Part 2. Describing corporate culture from its components and advanced companies, which practice corporate culture

2.1. Providing strong corporate cultures and cultural categories

Corporate culture has become increasingly important to firms in the past 20 years. Despite its intangible nature, its role is meaningful, affecting employees and organizational operations. And while culture is not the only factor guaranteeing success, positive cultures offer significant competitive advantages over rivals.

People come from diverse social, cultural and ethnic backgrounds, with different personalities and experiences. In a work environment, these factors manifest themselves in a wide variety of ways, and over time a dominant set of norms arise which guide the way work is accomplished. Deal and Kennedy popularized the notion of developing positive corporate cultures in their 1982 book Corporate Cultures, and since then the concept is seen playing as a central role in corporate strategy.

Corporate culture has many definitions as it is heavily influenced by the industry in which it operates, geographical location, history, employee personalities, etc. Some formal definitions have arisen, but essentially a corporate culture has several key elements: it offers a clear corporate vision; it is supported by corporate values consistent with the aims of the company and aligned with the personal values of organization members; a high value is placed on employees at all levels and there is extensive employee interaction across many levels; and the culture is adaptable, adjusting to external conditions, and consistent, treating all employees equally and fairly. These characteristics cannot exist without widespread employee support. And even though there may be strong sub-cultures within the company, the dominant culture must be strong enough for sub-culture members to embrace it.

In 1988 Sonnenfeld defined four types: the academy (exposing members to different jobs so they can move within the organization), the club (which is concerned with people fitting in), the baseball team (with its well-rewarded stars who leave for better opportunities) and the fortress (concerned primarily with survival). Goffee and Jones’ (1996) model takes a different route, suggesting a corporate culture is determined by levels of sociability (friendliness among community members) and solidarity (a community’s ability to pursue shared objectives) and developed a survey that quickly slots companies in on this scale in four categories: networked, mercenary, fragmented and communal.

None of these categories is considered to be better than the others. Instead, they serve as a way for management to determine where their culture fits relative to other types of cultures. A networked culture is distinguished by high sociability and low solidarity. Individuals in this type of culture feel like family and socialize often. Promotions are achieved and work is accomplished via informal networks or subcultures within the organization. This corresponds loosely with Sonnenfeld's club category.

A mercenary culture has low sociability and high solidarity. Individuals do not interact socially but are united in supporting strategic business objectives. They do not tend to exhibit a strong degree of loyalty, staying only as long as their personal needs continue to be met. This category is similar to Sonnenfeld's baseball team.

A fragmented culture has low sociability and low solidarity. People in this type of organization rarely interact. They may work with their office doors shut or from home. This type of culture might be found in a law office or in a company that is downsizing. This category would be similar to Sonnenfeld's fortress.

Finally, a communal organization has high sociability and high solidarity. This type of culture is often found in small start-up companies. Members of such an organization work very closely together for long hours and will likely socialize together. They strongly identify with the corporate culture and have a high sense of fairness so that rewards are shared equally. This category is most similar to Sonnenfeld's academy.

Organizations able to maintain positive cultures enjoy many benefits. Morale is improved, and the work environment more enjoyable, with increased teamwork, openness to new ideas and sharing of information. This activates learning and continuous improvement because of the free flow of information. It also helps attract and retain good employees.