Meaning of corporate culture in business

Inhalt

List of Figures

List of Tables

List of Abbreviations

1. Introduction
1.1. Introduction to the subject
1.1. Objectives and structure

2. Basics and general information
2.1. What is culture in general

3. All about corporate culture
3.1. Through corporate culture to economic success
3.2. Influences and requirements of corporate culture

5. Conclusion

Appendices

References

Further reading

List of Figures

Figure 1: The three layers of corporate culture

Figure 2: The Influence of corporate culture on company success

List of Tables

Table 1:The four main areas of spoken language

Table 2:Relationship between cultural dimensions and employee engagement

Table 3:The requirements for a successful cultural work by Kobi and Wüthrich (1986)

Table 4: "Top Boxes" of cultural dimensions

Table 5: Employee orientation and quality of work

List of Abbreviations

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1. Introduction

1.1. Introduction to the subject

Among the consequences of globalization, companies are faced to a growing competitive pressure. For this reason, they are continually trying to perceive every possible opportunity to achieve competitive advantage. The focus is placed primarily on key figures such as cost, asset turnover or processing times. Contrary to these hard factors, this work will to examine the extent to which corporate culture as a soft factor affecting the economic success.

1.1. Objectives and structure

This work aims to provide a first insight into the topic of corporate culture and investigate their importance to business success. After the introduction to the subject, culture in general will be defined. Then will be a move to focus on the entrepreneurial dimension to the fore. Then, a recent study by the German Federal Ministry of Labour and Social Affairs, will illustrate the meaning of corporate culture for the entrepreneurial success. This scientific study is based on a comprehensive statistical data base and can explicitly explain - along the fundamental Aspects a manager must observe - if and why corporate culture influenced the organizational success.

2. Basics and general information

2.1. What is culture in general

Since time immemorial, scientific disciplines set apart with the meaning of culture as awhole. For instance in anthropology, ethnology, and for several decades, sociologists,psychologists, linguists, and also in comparative religious studies, too.¹ While anthropolo-gists deal with the various forms of greeting, the expression of joy or grief, and manyother behaviors, linguists investigate the characteristics of verbal or nonverbal communi-cation.² In respect of nonverbal (or silent) communication every culture has its own formof body language or gestures.³ These behaviors are the result of socialization in a particu-lar cultural form or tradition.⁴ As the following illustration shows, the verbal (or spoken)language can be divided into four main areas, which can also recognize cultural variations.

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Table 1: The four main areas of spoken language⁵

Thus can be summarized culture, as “the configuration of basic assumptions abouthumans and their relationship to each other and to the world around them, shared by anidentifiable group of people”⁶. How the examples in figure 1 have showed, theseidentifiable groups of peoples - in this case the inhabitants of these countries - can bedivided by the way of their verbal communication. But the general cultural term isbroader than this linguistic point of view. Culture contains in the literary view simplyattitudes, beliefs, values and behavior, which be shared from a system like anorganization or social group.⁷ In the further course of this work will be come thisdistinction to the fore.

3. All about corporate culture

3.1. Through corporate culture to economic success

In the seventies, the success of Japanese companies at the world market had posed thequestion (first in the U.S. and later in Germany) how the local interaction is explicablewithout such strong influence of strategy, structure or system variables.⁸ Contrary to this in business, established hard facts⁹ one by the Federal Ministry of Labour and SocialAffairs in Germany (“Bundesministerium für Arbeit und Soziales”) initiated study¹⁰ hasshown that a combination of cultural dimensions such as identification, team orientation,fairness, promotion of professional development and organizational ability to change canexplain up to 31 percent of the professional success of a company.¹¹ Additional the twoHarvard professors Kotter and Heskett found out that the implementation of a corporateculture that focuses intensely on customers, employees, owners and management bodiescan boost the profits over a period of more than eleven years by mysterious 756 percent,while the comparison companies only recorded a growth of one percent.¹² Therelationship between entrepreneurial success and its cultural origins seems to be alreadywell known in the economy. How a in 2008 - during the economic crisis by the "Bain &Company” - conducted study reported, believing a total of 88 percent of the polled 1430executives that a corporate culture is as important as a strategy.¹³

But how every one of these executives understands the corporate culture at all? Whilethe social sciences grappled with this issue less in terms of practical implementation, thismakes together with the social-psychological, anthropological and ethnological discussionsubstantive progress today.¹⁴ However, there is still no uniformly agreed definition of thisterm.¹⁵ A corporate culture based on those basic common beliefs that influence decisivelythe thoughts, feelings and actions of managers and employees in a company.¹⁶

Under the concept of corporate culture are commonly understood all of an organizationcollectively embodied values, attitudes, norms, beliefs and symbolic systems, which carry their identity in terms of their purpose to the outside and are internally divided by its members.¹⁷ The following Figure 1 is intended to illustrate the three different layers of this term with respect to the exercise thereof.

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Figure 1: The three layers of corporate culture¹⁸

While the listed symbol systems are clearly worn out, the norms and standards are onlyto identify on the based behavior of the organizational participants.¹⁹ The core values areintegrated into her so deep and hidden, that although they are no longer consciouslyperceived, but affect the other two levels of symbolic systems, norms and standards.²⁰ Directed by the company management can be created in this way a kind of corporatephilosophy, which formulated explicit corporate policies that can be processed rationallyor emotionally for orientation, motivation or even used to plot corresponding legitima-tions.²¹

But corporate cultures are characterized by their heterogeneous subcultures, why the perceptions of the individual participants in the organization can distinguish.²² By the corporate culture there is the possibility to design an individual and supportive ethos of the company, to eliminate deficits in innovation and may to promote employee motivation ²³ .²⁴ As the following bullet point illustrates, the last one will have a huge influence on the achievement of corporate success.

3.2. Influences and requirements of corporate culture

As Figure 2 shows, corporate culture has a significant impact on the company success. But this can only more pronounced by its effect on the employee engagement.²⁵

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Figure 2: The Influence of corporate culture on company success²⁶

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¹ Look at Kutschker, M./ Schmid, S. : Internationales Management. P. 669.

² Cf. Watzlawick, P. : Wie wirklich ist die Wirklichkeit? Wahn, Täuschung, Verstehen. P. 17.

³ See at Keegan, W. J./ Green, M. C. : Global Marketing. P. 148.

⁴ So in Watzlawick, P. : Wie wirklich ist die Wirklichkeit? Wahn, Täuschung, Verstehen. P. 17.

⁵ Source: Own figure based on Keegan, W. J./ Green, M. C. : Keegan and Green, Chapter 4. In URL: http://www.ppt2txt.com/r/291da5e2/. Last check: 20.01.2012. And Keegan, W. J./ Green, M. C. : GlobalMarketing. P. 148.

⁶ Bhagat, R. S./ Steers, R. M. : Cambridge handbook of culture, organizations, and work. P. 47f.

⁷ Cf. Gibson, R. : Intercultural business communication. P. 16, 136.

⁸ Cf. Macharzina, K. : Unternehmensführung. Das internationale Managementwissen; Konzepte - Methoden -Praxis. P. 180.

⁹ See the same and Leitl, M./ Sackmann, S. : Unternehmenskultur als Erfolgsfaktor. In: Harvard Business Manager nr. 01/10. th. year. P. 39.

¹⁰ This study was conducted by the Harvard professors and Consultants from the consultancy Keenbaum Leitl and Sackman in the middle of 2009. In these 157 managers, staff resources and personnel managers were involved and consulted about corporate culture as a success factor, and their implementation of internal coordination. See the following source. P. 38.

¹¹ So Leitl, M./ Sackmann, S. : Unternehmenskultur als Erfolgsfaktor. In: Harvard Business Manager nr. 01/10. th. year. P. 39.

¹² See the same source.

¹³ Look into Kuhn, L. : Die beliebtesten Managementmethoden. In: Harvard Business Manager 06/09. 31th.year. P. 9f.

¹⁴ So Macharzina, K. : Unternehmensführung. Das internationale Managementwissen; Konzepte - Methoden -Praxis. P. 180f.

¹⁵ Vgl. dazu Meier, H. : Unternehmensführung. Aufgaben und Techniken betrieblichen Managements; Unternehmenspolitik und strategische Planung, Unternehmensplanung und Organisation, HumanResources-Management. P. 228.

¹⁶ Cf. Leitl, M./ Sackmann, S. : Unternehmenskultur als Erfolgsfaktor. In: Harvard Business Manager nr. 01/10. th. year. P. 38.

¹⁷ So einerseits Müller, H.-E. : Unternehmensführung. Strategien - Konzepte - Praxisbeispiele. P. 190. Und andererseits Zwahr, A. : Meyers Großes Taschenlexikon in 24 Bänden. P. 5557.

¹⁸ Source: Own figure based on Müller, H.-E. : Unternehmensführung. Strategien - Konzepte - Praxisbeispiele. P. 190. This extracted the image of Schein (1984).

¹⁹ Cf. Müller, H.-E. : Unternehmensführung. Strategien - Konzepte - Praxisbeispiele. P. 190.

²⁰ See the same. P. 191.

²¹ So Escherle, H.-J./ Kaplaner, K./ Neuburger, R. : Grosses Wörterbuch Wirtschaft. Grundwissen von A-Z. P.396.

²² Cf. Müller, H.-E. : Unternehmensführung. Strategien - Konzepte - Praxisbeispiele. P. 191.

²³ Employee motivation and innovation culture: An Internet-based study concluded that only 18 percent ofparticipants admitted to work in a company with good business and innovation climate. This was justifiedby the generally negative attitude of superiors toward employees and the fact that employees were often

given as the proposals of management and thus have a negative impact on motivation and innovation

performance. About the study: In this Internet-based study, more than 480 companies have participated, which took advantage of a time commitment of about two hours, the possibility of a self-audit, in which they can assess in six modules of 219 question for free their occupational innovation management and disclose at the same time risks and potential. Cf. Wildemann, H. : Am Kunden vorbei. In: Harvard Business Manager nr. 03/08. 30th. year. P. 9, 11.

²⁴ Cf. Wildemann, H. : Am Kunden vorbei. In: Harvard Business Manager nr. 03/08. 30th. year. P. 10.

²⁵ So Hauser, F./ Schubert, A./ Aicher, M. : Unternehmenskultur, Arbeitsqualität und Mitarbeiterengagement in den Unternehmen in Deutschland. P. 131. In URL: http://www.bmas.de/SharedDocs/Downloads/DE/PDF-Publikationen/forschungsbericht-f371.pdf?__blob=publicationFile. Last check: 16.01.2012.

²⁶ Source: Own illustration based on Hauser, F./ Schubert, A./ Aicher, M. : Unternehmenskultur, Arbeitsqualität und Mitarbeiterengagement in den Unternehmen in Deutschland. P. 130. In URL:http://www.bmas.de/SharedDocs/Downloads/DE/PDF-Publikationen/forschungsbericht-f371.pdf?__blob=publicationFile. Last check: 16.01.2012.