Corporate culture

Corporate culture is the group of beliefs, values, and norms that determine how employees interact with each other and process business transactions. Examples of the office culture are:

  • Belief structure. Employees uniformly have faith in a common set of beliefs, such as “we look out for each other” or “the customer will be delighted” that underlies much of what they do. This belief structure could be summarized into a slogan, such as “The Few. The Proud. The Marines.”

  • Bonus plans. The bonus plan may be set up to disproportionately reward salespeople, thereby sending the message that boosting sales is the primary mission of the business.

  • Dress code. For example, the office staff must adhere to a minimum standard every business day, with a business casual day on Fridays.

  • Office layout. The office may be set up with manager offices on the floor above and staff offices on the main floor, thereby creating a certain amount of separation between management and employees.

  • Stated values. A firm issues a list of its stated values to employees and posts them around the company, thereby placing a firm emphasis on certain behaviors.

  • Stories. The company regularly tells stories that communicate the core beliefs of the business. For example, the story of a pilot buying pizza for everyone on a plane that was stuck on the tarmac tells employees that this action embodies the values of the airline.

  • Symbols. The company shows its appreciation for employees by giving them something, such as a high-end suitcase (for traveling salespeople) or high-quality office chairs (for those working in the office all day).

Having a strong culture means that a group of employees at one company may come up with an entirely different way to deal with transactions than would a group at a different organization, sometimes with startlingly different results. For example, one culture focuses massively on pleasing the customer, making follow-up calls after an order is shipped to ensure that the customer is pleased, and providing whatever service is needed to make things right. Another company sells the same product, but its culture is focused on achieving the absolute lowest possible cost, which is passed along to the customer as a price reduction. There is no customer service. The result is that, in the first case, customers are thrilled with the level of support they received, while in the second case, customers are thrilled with the remarkably low price at which they bought the product. Neither approach is necessarily better than the other – they are simply the outcome of differing corporate cultures.

Related Courses

New Manager Guidebook