Challenges appeared in the corporate culture creation

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1. Corporate culture

Because the corporate culture is deeply embedded in the companies, and it has close relationship with the target, positioning, the way of management of the company, and with the increasing focus on the topic of corporate culture, it is of great significant for companies to pay attention to the construction of their own corporate culture in the competitive business environment.

1.1 Corporate culture

Gareth Morgan in his famous book “Images of Organization” describe the organizational culture as “To an outsider, daily life in an organizational society is full of peculiar beliefs, routines, leadership and rituals that indentify it as a distinctive cultural life…” (Morgan, 1997). From his commence on the corporate culture, we can conclude some features of the corporate culture. It is values, beliefs and customs that are shared by the people within the company which usually will not be understood or adopted wholly by people outside the company. In this point the corporate culture is an identity of a company that distinguishes the company from others. What’s more, corporate culture should be based on the daily life in the organization. Corporate culture is on one hand abstract like the vision, mission and value statement of the companies but on the other hand it should be detailed enough to be found in the common life in the organizations.

1.2 Benefits of corporate culture as a strategy
There are a lot of benefits of building appropriate culture of a company:

Firstly, strong corporate cultures improve firm performance by facilitating internal behavioral consistency (Sorensen 2002). For example, a white shirt, dark suit and a sincere tie (Smith 1999) is the uniform of the IBM during the last century, with the help of the uniform the company manage to keep the enormous employees under the same mark and this uniform help the employees from different department integrate in a whole unity.

Secondly, effective corporate culture contributes to core competency. Because of the uniqueness of the corporate culture, no two companies would have the same set of culture cluster, and thus even many big multinational are always imitated by their competitors, profound studies have found out that corporate culture one of the most difficult parts that could be imitated by other companies thanks to its obscurity probably.

Thirdly, corporate culture help reduce employee turnover rate. According to an early study that was carried out on four Australia hotels to examine the existence of turnover culture that caused a higher rate of employee turnover in the hotel industry (Derry & Shaw 1999), one of the founding was that there was close relationship between the corporate culture and the appearance of the turnover culture, those hotels that had weak culture system could easily be affected by the turnover culture. So it is important to build the corporate culture for a company to increase the commitment of the employees.

Fourthly, corporate culture acts as a measure of motivation. As mentioned in the first part of this essay, the motivation theory, theory Y holds the view that employees are self motivated if provide the chance they will work hard to achieve the corporate goals. And as we know, corporate culture in many companies are expressed formally in term of corporate vision, value and mission, if the corporate integrate its corporate culture into the organizational life and shared and accepted by the employees from their heart, then employees would become more motivated and energetic to strike for the corporate goals.

1.3 Challenges appeared in the corporate culture creation

On the other hand, despite the enormous advantages of building corporate culture, there are also a lot of blocks that hinder many companies from forming its own corporate culture, probably because of these difficulties corporate culture become more precious and desired by many companies.

Firstly, culture shocks will create inconsistency in building corporate culture. As many multinational companies having been expanding their business globally, the culture divergence in different countries have caused server problems for these companies. The happening of the cultural shocks in these companies will be inevitable. And Expatriates tend to bring along their “cultural baggage” when the cultural shocks happen (Elashmawi 2000). When the corporate culture is to large extent different from the local culture, inconsistency in the corporate culture may be created and thus sometimes compromises are needed in order to solve the culture shocks.

Secondly, there are many kind of corporate culture within which some corporate culture are to avoid uncertainties, these preservative style corporate culture may create block for the company for further innovation in its business and in its culture. And this shows the double side of the building of a company’s culture, on one side the corporate culture could help create stable and desired value and beliefs that are accepted widely within the context of the organization; but on the other hand, these stable value may become obstacles toward innovation of the companies, in many case corporate culture may even lead to inefficiency to companies which is not hoped and expected by the management.

Thirdly, culture difference in merger could disrupt culture system. As corporate culture is embedded deeply into the company, when two different with distinct corporate culture could have difficulties for one company to introduce their culture into the new employees who are deeply nurtured in their originally culture system. What’s more there may be strong resistance from these new employees if such culture changes are carried out by the company irrespective of their feeling which will drive them to form a group to resist such changes. There are many examples in which culture difference finally render a seemingly perfect merger.

1.4 Recommendations

Firstly, create a more compatible corporate culture. Do not try to integrate debatable topic into the corporate culture even though most employees of the company may find it quite acceptable, such as the religion relative topic, even in a Muslim country, it does not necessarily mean that it is wise to integrate a Muslim feature culture into the company because it may provoke inharmonic cases between employees who have different religions. To some extent, by not touching such sensitive topics, a company could create a more compatible corporate culture which would be more acceptable by most people with different culture background, and thus the company could embrace more diverse talents.

Secondly, create a system to examine the corporate culture from time to time. As mentioned above, a totally unchanged culture system could at last be act as blocks to the company’s development. So it is necessary to examine the corporate culture from the current situation in tern of technology development, culture changes, and industrial environment and so on, after the examination the company could select the useful changes that have been spotted during the examination and enact a proposal to gradually integrate such useful changes into the company’s culture system.

Thirdly, as mentioned cultural difference between two parts involved in a merger could be harmful and become out of control in the end, but there are also ways to tackle or avoid such problems. On one hand in the practical merger case, there are advanced agreement that could be made before hand on the topic of culture difference. And on the other hand, culture difference could be eliminated by culture training program or culture integration process.

1.5 Conclusion

Through the discussions above on the three areas of the management theory: employee motivation, leadership and corporate culture, with the help of abundant books and studies some preliminary conclusions have been made to answers the three questions that have been stated at the beginning of the essay as the goal of this study. About the questions on the motivation theory, theory X and theory Y are both useful in employee motivation but with different application conditions, the theory X is more effective in motivating employees in the lower levels of the company’s hierarchy structure while it more appropriate to apply the theory Y in the higher level employees. And in term of the questions about leadership topic, gender difference is existing and to some extent obvious in term of leadership styles, what is more the leadership style of a leader is flexible which is supported by the situational leadership styles. Lastly about the questions on corporate culture, some personal recommendations are provided to overcome the general obstacles faced by companies such as culture difference in merger.


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