Corporate values Other writers stress the importance of values. Deal and Kennedy, for example (2000: 21) consider that values – which they define as being ‘the basic concepts and beliefs of an organization’ – form the basis of corporate culture: ‘Values provide a sense of common direction for all employees and guidelines for their day-to-day behaviour.’ They add that ‘rational’ managers show little concern for the system of values of an organization; they are more interested in its structure, policies and procedures, strategies or budgets. This lack of
Concept 7.2 Corporate cultures 165 concern undermines both the leadership of the organization as well as commitment. The everyday business environment, however, requires that choices be made and values are an indispensable guide for making such choices. According to the same authors, three characteristics emphasize values and distinguish companies from each other: 1. The organizations have an explicit philosophy as to why they are conducting business. 2. The management places great importance on communicating the values that shape the company in terms of the economic choices and the business environment of the company. 3. These values are shared at all levels of the organization, from the shop floor to the board room. Identifying corporate cultures Deal and Kennedy (2000: 15–16) are among the first to examine in detail the phenomenon of corporate culture. Their book is intended primarily to serve as a primer on cultural management for business leaders. Using concrete examples taken from companies that, according to them, know how to manage their culture, they examine the role of the leader as a ‘mediator of behaviour’ and the positive effects of building culture. The main belief is that a company is not only a place where things are produced, but also an institution whose principal resources are people. And it is these people who manage themselves by using ‘the subtle cues of a culture’. A strong culture – which they see ‘as a system of informal rules that spells out how people are to behave most of the time’ – allows the behaviour of people to be guided and to ‘feel better about what they do, so they are more likely to work harder’. As stated in the introduction to this concept, the business environment in which a company operates has a considerable influence on the culture of the company. That is why Deal and Kennedy (2000) present a classification of the types of cultures on the basis of a study they made of various firms and their business environment. Using two factors – how much risk is involved in the firm’s activities, and how much time is needed before a company and its employees know how successful their decisions or strategies have been – they distinguish four categories of culture. These categories provide a useful framework for classifying organizational cultures.
- Fall '14
- Edgar Schein