What is Corporate Culture in Business?

 

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1.1 Understanding Corporate Culture

Corporate culture is often understood by people as something abstract. One author defines it as "the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature."  Some  LinkedIn posts suggest that since culture is an abstract thing, entrepreneurs should forget about it in dealing with concrete problems of the corporate life, implying that it's useless to talk about something that is intangible to people's lives.

Is corporate culture an abstract reality?

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Partly, yes! Corporate culture as the way of life of a particular business firm is something conceptual and abstract. In fact, it has intangible or non-material components such as core values, beliefs, and corporate laws and norms. But this doesn't mean that these non-material components of corporate culture do not affect people in a concrete way. Company rules, for instance, may appear abstract. But managers or employees can feel their coercive and psychological power once they violate them and feel their sanctions. As one lawyer would say: "It is better to charge than to be charged in court." The psychological trauma is even greater when one is not just civilly charged but criminally charged for violating company rules! Moreover, cultural beliefs can also affect the corporate life of business. When I was in Ho Chi Minh City, Vietnam, for a field research, I was told that retail business firms there normally experience more customers in the morning than in the afternoon because of the cultural belief that buying in the morning implies luck and prosperity to the buyer. Thus, retail operations are adjusted to focus on the morning rather than on the afternoon or evening. Obviously, employees of these retail outlets are affected by this cultural belief.

1.2 Defining Corporate Culture

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Before we discuss whether a toxic corporate culture can be altered or not, let us first clarify the meaning of culture. Culture has various definitions. But the earliest modern definition of culture by the English anthropologist Edward Burnett Tylor (1832-1817) defines it as "that complex whole which includes knowledge, belief, art, law, morals, customs, and any other capabilities and habits acquired by man as a member of society." Culture in this sense refers to the entire way of life of people, both material and non-material aspects, in a given social organization or society and not just people's knowledge of social etiquette or Western art.

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In a business organization, culture is synonymous with corporate or company culture. It refers to the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature. It is somewhat like 'the operating system' of the organization. It guides how employees think, act and feel. As such, corporate culture is an essential component in any business's ultimate success or failure.

1.3 Culture as a Socially Learned System

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Despite the diversity of cultural perspectives, one thing is common with regard to culture: culture is a socially-learned system in society or social organization, not a natural and biologically-determined reality. Thus, if culture is a socially learned system, then it can be changed and unlearned. It’s not fixed and immutable as many thought it to be. In fact, with the current globalization age, corporate cultures in the world are changing so fast because of cultural diffusion brought about by the transnational operation of business, merger, acquisition, outsourcing, and networking of companies or multinational corporations. The major issue therefore is not whether a culture can be changed or not, but whether the person or group who wants to change it, particularly a toxic culture, has sufficient resource, influence and political will to effect the intended change. Take note that culture change in a business organization can originate from the top with business owners and top managers initiating the change, or from below with organized groups or workers initiating the change. In the case of a merger, the change can come from an outside force, especially if the mother  company is much bigger than the acquired firm.

1.4 Corporate Culture as a Lived Experience

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Corporate culture is therefore a lived experience. It affects both the cognitive and material or behavioral aspects of people's lives. It affects the workers' social and economic life in the firm. If the firm, for instance, often delays the release of salaries due to bad management, the rank-and-file employees and their families would literally starve. Or if the firm does not provide skills training or career development for its employees and managers, the company's productivity and brand can be affected. The point here is: Culture is not just an abstract reality, but, above all, a lived reality that affects all the members of a corporate community.

As a lived experience, corporate culture is experiential. Its totality could not be described on paper since it is the entire way of life of a particular business organization. It can only be fully understood and felt by people if they are immersed in it, participating in its day-to-day activities for a considerable period of time. Once people become regular members of the company as employees or managers and actively interacting with people, structures, and rules, they would soon discover the firm's basic cultural patterns.  Thus, people could not fully understand and appreciate the generosity of Google's corporate culture, for instance, to its employees and managers if they are not part of the internal culture of the company.

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This internal view of the corporate life by insiders is what anthropologists call as the emic perspective (insider's view). Job seekers who do not have any idea of the inner workings of the internal culture of the hiring company may soon be discouraged or shocked if they discover as new employees that the corporate image of their new employer as projected in the social or mass media is not what they actually live or experience inside the company. Thus, acquiring an internal knowledge of a corporate culture can only be understood if one is part of the corporate community. Nonmembers can only gain the etic (observer's perspective) or external knowledge of the firm's culture. Only insiders such as employees and managers can feel and understand the basic patterns of their corporate culture as they belong to the firm's corporate structure.

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