CORPORATE CULTURE

Aco MomcilovicHR Specialist

L’Oreal Adria d.o.o.

Content

• Introduction• Different Models• Why it is important• Cultural Fit• How it is created (Examples, Interpretation)• Cultural Interview• Does It Make Difference? (Effectiveness)• Examples• Finish

Artifacts (visible organizational structure and processes)

Values (strategy, goals, philosophy)

Assumptions (unconscious beliefs, perceptions and feelings

Group Interaction

Shared Values

Norms of Behavior

Positive Results

CULTURE

The emergence of culture

Strategic fit

com

munic

ati

on

com

munic

ati

on

com

munic

ati

on

“Vision”(to be)

Current situation“As it is”

“Cult

ure

” (H

ow

to b

ehave a

long t

he w

ay)

“Str

ate

gy”

(W

hat

do w

e n

eed t

o f

ocu

s on)

DIFFERENT MODELS

Flexibility

Control

Internal External

Open Systems Model:

Rational Goal Model:

Human Relations Model:

Internal Process Model:

- Creativity- Inventiveness- Growth- Competiveness

- Task focus- Goal clarity- Efficiency- Performance

- Teamwork- Participation- Supportiveness

- Centralization- Routinization, formalization- Stability, continuity, order- Predictable performance outcomes

Matching Strategy: - Defender - Prospector - Analyzer

Goals: HRM Development, Morale

Cultural Values: (Consensual)

Goals: Growth, Resource Acquisition

Cultural Values: (Developmental)

Matching Strategy: -Prospector

Goals: Stability and Control

Cultural Values: (Hierarchical)

Matching Strategy: - Defender

Goals: Efficiency, Productivity

Cultural Values: (Rational)

Matching Strategy: - Analyzer

Role, Control, Goal and Soul Models

CONTROL

Effective Ineffective

• Unites effort • Limited by leader

• Moves quickly • Politics

• Strong leader • Isolated from bad news

• Clear direction • Overworked leaders

• Clear expectation • Information as power

• Loyalty • Short range thinking

Effective Ineffective

• Well designed systems

• Change is slow

• Clear lines of authority

• Low trust

• Structure • Following the rules

• Limit to personal power

• People as parts not human

• Efficient operations • Under-utilise talent

• Quick to learn jobs • Boundaries

ROLE

Effective Ineffective

• High motivation • Burnout

• Maximum use of talent

• Waste resources

• Rapid learning • End justifies the means

• Unity of effort • Isolated from reality

• Reduced controls • Inward focus

• Mutually valued goals

• Arrogant

GOAL

Effective Ineffective

• Good communication

• Task neglect

• Commitment • People before organisation

• High trust • Slow decision making

• Co-operation • Loses direction

• Caring and listening • Slow to change

• Sense of belonging • Frustrates ambition

SOUL

In Riding the Waves of Culture, Fons Trompenaars

• In the same way, we believe that effective organisations focus attention not on one culture, but on an appropriate balance of the four cultures so that the best attributes of each enable the organisation to thrive

• systemic model - described three levels of culture; 1) the explicit layer made up of artifacts and products and other observable signs, 2) the middle layer of norms and values and 3) the implicit layer, which is comprised of basic assumptions and beliefs.

Why is corporate culture so important?

• To survive and prosper in a ever-changing environment, adaptability is key

• industries need more than gradual adjustment to changing circumstances; we need to shift paradigms

• The central challenge: to create and lead an adaptive enterprise

Cultural Fit Research

• A&DC – effects of cultural fit

• when Cultural Fit is absent employees report lack of engagement with their employer and their colleagues

• In small and mid-size businesses, it’s common for the company culture to reflect the person at the top.

One More Time

• With some examples

Corporate Culture

Organization Culture Defined:

•Set of key behaviors, beliefs and shared understandings that are

shared by members of the organization.

•Defines basic organizational values and communicates to new members

the correct way to think and act.

•Each firm has a distinct culture.

Corporate Culture

Interpreting Culture:

Rites and ceremonies

- Elaborate planned events conducted for the benefit of an audience.- Used to reinforce specific values or create a bond among

people.- Four types of rites and ceremonies:

Rites of passage

Corporate Culture

Rites of enhancement

• Annual awards night.

• Enhances social identities and increase status of employees.

Corporate Culture

Rites of renewal

• Refurbish social structures and improve organizational functioning.

Rite of integration

Corporate Culture

Stories

- Narratives based on true events that are shared among organizational employees and told to new employees to inform them about an organization.- Stories keep alive the primary values of the organization.- Commonly include company heroes or historic legends.

Corporate Culture

Symbols

- Physical artifacts use to focus attention on a specific item. - Nordstrom example:

Language

- Includes slogans and metaphors.

- 3M – “at 3M the 11th commandment is never kill a new product idea.”

- YEGA

How to explore culture?

Culture Interviews

Does Culture Makes Difference?

System Effectiveness

Constructive cultures promote a greater “exchange” between the organization and members (and increase effectiveness)

Aggressive/Defensive cultures fail to enhance members’ contributions and outcomes (and thus promote turnover)

Passive/Defensive cultures reduce members’ contributions and outcomes (and reduce effectiveness)

System Effectiveness

Greater effortHigher performanceMore innovative solutions

• Member PerspectiveOutputs (to members) > Inputs (from members)

Higher satisfaction Lower stressGreater inclusion & integration

Passive/Defensive Cultures

• Approval (3)

• Conventional (4)

• Dependent (5)

• Avoidance (6)

Aggressive/Defensive Cultures

• Oppositional (7)

• Power (8)

• Competitive (9)

• Perfectionistic (10)

Constructive Cultures

• Achievement (11)

• Self-Actualizing (12)

• Humanistic (1)

• Affiliative (2)

Differences between employees

Life Styles Inventory(Descriptions by Others)

Effectiveness in Current Position

Top 10%

(n = 487)

Differences between employees

• Life Styles Inventory• (Descriptions by Others)

• Effectiveness in• Current Position• Bottom 10%

• (n = 459)

IMPACT on Performance

DefensiveCulture

ConstructiveCulture

682%

166%

Revenue

901%

74%

Stock Prices

756%

1%

Net Income

4X!

12X!

Metamorphosis

• Organizational Culture – National Culture

– National Culture has bigger influence than corporate

Different Examples

• Imagine few extreme cultures

Art GalleryVisible aspects of cultural organization

LIBRARY

Way to solve problems, documentation, politics, written communication ...

Church

Holy place. Strategy, goals, philosophy

CATACOMBS

CULTURES can be Changed!

• Who lives in caves?• Xerox• Daimler Chrysler• Civil Rights & Increasing Tolerance• NASCAR• Boston Red Sox / Chicago White Sox• The Catholic Church• From Communism to Capitalism

Leadership

• “Organizational cultures are created by leaders, and one of the most decisive functions of leadership made well be the creation, the management, and – if and when that may become necessary – the destruction of culture.”

• A Culture of Continuous Learning – Key to Improving Organizational Culture

THE END!

• How we do things round here!