Corporate Culture - How Corporate Culture is managed in organisations and what could be done better

Text Number B3, GRIN Publishing

Sven Röhm

Heterogeneity of Corporate Culture

How corporate culture is managed in German organisations

and what could be done better

GRIN Publishing

Copyright © June 2006 by GRIN Publishing GbR, Munich and Ravensburg http://www.grin.com Printed and bound by Books on Demand GmbH, Norderstedt Printed in Germany ISBN-13: 978-3-638-00002-4 ISBN-10: 3-638-00002-8

For

Preface

Corporate culture has gained importance in the business world in the last two decades. The consideration of corporate culture, nevertheless, differs significantly in organisations. Some organisations have taken their corporate culture into account for strategic decisions (e.g. cultural fit during Mergers & Acquisitions) but other organisations have tended to neglect this issue at all (Deal and Kennedy, 1999).

Deal and Kenndy (1999) consider corporate culture as a hidden success factor of organisation which ensures commitment of the employees. According to them (1999), organisations with a ‘strong’ corporate culture outperform “run-of-the-mills companies by a massive margin” (Deal and Kennedy, 1999: 2).

Corporate culture, nevertheless, has been a controversially discussed topic in the literature on which different general ‘best practices’ had been suggested by academics. However, it can be argued that the few empirical studies of corporate culture, notably Kotter and Heskett’s (1992) quantitative survey, have been methodologically limited (Alvesson, 2002), e.g. to few senior managers of the examined organisations. Therefore, this project employs, besides interviews with senior managers of the three examined German organisations, a survey which is focused on employees of different hierarchical and divisional levels in one organisation. The findings of the research clearly show that corporate culture is a far more heterogeneous phenomenon than many academics suggest (e.g. Kotter and Heskett, 1992; Deal and Kennedy, 1982).

In this research, corporate culture appears as a network of interrelating cultural patterns which is unique to different organisations due to different organisational and environmental challenges. The survey also identified that the perceptions of corporate culture differ between senior management and the employees. Therefore, the employees’ perception of the corporate culture must be taken into account in order to prevent cultural dichotomy. Furthermore, the senior management should implement a

8 Preface

sustainable process of monitoring the development of corporate culture. Continuous monitoring enhances the understanding of the organisation and the consequences of managerial actions. Consequently, this can help to raise commitment and efficiency of the workforce.

Düsseldorf, June 2006

Sven Röhm

Acknowledgements

The author would like to thank the senior managers of the organisations ZF Group, Centrotherm GmbH & Co. KG and a third worldwide operating organisation, which has chosen to stay anonymous and will be named XYZ Co. hereafter, for having participated in this project. The author also would like to thank all employees of Centrotherm GmbH & Co. KG who had participated in the survey. Furthermore, the author would like to thank Brian Jones, senior lecturer at the Teesside Business School, for the valuable discussions about corporate culture.

The fantastic support of the participants provided a comprehensive methodological approach to the assessment of corporate culture in organisations. The collected data and the developed models are valuable for every organisation that is willing to implement sustainable corporate culture management.

10 Acknowledgements

Table of Contents 11

Table of  Contents  

  Preface  7

  Acknowledgements  9

Table of  Contents  11

  List of Tables  14

  List of Figures  15

  List of Boxes  16

1  Introduction  17

1.1  Background of Corporate Culture Studies  18

1.2  Research Aims and Objectives  19

2  Literature Review  21

2.1  The Architecture of Corporate Culture  21

2.2  The Main Elements of Corporate Culture  24

2.2.1  Artefacts  24

2.2.2  Values Beliefs and Attitudes  30

2.2.3  Basic Assumptions  33

2.3  Determination of Corporate Culture in its Wider Context  35

2.3.1  The Sources of Corporate Culture  35

2.3.2  The Harrison and Handy Model  36

2.4  Corporate Culture and Performance  38

2.4.1  Underlying Assumptions  38

2.4.2  Academically Suggested Relationships  40

2.5  Cultural Heterogeneity in Organisations  42

2.6  Summary  45

11

12  Table of Contents  

3  Methodology  47

3.1  The In-depth Interviews  49

3.1.1  Sampling  49

3.1.2  The Interview Design  50

3.1.3  Data Analysis of the Interviews  52

3.2  The Focus Group Interview  53

3.2.1  Sampling  54

3.2.2  Focus Group Interview Design  55

3.2.3  Data Analysis of the Focus Group Interview  57

3.3  The Questionnaire-based Survey  58

3.3.1  Sampling  59

3.3.2  The Questionnaire Design  59

3.3.3  Data Analysis of the Survey  66

4  Research Findings  69

4.1  In-depth Interviews  69

4.2  Focus Group Interview and Survey at Centrotherm  76

5  Conclusions  91

5.1  Diverge Perceptions of Cultural Artefacts in Organisations  92

5.2  Oversimplification and Generalisation of Corporate Values  

  Beliefs and Attitudes  93

5.3  The Interrelationship between Corporate Culture and  

  Structure  95

5.4  Existence of Subcultures and Cultural Heterogeneity  96

5.5  Non-existence of Pragmatic Relationships between Corporate  

  Culture and Performance  97

5.6  Summary  98

6  Recommendations  99

Table of Contents 13

  References  105

  Appendices  111

  A: Guideline for In-Depth Interviews (English)  112

  B: Guideline for Focus Group Interview (English)  113

  C: Questionnaire for Survey at Centrotherm (German)  113

  :D Coded Questionnaire (English)  121

  F: Participation in Survey  132

  G: Statistical Analysis of Survey Question 1  133

  H: Statistical Analysis of Survey Question 2  136

  I: Statistical Analysis of Survey Question 3  138

  J: Statistical Analysis of Survey Question 4  139

  K: Statistical Analysis of Survey Question 5  143

  L: Statistical Analysis of Survey Question 6  148

  K: Statistical Analysis of Survey Question 5  152

  M: Qualitative Analysis of Survey Question 7  156

  N: Qualitative Analysis of Survey Questions 8 and 9  158

  O: Qualitative Analysis of Survey Question 10  160

  P: Statistical Analysis of Survey Question 11  161

  Q: Statistical Analysis of Survey Question 12  170

  R: Statistical Analysis of Survey Question 13  176

  S: Statistical Analysis of Survey Questions 14 to 23  177

13

14  List of Tables  

  List of Tables  

Table 3 1:  Questions for the In-Depth One-to One Interviews  52

Table 3 2:  Questions for the Focus Group Interview  57

Table 4 1:  Data Distribution According to Division and Occupational  

  Status  77

Table 4 2:  Overview Results of Statistical Analysis (t-value and  

  F-value)  88

Table 6 1:  Scenarios of Impact of Commitment on Additional  

  Profits  103

List of Figures 15

  List of Figures  

  Figure 2 1: The Onion Diagram : Manifestations of Culture at  

  Different Levels of Depth (Hofstede 2001: 11)  23

  Figure 2 2: Levels of Culture and Their Interaction (adapted from  

  Schein 1985b)  24

  Figure 2 3: Influence of Culture on Behavior and Behavior on  

  Culture (Adler 2002: 17)  32

  Figure 2 4: Culture Quadrant by Harrison (Handy)  37

  Figure 4 1: Categories and Relationships in Accordance with the  

  Interview Analysis  70

  Figure 4 2: Categories and Relationships in Accordance with Focus  

  Group Interview Analysis  78

15

16  List of Boxes  

  List of Boxes  

  Box 3 1: Categorisation of Job Description Status and Division  60

  Box 3 2: Question 1: Perception of the Organisation in Form of  

  Triangles  60

  Box 3 3: Question 2 to 3: Mission Statement  60

  Box 3 4: Question 4 and 6: Structural Attributes of the  

  Organisation  61

  Box 3 5: Question 5: Organisational Belongingness  62

  Box 3 6: Questions 7 to 9: The Perception of Corporate Values at  

  Different Stages  62

  Box 3 7: Question 10: Corporate Stories  63

  Box 3 8: Question 11: Interrelationship Between Strategy Change  

  and Performance  63

  Box 3 9: Question 12: Work Relations and Trust  64

  Box 3 10: Question 13: The Logo  64

  Box 3 11: Questions 14 to 23: Attitudes to Different Statements  65

1 Introduction

It is estimated by the renowned market research institute Gallup that approximately € 260 billion a year (about 12 percent of the German gross domestic product of about € 2,100 billion according to Deutsches Statistisches Bundesamt (2004); hereafter abbreviated as GDP) get lost within the German economy due to missing commitment (Kröger, 2004). Gallup refers to unnecessary high absenteeism rates of employees, their unwillingness to perform beyond the minimum requirements, and risk avoidance (i.e. better to do nothing than something wrong) in order to preserve their work places (Kröger, 2004). Consequently, each employee in Germany could, statistically, contribute additional € 6190 to the profits of the organisation every year (where about 42 million people are in work relations in Germany according to the Deutsches Statistisches Bundesamt, 2004) if s/he was fully committed and motivated.

However, it can be observed that some organisations generate more commitment and motivation of their employees than others which goes beyond the notion of strategic, environmental and structural issues (Deal and Kennedy, 1999). Academics (e.g. Brown, 1998; Kotter and Heskett, 1992; Peters and Waterman, 1982) refer in this regard to the corporate culture – the soul of an organisation – as noted below.

The basis of work relations between employers and employees is compensation (Deal and Kennedy, 1999). People work to afford and to maintain a comfortable life (Deal and Kennedy, 1999). Thus, they are involved in and contribute to organisational aims which are generally the creation of products or services. This contribution can usually be ‘scientifically’ measured in terms of output, put-through and time (Weidner and Freitag, 1998). It is, furthermore, fixed in work contracts and psychological contracts between employers and employees and shows the general expectation of what should be done at a minimum from both sides. That usually means that an employee has to work a certain amount of hours a week and should fulfil certain tasks which have been allocated to him. In return, the employee gets an agreed compensation in monetary terms. However, employees tend to neglect their duties or even leave companies,

18 Introduction

despite an appropriate compensation, when they do not feel comfortable within the organisation (Deal and Kennedy, 1999). Hence, they are not fully committed to their organisations.

Corporate culture directly affects commitment either in a positive or in a negative way (Peters and Waterman, 1982). As noted above, some organisations are able to create more commitment than others, which relates to the corporate culture (Peters and Waterman, 1982; Deal and Kennedy, 1999). Commitment drives the behaviour of the employee at the workplace. It can comprise the willingness of simply showing up at work or of even contributing more than expected. It can, furthermore, reflect the willingness to take additional shifts, to bring in ideas and performance beyond the agreed level. Commitment is a less scientifically measurable phenomenon. It is often referred to by analysing absenteeism rates, the amount of extra- hours worked in the organisation, etc (Jost, 2003). However, organisations often struggle to identify the extent of commitment in comparison to contribution because the boundaries are blurred.

1.1 Background of Corporate Culture Studies

There is only a brief outline of the background of corporate culture studies given here because the below noted literature will be introduced in more detail in the literature review (Section 2).

Corporate culture is a fairly young discipline. The path for corporate culture theory was evened by the Human Relations School in the 1950s and 1960s which emphasised to take human needs into account (Brown, 1998). This approach opposed the Modern Structural Theory (e.g. Lawrence and Lorsch) in the 1960s which described organisations as purely rational and mechanistic entities (Brown, 1998). However, early organisational sociologists such as Max Weber and Emile Durkheim identified non-mechanistic and ‘irrational’ features of organisational life in the early twentieth century, e.g. myths, rites and charismatic leadership (Brown, 1998). As a consequence, the focus on this non-mechanistic and irrational part of organisational life increased throughout the twentieth century; and created the basis for the corporate culture theory (Brown, 1998).

The first wave of corporate culture literature emerged in the late 1970s and early 1980s, notably the work of Handy (1978), Deal and Kennedy (1982), Peters and Waterman (1982) and Schein (1985). This first wave was succeeded by a variety of work pieces throughout the 1990s, e.g. Brown (1998), Hampden-Turner (1994) and Kotter and Heskett (1992). Nevertheless, although there are some studies and theories of corporate culture, organisations still differ widely in terms of their corporate culture. This indicates that none of the corporate culture approaches have had a significant breakthrough yet. Apparently, the ‘best practice’ of corporate culture, which was passionately sought for by a variety of academics, either does not exist or has not been found; and € 260 billion loss a year alone in Germany might indicate shortcomings in finding the ‘best practice’ for corporate culture.

Therefore, this text explores corporate culture by using adequate, pre-existing theory and both qualitative and quantitative research in order to develop a framework of how corporate culture could be described in the illustrated three German organisations.

Thus, relevant cultural patterns in the regarded organisations will be outlined and their relationships to each other must be identified by using interviews with representatives of the senior management at first. Secondly, it must be examined whether the outlined patterns are perceived homogeneously throughout different hierarchical and divisional levels of the organisation by the means of a survey, or the perception is unequally distributed between different organisational (e.g. senior management, shop-floor) and divisional groups. Finally, the impact of the corporate culture on the organisational performance must be examined because organisations invest in corporate culture for an economic reason.

An overview about the content and structure of this thesis is given by the following research aims and objectives.

1.2 Research Aims and Objectives

The aim of this research is to show how corporate culture has evolved differently in German organisations and how it is perceived

20 Introduction

differently by diverse organisational groups. Thus, this research attempts to challenge diverse academic approaches which presume generality of corporate culture. It shall encourage organisations to examine their corporate culture more thoroughly from different perspectives in order to prevent misinterpretation on the basis of insufficient and unrepresentative perception of the corporate culture on the senior management’s behalf.

The research objectives are listed below as the following: − To critically assess the basic assumptions and limitations of prevalent corporate culture theory according to the approaches of Schein (1985b) and other academics;

− To identify the underlying assumptions and key drivers of corporate culture in German organisations by means of qualitative and quantitative research;

− To illustrate the interrelationships between different cultural patterns in the regarded organisations according to the data gathered in the primary research;

− To examine whether corporate culture can be seen as homogeneous or as a product of heterogeneous perceptions and organisational groups (e.g. senior management, employees, etc.);

− To assess the impact of corporate culture and incorporated values, beliefs and attitudes on organisational performance, as identified in this research, in comparison to Kotter and Heskett’s (1992) assertion of positive corporate culture- performance relationships; and − Finally to suggest an approach to corporate culture on the basis of the participating organisations that would be a benefit to other organisations in terms of increased commitment and profitability of the employees.

2 Literature Review

2.1 The Architecture of Corporate Culture

Corporate Culture is one of the big buzzwords in contemporary business science. Business students, managers and academics often tend to refer ‘culture’ to surface phenomena rather than to explore the meanings and ideas behind it (Alvesson, 2002). The following brief introduction into the terminology of culture according to Hofstede (1980, 2001), and corporate culture according to Schein (1985b) should provide a basic understanding of the phenomenon corporate culture.

Culture derived from the Latin term ‘cultura’ which is translated as agriculture, artificial rearing of bacteria, cultivation of body and soul, etc (Jost, 2003). However, the term culture often equates classic music, operas, literature and exotic rituals of African tribes in people’s minds. These pictures are patterns of culture but they are not culture per se as the following definition of Kluckholm (1951: 86) shows:

Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting and distinctive achievements of human groups, including their embodiments in artefacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values. (Kluckholm, 1951: 86)

Hofstede (1980, 2001) accounts groups, e.g. nations, societies and members of an organisation for being carrier of culture since “…culture is the collective programming of the mind that distinguishes the members of one group or category from another” (Hofstede, 2001: 2). He distinguishes between three different modes of ‘mental programming’:

22 Literature Review

− Universal programming is the biological operating system of human beings. It is inherited through the genes and controls basic functions as laughing, crying, fear or aggression.

− Collective programming, which equals culture, appears in groups and is distinctive from other groups. Collective programming manifests in language, artefacts, rituals and symbols.

− Individual programming is the personality of humans which is unique. Personality must be assumed since even identical twins that grow up in the same sociological environment have different attitudes and diverse behaviour.

According to Hofstede (2001), shared values of members of a specific, interrelated group are the core of culture. Values help people to make decisions and manifest themselves in contrasting dimensions, e.g. good vs. evil, beautiful vs. ugly, safe vs. dangerous, etc (Hofstede, 2001).

Hofstede’s (1980, 2001) architecture of culture is illustrated in Figure 2.1 – the onion diagram. The different layers jointly emit visible practices – ‘how things are done here’. Rituals are based on shared values and reflect the way people greet each other, respect each other and celebrate (religious) ceremonies. Heroes represent the perceived values within a group and can be real or fictive (e.g. the founder of a company, or McDonald’s clown Ronald). The most visible parts of either culture are the symbols. They can appear in form of objects, language, special jargon, arts etc. Hofstede (2001) insists that the level of external influence and change of cultural patterns decreases toward the inner layers and the core values. Hence, it is more likely that symbols and heroes change over time in contrast to values, which are supposed to be fairly stable.

Figure 2.1: The „Onion Diagram“: Manifestations of Culture at Different Levels of Depth (Hofstede, 2001: 11)

Hofstede (2001) asserts that values are fairly stable in the long term, and rather influence the outer layers than being affected by them in the short term. Hofstede’s (1980, 2001) fairly consistent approach to culture was confronted by more transactional models of culture.

In contrast to Hofstede, Schein (1985b) considers culture as a continuous process of interaction between the values, beliefs and attitudes, the basic assumptions, and the artefacts of a culture. He (1985b) proposes, as illustrated in Figure 2.2, that the basic assumptions are the deepest level of culture and the artefacts are the superficial manifestation of culture. Schein’s (1985b) model is clearly favoured by a majority of management literature since it offers a greater number of interfaces for acting on the culture process whereas Hofstede’s (2001) approach solely promotes values as drivers of cultural change.

The term corporate culture is the simple application of culture theory to an organisational context. Thus, solely the term corporate culture will be used in the following.

24 Literature Review

Figure 2.2: Levels of Culture and Their Interaction (adapted from Schein, 1985b)

The elements of corporate culture, as illustrated in Figure 2.2, will be explained in detail in the following section.

2.2 The Main Elements of Corporate Culture

2.2.1 Artefacts

This section is dedicated in detail to artefacts since they are the most visible and superficial manifestation of culture, and consequently corporate culture (Schein, 1985b; Brown, 1998). Cultural artefacts are highly important since they are indicators of an organisation’s culture (Brown, 1998). However, Gagliardi (1990) argues that scholars have paid lip service to artefacts while neglecting them in substance. In order to bridge this gap, Brown (1998) defined the following categories as crucial elements of artefacts:

− Material objects and symbols;

− Physical layouts;

− Technology;

− Language, stories, jokes and myths;

− Behaviour patterns; and

− Rules, systems, procedures and programmes.

Material objects, predominantly logos and mission statements, provide a good insight into an organisation’s culture (Brown, 1998). Hampden-Turner (1990) analysed the logos of Apple, Volvo, Honda and Tandem Computers, and drew the conclusion that logos can act as a carrier of purposeful cultural messages. According to Hampden- Turner (1990), Apple’s multicoloured fruit of the forbidden fruit, from which a bite was taken, symbolises the birth of new knowledge – an appropriate message for the very innovative company. However, the symbolic of logos can be overstated because some organisations do not intend to emit messages, and some logos are products of advertising agencies which have not had deeper insights into the cultural setting of an organisation (Brown, 1998).

The same applies for mission statements. They can be powerful tools for transmitting the purpose, key beliefs, values and relationships (to stakeholders) of an organisation but they can also be misguided by good intentions rather than real practices (Brown, 1998).

Physical layouts, i.e. architecture can reflect corporate culture. Berg and Kreiner (1990) assert that buildings and office architecture often reflect the organisation’s history, the status, the way of working, etc. Unique buildings can serve as totems or unifying and identifying symbols (e.g. the Pentagon). More than that, the presence of coffee-corners, open offices, or a gym tells a story about the values and the culture of an organisation. Coffee-corners might stand for informal communication, open offices for team-work and a gym for young, vital and dynamic approaches to work.

26 Literature Review

Technology, which usually comprises information technology and production equipment, can be taken as an indicator for the organisation’s culture (Brown, 1998). The usage of extensive Management Information Systems (MIS) can reduce human relationships to technocratic, impersonal relationships at the workplace. Furthermore, restriction of access to the internet in organisations can be interpreted as mistrust towards employees, which are sometimes thought to abuse the internet for personal issues.

The language in an organisation is a significant element of corporate culture. It is not simply the means of communication, it “…is also a fundamental determinant of how we comprehend the world we live in” (Brown, 1998: 16). Brown (1998) mentions jokes, anecdotes, stories, metaphors and jargon as key rudiments of corporate language. But the language itself is a highly cultural construct; terms such as ‘acceptable quality’ can divert from organisation to organisation, and even within the same organisation. The production department of a firm, for instance, might have a different perception of quality in comparison to the quality control department (Brown, 1998).

Organisational stories, which Martin et al. (1983) defined as narratives that focus on a single, unified sequence of events, and organisational jokes are important indicators of corporate culture since they are direct products of human relations at the workplace (Jost, 2003). Moreover, they are a particular control mechanism because they are memorable in the long term, they generate belief, and they encourage attitudinal commitment by appealing to legitimate values (Wilkins, 1983). Jost (2003: 13) even defines corporate culture as “…the sum of all stories told [in the organisation]”. Stories and jokes in an organisation – although they can vary from teller to teller – have certain common themes between them (Martin et al., 1983).

Martin et al. (1983) analysed a variety of organisational stories and discovered the following seven types of stories in private and public organisations:

1. Can employees break the rules?

2. Is the big boss human?

3. Can the little person rise to the top?

4. Will I get fired?

5. Will the organisation help me when I have to move?

6. How will the boss react to mistakes?

7. How will the organisation deal with obstacles?

The following story is a good example for corporate stories, and can be clearly identified by the above noted seven types of stories:

At the Revlon Corporation the story is told about Charles Revlon, the head of the group, who insisted that employees arrived for work on time, but seldom arrived himself much before noon. One day Charles wandered in and began to look over the sign-in sheet, only to be interrupted by a receptionist who had strict orders that the list should not be removed. Both insisted they were in the right until finally Charles said ‘Do you know who I am?’ And she said ‘No Sir, I don’t’. ‘Well, when you pick up your final paycheck this afternoon, ask’em to tell ya’. (Tobias, 1976)

Jokes are usually more general and less organisation-specific, but are often applied to describe specific events, situations or conditions in an organisation. During the research interviews of this thesis, the author was told the following joke by a manager which he perceived to be representative for the organisation to a certain degree:

There was a baby found on the company’s ground. The company’s executives set up an investigation commission in order to find out whether the baby was a ‘product’ of the company. After four weeks of investigation the commission denied any connection between the company and the baby due to the following three findings: First of all, the company has never managed to finish a project within 9 months; secondly, the company has never produced anything mindful; and thirdly, none of the company’s

28 Literature Review

products have worked well right after their ‘birth’. (Senior manager of Centrotherm, 2004)

Myths are often incorporated into stories, but also exist in collective and individual beliefs about how the world works (Boje et al., 1982). According to Boje et al. (1982), myths are used to legitimise past, present and future actions, to maintain and conceal value systems and political interests, to explain and create cause and effect relationships under conditions of incomplete knowledge, and to reduce anxiety and uncertainty in turbulent and dynamic times. A good example for the usage of simple cause and effect relationships under conditions of incomplete knowledge is the ‘women dilemma’. There is the widespread myth that women are unreliable because they treat their career as secondary to getting married and having children. As a consequence, some organisations exclude women from higher-paid jobs and promotion (Brown, 1998). Without any prospect of progress, most of them choose to leave the organisation. The resulting turnover rate of women in these organisations seems to confirm the myth, and thus reinforces it (Brown, 1998).

Similar to language, behavioural patterns are direct products of human relationships. Behavioural patterns comprise rites, rituals and ceremonies that differ from one organisation to another (Brown, 1998). Ceremonies are thought of as “… celebrations of organisational culture, or collective acts of cultural worship that remind and reinforce cultural values” (Brown, 1998: 21). Ceremonies can be extremely glamorous annual presentations comprising prize awards, success stories within the organisation, etc. On the other hand, ceremonies can be quite simple. Departmental Christmas dinners or barbeques in the summer, as well as spontaneous parties after having accomplished a certain goal, can also be seen as ceremonies which raise the employees’ commitment to the organisation or an organisational group.

Rites and rituals, as another important element of behavioural patterns, may be defined as “… relatively elaborate, dramatic, planned sets of activities that consolidate various forms of cultural expression into organised events, which are carried out through social interaction, usually for the benefit of an audience” (Trice and

Beyer, 1984: 142). Trice and Beyer (1984) distinguish between three types of rites:

Rules and regulations, both formal and informal, have a significant stake in corporate culture. They can give an idea of the work relations within the organisation (Brown, 1998). The more the way of working is regulated by rules, the less creativity, for instance, can be expected within the organisation. However, the assessment and interpretation of rules and regulations requires a complete understanding of the organisation’s motives (Brown, 1998). Fixed schedules for starting and ending the working day of clerical employees might be interpreted as a strongly dominant corporate culture and leadership although this programme was supposed to show solidarity with shift-based manual workers due to an act of organisational equality.

In addition to Brown’s (1998) list of organisational artefacts above, corporate heroes, as Hofstede (2001) insisted in his onion diagram, must be taken into consideration. Corporate heroes can be the original founders of the organisation (e.g. Bill Hewlett and Dave Packard), the current CEO (Steve Jobs at Apple), or every employee who set a widely recognised example for colleagues or subordinates. Deal and Kennedy (1982) advocate the creation and existence of corporate heroes because they:

− make success seem attainable and human for ordinary employees;

− provide role models and high standards for others to follow;

30 Literature Review

− symbolise the organisation to internal and external stakeholders;

− preserve and enhance cultural values and uniqueness of the organisation;

− encourage greater commitment to the organisation, and urge people to identify their personal achievements with the organisation’s success; and

− motivate employees.

Nonetheless, Wilkins et al. (1990) argued that there are dangers incorporated in attempting to create heroes. First of all, the focus on a single ‘magician’ can undermine an existing corporate culture of teamwork and co-operation (Wilkins et al., 1990; Brown, 1998). Moreover, recent corporate scandals, e.g. Enron, have shown that some senior managers are rather concerned about their payslips and stock options than being a good example. Famous founders of organisations have sometimes turned out to be less admirable and exemplary than expected – Henry Ford, for instance, was a passionate anti-Semite.

However, there is no doubt that corporate heroes on every hierarchical level can create immense commitment, motivation and performance when they honestly and enduringly care for their colleagues and subordinates (Brown, 1998).

2.2.2 Values, Beliefs and Attitudes

Values, beliefs and attitudes are thought to be interrelated, as shown in Figure 2.3. Values are directly connected with moral and ethic codes, and guide people in their decision-making (Hofstede, 2001). Values “…determine what people think ought to be done” (Brown, 1998: 26). Rokeach (1973: 5) delivered the following widely accepted definition of values:

A value is an enduring belief that a specific mode of conduct or

end-state of existence is personally or socially preferable to an

opposite or converse mode of conduct or end-state of existence. (Rokeach, 1973: 5)

Values (see Figure 2.3) are the basis for beliefs. Values determine the belief of individuals or groups of how the world works (Brown, 1998). People, for instance, who value honesty, openness and integrity, are very likely to believe that organisations are only able to work effectively when they apply honesty, openness and integrity to their stakeholders. To conclude, beliefs concern of what people think is or is not true according to their set of values (Brown, 1998). However, Schein’s (1985a) assertion that organisational leaders’ beliefs can easily be transformed into collective beliefs through the medium of values must be regarded with caution since the leader’s beliefs do not necessarily overlap with beliefs of other individuals or groups in the organisation.

Attitudes (see Figure 2.3) connect feelings with values and beliefs, and hence are a consequence of these (Brown, 1998). They are a learned predisposition to respond in a consistently favourable or unfavourable manner to a particular thing or idea (Brown, 1998). Attitudes are likely to differ within an organisation since different groups perceive different things or ideas as important or valuable. Conflicts, for example, can arise between the profit-oriented senior management, the product-focused designers and engineers, and the customer-focused sales and marketing department of how to proceed with a certain product or project. Attitudes must be distinguished from short-term opinions since the former are sustainable. They include rational patterns based on objective information and irrational patterns, mainly stereotypes and prejudices towards something, individuals or groups (Adler, 2002; Hofstede, 2001; Brown, 1998). An example might be the employees’ compensation policy of an organisation. The objective fact that there was no performance-related compensation granted by the organisation in the last year could be reinforced through subjective, stereotypical perception that performance has never been valued in the organisation, and prejudices that the senior management has always tried to exploit its employees. As a consequence, the employees might have the attitude that they do not have to perform well since performance is not recognised by the organisation.

32 Literature Review

Figure 2.3: Influence of Culture on Behavior and Behavior on Culture (Adler, 2002: 17)

Thus, the behaviour of the employees (in the above noted example) is affected; they are likely to act indifferently. Adler (2002) defines behaviour as the sum of all actions a human being conducts. It equals Hofstede’s (2001) practices, which are illustrated in Figure

2.1. Behaviour can be separated into individual behaviour and

collective behaviour (Adler, 2002) whereas collective patterns are always existent in individual behaviour, e.g. the group process of solidarity of specific working classes during union-led strikes. The behaviour of people, especially the collective behaviour, influences the culture of the respective group in a long-term process. Adler (2002) insists that culture and behaviour are in a continuous cause and effect relationship.

The modified culture is based on an influenced set of values. This represents a continuous process of cultural change – a dynamic cycle. Nevertheless, the pace of cultural change should not be overestimated. Adler (2002) and Hofstede (2001) insist that cultural change is slow since values, which are the core of culture according to Hofstede (2001), proved to be comparatively stable.

Furthermore, Adler’s (2002) model (Figure 2.3) shows that short- term interference of groups of interest, e.g. an organisation’s leadership, is less promising than some academic tries to induce. It is also conspicuous that she, in contrast to Schein (1985b), does not

include artefacts into her cause and effect relationship model of cultural change. Artefacts reflect cultural settings but they are not eligible for a sustainable alteration of corporate culture and embedded values.

2.2.3 Basic Assumptions

Basic assumptions are deeply rooted assumptions which are shared by people and guide their perceptions, feelings and emotions about things (Brown, 1998).

Argyris’ (1976) term ‘theories-in-use’ is often used as a synonym for basic assumptions. Schein (1981) implied that culture may be defined in terms of its basic assumption.

Basic assumptions differ from beliefs by being preconscious, impossible to confront and highly complex in terms of assessment and determination (Brown, 1998). Schein (1985a) has introduced five dimensions to categorise basic assumptions, as briefly outlined hereafter:

1. Humanity’s relationship to its environment: Organisations have a

widely different perception of their relationship to the environment. Some organisations insist that they are able to shape/dominate the environment to a certain extent, and hence can force other institutions in the environment to comply. Some organisations presume that they have to harmonise with their environment by e.g. aligning their business strategy to the specific settings. Others feel dominated by their environment and seek for survival by taking every chance, e.g. niches.

2. The nature of reality and truth: There are different ways of

reaching decisions and identifying the ‘truth’ in organisations. Some organisations heavily rely on the wisdom of trusted leaders in order to decide the truth. In other organisations, Max Weber’s ‘legal-rational’ bureaucracy (Thompson and McHugh, 2002) – reliance on rules and regulations – determines the decision- making. Still other organisations find their truth through debate and conflict; what survives this process must be a right decision.