MM 5001

Business Ethic, Law, and Sustainability

Mid-Term Exam: Corporate Culture

Executive 48 5 October 2013

Suziane (29112309)

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND MANAGEMENT

INSTITUT TEKNOLOGI BANDUNG

2013
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Corporate Culture

1. Introduction

Culture is a set of norm, moral, value, and customs (rules) that belong to human that

used also for interpreting the environment and used to create the behavior. Corporate is a

community that consist group of people act as single entity and recognized as such in law,

where there is a border as the activities arena and there are some roles that followed by rules.

Corporate culture is a set of norm, moral, value, and rules conduct the behavior of individual

in the corporate.

Corporate culture is the personality of the organization. The primary goal of corporate

is shareholder wealth maximization. Shareholders are members of society; therefor corporate

should have responsibilities to society at large and behave ethically. Negative publicity often

leads to negative impacts on a corporate. All of the members shared beliefs, values, and

behaviors, and then will be a default character and make the culture difficult to change. In

this paper I will explain about corporate culture from some opinions and the changes of

corporate culture.

2. Corporate Culture in some opinions

Corporate Culture expressed in the day-to-day practices, communications, and beliefs

and resulting with a vision that everyone understands to which everyone is committed.

Definition of corporate culture from some opinions:

Culture can be described in a circular fashion where philosophy expresses values;

values are manifest in behavior; and behavior gives meaning to the underlying philosophy.

Philosophy, values, and behavior describe an organizations culture and culture is the glue

that holds the organization together. (DeWitt, 2001)

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It is dynamic and fluid, and it is never static. A culture may be effective at one time,

under a given set of circumstances and ineffective at another time. There is no generically

good culture. There are however, generic patterns of health and pathology. (Hagberg &

Heifetz, 2000)

Culture is the shared beliefs, values, and norms of a group and it includes: (1) the

way work is organized and experienced; (2) how authority exercised and distributed; (3) how

people are and feel rewarded, organized, and controlled; (4) the values and work orientation

of staff; (5) the degree of formalization, standardization, and control through systems there

is/should be; (6) the value placed on planning, analysis, logic, fairness, etc.; (7) how much

initiative, risk-taking, scope for individuality, and expression is given; (8) rules and

expectations about such things as informality in interpersonal relations, dress, personal

eccentricity, etc.; (8) differential status; (9) emphasis given to rules, procedures, specification

of performance and results, team, or individual working. (BOLA, 2001)

In my opinion corporate culture is set of written and unwritten rules that conduct the

members of corporate to behave and beliefs, which set by the leader of the corporate to

achieve the vision and mission. Corporate culture impacted by the environment (social,

politic, and leadership conditions). In many corporates, corporate culture usually changes

based on the corporate business condition.

Some of the causes of profitability and responsiveness issues are found in the cultures

of the corporate. We need to identify and understanding key attractors and drivers of the

corporate culture to overcome the problems. Some of the issues that can be solved by

understanding the corporate culture are: (1) hiring the suitable employees for the corporate;

(2) creating policies and assignments; (3) making significant changes in response to real

threats to its continued existence; (4) facilitating mergers, joint ventures, and acquisitions; (5)

increasing profitability and growth.

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3. Changes The Corporate Culture

It is not a piece of cake to change the corporate culture. It should be undertaken

lightly. For change to be successful here needs to be a compelling reason to change, a clear

vision of what the change will be, and a sensible first step. (Tribus, 2001). Culture changes

require consistency of message, goal, direction, and leadership to succeed. This changes

requires a strong leader who knows where they want the company to go, why they want it to

go there, can articulate both these points, and who has the power to drive the change

throughout the organization.

Leaders of organizations must lay value foundations, cultural anchors, and

behavioral guidelines so that growth and development are harmonious and congruent, and not

mechanistic, haphazard, harmful, or destructive. Creative conflict and patterned

disequilibrium are the paradoxical dynamics for culture, development, and growth in

organizational life. (Stupak, 1998) Changing the corporate culture is an expensive and long

process without guaranteed results. The easiest way to change the corporate culture is to fire

everyone and hire the new staff, and implement the new culture to the new staff, because

change the mature staff is more difficult than teaching the new staff.

If the business of the corporate uses skilled-employees, the leader cant to replace the

employees with the new one. Because the value of the company from their employees. This

situation needs adaptability process and consistency goal set of the corporate. In my opinion,

every corporate should develop the employees to have the adaptability competence, resulting

flexibility. In other hand, every corporate should develop the employees to have the

consistency and understanding of the vision, mission, and value of the corporate. With these

consistency and understanding, the employees have the integrity to the corporate.
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The changes of corporate culture should be causes of some important reason. Tan

(2001) outlines four instances: (1) when two or more companies of varied backgrounds

merge and continuous conflict among people of different groups are undermining their

performance; (2) when an organization has been around for a long time and its way of

working are so entrenched that is hindering the company from adapting to changes and

competing in the marketplace; (3) when a company moves into a totally different industry or

areas of business and its current ways of doing things are threatening the survival of the

organization; (4) when a company whose staff are so used to work under the favorable

conditions of economic boom but could not adapt to the challenges posed by an economic

slowdown.

4. Conclusion

Culture is important part of the corporates environment. Culture affects the

performance of the corporate, because culture is set of norm, moral, value, and rules that will

be become the behavior of the employees to achieve the corporates goals. Goals set by the

leader, and the culture should be also set by the leader.

In some conditions, corporate culture should be changed to face corporate business

condition. Changing corporate culture should be done carefully. We must identify exactly the

reason, the attractor, and the key of the corporate culture itself. The most important thing in

changing corporate culture is should be suitable with the corporate goals.

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References

Joanne Mowat, the Herridge Group, Corporate Culture, 2002. (Journal)

Bambang Rudito, cross cultural relationship, Corporate Culture, 2013. (Business Ethics

Lecture slide)