiley.

Schein, E. (2010). Organizational culture and leadership. San Francisco, CA: Jossey- Bass.

Hartman, L. (2005). Perspectives in business ethics. Boston, MA: McGraw-Hill.

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