How to Change a “Toxic” Corporate Culture

Introduction

When we feel harassed and intoxicated by the overall working environment of our company, we either wish to resign or want that company owners, top managers, or organized groups in the business firm would do something to change the corporate culture. Undesirable elements such as work overload, bullying, low company pay and benefits, intense rumor mongering and gossiping, poor leadership, or negative values sometimes force us to leave the company or do something to change the company culture. In her article, “7 Signs You’re working in a Toxic Workplace,” Bruna Matinuzzi (2013) mentioned seven (7) signs of a toxic company culture [1]:

1. Lack of equality of rules. In a toxic culture, there is a double standard in the application of rules: one for those who are close with power holders and another for those who are powerless and with weak corporate connection. Power cliques are usually given a preferential treatment with regard to the enforcement of company rules in a toxic environment.

2. Negative cliques thrive. “A band of employees form a negative clique whose members behave like corporate teenagers. They put a negative spin on most company initiatives covertly.

3. Malice trumps kindness. Bad people in the company do their greatest damage by sabotaging anything that honest and good employees are trying to accomplish for the good of the business organization. They continuously create roadblocks to sabotage sincere efforts of some employees to help improve the company.

4. Managers play favorites.The manager spends more face time with these selected few than with others. The favorites are publicly praised by the manager for their work, while those who are not mentioned end up feeling bad.

5. Unqualified cronies are hired. Power cliques of employees and managers in the company lobby senior executives to hire friends who are clearly not a good fit for the job or the culture. They bypass the normal recruitment processes to enlist more cronies in their negative camp.The result: the company hires incompetent employees who are loyal not to the institution but the sponsoring power clique.

6. One of the leaders is a poster boy for bad behavior. “This is an individual who is the antithesis of what a leader should be. He is looking out for number one—his prime motivation is the pursuit of power and money. He is untrustworthy, cheats his partners and every other stakeholder, flirts with female staff, and gossips about one team member to another.”

7. Lucrezia Borgia is on staff. Lucrezia Borgia is a metaphor for the bright, clever and evil employee “behind the throne” who drives many good people away from the company. In the eyes of management, this employee is considered a trusted and company cop who allegedly has the company’s best interest at heart. She has the ear of upper management who are oblivious to the harm she is causing and believe all the filtered information they receive from her. In a business, there are always senior employees who pretend to protect the company’s interest when, in fact, they are only promoting their own vested interests!

Questions: Do you have any or all of these signs of a toxic culture in your workplace? If a corporate culture fuels the life of a business firm, are there ways to change it especially when it becomes toxic? How?

Understanding Corporate Culture

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” [2]. 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.

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” [3]. 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 [3].

Culture as a Socially-Learned System

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 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 merger, the change can come from an outside force especially if acquiring mother company is much bigger than the acquired firm.

How to Change Corporate Culture

Whatever is the origin or the level of power and determination to change the company culture, the following areas or actions are undeniably crucial in changing culture, especially a toxic corporate culture.

1. Make a physical makeover of the company.

It would be better to make a significant makeover of the physical aspect of the company such as change in physical arrangement and structure of offices, architecture, logo, etc. Take note that culture has 2 components interacting with one another: the material and non-material.The material component affect people’s behavior in a company. We have to take remember that humans are closely connected with material things. The physical structure interacts with the social structure.

A toxic culture is facilitated by a material structure which encourages it. Thus, in company where working spaces are open and cramped in one area, divided only by low partitions, enabling people to easily see each other face-to-face and exchange information, a culture of rumors and gossip can easily be formed compared to a set-up where working spaces and offices are divided by closed partitions. In this case, employees cannot directly see and talk with each other and thus minimize unnecessary

chatter.

But a surveillance system would also lead to some negative effects to corporate culture. In working areas where CCTV cameras are installed, employees would tend to act like robots and become artificial in their behavior because they know that their actions are being continuously monitored by the management.

Furthermore, the type of equipment used by employees in the company can also affect social behavior and performance. In one multinational jeans company in Southeast Asia, the management discovered in a research that the company’s productivity declined because they used imported sewing machines intended for Caucasian sewers which were too big and burdensome for Asians and thus employees weren’t able to reach the quotas set by the company because of stress and fatigue of operating over-sized equipment. Indeed, the material component of the company culture can affect the social structure of the organizational culture.

2. Evaluate the compensation and reward system. Make it fair and generous to everyone.

Compensation and social benefits also constitute an important material component of the company’s culture that directly affect employees’ social behavior as well as the entire corporate culture. Evaluate the compensation, social benefit, and incentive systems of the company. Make them scalable based on performance, qualification, and merit. Personalism and cronyism can be avoid if the system is clear, efficient, rational, and based on merit. Moreover, a friendly and familial culture can be created if managers and employees feel that they are taken cared of fairly and generously by their own company like true members of a family through an efficient reward system.

3. Examine the existing rules, policies and procedures. Make them fair, consistent and realistic.

Aside from the material aspect, the non-material realities such as the company’s core values, traditions, beliefs, customs, laws and policies also affect the company culture. If the company rules and law enforcement are too strict and rigid, for instance, people’s creativity and freedom are curtailed, employees would tend to be passive in their behavior, uncommitted to what they do, and/ or to engage in covert resistant acts such as spreading rumors and gossip. Or if the law enforcement is lax and selective, power elites would arise and control the company’s resources and reward system.Finally, company procedures, rules and regulations are sometimes unrealistic and unnecessary; and thus, promote red tape and increase employees’ work, stress, and burden in the company. Company rules, policies and procedures must be simplified to ease up the workload of the employees. A more relaxed environment can improve the personal disposition of employees and allow them to think more positive things for the company.

4. Appoint a new CEO and/or top managers who can actualize the intended corporate culture. Reshuffle people inside the company and retrench “troublemakers” if necessary.

The CEO and top managers of this new corporate culture must come a company whose mindset is similar to the intended culture. Thus, the Biblical saying that it is not good to place new wine in old wineskin is correct. New wineskin for new wine. Therefore it is desirable to appoint or hire new managers to replace those existing officers who perpetuate favoritism and toxic culture.In mergers or acquisition, the corporate culture of the dominant company usually overshadows the prevailing culture of the smaller company since the new crop managers would now assume leadership in the acquired business firm.

The power cliques in the company must be identified and members must be given different positions and assignments if possible to minimize their impact in the company. If the communication system is efficient, truthful, and transparent, Lucrezia Borgias in the company can be minimized or eliminated.

5. Change the hiring system. Hire only people with personality or character which The into the new culture intended by management to achieve.

People are agents of culture.The type of people or leaders determine the values and overall direction of the corporate culture. Thus, if owners or top managers of the toxic culture want to establish a new culture, the recruitment process must be changed. If the recruiters themselves are in alliance with power cliques inside the company, then the HRD must be revamped and new recruiters must be hired. The qualification, background and personality of the new recruits and employees must fit into the new corporate culture that the company wants.

6. Improve the compensation, perks and social benefits of employees.

The key to a friendly corporate culture as well as to higher corporate productivity is generous employee compensation scheme, perks, and social benefits, especially if the company is earning more profit. If employees feel that they are loved by their own company, they too, in turn, would love their company and strive to increase the company’s productivity. Google is a company that is well-known for its employee-friendly corporate culture. It offers unconventional perks such as telecommuting, flex time, tuition reimbursement, free employee lunches, on-site doctors and, at its corporate headquarters in Moutain View, Calif., on-site services like oil changes, massages, fitness classes, car washes and a hair stylist. Because of these, Google has soared in productivity and becomes one of the the most-sought companies for job hunters. Google’s corporate culture has helped it to consistently earn a high ranking on Fortune magazine’s list of “100 Best Companies to Work For “[4].

The Church Teaching on the Purpose of Business

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For the Catholic Church, a business enterprise is not only a profit-earning endeavor: “The purpose of a business firm is not simply to make profit, but is to be found in its very existence as a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole society.” Owners, managers, and workers in a business firm form a community of persons. By “person”, it means that an individual in business are only a “cog in a machine” that performs merely a technical function in a business firm and nothing more. A “person” for the Pope is a mystery. He or she is not only an individual with intelligence, emotions, feelings and aspirations, but above all, with human rights and dignity as he or she is created in the image and likeness of God and redeemed by the Blood of Christ and destined to be with Him in the afterlife. Thus, a member in a business firm, no matter how low is his or her position, deserves respect, a decent wage with social benefits and active participation in the overall direction of the business as part of its entrepreneurial community.

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References

[1] Martinuzzi, Bruna (2013). “7 signs You’re Working in A Toxic Office” Retrieved from https://www.americanexpress.com/us/small-business/openforum/articles/7-signs-youre-working-in-a-toxic-office/

[2] http://varenne.tc.columbia.edu/hv/clt/and/culture_def.html

[3] http://www.inc.com/encyclopedia/corporate-culture.html

[4]http://www.investopedia.com/terms/c/corporate-culture.asp

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