Company Core Values. Implementation in Existing Company Cultures

Research Paper (undergraduate), 2016

16 Pages


Table of Content

List of Figures

1. Introduction

2. Corporate Culture
2.1 The definition of corporate culture
2.2 Values in a corporate culture

3. Corporate Core Values
3.1 The meaning of corporate core values
3.2 The impact of corporate core values

4. Implementation of corporate core values
4.1 Defining corporate core values
4.2 Adapting processes to core values

5. Conclusion


ITM Checklist

List of Figures

Figure 1: Categorized corporate culture

1. Introduction

Most companies of the “Fortune 100” have corporate core values.1 Values that should stand for the beliefs of the founders or management. But in many cases these values are meaningless. The reason, in many cases, is, that the responsible persons in a company thins they have to. Why? Because mostly all successful companies have defined also some kind of values. But this approach can lead to more damage than positive impact. Sticking to values needs a strong standing from everybody in the company. Not only the employees have to develop a mindset for lived values. Also corporate governance and strategy have to adept values in the same meaning as for the single employee. Living them in the right or wrong way could therefore have a not insignificant impact on corporate governance, culture and strategy.2

This assignment will give a brief overview about the meaning, possible impact and implementation of corporate core values in an existing corporate culture.

2. Corporate Culture

2.1 The definition of corporate culture

There are several definitions of corporate culture existing. Schein´s definition of corporate culture is, for example is, “... a pattern of shared basic assumptions that a group has learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.”3

A more detailed approach from Clemente and Greenspan is, to define corporate culture in three basic determinants:


“... culture is determined by the size, age, and history of the company; the industry in which it operates; the geographic location; and whether it is a product or service provider.”4


“... culture is defined by the distribution of power and the primary modes of managerial decision-making. A company's political composition sets the tone that impacts employees' activities and contributes to how people feel toward their roles.”5


“... culture is defined as the collective thoughts, habits, attitudes, feelings, and patterns of behavior.”6

Besides these two definitions from Schein as well as from Clemente and Greenspan, Ahmed is suggesting a definition which implements the basic elements of various definitions of corporate culture, which are mostly differing on the focus of study, in the following way: “… [Corporate culture] is the pattern of arrangement, material or behavior which has been adopted by a society (corporation, group, or team) as the accepted way of solving problems.”7

Concentrating on arrangement and behavior, corporate values have a big importance when it comes to corporate culture. Values can bee seen as a fundamental definition and guidance how the two characteristics, arrangement and behavior, should be implemented, balanced and lived in an existing corporate culture.

2.2 Values in a corporate culture

There is a wide range of values existing that could describe or define a corporate culture. Not every of them can be used as a core value. There are some fundamental differences, which Lencioni is trying to separate in four different categories:8

aspirational values

These values are in many cases needed for strategic aims. Mostly there are distinct differences between the needed and lived manifestation. They should not intersect with the core value of the company.

permission to play values

They are defining the culture of daily work for all employees. Usually they do not differ to the values of competitors and are defined by the industrial area where the company is settled in. Trust, for example is a permission to play value in the financial sector.

accidental values

The employees itself are defining these values by their own culture. They are not managed by leadership or other values which are defined by the company itself. The chance of creating these values is getting higher if the diversity is very low.

corporate core Values

They can never be compromised and are forming the cornerstones of the company. But not to be compromised and being the cornerstone of a company is a very fixed and inflexible definition.

As a pictorial representation, core values van be seen also as a foundation of a building. If there are already walls and different floors, it is mostly impossible to change the foundation. The only way would be to tear off all the elements that were already build, which means a really high effort and nearly construction the building from scratch. Due to this importance, corporate core values have a serious impact of corporate culture.

3. Corporate Core Values

3.1 The meaning of corporate core values

One purpose of core values is, to give a corporate culture a kind of red thread were normally every single person or department has its own opinion about the company goals and the view on how to achieve these with an own defined work together mentality. Based on the alignment to a few clear core values, a unification of the global thinking of all individuals in an enterprise environment can be reached, which will result to an positive impact for an enterprise.9

As mentioned, core values should be a kind of red thread for a corporate culture. Which means also, that they have not to reflect the culture, the executives want to have. In this case, they could be better defined as aspirational values. Rather core values should strip down the the lived and internalized values from the founders to a few single words, which are defining the way of living the company culture.10

3.2 The impact of corporate core values

Putting core values over standard economic aims, e.g. within strategic decisions, will lead to more integrity of the board members and to all other executives. Employees will work with more intrinsic motivation, if they get the feeling, that everybody in the company is living the defined core values. Self-accountability and employee ownership will be supported through easier understandable and faster decisions making by value. This impact cannot be forced or supported by extrinsic motivators like money.11 Rather an intrinsic motivation will be created through an implementation. Having a look on Herzberg`s “two-factor theory”12, corporate core values can support and increase the motivator factor which leads to an increasing job satisfaction. Setting the right goals and their evaluation regarding to values could also increase the performance of every employee regarding to Locke´s “theory of goal setting and task motivation”.13

For that reasons, they can lead to differ against competitors on the market. Cause with a set of convincing and meaningful values a company can gain big advantages due to higher motivated and engaged employees.14 It will boost the overall outcome and performance of the whole company. From a long-term view, this can compensate economic disadvantages caused by possible strategic decision making by value. To take this thought one step further, it can open also a way of new opportunities.

Core values can have also a negative impact. Therefore, the implementation should only be considered if there is a strong standing behind them and executives have to be open to criticism when it comes to a violation of core values. Meaningless and empty values can also cause cynical employees and destroy the management integrity in a harmful way.15 It also means a switch from short term thinking to long term thinking. The board of directors have to accept, that an implementation of core values will not lead to an immediately positive outcome.16 Because values are part of the company culture, nobody can predict the development of a whole culture based on some short term thoughts or events. Several iterations will be needed to have a sustainable implementation and a measurable impact.17


1 cp. Time Inc., “100 Best Companies to Work for.”

2 cp. Lencioni, “Make Your Values Mean Something.”

3 Schein, Organizational Culture and Leadership, 17.

4 Clemente and Greenspan, “Culture Clashes,” 12.

5 Ibid.

6 Ibid.

7 Ahmed, Loh, and Zairi, “Cultures for Continuous Improvement and Learning,” 430.

8 cp. Lencioni, “Make Your Values Mean Something.”

9 cp. Haley, “Values Back in Vogue.”

10 cp. Lencioni, “Make Your Values Mean Something.”

11 cp. Haley, “Values Back in Vogue.”

12 cp. Herzberg, Mausner, and Snyderman, “The Motivation to Work .”

13 cp. Locke and Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation.”

14 cp. Lencioni, “Make Your Values Mean Something.”

15 cp. ibid.

16 cp. Haley, “Values Back in Vogue.”

17 cp. Lencioni, “Make Your Values Mean Something.”

Excerpt out of 16 pages


Company Core Values. Implementation in Existing Company Cultures
The FOM University of Applied Sciences, Hamburg
Human Resource Management
Catalog Number
ISBN (eBook)
ISBN (Book)
File size
625 KB
HR Management, Core Values, Corporate Culture, Human Resources
Quote paper
Dirk Köhler (Author), 2016, Company Core Values. Implementation in Existing Company Cultures, Munich, GRIN Verlag,


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