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Corporate Culture: Help or Hindrance Essay

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“The only thing of real importance that leaders do is to create and manage culture. If you do not manage culture, it manages you, and you may not even be aware of the extent to which this is happening.” Edgar Schein, professor MIT Sloan School of Management

Nowadays, in the end of 2011, we can make a clear overview of the remarkable events that took place not a long time ago. And though some people might argue that the hardest economic crisis since 1929 still hasn`t finished, and is going to be continued, we are able to make certain conclusions and ask a couple of thrilling questions: “Why, when all other companies experienced dramatic collapse, some of them even managed not to reduce, but to increase their sales and market share?” Or “Why a company that has been operating for 200 years already is pushed out of its market by some barely known firm?” What makes these events possible? Magic? Well, you definitely will not believe it if you are older than 8 years old.

Some highest creatures? Well, it is quite unlikely too.

Santa Claus? Who knows, maybe… But science believes that there are more realistic reasons for such events that in general are called invisible strategic assets. One of such assets, supposed by most of the scientists as the most important one, is called corporate or organization culture [1].

To begin with, let us formulate, what is corporate or organization culture. By Edgar H. Schein organizational culture is defined as “A pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration that have 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” [2]. As we can see, concept of corporate culture is of great importance for adaptation and general comfort of employees. But in nowadays tough economic conditions, this is definitely not the highest priority for an organization. Much more important is whether corporate culture can be a help for a company, and whether it can save money or make firm more profitable.

To answer this complicated question that was a theme for creating of dozens of scientific books and hundreds of pages and years of research we will start with some facts from the history of development of this concept. Due to Naomi Stanford, the concept of organization dates its popular roots from 1980s. Then in 1982 two first books on importance of organization culture were published, and despite the fact, that they were strongly criticised, they attracted attention of business and became setters of new management trends. But at that moment of time these concepts were understood in not quite proper way, managers were trying to implement some cultural principles and waited for some kind of miracle. And though it hasn`t happened, scientists have developed the theory body and researched main aspects [3].

As we see, corporate culture has been existing for 25 years already, but does it actually work? To my personal opinion – yes, it does. It is intangible, you can hardly measure it or state whether it exists or not. You can not definitely say that: “these sales increased” or “our company has succeeded in this project because we have such great organization culture”. But all that events actually took place because of it. Because if not, how you can explain what has differentiated extraordinary successful firm that produce relatively same products from the others? For example, quite small studio Pixar that has confronted Disney marketplace has produced 11 hits cartoons out of 11 attempts.

Every film of it was nominated for an Academy Award and Pixar has won the awards about three quarters of the time [5]. What these facts tell us about if not a specific, unique organization culture, that is implemented in this organization. Unfortunately, corporate culture is a phenomenon that is very hard to establish and moreover, to control if any aspects of the company`s functioning are to be changed, what creates a wrong impression about its necessity and productivity in general. However, despite all arguments we can confidently assert that corporate culture works and it is of great help for an organization.

List of references:

1. Eric Flamholtz, Yvinne Randle – “Corporate Culture: The Ultimate Strategic Asset”; 2. Edgar H. Schein – “Organizational Culture and Leadership”; 3. Naomi Stanford – “Corporate Culture: Getting It Right”. 4. John P. Kotter – “Corporate Culture and Performance” 5. Kim S.
Cameron, Robert E. Quinn – “Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework”.

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