Abstract

Diploma work has suggested that understanding corporate culture as a

management philosophy is essential to managing an organisation in improving its
overall performance. Using questionnaire survey, this study examines the
influence of corporate culture on organisational commitment. Specifically, this
study examines four dimensions of corporate culture, namely teamwork,
communication, rewards and recognition and training and development on
employees’ commitment towards the organisation. The results show that all
dimensions of corporate culture chosen in this study are important determinants in
motivating the employees to be committed to their organisation. The findings
implicate that an organisation needs to be aware of the importance of these
dimensions in providing a favourable working environment to its employees in
attaining their full commitment for organisational success.
 CORPARATE CULTURE
1. Introduction
Despite all due diligence, commitment, and application, the culture may not
change or it may not change in the intended direction, or even in an appropriate
direction. It is an expensive and long process without guaranteed results.
Changing a culture can take between three to six years during which profitability
can be seriously affected (Toolpack, 2001). However, those companies that
successfully changed their cultures reap enormous rewards. One way to mitigate
the downside during the long-term culture change is to implement incrementally.
Consider approaches such as Morgan’s (1996) 15% Solution which advocates
incremental change within an individual’s 15% sphere of influence. Multiple
incremental changes, in the same direction (towards the same attractors) can
organically change corporate culture from within. As an executive, identifying,
understanding, and influencing the organizational culture can ensure corporate
agility and financial success. As a potential employee, catching a glimpse of the
true culture of an organization will help one decide if the company is a place
where one can contribute and flourish. In both cases, misunderstanding the culture
can lead to disaster. Corporate cultures have both gross and subtle manifestations
that provide clues to the underlying norms and beliefs. Paying attention to the work
practices, environment, communication paths, and even the level of humour in a
company, will give one a hint of the dominant organizational culture. Identification
and understanding the culture is necessary to affect any minute or large scale
changes in response to market imperatives. If one does not have a clear picture
of the culture one cannot effectively modify it.
This diploma work touches on four key questions in relation to corporate culture:
· What is corporate culture?
· Why is it important to understand the corporate culture?
· How can one identify the corporate culture?
· Can corporate cultures be changed?
Corporate culture is the personality of the organization: the shared beliefs, values
and behaviours of the group. It is symbolic, holistic, and unifying, stable, and
difficult to change.
Made up of both the visible and invisible, conscious and unconscious learnings
and artefacts of a group the culture is the shared mental model. This model is
taken for granted by those within the group and is difficult for outsiders to
decipher. It is important to remember that the corporate culture is not the ideals,
vision, and mission laid out in the corporate marketing materials. Rather, it is
expressed in the day-to-day practices, communications, and beliefs. According
to Borgatti (1996) a strong culture:
· Is internally consistent
· Is widely shared, and
· Makes it clear what appropriate behavior is.
Resulting in an organization with a vision that everyone understands to which
everyone is committed. Whenever human beings gather and particularly when
individuals with a common purpose begin working together, work strategies and
thinking processes will develop and an organizational culture will be created. Most
corporate or organizational cultures have key features in common with the larger
culture in which they exist. For example, corporate cultures in America all have
some similar underlying thread. Corporate cultures in other countries also have a
unifying, cross-company flavour. However, even within a social culture, each
corporate culture is unique. Put more simply, corporate culture is the way things
get done in an organization. It is what drives action in the organization, guiding
how employees think, act and feel. It is the systematic set of assumptions that
define day-to-day working behaviour. Corporate culture can also be looked at as a
system with inputs from the environment and outputs such as behaviours,
technologies and products. 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) According to BOLA
(2001) culture is the shared beliefs, values and norms of a group and it includes:
· the way work is organised and experienced
· how authority exercised and distributed
· how people are and feel rewarded, organised and controlled
· the values and work orientation of staff
· the degree of formalisation, standardisation and control through systems there is
· the value placed on planning, analysis, logic, fairness etc
· how much initiative, risk-taking, scope for individuality and expression is Given
· rules and expectations about such things as informality in interpersonal
relations, dress, personal eccentricity etc
· differential status
· emphasis given to rules, procedures, specifications of performance and results,
team or individual working.
In the beginning corporate culture is shaped by the leaders and by the purpose
for with the company has been created. It then develops within the constraints of
the environment, technology, values of the leadership, and performance
expectations. “The initial culture is altered by the design variables of the company,
experiences of the company, management’s leadership style, the structure of the
company, the nature of the tasks of the groups, the way decisions are made, and the
size of the company. In addition, the developing culture is affected by the internal
integrity of the company, the climate, and how well the company is competing in
the marketplace, its effectiveness.” (DeWitt,2001)
While there may be a dominant organizational culture that is pervasive throughout
the company, this level of cultural integration is rare. More often there are many
cultures and sub-cultures (the basis for silos in organizations) which may be of
differing strengths and which may have differing levels of influence. “Subcultures
may share certain characteristics, norms, values and beliefs or be totally different.
These subcultures can function cooperatively or be in conflict with each other.”
(Hagberg & Heifetz, 2000).
1. Importance of corporate culture
Corporate culture is a hidden mechanism of coordination directing each
individual towards the common goal. The goal and the ways of achieving the
goal cannot be changed without understanding key attractors and drivers in the
culture. The causes of many profitability and responsiveness issues in corporations
are not found in the structure, in the leadership, or in the employees. The problems
are found in the cultures and sub-cultures of the organization. Understanding the
culture of an organization facilitates: · Hiring employees that will succeed in the
organization (lowering recruitment, development, and human resource
maintenance and management costs).
- “the culture of an organisation affects the type of people employed, their career
aspirations, their educational backgrounds, their status in society.” (BOLA, 2001)
- “the only trustworthy predictor of on-the-job success is how closely an
individual’s work habits match the organizational culture…” (Giles, 2000)
Creating policies and assignments to increase profitability and respond to
market demands. Having a firm grasp of a company’s culture and its nuances gives
an executive the edge.
- “New policies and assignments should consider the organizational culture and
should be communicated in a manner congruent to the existing work strategies and
beliefs. Learning how to communicate to the above listed tendencies can give an
executive enormous power. “(Giles, 2000)
- “If the organization wants to maximize its ability to attain its strategic objectives,
it must understand if the prevailing culture supports and drives the actions
necessary to achieve its strategic goals.” (Hagberg & Heifetz, 2000) . Making
significant changes to the corporation in response to real threats to its continued
existence.
- “Understanding and assessing your organization's culture can mean the difference
between success and failure in today's fast changing business environment”
(Hagberg & Heifetz, 2000)
- “Many companies have turned themselves around, converting imminent
bankruptcy into prosperity. Some did it through financial gimmickry, but the ones
who have become stars did it by changing their own culture.” (Toolpack, 2001)
- “The power of cultural change is strong -- strong enough to turn an aging
dinosaur into a state-of-the-art profit-maker… Because people working in different
cultures act and perform differently, changing the culture can allow everyone to
perform more effectively and constructively.” (Toolpack, 2001)
· Facilitating mergers, joint ventures, and acquisitions.
- Being able to merge and reinvent corporate cultures plays a critical role in
national and international takeovers, joint ventures and mergers. If the cultures
cannot be merged or reinvented then the business will fail. (Wilms, Zell, Kimura
and Cuneo, 1994) Decisions to form joint ventures are made on economic
grounds. Their failure to succeed relates to the key noneconomic factor, the
corporate cultures involved. Increasing profitability and growth.
- Understanding, shaping, nurturing, and proclaiming cultural aspects can increase
corporate profitability and growth.
“Companies that display specific facets of corporate culture grow 10 times faster
than companies that don't. The average net sales growth for so-called high-culture
companies is 141 percent, compared with 9 percent growth at "low-culture"
companies” (Kosan, 2001)

1.1 Indicators of corporate culture

Corporate culture can be identified and analyzed and there are several
consulting firms in North America making significant profits doing just that. Many
focus on identifying workforce attitudes, behavioural preferences, and the work
environment including structure, physical artefacts, and communication channels.
All agree that attention must be paid to the intangible (unconscious) as well as
the tangible (conscious) aspects including the deeply rooted basic assumptions
that are often taken for granted by those inside the organization. “Organisational
culture may be visible in the type of buildings, offices, shops of the organisation
and in the image projected in publicity and public relations in general…An
organisation’s culture may be imperceptible, taken for granted, assumed, a status
quo that we live and participate in but do not question” (BOLA, 2001) Another key
indicator is the true reward structure: not what the reward and recognition
programs advertise but how and why people are really rewarded. “What
management pays attention to and rewards is often the strongest indicator of the
organization’s culture. This is often quite different than the values it verbalizes or
the ideals it strives for.” (Hagberg & Heifetz, 2000). Other artefacts, key to
identifying aspects of a particular culture, include:
· Architecture and décor. What does the actual physical environment look like? Is
it a pleasant airy space with areas intended to encourage chats over coffee? Are
employees working in cubicles with management offices along the windows?
Remember to consider the type of work being done when looking at the
environment.
· The clothing people wear. Is the dress formal or informal? Does dress change
depending on the day or the week or interaction with external clients? Does the
official dress code say one thing but employees dress a different way?
· Organizational processes and structures.
· Rituals, symbols and celebrations.
· Commonly used language and jargon.
· Logos, brochures, company slogans. (Hagberg & Heifetz, 2000)
To confirm that the analysis of the artifacts is creating a true picture of the
corporate culture, talk to employees who have been with the company for between
four and six months and who are planning to stay. Find out what they have run up
against, identified, and learned to work with and around. Their continued existence
and happiness in the organization depends on their being able to integrate with the
existing culture. They have a vested interest and will have identified key cultural
aspects that may not be obvious in the artifacts and may be invisible to those who
have been there over a year.
It is widely recognized that cultural differences between the partners of a merger
are one of the most common reasons for failure in mergers. This may happen
during pre-merger negotiations or during post-merger integration. Despite all Due
Diligence, the two partners of a merger fail to form a new successful unit that is
able to exploit all synergies. Often, the term ‘corporate culture’ is used to
describe issues like objectives, personal interests, behaviors etc. Many problems in
cooperation and teamwork are blamed to culture. However, in a merger, ‘culture’
is more than making the people from both partners work together smoothly. The
development of a new, shared culture is a critical factor for merger success. It is
possible to manage this process in a structured way.
Corporate Culture is embedded deeply in the organization and in the behavior of
the people there. It is not necessarily equal to the image the company gives itself in
brochures and on the website. Therefore, it is difficult to determine an
organization's culture from the outside. Especially in pre-merger negotiations
– when time and confidentiality are critical factors while trust still needs to be
established
– it can be a challenging task to find out if the cultures of the potential partners fit
together.
Culture:
Assumptions
Believes
Values
Norms
Styles
Mechanisms:
Rewards
Systems
Structures
Capabilities
Strategy:
Products
Services
Customers
Colleagues
Behavior
Customers
Suppliers
State
Society
Competitors
Shareholders
Corporate culture is determined by a variety of different factors:
- Artifacts
- Management styles
- Norms
- Values
- Believes
- Assumptions
The concept of corporate culture is best described by the sentence
The way we do things around here.
There is no one right culture for an organization. There are only cultures that fit
more or less to the particular situation of the organization.
In practice, several cultures can exist within one organization. This may more often
happen in larger, diversified companies, when some divisions / departments start to
develop their own ways to do things.
In the result, there are three types of cultural differences
-Cross-national differences (especially in
cross-boarder mergers),
- Cross-organizational differences,
- Cross-functional differences.
In practice we can find problems of cultural fit in following areas:
- Organizational values
-Management culture and leadership styles
-Organizational myths and stories
-Organizational taboos, rituals
-Cultural symbols
Cultural problems can develop unexpected dynamics in such situations:
1. Realization of differences
2. Stressing and evaluation of differences
3. Mutual stereotyping
4. Mutual blaming
5. Battle for cultural dominance
Giles (2000) provides a series of questions to identify the dominant corporate
culture.
· Is the company primarily market based, technology based, customer
based or owner based.
Also helpful in identifying and understanding corporate culture are corporate
culture models including:
Proponent Components of Model
Rensis Likert · autocratic
· benevolent autocratic
· consultative
· participative
Burns and Stalker · mechanistic · organismic
Henry Mintzberg · simple structure
· machine bureaucracy
· divisionalized
· professional bureaucracy
· adhocracy
Roger Harrison · power
· role
· task
· personal
Each of these models provides a framework in which a corporate culture can be
analyzed.
1.2 Changing a corporate culture
Changing a corporate culture is a complex, long-term, and expensive
undertaking that will either revitalize or kill the company. It should not be
undertaken lightly. Culture change must be driven by a powerful, transformational
reason: The competition is succeeding and you are not: Your company will fail if it
does not change. “For change to be successful there needs to be a compelling
reason to change, a clear vision of what the change will be, and, a sensible first
step.” (Tribus, 2001) Tan (2001) outlines four instances where corporate cultures
need to be changed:
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 organisation has been around for a long time and its way of working
are so entrenched that it 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 organisation;
and
4. When a company whose staff are so used to work under the favourable
conditions of economic boom but could not adapt to the challenges posed by an
economic slowdown.
Corporate culture cannot be changed through changing a policy or issuing an edict.
It can also not be accomplished overnight. “The only way to change organizational
culture overnight is to fire everyone and hire a new staff with the working
behaviors you now want.” (Giles, 2000) Culture change requires consistency of
message, goal, direction, and leadership to succeed. To change a culture one needs
to change the images and values, the evaluative, and the social elements of the
organization. This 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. This leader, in
all the proponents of change in the organization, must consistently and obviously
“model the behavior they want to see in others. If they do not send a consistent
message and keep that message clear and dominant over time, cultural change may
be seen as just another fad.” (Toolpack, 2001)
Given strong leadership, Bijur (2001) has identified the five aspects of a successful
change.
1. Values: values that drive the organization toward the realization of a
shared vision. Motivation: understand what motivates people. Make them
stakeholders in the change.
3. Shared Ideas and Strategies: create an environment that enables the
sharing of ideas and strategies and encourages change.
4. Goals: clear and unambiguous goals, frequently communicated and
discussed. Clear link between individual and corporate goals.
5. Performance Ethic: a reward and recognition system that instills in the
organization a performance ethic.
Changing a culture is an incremental endeavour. The organization should move,
in a non-linear fashion, from stability, through chaos, to the realignment with new
values, beliefs, norms, and artefacts. The climate must engender organic
change, exploration, learning from failure and must adjust as the new culture
emerges, anchored to leader-established values, goals, and behavioural guidelines.
“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). Despite all due
diligence, commitment, and application, the culture may not change or it may not
change in the intended direction, or even in an appropriate direction. It is an
expensive and long process without guaranteed results.
Changing a culture can take between three to six years during which profitability
can be seriously affected (Toolpack, 2001). However, those companies that
successfully changed their cultures reap enormous rewards.
One way to mitigate the downside during the long-term culture change is to
implement incrementally. Consider approaches such as Morgan’s (1996) 15%
Solution which advocates incremental change within an individual’s 15% sphere
of influence. Multiple incremental changes, in the same direction (towards the
same attractors) can organically change corporate culture from within.

Organisational commitment
Organisational commitment is often referred to employees’ psychological
attachment to the organisation (Mowday, 1979; Mowday et al. 1982)1. There are
three components of organizational commitment, namely, affective commitment,
continuance commitment and normative commitment (Meyer and Allen, 1991).
Affective commitment refers to employees’ positive emotional to the organisation.
An employee who is affective committed strongly identifies with the goals of the
organisation and tends to remain with the organisation (Kanter, 1968; Mowday et
al., 1982). Continuance commitment refers to the employees’ commitment to the
organisation due to their perceived high cost of losing organisational membership.
This includes loss of economic costs such as pension accruals and social costs such
as friendship ties with colleagues (Meyer and Allen, 1991). Of consequence, the
employees remained with the organisation because they have to.
Normative commitment refers to the employees’ commitment to the organisation
due to their feelings of obligation (Meyer and Allen, 1991) which could be derived
from many sources.
Normative commitment could also derive before the employees join the
organisation through their families or socialization processes that requires loyalty
to one organisation. Of consequence, the employees stayed with the
organisation because they ought to.
Meyer and Allen (1991) argued that these components are not mutually exclusive.
This implied that employees could be simultaneously committed to an organisation
in an affective, continuance and normative commitments at varying levels of
intensity. Employees could at any point of time have a commitment profile that
reflected high or low levels of all components (Meyer et al. 2002). These different
profiles would eventually lead to different effects on workplace behaviour.
Employees’ commitment profile could be influence by many factors, one of it
being corporate culture.
Corporate culture involves with social expectations and standards as well as the
values and beliefs that individuals hold central and that bind organisational groups
(Lawson and Shen, 1998). It is a pattern of basic assumptions invented, discovered
or developed by a given group as it learns to cope with its problem of external
adaptation and internal integration (Schein, 1992). These values are then
being taught to new members in the organisation as the correct way to think and
feel in relation to these problems. Culture is looked upon as a reward of work
(Peters and Waterman, 1982). A large body of the management and business
literature has examined the link between corporate culture and organisational
performance. This body of literature has identified various dimensions of corporate
culture related to organisational performance (such as Meyer and Allen, 1991;
Ricardo and Jolly, 1997; Lau and Idris, 2001; Meyer et al. 2002). These include
communication, training and development, rewards and recognition, effective
decision-making, risk taking for creativity and innovation, proactive planning,
teamwork and fairness and consistency in management
practices (Ricardo and Jolly, 1997; Lau and Idris, 2001). Within these dimensions,
four important dimensions of corporate culture are teamwork (Morrow, 1997;
Osland, 1997; Karia and Ahmad, 2000; Karia and Ashari, 2006), communication
(Nehers, 1997; Myers and Myers, 1982), training and development (Karia, 1999;
Karia and Ahmad, 2000; Acton and Golden, 2002) and rewards and
recognition (Zigon, 1997; Allen and Helms, 2002).
Figure 1 illustrates the framework that underpins this study. The framework posits
that corporate culture could influence organisational commitment. This framework
is based on Lau and Idris’s (2001) four dimensions of corporate culture. The four
dimensions are teamwork, communication, training and development and rewards
and recognition. These four dimensions are selected because they have been
selected as those likely to have the greatest effects on employees’ behaviour
(Ricardo and Jolly, 1997;Lau and Idris, 2001). It is expected that these dimensions
of corporate culture influence the organisational commitment. Therefore, the four
dimensions of corporate culture becomes the independent variable.
Organisational commitment could be influenced by corporate culture because it
reflects the relative strength of employees’ attachment or involvement with their
organisation (Lau and Idris, 2001). Organisational commitment could either derive
from affective commitment, continuance commitment and normative commitment.
Therefore, organisational commitment is the dependent variable in this study.

Corporate culture Organisational

• Teamwork
• Training and development commitment
• Communication
• Rewards and recognition

Figure 1: Framework of this study

1.3.1 Hypotheses
A body of the literature has examined the link between teamwork and
organisational performance (Karia and Ahmad, 2000). These studies found that
teamwork is one of the important dimensions in influencing organisational success
as well as achieving good relationship between workers and managers. The results
indicate that an organisation that practices some levels of teamwork often
experienced an increase in employees’ commitment to the organisation. It is
expected that similar results would appear in this study. Therefore, the following
null hypothesis is developed:
H1: There is no significant relationship between teamwork and organisational
commitment.
Another body of the literature has examined the link between communication and
organisational performance (Neher, 1997; Myers and Myers, 1982).
Communication refers to the sending and receiving messages by means of symbols
and sees organisational communication as a key element of organisational climate
(Drenth et al., 1998). Studies examining this issue found that the manner in which
the organisational goals and employees’ role in advancing these goals are
communicated to employees strongly organisational commitment (Robbins, 2001;
Brunetto and Farr-Wharton, 2004). This led to the following null hypothesis:
H2: There is no significant relationship between communication and organisational
commitment. Another body of the literature has examined the link between
training and development and organisational performance. The studies that have
examined this dimension found that this dimension plays an important role since it
facilitates the updating skills, lead to increase commitment, well-being
and sense of belonging and consequently led to the strengthening of organisational
competitiveness (Cherrington, 1995; Bartlett, 2001) particularly, organisational
commitment. Therefore, the following null hypothesis is developed:
H3: There is no significant relationship between training and development on
organizational commitment.
Studies have also examined the link between rewards and recognition and
organizational performance. Rewards and recognition refer to something that
increases the frequency of an employee’s action (Zigon, 1997). This dimension is
considered a motivating factor in helping employees build feelings of confidence
and satisfaction (Keller, 1998) and should closely align to organisational strategies
(Allen and Helms, 2002). Studies that examined this issue found consistent
influence that rewards and recognition influence employees’ commitment and in
turn influence organisational success (O’Driscoll and Randall, 1999; Zhang, 2000;
Karia and Ashari, 2006).
H4: There is no significant relationship between rewards and recognition and
organizational commitment.
1.4 Research Design
This study focuses on corporate culture and its impact on organisational
commitment. Specifically, this study looks into whether:
1. Teamwork influence organisational commitment.
2. Training and development influence organisational commitment.
3. Communication influence organisational commitment.
4. Rewards and recognition influence organisational commitment.
This study examines these issues by way of a questionnaire survey.

2. Analysis of managing the company's corporate culture

Corporate culture is a key component in the achievement of an organization's
mission and strategies, the improvement of organizational effectiveness, and the
management of change. Culture is rooted in deeplyheld beliefs. It reflects what has
worked in the past. It is a pattern of shared beliefs, attitudes, assumptions and
values, which may not have been explicitly articulated. Corporate culture shapes
the way people act and interact and strongly influences how things get done. It
encompasses the organization's goals, behavioural norms, and dominant
ideologies. Culture can be expressed through the organization's myths, heroes,
legends, stories, jargon, rites, and ritual.
Corporate culture can work for an organization by creating an environment that is
conducive to performance improvement and the management of change. It can
work against an organization by erecting barriers that prevent the attainment of
goals. The impact of culture can include conveying a sense of identity and unity of
purpose to members of the organization, facilitating the generation of commitment
and shaping behaviour by providing guidance on what is expected.
Managers of oil and gas companies live within the corporate culture. They must
understand it as a basis for diagnosing and solving problems and for developing
new policies or procedures. They may be involved in managing the culture in times
of change or during crises.
Culture is manifested in the form of norms, the unwritten rules of behaviour and
values, what is regarded as important, expressed as beliefs on what is best or good
for the organization and what ought to happen.
Values can be implicit or articulated in value statements. The value set of an
organization may only be recognized at the top level, or shared so that the
enterprise could be described as value-driven. Statements describing general
principles of behaviour may support them. Other manifestations of culture include
artifacts, the tangible aspects of an organization that people hear, see, or feel;
management style, the way in which managers behave and exercise leadership and
authority; organizational behaviour, the way in which people act and interact in the
organization, the structure of the organization, the process and systems used in the
organization; and, organizational climate, the working atmosphere of the
organization. This can be described as the explicit culture and was defined by
Payne and Pugh as a concept "reflecting the content and strength of the prevalent
values, norms, attitudes, behaviours and feelings of a social system". Corporate
culture is a system that is continuously affected by events and influences over time.
These derive from the organization's external environment and from its internal
processes, systems, and technology (Armstrong, 1991).
This paper is a critical analysis of managing the company's corporate culture to
enhance organizational efficiency, productivity, and efficient service system. It
seeks to sensitize the library managers through divergent views and opinions on
how they can manage the corporate culture of their organizations, and to apply the
basic principles of corporate culture management to Oiland gas companies
management.
The current interest in corporate culture began in the 1980s with the work of
writers such as Allen and Kraft (1982), Deal and Kennedy (1982), and above all
Peters and Waterman (1982). Academics had drawn attention to its importance
much earlier, however. Indeed, Allaire and Firsirotu (1984) showed that, more than
twenty years before the work of Peters and Waterman, there was already
substantial academic literature on organizational culture. Blake and Mouton
(1969), for example, were already arguing that there was a link between culture
and excellence in the late 1960s.
Turner (1986) traced the "culture craze" of the 1980s to the decline of standards in
manufacturing quality in the USA and the challenge to its economic pre-eminence
by Japan. He comments that the concept of culture holds out a new way of
understanding organizations, and has been offered by many writers as an
explanation for the spectacular success of Japanese companies. Bowles (1989),
among others, observes that there is an absence of a cohesive culture in advanced
economies in the West, and that the potential for creating systems of beliefs and
myth within organizations provides the opportunity for promoting both social and
organizational cohesion. The case for culture was best summed up by Deal and
Kennedy (1983), who argued that culture rather than structure, strategy, or politics
is the prime mover in organizations.
Silverman (1970) contended that organizations are societies in miniature and can
therefore be expected to show evidence of their own cultural characteristics.
However, culture does not spring fully formed from the desires of management.
Allaire and Firsirotu (1984) argue that it is the product of a number of different
influences: the ambient society's values and characteristics, the organization's
history and past leadership, and factors such as industry and technology.
Culture, as Elridge and Crombie (1974) state, refers to the unique configuration of
norms, values, beliefs, ways of behaving and so on, that characterize the manner in
which groups and individuals combine to get things done. Culture defines how
those in the organization should behave in a given set of circumstances. It affects
all, from the most senior manager to the humblest clerk. They and others judge
their actions in relation to expected modes of behaviour. Culture legitimizes certain
forms of action and proscribes other forms. This view is supported by Turner
(1971), who observes that cultural systems contains elements of "ought" which
prescribes forms of behaviour or allow behaviour to be judged acceptable or not.
Handy (1986) identifies four types of culture: power, role, task and person. He
relates each of these to a particular form of organizational structure.
• A power culture is frequently found in small entrepreneurial organizations
such as some property, trading, and finance companies. Such a culture is
associated with a web structure with one or more powerful figures at the center,
wielding power.
• A person culture is rare. The individual and his or her wishes are the central focus
of this form of culture. It is associated with a minimal structure, the purpose of
which is to assist those individuals who choose to work together. A person culture
can be characterized as a cluster or galaxy of individual stars.
• A role culture is appropriate to bureaucracies, and organizations with
mechanistic, rigid structures and narrow jobs. Such cultures stress the importance
of procedures and rules, hierarchical position and authority, security and
predictability. In essence, role cultures create situations in which those in the
organization stick rigidly to their job description (role),and any unforeseen events
are referred to the next layer up in the hierarchy.
• Task cultures, on the other hand, are job– or project– oriented, with the onus on
getting the job at hand (the task) done rather than prescribing how it should be
done. Such types of cultures are appropriate to organically structured organizations
where flexibility and teamwork are encouraged. Task cultures create situations in
which speed of reaction, integration, and creativity are more important than
adherence to particular rules or procedures, and where position and authority are
less important than the individual contribution to the task in hand.
Handy (1986) believes that it is these last two forms of culture, role and task,
which are most frequently found in organizations. Handy's categorization of types
of culture is useful for giving a picture of different organizational cultures. It
serves to highlight both the difficulty of clearly defining cultures and the profound
implications of the cultural approach to organizations. These implications fall
under four main headings:
1. Deal and Kennedy (1983) argue that behaviour, instead of reacting
directly to intrinsic motivators, is shaped by shared values, beliefs, and
assumptions about the way an organization should operate, how rewards should be
distributed, the conduct of meetings, even how people should dress.
2. If organizations have their own identities, personalities, or cultures, are there
particular cultural attributes that are peculiar to top performing organizations?
3. Sathe (1983) argues that culture guides the actions of an organization's
members without the need for detailed instructions or long meetings to discuss
how to approach particular issues or problems, and reduces the level of ambiguity
and misunderstanding between functions and departments. In effect, it provides a
common context and a common purpose for those in the organization. This is only
true when an organization possesses a strong culture, and when the members of the
organization have internalized it tothe extent that they no longer question the
legitimacy or appropriateness of the organization's values and beliefs. 4. One of the
most important implications is that as Barratt (1990) observed, "values, beliefs and
attitudes are learnt, can be managed and changed, and are potentially manipulable
by management." O'Reilly (1989) is one of those who clearly believes this is the
case. He argues that it is possible to change or manage a culture by choosing the
attitudes and behaviours that are required, identifying the norms or expectations
that promote or impede them, and then taking action to create the desired effect.

2.1. Managing corporate culture

Because corporate culture is based on taken-for-granted assumptions and beliefs, it
can be an elusive concept. There may not be a single culture, but a number of
cultures spread throughout the organization, and this does not make "managing"
the corporate culture easier. There is no such thing as a "good" or "bad" culture,
but only cultures that are appropriate or inappropriate.
The strength of culture clearly influences its impact on corporate behaviour. Strong
cultures have more widely-shared and more clearly expressed beliefs and values
than do weak ones. These values will probably have been developed over a
considerable period of time and they will be perceived as functional in the sense
that they help the organization achieve its purpose.
Culture is learned. Schein (1983) suggests that it is learned in two ways. First,
there is the trauma model, in which members of the organization learn to cope
using defense mechanisms. Second, there is the "positive reinforcement" model,
where things that work become embedded and entrenched. Learning takes place as
people adapt to and cope with external pressures, and as they develop successful
approaches to carrying out organizational goals. The nature of those goals largely
determines the way it goes about its business, and this in turn affects the way the
corporate culture develops and is manifested within the organization. Against this
background, organizational members, with the values, philosophy, beliefs,
assumptions, and norms of top management playing a dominant role, create
corporate culture.
This view of the creation of corporate culture is applicable to the
oil and gas company and its employees in this age of electronic library. For
developed and industrialized nations. But the story is not the same in the
developing world; there is a technology gap being developing nations and the rest
of the world. The developing world is faced with the serious challenge of
nosediving economies resulting in large-scalepoverty. Few developing countries
are thinking seriously about issues such as digital libraries and the skills required
for staff members in those libraries.
According to Armstrong (1991) approaches to managing corporate culture and
achieving cultural change in oil and gas company are:
• Reorganization to facilitate integration, to create departments or jobs which are
responsible for new activities or to eliminate unnecessary layers of management.
Some libraries have created ICT units. Other departments such as cataloging have
reorganized to integrate the use of ICT, and specialists such as system engineers
are recruited to enhance the smooth running of the ICT operation.
• Organizational development to help the organization respond to change.
• Communication to get the message across
• Increase the identification of staff with the firm and therefore enhance their
commitment. This could be helped as easily as by creating a website with staff
pictures, departments, and job titles.
• Provide the opportunity for all levels of staff to become more involved in
the organization's affairs. Participatory management will help to improve the
corporate culture. The sense of belonging will result in the increase in company’s
productivity.
• Generate ideas from staff to develop the business, improve the levels of
customer service, and increase productivity.
• Training can help form new attitudes about customer service quality, managing
and motivating people, or productivity; to increase commitment to the firm and its
values; to review and challenge assumptions, and to improve skills or teach new
skills.
• Recruitment of new employees to fit the desired culture or to reinforce the
existing culture. Performance management to ensure that managers, supervisors,
and staff are aware of their objectives and are assessed on results, and that
performance improvement programmes consisting of self-development, coaching,
counseling, and training are used to capitalize on strengths or overcome
weaknesses.
• Reward management to enhance the cultural assumption that rewards should be
related to achievement
2.2 Analysis of corporate culture factors
Culture is not static. As the external and internal factors that influence
culture change, so culture will change. However, cultural change will be slow,
unless there is some major shock to the organization (Burnes, 1991). This in itself
may not be a problem, if other factors also change slowly. In addition, like Handy
(1986), Allaire and Firsirotu (1984) argue that, to operate effectively and
efficiently, an organization's culture needs to match or be appropriate to its
structure. As Handy (1986) commented "experience suggests that a strong culture
makes a strong organization, but does it matter what sort of culture is involved?
Yes, it does. Not all cultures suit all purposes or people. Cultures are founded and
built over the years by the dominant groups in an organization. What suits them
and the organization at one stage is not necessarily appropriate for ever – strong
though that culture may be."
For a variety of reasons, organizations may find that their existing culture is
inappropriate or even detrimental to their needs. In such a situation, many
organizations have decided to change their culture. Many writers advocating
culture change, including Peters and Waterman (1982) with their seven steps to
excellence, take a very prescriptive line. Others appear to underestimate the
difficulty involved in changing culture. There are other writers, however, who
while sharing the belief that culture can be changed, take a more considered view.
One of the more influential, Schein (1985), believes that before any attempt is
made to change an organization's culture, it is first necessary to understand it.
Schein's approach is to treat culture as an adaptive and tangible learning process.
His approach emphasizes the way in which an organization communicates its
culture to new recruits. It illustrates how assumptions are translated into values and
how values influence behaviour. Schein seeks to understand the mechanisms used
to propagate culture, and how new values and behaviours are learned. Once these
mechanisms are revealed, he argues, they can then form the basis of a strategy to
change the organization's culture. The work of Schein (1985), Schwartz and Davis
(1981), Cummings and Huse (1989) and Dobson (1989) provide organizations
with the guidelines and methods for evaluating the need for and undertaking
cultural change. Schein's work shows how an organization's existing culture can be
revealed. Schwartz and Davis' shows how the need for cultural change can be
evaluated and the necessary changes identified. Finally, the work of Cummings
and Huse (1989) and Dobson (1989) shows how cultural change can be and is
implemented.
The cultural analysis is a tool for identification and overcoming of cultural
differences between partners in mergers. A detailed analysis shows differences and
common grounds between the people of both organizations. Thus, it allows
improving interaction and communication.
Characteristics of Culture. Perception of other Organization Own Perception
True False True False
Democratic
Bureaucratic
Authoritarian
Open for changes
Traditional
Responsible for people
Team-orientated,
cooperative
Hierarchical
Transparent processes
on all levels
International Focus
Egoism of departments
Long-term orientation
Answers from organization A Answers from Organization B Difference: Potential
cultural problems
Example for cultural analysis for identification of cultural differences
This analysis can be performed by comparing both partners’ perceptions of various
features of corporate culture. The difference in perceptions of particular
characteristics of cultures indicates potential conflicts. Another important step is
the establishment of a new cultural basis on which the new culture can develop.
The name of the new organization may take a key role in this process. The new
name is a symbol for the changes that come along with the merger, and it indicates
how much both old companies contribute to the new one.
Moreover, it is necessary to harmonize and to communicate all other elements that
influence culture, e.g. reward systems, systems for performance measurement.
Organizations that want to integrate both old cultures have to take care that no
partner gets advantages or disadvantages. In order to avoid the backwards looking
‘us vs. them’-thinking, it is advisable to form new teams with people from
both organizations. Practical experience has shown that at least 25% of staff should
be allocated to new / other teams. Only than, everybody will realize that inevitable
changes are on their way.
Other approaches to avoid cultural problems:
Newsletters
 and hotlines
Realistic
 predictions of development,
milestones and outcomes of the merger
Workshops

Surveys,
 questionnaires and feedback
analysis
Integration
 teams
Building
 of new teams
Mutual
 evaluation in and between mixed
teams

2.3 Positivism Is Realist.

To Hegelian idealists only “reason” is real and everything else is purely perception
— ideas of the mind: rocks and trees do not exist. To others rocks, bodies, and
trees are very real—one may see, touch,
taste, and smell them. Rocks are tangible observables, as are many organizational
phenomena like policy manuals, charts, memos, incentive plans, budgets, and
employees. Other things, such as atoms, base-pairs, gravity waves, and black
interstellar matter, are tangible unobservables. In organizations things that are in
some sense tangible may not be directly observable to scientists who are
“outsiders”—the myriad day-to-day insider communications, transactions, and
behavioral events may qualify as tangible unobservables. Many other things in
organizations, are intangible unobservables, such as cognitions, attitudes, values,
norms, corporate culture assumptions, networks, and so forth—though some may
be potentially detectable in the future. If realism means focusing only on tangible
observables, what Manicas (1987) calls “empirical realism,” the Received View
could appear realist since it tries to avoid anything metaphysical. But compared to
scientific realists, who may define tangible and intangible unobservables as “real,”
the Received View is decidedly not realist because it was born in opposition to
idealism and metaphysical unobservables, and its belief in the strict separation of
theory and observation terms means that theory terms are always unreal (otherwise
they would be observation terms). In conclusion, saying that the Received View is
realist is false, as Hunt concludes, though in fact most working natural scientists
and most current organizational positivists all accept unobservables as real,
suggesting thattheir logic-in-use is in fact mostly scientific realist, as that term is
variously defined,10 and that they do not follow the Received View.
2.4 Questionnaire design
The questionnaire used in this study is adapted from Lau and Idris (2001) and Ooi
and Arumugam (2006) with some modifications to suit the context of this study.
The questionnaire consists of six sections. The first section requests the
respondents to complete 8 questions related to training and development. These
include employees are encouraged to accept education and training within the
organisation, availability of resources for employees’ education and training within
the organisation, employees are trained to use quality management tools, specific
work-skills training given to employees, management’s concern for employees’
career development, opportunities for training and adequacy time spent on training
session. Section B consists of 8 questions related to reward and recognition. These
include improved working condition to recognise employees’ quality improvement
efforts, compensation system encourages team and individual contribution,
rewards and recognition based on work quality, suggestions appropriately
rewarded and recognised, rewards and recognition clearly communicated,
innovative employees being rewarded and recognised, emphasise on performance-
related rewards and organisation equitable in hiring, compensation, recognition
and promotion. Section C requests respondents to respond 8 questions on
teamwork. These include work within department is appointed around groups,
comfortable to work in team rather than individual, workplace decisions based on
consensus, cooperation within departments, sharing of ideas, cliques look after
themselves, job participation and interpersonal cooperation. Section D requests
respondents to complete 8 questions on communication. These include
management regularly provides feedbacks among teams, continuously improve
communication between management and staffs, effective communication,
freedom of speech, communication as tool to shape corporate culture, availability
of internal communication strategy, communication sharing and open
communication. Section E requests the respondents to respond to questions related
to organizational commitment. This section is adapted from Mowday et al. (1979)
with some modification which defines the extent the employees are with the
organisation, their desire to remain with the organisation and their willingness to
expense effort on behalf of the organisation. These include willingness to put great
deal of effort beyond what is normally expected, speak highly of organisation,
loyalty, willingness to accept any tasks, care about the fate of the organisation,
trust, organisational goals, strive for maximum commitment, organisation
achievement and fair treatment. The respondents are asked to provide their
responses using a 5-point scale from 1 (strongly disagree) to 5 (strongly agree).
The last section, Section F requests respondents’ demographic profile such as age,
marital status and gender among others. Questions in Section F are asked in
categorical form.
2.5. Data collection
One hundred and eighty seven questionnaires were distributed to the company’s
employees in all 11 departments. Each department were distributed 17
questionnaires. However, 3 staffs volunteered to participate in the study. This led
to a total sample of 190. The respondents were approached by the
researcher at their respective departments. The respondents were encouraged to
complete the questionnaire on the spot or to return the questionnaire after 2 days.
The questionnaires were handcollected by the researcher after 2 days. All 190
questionnaires distributed were collected and complete.

2.6 Research Construct

Dimensions of corporate culture are assessed by way of a series of questions that
require participants to indicate, using a 5-point scale from 1 (strongly disagree) to
5 (strongly agree), their opinions of teamwork, communication, rewards and
recognition and training and development. For each respondent, the responses to
questions in each dimension are aggregated and an average response was
calculated as a score to represent the respondent assessment of the dimensions.
To assess the level of organisational commitment, the respondents are asked to rate
the degree of organisational commitment using a 5-point scale of 1 (strongly
disagree) to 5 (strongly agree). The mean scores of the 10 variables related to
organisational commitment are used as an indication of the level of organisational
commitment. A reliability test was performed before distributing the questionnaire
to the respondents. The results show that the reliability for teamwork is 0.830,
training and development (0.889), communication (0.897) and rewards and
recognition (0.907). The results also show that the reliability for organisational
commitment based on 10 items is 0.924. The results indicate that all variables in
this study are reliable.
 3. Positivism is reificationist.
Reification is defined as elevating metaphysical terms to object or status (Hunt
1994). Given that the Received View insists that theory terms are not real, as noted
above, positivists surely may not be accused of reification, as Hunt elucidates. It is
possible that scientific realists and organizational positivists might appear to be
reifying, but this is also not true. Scientific realists, knowing full well that
reification is considered a gross error by philosophers (Angeles 1981), consider
theory terms real even though they are not “thing-like.” Thus Levin (1991) uses the
example of hammering nails—the hammer and nails are thing-like real; the force
driving the hammer is real but not thinglike. As Rescher (1987, p. 3) says,
“Whatever is needed to provide an adequate account for the existence or the nature
of something real is itself real and, as such, actually exists.”11 Thus, given that the
hammer is real, the theory term, force, is also real. Organization scientists
generally view people as having needs, attitudes, and cultural assumptions and
since the forces implied by these terms drive real observable behavior, it follows
that in scientific realist epistemology such terms are real. The fact that organization
science, in practice, accepts unobservables, such as attitudes, needs, and networks
as real, measurable, and having an effect, clearly separates it from the Received
View and makes it scientific realist. Thus, postpositivists are wrong, whether they
are aiming at positivists, scientific realists, or organization scientists (defined as
either positivists or realists). Culture helps account for variations among
organizations and managers, both nationally and internationally. It helps to explain
why different groups of people perceive things in their own way and perform
things differently from other groups. However, all members of staff help to shape
the dominant culture of an organization, irrespective of what senior management
feel it should be. Culture is also determined by the nature of staff employed and the
extent to which they accept management philosophy and policies or pay only "lip
service". It is therefore necessary that managers live within the corporate culture.
Understand it as a basis for diagnosing and solving problems and for developing
new policies or procedures. And they may well be involved in managing the
culture in times of change or during crises. The type of activity the organization
carries out largely determines the way it goes about its business, and this in turn
affects the way the corporate culture develops and is manifested within the
organization. Against this background, organizational members, with the values,
philosophy, beliefs, assumptions, and norms of top management playing a
dominant role, create corporate culture.
Teamwork, cooperation, and helpfulness between workers can be of substantial
value. There are many examples (workers with complementary skills can increase
output and productivity by helping each other on individual tasks. Similarly, the
sharing of information between different workers or work groups often greatly
enhances the efficiency of production. While cooperation of workers is beneficial
to the term, the exertion of cooperative effort is usually costly to a worker.
Moreover, it is typically hard to identify, let alone to verify, whether or not a
worker has helped a co-worker or shared information. Hence, incentives for
cooperation are difficult to provide. Unless workers are intrinsically motivated,
therefore often face inefficiently low levels of worker cooperation.
Yet, empirical evidence as well as carefully designed experiments suggest that
workers sometimes do cooperate and that a large part of this cooperation is driven
by so-called \conditional cooperation", that is, a preference to cooperate
conditional on the cooperation of others.
Could it be that the existence of conditional cooperators mitigates (or even solves)
the above described cooperation problem within firms? The answer is not
immediately clear since the same empirical evidence suggests that workers'
preferences are heterogenous, where a sub-stantial fraction of workers reveal
purely selfish behavior. In case cooperation is efficient and labor markets are
competitive, that employ cooperative workers should pay high wages due to high
output. This attracts sel.sh types. Consequently, it has been conjectured in the
literature (Lazear 1989, Kandel and Lazear 1992) that there can exist no separating
equilibrium in which workers self-select into di®erent .rms if preferences are
private information. Moreover, labor market competition should eventually erode
all cooperation, since conditionally cooperative workers no longer voluntarily exert
team effort in the presence of types. Cleanest evidence for conditional cooperation
comes from laboratory experiments (Fischbacher, GAachter, and Fehr 2001,
GAachter and ThAoni 2005, Fischbacher and GAachter 2006, Kosfeld, Fehr,
andWeibull 2006). Frey and Meier (2004) and Heldt (2005) provide field evidence
for conditional cooperation. A recent discussion of the experimental work, also in
view of policy implications, is given by GAachter (2006). Empirical studies that
document conditional cooperation in real labor environments include Ichino and
Maggi (2000) and Bandiera, Barankay, and Rasul (2005).
Lazear (1989) argues in a tournament setting where workers can be either
cooperative (doves) or selfish (hawks). He shows that types do not self-sort,
concluding \that dovish firms should use personality as a hiring criterion. Hawks
will attempt to pass themselves of as doves, feigning a noncompetitive personality.
It is rational for dovish firm to limit the work force to genuine doves" (Kandel and
Lazear (1992) provide similar arguments in a profit sharing model.
While the above arguments are correct, we show in this paper that the conjecture is
wrong. In addition, we impose the following cutoff rules: whenever a worker is
indifferent between exerting and not exerting effort, he exerts effort; whenever a
worker is indifferent between exerting only team effort and exerting only
individual effort, he exerts only individual effort.
Intuitively, workers behave optimally within a firm if they maximize their
expected utility given the firm's contract, the equilibrium strategies of the other
workers, and the common beliefs. In a perfect Bayesian equilibrium, workers'
effort choices must form a Bayesian equilibrium in every subgame and thus for all
possible contracts w. Based on these equilibrium outcomes each worker computes
his expected utility upon accepting a particular contract and chooses the contract
that maximizes his utility over the set of offered contracts.
Although preferences are private information, contract choices might serve as a
signal. Equilibrium beliefs are required to be consistent with worker's acceptance
decisions and Bayes' rule whenever this is possible. If a contract is never accepted
in equilibrium, beliefs are undetermined and can be set arbitrarily.
A competitive equilibrium is now a set of offered contracts which, given that
workers behave optimally, satisfies the following requirements. First, the
equilibrium set of offered contracts contains no irrelevant contracts that are never
accepted in equilibrium. Second, no firm offers a contract that makes expected
losses in equilibrium. Otherwise, the firm could increase its expected profit by
withdrawing the offered contract. Third, competition for workers is modeled by
free entry. A set of offered contract then forms an equilibrium only if no firm can
enter the market by offering a new contract that attracts workers and yields non-
negative expected profit. This is formally captured in Definition 2.
De.nition 2 (Competitive Equilibrium) Given that workers behave optimally for all
possible sets of offered contracts, a competitive equilibrium is a set of offered
contracts.
A competitive equilibrium has the following properties. Since .rms can employ any
number of teams, there is no rationing. Because there is an in.nite number of
workers, workers in a symmetric equilibrium can be sure to .nd a co-worker when
accepting a contract that is optimally accepted with strictly positive probability.
Consequently, all workers of the same type receive the same equilibrium utility.
Let u µ denote the equilibrium utility of a type-µ worker. We call a competitive
equilibrium a separating equilibrium if there exists no offered contract that is
accepted with strictly positive probability by both types of workers. A worker's
type can then perfectly be inferred from his contract choice. In all other equilibria
there exists at least one contract that is accepted by both types of workers with
strictly positive probability. In this case we say that there is pooling in equilibrium.
Whether a set W¤ of contracts can be supported as a competitive equilibrium
depends on workers' reaction towards a newly offered contract w0 62 W¤. This
reaction in turn depends on workers' beliefs upon accepting the new contract, on
the Bayesian equilibria they expect to be played within firms, and on whether they
expect to find a colleague. As common in screening and signalling models, there
exist multiple equilibria that are based on particular out-of-equilibrium beliefs.
Further, there can arise coordination problems concerning the Bayesian equilibria
within .rms and workers' acceptance decisions. To rule out implausible competitive
equilibria we employ the following equilibrium re.nements. Refinement 1 (Beliefs)
Consider a competitive equilibrium W¤ and suppose an additional
contract w0 62 W¤ is offered. Suppose further that u¤
µ > max(e;~e)
uµ(w0; e;~e)
for all (e;~e)
and uµ0(w0; e;~e) . u¤
µ0 for some (e;~e) with µ 6= µ0. Then .(µjw0;W¤ [ w0) = 0.
Refinement 1 applies Cho and Kreps's (1987) intuitive criterion to rule out the
situation that
workers might not accept a newly offered contract only because they then believe
their co-worker to be of a certain type. Precisely, if a particular type of worker
always gets strictly less than his equilibrium utility by accepting a new contract, he
should never accept this contract.
3.1 Role and interrelations of the Corporation
Corporation is established on the basis of merging of CMAR JSC and
Kazinvest LLP and it has JSC legal form. The Corporation is an institute of
development and it preserves the status of FSD Kazyna Company. Interrelations
between the Corporation and FSD Kazyna are defined by Provision 7 of
Memorandum about basic principles of activity of the “Fund of stable development
“Kazyna” joint-stock company, confirmed by the resolution of the Government of
the Republic of Kazakhstan dated April 15, 2006 N 286.
Corporation as FSD Kazyna Company has its basic objective, which consists in
facilitation of improvement of national competitive capacity and successful
integration of Kazakhstan economy in global system via organization and
coordination of concentrated efforts on the basis of effective state-private dialogue.

In respect of the state management bodies the Corporation has recommendatory

and consulting function, without the right if intervention and implementation of
regulative, supervisory, control and other functions, which belong to exclusive
competence of the state management bodies of any level.
In respect of the private sector the Corporation as an institute of development
operates as provider of state technical (expert-consulting) assistance to the private
sector agents – associations, enterprises, laboratories, farming enterprises,
consulting, educational establishments and other.
While implementing its activity, the Corporation closely interacts with other
development institutions regarding the questions of both strategically and operative
character, via realization of projects/programs, the network of representative
offices abroad and in the regions, regular exchange of information, discussion of
initiatives, joint developments and other.
Financing of the Corporation activity is implemented from the funds of authorized
capitals, consolidated by CMAR JSC and Kazinvest LLP, and also from additional
funds of the state budget, which are appropriated for special programs/projects of
support of initiatives and events of private and state sectors in the sphere of trade
and investments of non-primary sectors of economy. .
The Corporation services regarding support in the sphere of trade and investments
(informational-consulting services, training services, organizational services etc.)
are rendered on mixed basis. Services, rendered within the frameworks of state
programs of target support of higher priority branches/spheres and financed from
the funds of the state budget and own funds of the Corporation, are free of charge.
The Corporation is entitled to render services on the basis of expenses
reimbursement and on commercial basis. The list of services, rendered on
commercial basis and on the basis of the expenses reimbursement, and also
formation mechanism of prices for such services are confirmed by FSD Kazyna.
3.2 Implementation arrangements
Implementation structures and instruments are necessary for the purpose of
putting export strategy into practice. Export promotion Corporation should become
such structure. This Corporation shall implement general coordination of efforts,
including those of other organizations and development institutes give information
about investment possibilities in Kazakhstan as well as abroad for both domestic
investors and trade partners. It means that among other things the Corporation will
play a role of connecting link between the wants of the real sector and analytical
agencies.
The following instruments are planned to be used in order to implement the
Corporation activity:
Close cooperation with interested parties
Close contact with all parties, affecting the export development (business-
associations, enterprises, state bodies, academic circles, NPO) is necessary for the
purpose of revelation of “bottlenecks”, problems, which prevent the development
of domestics goods export, and also for the purpose of elaboration of the
development strategy and necessary measures regarding its realization.
International cooperation
Cooperation at the international level includes realization of joint projects,
attraction of international experts, technical assistance and also exchange of
experience.
Teams of national and international expertise
According to all projects one suggests to attract highly-qualified experts,
including those of international level for the purpose of conducting the projects
expertise and making strategic decisions.
 In addition, it is necessary to form own expertise of the Corporation via
intensive training (distance training, on-job training, intramural courses) with
attraction of international/foreign expertise
Development and realization of projects
Working on the projects and also its monitoring are implemented from the
beginning of the development stage till realization.
It is also necessary to perform constant development of own methods and
adaptation of advanced methods and instruments on planning and realization of
projects, and also to put elaborated methods into practice.
Work with branches/enterprises, which have the biggest export potential
The Corporation will execute work on revelation of branches/enterprises, which
have the biggest export potential. Identification of such branches is implemented
on the basis of their competitive capacity, state and potential possibilities for
export of international level products..
Mixed policy of tariffs for the Corporation services – from the expenses
reimbursement to commercial transactions.
Services, rendered by the Corporation, should not be free of charge, however,
their majority (for example some training courses, informational bulletins,
publications etc.) are planned to be furnished at prime cost. At the same time the
services of commercial character should be furnished at market prices, that will be
the source if the Corporation income. Besides of that, the Corporation should aim
at rendering predominantly those services, which are in the least presented by
private sector.
3.3 Instruments of the conception realization
The companies, which are planning to come to international markets and to
export their production, face the variety of problems. Potential exporters are ready
for some of these problems such as tariff barriers. However, other problems arise
and it is often difficult for exporters to solve them on their own. These problems
may include non-tariff trade barriers in the form of standards, technical
regulations, sanitary and phytosanitary measures and procedures of compliance
evaluation. Compliance with these requirements and standards is difficult and
expensive process for exporters.
One of the significant tasks, set in front of an exporter, is effective work
regarding accumulation of information about demands of a potential counterparty,
its paying capacity, and also evaluation of specific conditions, which are typical for
particular regional market, at the stage of export contract preparation.
Preparation of the companies for their coming to international markets is very
complicated, usually long and expensive process, however, this stage is
determinative one in subsequent activity of the company. The Corporation task is
to give all possible support to an enterprise, which has high export potential,
especially at that stage when it faces the most difficult barriers of international
trade while possessing insufficient experience.
Taking into consideration international experience of export support, one may
suggest the following kinds of services, which will be the most useful for potential
exporters:
− Organization of training seminars
− Assistance to enterprises during fulfillment of requirements of the
global market
− Informational and consulting provision
Let us define each of them.
Organization of training seminars
Trainings and seminars are especially useful at the first stages of the company
preparation for international trade. Seminars will be specially developed according
to the needs of export-oriented enterprises, that will allow these companies to
penetrate the global market with the least losses. It is also reasonable to conduct
panel sessions, necessary for discussion of export problems, legislation gaps,
projects on improvement of the country export orientation.
Theme are of the courses may cover the following issues:
− preparation of necessary export documentation
− customs procedures
 − export activity licensing
− conditions of transportation
− methods of international settlement
− evaluation and insurance of risks
− development of export strategy
− market analysis
− international quality standards
− export possibilities
− export management
− development and advancement of products
It is not the full list of the themes for seminars, which should be conducted for
export development.
Beside from general educational-outreach programs, it is necessary to work out
the base for individual trainings, which shall be conducted for separate enterprises.
Specific feature of such trainings consists in the fact that the final program is
elaborated jointly with a customer and consider all his requirements and desires
regarding the course.
Owing to such trainings a company will be able to do the following: receive
initial information and advice regarding the way of export plan development,
determine export possibilities and make initial evaluation of a market or markets,
where it should fixate. Courses and consulting of the professionals will help a
company-exporter to determine the strategy of coming to the market regarding
goods and services, which this company wants to export, and also to determine
potential partners in the markets.
In addition, the Corporation will create a widespread data base of laboratories,
specialized research centers, experts, including international ones, which have
specialization in various industry branches. These data bases will work in open
access for exporters. Via such data bases it will become simpler to solve the
problem of the lack of qualified specialists and experience exchange.
 Methodology on conduction of Buyers-Sellers Meeting
Preparation to the Buyers-Sellers Meeting starts from the survey of the
product/service demand. Demand survey is conducted on the basis of trade flow
analysis of the product (countries and the clients in those countries are defined).
Methods of the survey – questioning and interviewing of organizations, which are
potentially interested or ready to buy products of Kazakhstan (of region). Survey
defines the products that clients are ready to purchase in Kazakhstan (in region).
Further, analysis is carried out on the basis of survey results and potential
suppliers are defined (seller). Demand survey is conducted on the basis of
questionnaire, which is drawn out with consideration of the results of demand
survey. According to the results, profiles of companies are designed with product
identification, contact details and other relevant data, which could be potentially
interesting for clients.
On the basis of information, received in the process of the research,
matchmaking of sellers and clients is conducted and participants of the Meeting are
defined. All participants, defined in the process of matchmaking, are confirmed for
their interest in and readiness for taking the part in the Meeting. As the
confirmation for participation is received, for every participant time schedule of
meetings is prepared.
Meeting organizational points are: hall selection, preparation of materials,
distribution of invitations, and other organizational works.
Meeting could take up 2-3 days, depending on a number of participants,
defined in the process of matchmaking.
Conduction of the meetings will require expenses, related to publishing of
materials for meeting participants, premise rent and payments for translators’
services.
Results of the meetings are recommended to design in the form of
publications, which will include results of trade flow analysis, profiles of
companies – participators, profiles of clients, and description of the Meeting’s
algorithm. Mass media should give coverage to the event.
Methodology on export promotion of pilot industries products that have high
export potential index
Conduction of this kind of assessment requires involvement of foreign
experts. Preliminary diagnostics will allow selecting those companies, which have
high export potential and are ready to develop their export capacity.
Then, a team of foreign and national experts conducts more detailed audit of
companies that were selected according to results of preliminary assessment. On
the basis of the audit conclusions, individual programs on export promotion are
developed. Implementation of the individual programs is realized by the
companies in a group, under the supervision of foreign expert and assistance of
national expert.
The Program on promotion is not limited just by the work with groups of
companies, but provides events on the industry level, such as trainings (formal and
informal), information distribution, and general consultations.
Expenses for foreign and national expertise – industrial or marketing, are to be
calculated on the basis of 90 people and 3-4 visits in Program realization period.
Period of realization is 2-3 years, depending on an industry or a company.
This Program supposes conduction of 4 arrangements for whole industry, such
as trainings and consultations that require expenses for premise and equipment
rent, delivery materials and translation services.
Individual program arrangements include travel and residence expenses of
employees, purchase of information, preparation of general information for
companies with involvement of national consultancy (for example, country and
industrial brochures, informlist), and translation of the materials in foreign
languages.
Annual conduction of specialized events for selected group of companies, such
as trade missions, participation in exhibitions/fairs, etc., require expenses for:
premise rents, floor spaces in exhibitions, design of exhibition stands, participation
fees, and co-finance for travel fees of participators.
 For media coverage, the project should consider about two events per year that
supposes payments for publications in national and foreign press, and participation
in radio and television programs. Publication of such materials, as exporter
directories and references is recommended to publish twice a year.
Conduction of round tables and forums on national and local levels is necessary
as well, which main objective is the discussion of problems identified during the
programs’ implementation.
The program implementation, in the first place, will assist companies to
improve the export performance or to become an exporter. On the second place,
through continual collaboration of national and foreign experts, it will allow
developing of national expertise in the area of export promotion. The industry as a
whole, have an opportunity to improve its competency through trainings,
information and practical events.
4. Descriptive Statistics
This section presents the descriptive statistics of the dimensions of corporate
culture and organizational commitment. The results are shown in table 1. The
results show the mean score for organizational commitment is 3.903. The results
indicate that most respondents have high commitment towards their organisation.
Table 1 also show that the respondents provide the highest mean score for
training and development (3.7954) followed by communication (3.7738) and
teamwork (3.6651). On the other hand, the respondents provide the lowest mean
score for rewards and recognition (3.5027).
Table 1: Descriptive statistics of corporate culture and organisational
commitment
Variable Mean score

Organisational commitment 3.9030

Training and development 3.7954

Communication 3.7738

Teamwork 3.6651
Rewards and recognition 3.5027

Hypothesis 1 states that there is no significant relationship between teamwork

and organisational commitment. Hypothesis 1 is tested using Pearson’s correlation.
Table 2 presents the results of testing hypothesis 1.
Table 2: Teamwork and organisational commitment
Teamwork Organisational commitment r 1 0.523

Teamwork p 0.000
N 190 190
r 0.523 1

Organisational commitment p 0.000

N 190 190

The results show that there is a significant relationship between teamwork and
organizational commitment (p=0.000). Such results are consistent with Morrow
(1997). The results indicate that teamwork is important in facilitating employees’
ability to work together in completing a task. Such finding is also consistent with
Osland (1997). Therefore, hypothesis 1 is rejected.
This section presents the results of testing hypothesis 2. Hypothesis 2 states that
there is no significant relationship between training and development and
organisational commitment. Hypothesis 2 is tested using Pearson’s correlation.
Table 3: Training and development and organisational commitment
Teamwork Organisational commitment r 1 0.392

Training and development p 0.000 N 190 190 r 0.392 1

Organisational commitment p 0.000

N 190 190

Table 3 presents the results of testing hypothesis 2. The results show that there is a
significant relationship between training and development and organisational
commitment (p=0.000). The results support the results of previous studies
(O’Driscoll and Randall, 1999; Zhang, 2000; Karia and Ashari, 2006) that indicate
proper training and development enable employees to do the right things the first
time. The findings imply that organisation that provides training and development
to their employees would lead to higher job satisfaction and commitment towards
the organisation. Hypothesis 2 is therefore, rejected.
Hypothesis 3 states that there is no significant relationship between
communication and organisational commitment. Hypothesis 3 is tested using
Pearson’s correlation.
Table 4: Organisational communication and organisational commitment
Communication Organisational r 1 0.754
commitment

Communication p 0.000 p 0.000

N 190 190
r 0.754 1

Organisational commitment p 0.000

N 190 190

Table 4 presents the results of testing hypothesis 3. The results show that there is a
significant relationship between communication and organisational commitment
(p=0.000). The results indicate that communication is a dominant dimension of
corporate culture. The results imply that communication is important in improving
employees’ commitment which in turn influences organisational commitment.
Such finding is consistent with Ooi and Arumugam (2006). Therefore,
hypothesis 3 is rejected.
Hypothesis 4 states that there is no significant relationship between rewards and
recognition and organisational commitment. Hypothesis 4 is tested using Pearson’s
correlation.
Table 5: Rewards and recognition and organisational commitment
Rewards and recognition r 1 0.499
Organisational commitment
Rewards and recognition p 0.000
 N 190 190
r 0.499 1
Organisational commitment p 0.000
N 190 190

Table 5 presents the results of testing hypothesis 4. The results show that there is a
significant relationship between rewards and recognition and organisational
commitment (p=0.000). The results indicate that rewards and recognition is a
motivating factor in influencing employees’ commitment because both elements
have motivating effects on people at work. Such finding is consistent to
O’Driscoll and Randall (1999) who found that rewards offered by an organisation
would have a positive effect on employees’ commitment towards their work and
their organisation. Therefore, hypothesis 4 is rejected.
4.1 Mergers and corporate culture
It is a problem in many mergers that the more powerful partner imposes his culture
on the less powerful one. This is done without any evaluation which culture would
be the more suitable one for the new organization. This approach may lead to a
successful merger and integration quickly in some situations. In other
situations, however, this approach will destroy much of the value that was
expected to grow from the merger. Especially when both partners are very
different, it needs a closer evaluation, which culture will be best for both
together.Why is corporate culture that important?
Corporate culture influences the performance of an organization, since it
determines:
The
 way the organization tackles problems
and questions
Peoples’
 attitude to changes
The
 way people interact with each other
The
 way the organization interacts with
stakeholders
Peoples’
 commitment to strategy
A perfect integration (which is rarely achieved in practice) would develop a new
culture form both former cultures of the partners. Ideally, this new culture should
include the best elements from both organizations. Reality often
looks different. We can distinguish the following types of cultural integration:
Cultural Pluralism
Cultural Resistance
Cultural Takeover
Cultural Blending
Cultural pluralism and cultural blending do not work in most cases. The results are
cultural resistance followed by a cultural takeover. The problem in mergers is that
people from very different organizations (and cultures) are expected to work
together, to discuss, and to solve complex strategic and operative tasks. It is very
difficult to impose a new culture that does not have the acceptance of the people.
This perceived attractiveness of cultures can have the following impact on the
integration process:
Assimilation (potentially smooth transition) low

Deculturation (alienation) low

Separation (culture collision or multiculturalism) high
Integration (culture collision or satisfactory integration) high
Perceived attractiveness of own culture Perceived attractiveness of other culture
In summary, the rules for cultural implementation of a merger is as follows:
To impose an unwanted culture is a good solution in very few cases.
Integrating cultures are much harder to achieve; however, in the long term they
promise much better results.
Checklist „Mergers and Corporate Culture“
Develop
 a strategy for cultural integration already in pre-merger phase. Decide
if you want to go on with one of the existing cultures or if you prefer an integration
culture.
Analyze
 and describe the existing cultures. Differences and common elements
of both cultures show up only in direct comparison. Thus, you can also identify
cultural barriers, differences in communication and other potential problems.
Decide
 which role the new culture shall play in the merged organization.
Determine, why you decide for a particular culture and what you want to achieve
with it.
Establish
 ‘bridges’ between both companies. In order to achieve mutual
understanding, there is nothing better than cooperation.
Establish
 a basis and mechanisms for the new culture. This includes a
supporting
system of rewards and sanctions.
Be
 patient People take time to be acquainted to a new cultural reality.
Establishing a solid corporate identity is vital for companies in today s
overcrowded market. Because consumers are increasingly overwhelmed by the
number of choices presented to them, it is crucial to differentiate your product or
service from the competition. Corporate identity merges strategy, culture, and
communications to present a memorable personality to prospects and customers.
The term is closely linked to corporate philosophy, the company s business
mission and values, as well as corporate personality, the distinct corporate culture
reflecting this philosophy, and corporate image. The main objective of corporate
identity is to achieve a favorable image among the company s prospects and
customers. When a corporation is favorably regarded this is likely to result in
loyalty. If the corporate identity is the self-portrayal of a company, then the
corporate image is the perception of an organization by the audience. The closer
the corporate image is to the corporate identity; the closer the public s perception
of a company is to how the company defines itself, making for superior corporate
communication. For example, most companies have access to the same
technology.
If they want to further distinguish themselves, the strategy must rely on another
factor than technology: the user experience. As the audience s focus changes
constantly, corporate strategies must move in the same direction as the customer.
Different Types of Corporate Identity The type of corporate identity will determine
the characteristics that link the product to its company or brand. According to
Wally Olins, one of the world s leading branding consultants, there are three
kinds of corporate identity. The identity can be monolithic, meaning
that the whole company uses one visual style and that the consistency between the
corporate identity and the product identity is very strong, the product reflecting the
corporation directly. The identity can also be endorsed where the subsidiary
companies (brands) have their own style, but the parent company remains
recognizable in the background. In this case, the link between the corporation and
its different brands may take the shape of a common factor, tying the different
brands together. Finally, there is the branded corporate identity in which the
subsidiaries have their own style, and the parent company is not recognizable. The
products represent the brand identities rather than the corporate identity. All the
same, a strong general corporate identity remains of great importance, as it defines
the guidelines and strategies of the subordinate brands. Therefore the identities of
the products of each brand are consistent with the main corporate identity and
values. Different Types of Corporate Identity The type of corporate identity will
determine the characteristics that link the product to its company or brand.
According to Wally Olins, one of the world s leading branding consultants, there
are three kinds of corporate identity. The identity can be monolithic, meaning
that the whole company uses one visual style and that the consistency between the
corporate identity and the product identity is very strong, the product reflecting the
corporation directly. The identity can also be endorsed where the subsidiary
companies (brands) have their own style, but the parent company remains
recognizable in the background. In this case, the link between the corporation and
its different brands may take the shape of a common factor, tying the different
brands together. Finally, there is the branded corporate identity in which the
subsidiaries have their own style, and the parent company is not recognizable. The
products represent the brand identities rather than the corporate identity. All the
same, a strong general corporate identity remains of great importance, as it defines
the guidelines and strategies of the subordinate brands. Therefore the identities of
the products of each brand are consistent with the main corporate
identity and values.
4.2 Sustainable development: a business definition
The concept of sustainable development has received growing recognition, but it is
a new idea for many business executives. For most, the concept remains abstract
and theoretical.
Protecting an organization’s capital base is a well-accepted business principle. Yet
organizations do not generally recognize the possibility of extending this notion to
the world’s natural and human resources.
If sustainable development is to achieve its potential, it must be integrated into the
planning and measurement systems of business enterprises. And for that to happen,
the concept must be articulated in terms that are familiar to business leaders.
The following definition is suggested:
For the business enterprise, sustainable development means adopting business
strategies and activities that meet the needs of the enterprise and its stakeholders
today while protecting, sustaining and enhancing the human and natural resources
that will be needed in the future.
This definition captures the spirit of the concept as originally proposed by the
World Commission on Environment and Development, and recognizes that
economic development must meet the needs of a business enterprise and its
stakeholders. The latter include shareholders, lenders, customers, employees,
suppliers and communities who are affected by the organization’s activities.
It also highlights business’s dependence on human and natural resources, in
addition to physical and financial capital. It emphasizes that economic activity
must not irreparably degrade or destroy these natural and human resources.
This definition is intended to help business directors apply the concept of
sustainable development to their own organizations. However, it is important to
emphasize that sustainable development cannot be achieved by a single enterprise
(or, for that matter, by the entire business community) in isolation. Sustainable
development is a pervasive philosophy to which every participant in the global
economy (including consumers and government) must subscribe, if we are to meet
today’s needs without compromising the ability of future generations to meet their
own.
4.2.1 Implications for business
It has become a cliché that environmental problems are substantial, and that
economic growth contributes to them . A common response is stricter
environmental regulation, which often inhibits growth. The result can be a trade-
off between a healthy environment on the one hand and healthy growth on the
other. As a consequence, opportunities for business may be constrained.
However, there are some forms of development that are both environmentally and
socially sustainable. They lead not to a trade-off but to an improved environment,
together with development that does not draw down our environmental capital.
This is what sustainable development is all about - a revolutionary change in the
way we approach these issues.
Businesses and societies can find approaches that will move towards all three goals
- environmental protection, social wellbeing and economic development - at the
same time.
Sustainable development is good business in itself. It creates opportunities for
suppliers of ‘green consumers’, developers of environmentally safer materials and
processes, firms that invest in eco-efficiency, and those that engage themselves in
social well-being. These enterprises will generally have a competitive advantage.
They will earn their local community’s goodwill and see their efforts reflected in
the bottom line.
Practical considerations
While business traditionally seeks precision and practicality as the basis for its
planning efforts, sustainable development is a concept that is not amenable to
simple and universal definition. It is fluid, and changes over time in response to
increased information and society’s evolving priorities.
The role of business in contributing to sustainable development remains indefinite.
While all business enterprises can make a contribution towards its attainment, the
ability to make a difference varies by sector and organization size.
Some executives consider the principal objective of business to be making money.
Others recognize a broader social role. There is no consensus among business
leaders as to the best balance between narrow self-interest and actions taken for the
good of society.
Companies continually face the need to trade off what they would ‘like’ to do and
what they ‘must’ do in pursuit of financial survival.
Businesses also face trade-offs when dealing with the transition to sustainable
practices. For example, a chemical company whose plant has excessive effluent
discharges might decide to replace it with a more effective treatment facility. But
should the company close the existing plant during the two or three-year
construction period and risk losing market share? Or should it continue to operate
the polluting plant despite the cost of fines and adverse public relations? Which is
the better course of action in terms of economy, social wellbeing and the
environment? Moreover, many areas of sustainable development remain
technically ambiguous, making it difficult to plan an effective course of action. For
example, the forestry industry has had difficulty defining what constitutes
sustainable forest management. Some critics believe that simply replacing trees is
not enough, because harvesting destroys the biodiversity of the forest. Clearly,
more research will be needed to resolve such technical issues.
From a broader perspective, however, it is clearly in the interest of business to
operate within a healthy environment and economy. It is equally plain that, on a
global basis, growing and sustainable economies in the developing countries will
provide the best opportunities for expanding markets.
To some, sustainable development and environmental stewardship are
synonymous. In the short term, sound environmental performance is probably a
reasonable objective for most businesses, with sustainable development as a longer
term goal. However, this can lead to confusion. In the developed world, the focus
is on environmental management, while in developing countries, rapid and
sustainable development is paramount.
The global economy is coming under growing pressure to pay for the restoration of
damaged environments. But this economic engine is being asked to help solve
other pressing problems at the same time. The challenge is to solve all of these
problems in a sustainable manner, so as to generate continuing development.
Despite ambiguities about definitions, there is now widespread support for
sustainable development principles within the business community. However, for
that support to grow, it will be important to recognize and reward initiatives that
are being taken to turn the concept into reality.
William Mulligan, environmental affairs manager at Chevron Corporation, reflects
the view of many in the business community who believe that the environment is
now a major issue - one which presents both challenges and opportunities.
‘Over the last decade, we have seen many polls confirming the importance of the
environment to Americans,’ he says. ‘Only an irresponsible company would
dismiss this trend as a passing fad or fail to recognize the need to integrate
environmental considerations into every aspect of its business. Environmental
excellence has to become part of strategic thinking. It is in our best economic
interests to do so. In fact, whenever we are forced to change, we often find
opportunities.’ This positive change in attitudes and practices is echoed by the
Organization for Economic Cooperation and Development, which says: ‘There is
now a realistic prospect of harmonizing environmental and economic
considerations, and thus of gradually incorporating these objectives in policy.’
Many executives have demonstrated that pursuing sustainable development
strategies makes good business sense. For example, a 3M manufacturing plant
scaled down a wastewater treatment operation by half, simply by running cooling
 water through its factories repeatedly instead of discharging it after a single use.
Meanwhile Dow’s ‘Waste Reduction Always Pays’ programme, which began in
1986, has fostered more than 700 projects, and saved millions of dollars a year.
And in a Westinghouse metal finishing factory in Puerto Rico, the company
reduced ‘dragout’ - the contamination accidentally carried from one tank to another
- by 75% simply by shaking the tank to remove solids before releasing the
chemical to the next tank. Pacific Gas and Electric decided that energy
conservation was a more profitable investment than nuclear power, and
McDonald’s made its well-publicized move from plastics to paper the cornerstone
of a much broader, but less visible, waste reduction strategy.
There are other significant developments too, Elkington points out. Many consumers are
now prepared to pay more for environmentally responsible products. And the emergence
of ethical investment funds has thrown the spotlight onto corporate environmental
performance.
Also significant, says Elkington, is that companies are changing from within, rather than
simply responding to external pressure from consumers and environmentalists.
Enhancing management systems
The concept of sustainable development needs to be incorporated into the policies and
processes of a business if it is to follow sustainable development principles. This does not
mean that new management methods need to be invented. Rather, it requires a new
cultural orientation and extensive refinements to systems, practices and procedures.
The two main areas of the management system that must be changed are those concerned
with:
A
 greater accountability to non-traditional stakeholders;
Continuous
 improvement of reporting practices.
Developing an effective management framework for sustainable development requires
addressing both decision-making and governance. The concept of sustainable
development must be integrated both into business planning and into management
information and control systems. Senior management must provide reports that measure
performance against these strategies.
Governance is increasingly important because of the growing accountability of the
corporation and its senior management. Information and reporting systems must support
this need. Decision-making at all levels must become more responsive to the issues
arising from sustainable development.
Seven steps are required for managing an enterprise according to sustainable
development principles. These are set out below.
1. Perform a stakeholder analysis
A stakeholder analysis is required in order to identify all the parties that are directly or
indirectly affected by the enterprise’s operations. It sets out the issues, concerns and
information needs of the stakeholders with respect to the organization’s sustainable
development activities.
A company’s existence is directly linked to the global environment as well as to the
community in which it is based. In carrying out its activities, a company must maintain
respect for human dignity, and strive towards a society where the global environment is
protected.
At the beginning of this century, company strategies were directed primarily towards
earning the maximum return for shareholders and investors. Businesses were not
expected to achieve any other social or environmental objectives. Exploitation of natural
and human resources was the norm in many industries, as was a lack of regard for the
wellbeing of the communities in which the enterprise operated. In short, corporations
were accountable only to their owners.
Today, business enterprises in developed countries operate in a more complicated, and
more regulated, environment. Numerous laws and regulations govern their activities, and
make their directors accountable to a broader range of stakeholders. Sustainable
development extends the stakeholder group even further, by including future generations
and natural resources.
Identifying the parties that have a vested interest in a business enterprise is a central
component of the sustainable development concept, and leads to greater corporate
accountability. Developing a meaningful approach to stakeholder analysis is a vital aspect
of this management system, and one of the key differences between sustainable and
conventional management practices.
The stakeholder analysis begins by identifying the various groups affected by the
business’s activities. These include shareholders, creditors, regulators, employees,
customers, suppliers, and the community in which the enterprise operates. It must also
include people who are affected, or who consider themselves affected, by the enterprise’s
effect on the biosphere and on social capital.
This is not a case of altruism on the company’s part, but rather good business. Companies
that understand what their stakeholders want will be able to capitalize on the
opportunities presented. They will benefit from a better informed and more active
workforce, and better information in the capital markets.
In identifying stakeholder groups, management should consider every business activity
and operating location. Some stakeholders, such as shareholders, may be common to all
activities or locations. Others, such as local communities, will vary according to business
location and activity. Finally, the stakeholder analysis needs to consider the effect of the
business’s activities on the environment, the public at large, and the needs of future
generations.
After the stakeholders have been identified, management should prepare a description of
the needs and expectations that these groups have. This should set out both current and
future needs, in order to capture sustainable development concept. The key is to analyze
how the organization’s activities affect each set of stakeholders, either positively or
negatively.
Developing these statements of needs and expectations requires dialogue with each
stakeholder group. To this end, some companies have established community advisory
panels. Similar groups made up of employees, shareholders and suppliers have been used
to help management better understand their needs and expectations.
Because the needs of stakeholder groups are constantly evolving, monitoring them is an
ongoing process.
The stakeholder analysis may reveal conflicting expectations. For example, customers
may demand new, environmentally safe products, while employees might be concerned
that such a policy could threaten their jobs. Shareholders, meanwhile, may be wary about
the return on their investment. A stakeholder analysis can be a useful way to identify
areas of potential conflict among stakeholder groups before they materialize.
2. Set sustainable development policies and objectives
The next objective is to articulate the basic values that the enterprise expects its
employees to follow with respect to sustainable development, and to set targets for
operating performance.
Senior management is responsible for formulating a sustainable development policy for
its organization, and for establishing specific objectives. Sustainable development means
more than just ‘the environment’. It has social elements as well, such as the alleviation of
poverty and distributional equity.
It also takes into account economic considerations that may be absent from a strictly
‘environmental’ viewpoint. In particular, it emphasizes maintaining or enhancing the
world’s capital endowment, and highlights limits to society’s ability to substitute manmade
capital for natural capital.
Nevertheless, a policy on environmental responsibility is a good first step towards the
broader concerns of sustainable development.
Management should incorporate stakeholder expectations into a broad policy statement
that sets out the organization’s mission with respect to sustainable development. This
policy statement would guide the planning process and put forward values towards which
management, employees and other groups such as suppliers are expected to strive.
Drafting a policy statement that is both inspirational and capable of influencing behaviour
is a challenging task. However, the benefits justify the effort.
The following policy statement was developed by the Dow Chemical Company:
The operating units of the Dow Chemical Company are committed to continued
excellence, leadership and stewardship in protecting and conserving the environment for
future generations. This is a primary management responsibility as well as the
responsibility of every employee worldwide. We are sensitive to the concerns of the
public and accountable to them for our decisions and actions. We believe in the
responsible integration of environmental and economic considerations in all decisions
affecting our operations. We are continuously reducing our emissions to protect human
health and the environment. Our goal is the elimination of wastes and emissions.
Policy statements like this one should be developed and implemented in a way that
visibly involves directors and senior management.
A survey by DRT International of European companies found that half of the respondents
have board members who are responsible for environmental issues. The report adds:
The amount of time spent on environmental issues at board level varies greatly between
countries and sectors. The greatest involvement is found in the chemical and
pharmaceutical industries and in utilities. These sectors devote significant resources to
planning green strategies and establishing sophisticated environmental management
systems. The lowest involvement is in tourism and financial services, where none of the
companies surveyed had board-level appointments.
There are many benefits in actively involving the board of directors in the development
of a sustainable development policy. It is the board of directors that determines overall
priorities and sets the tone for management and employees. By itself, the board’s
commitment will not guarantee that a sustainable development policy will be effectively
implemented. However, the absence of that commitment will certainly make it difficult to
implement the policy.
While statements of broad policy on sustainable development are important, senior
management and directors should supplement their policy statement with a series of
specific objectives. For example, the following statement of policy and objectives,
developed by Northern Telecom, illustrates the desirable scope and level of specificity:
Recognizing the critical link between a healthy environment and sustained economic
growth, we are committed to leading the telecommunications industry in protecting and
enhancing the environment. Such stewardship is indispensable to our continued business
success. Therefore, wherever we do business, we will take the initiative in developing
innovative solutions to those environmental issues that affect our business.
We will:
Integrate
 environmental considerations into our business planning and decisionmaking
processes, including product research and development, new
manufacturing methods and acquisitions/divestitures;
Identify,
 assess and manage environmental risks associated with our operations
and products throughout their life cycle, to reduce or eliminate the likelihood of
adverse consequences;
Comply
 with all applicable legal and regulatory requirements and, to the extent
we determine it appropriate, adopt more stringent standards for the protection of
our employees and the communities in which we operate;
Establish
 a formal Environmental Protection Program, and set specific,
measurable goals;
Establish
 assurance programs, including regular audits, to assess the success of
the Environmental Protection Program in meeting regulatory requirements,
program goals and good practices;
To
 the extent that proven technology will allow, eliminate or reduce harmful
discharges, hazardous materials and waste;
Make
 reduction, reuse and recycling the guiding principles and means by which
we achieve our goals;
Prepare
 and make public an annual report summarizing our environmental
activities;
Work
 as advocates with our suppliers, customers and business partners to jointly
achieve the highest possible environmental standards;
Build
 relationships with other environmental stakeholders - including
governments, the scientific community, educational institutions, public interest
groups and the general public - to promote the development and communication
of innovative solutions to industry environmental problems;
Provide
 regular communications to, and training for, employees to heighten
awareness of, and pride in, environmental issues.
It is important that sustainable development objectives be clear, concise and, wherever
possible, expressed in measurable terms. Establishing measurable objectives is essential
if management and others are to be able to assess whether their business activities have
met the established objectives.
In setting these objectives, management will need to determine the appropriate level of
aggregation. For example, one objective might be to set measurable performance targets
for waste reduction at all operating locations. This goal would then be supported by more
detailed objectives for each operating location.
After the sustainable development objectives have been established, management should
compare its competitive and financial strategies against these targets. In some areas,
business strategies will be consistent with the sustainable development objectives. In
others, existing strategies may be incomplete or in conflict with them. Consequently,
strategies may have to be modified.
It is important to ensure that the sustainable development objectives that are established
complement the enterprise’s existing competitive strategies. In other words, sustainable
development should provide an additional dimension to business strategy. It provides
senior management with an additional benchmark against which business strategies and
performance should be assessed.
An effective external monitoring system is necessary for directors and senior
management, in order to ensure that sustainable development policies, objectives and
management systems are appropriate for the complex and rapidly changing world in
which their business operates. Information should be gathered on key subjects, including:
New
 and proposed legislation;
Industry
 practices and standards;
Competitors’
 strategies;
Community
 and special interest group policies and activities;
Trade
 union concerns;
Technical
 developments, such as new process technologies.
For many enterprises, monitoring and influencing external developments means
becoming more actively involved in the public policy process. A commitment to
sustainable development involves helping to formulate policies that shape external
developments, so that industry-wide sustainable development objectives are achieved.
To this end, responsible business enterprises are taking leadership roles in industry
associations, working with government and special interest groups to achieve positive
results for both the enterprise and the stakeholders.
The monitoring of external developments is particularly complex for companies selling to
export markets, and even more so for those with production facilities in several countries.
Many multinational corporations subscribe to the International Chamber of Commerce
principles on environmental management. These include adherence to international
environmental performance standards. However, monitoring all the relevant international
developments can be a daunting task.
This external monitoring can be integrated into a firm’s strategic management process, or
else carried out as a separate exercise. Some corporations have social policy committees
whose scope covers sustainable development issues. Others have environmental
committees with a narrower focus.
3. Design and execute an implementation plan
It is important to draw up a plan for the management system changes that are needed in
order to achieve sustainable development objectives.
Translating sustainable development policies into operational terms is a major
undertaking that will affect the entire organization. It involves changing the corporate
culture and employee attitudes, defining responsibilities and accountability, and
establishing organizational structures, information reporting systems and operational
practices.
These changes are normally so substantial that a three-to-five-year plan with one year
milestones will be needed.
Managing this type of organizational change requires leadership from senior
management. The board of directors, the chief executive officer and other senior
executives must be actively involved in the process. They need to lead by example, and
to set the tone for the rest of the organization.
As a starting point, after the board and senior management have established their
sustainable development objectives, these should be communicated to the various
stakeholder groups. Some organizations have ongoing consultation arrangements with
stakeholders which facilitates this process. There is little point in embarking on a
programme to meet stakeholders’ needs without first consulting stakeholders to ascertain
what those needs are.
It is also important to determine any modifications that should be made to the
organization’s systems and processes in order to ensure that day-to-day activities are
performed in a manner that is consistent with these objectives.
The enterprise’s organizational structure should then be reviewed to determine who
should take specific responsibility for the sustainable development objectives. In some
cases, environmental management committees have been established; in others, a specific
department has been established under the leadership of a senior environmental
executive.
Some organizations incorporate statements of environmental responsibility into the job
descriptions of managers and staff. Clearly defining accountability is essential to
successful implementation.
Cultural change and retraining should complement the new goals. Reward systems and
incentives reflecting the new corporate values should also be considered.
Business planning processes should be modified to reflect the sustainable development
priorities, the expanded stakeholder consultation process, and external monitoring needs.
Management information systems should be enhanced, in order to ensure that
management and employees receive the information they need to assess their
performance against the objectives.
Marketing activities should consider customers’ needs regarding sustainability. This will
require changes to the organization’s market research efforts. This feedback can affect
the way products are designed, produced, packaged, marketed and promoted. In some
cases, new markets may be added or existing markets redefined.
Meanwhile production processes and operating procedures must be assessed against
regulations, industry practices or internal standards, in order to determine areas for
improvement. This represents an opportunity for the company to develop innovative
production processes.
Regulatory requirements are easily identifiable, although they continually evolve.
Sustainable development criteria are less precise, and are generally not yet clearly
manifested in regulations. The use of industry practices as performance norms is
expanding rapidly, and in some cases these standards exceed regulatory requirements.
The chemical industry’s ‘Responsible Care’ programme is one example of industry
standards that companies can use to foster improvements in their processes and practices.
Another popular tool is benchmarking.
At the same time, managers responsible for procurement must reassess their choice of
suppliers, in terms of their products and the way in which they are produced, to ensure
that the company’s sustainable development objectives are fostered through its
purchasing activities.
Financial planning should consider the capital requirements for process changes, as well
as possible tax incentives and the financial effect of new mechanisms such as credits for
waste recovery.
A successful implementation plan depends on ‘rethinking the corporation’ if it is to
respond to the paradigm shift associated with sustainable development. It is important to
address not only the positive forces for change but also barriers and sources of resistance.
While the basic management framework may remain intact, substantial changes will
probably be needed in the culture, the organization and its systems. The plan must have
full ‘buy-in’ if it is to be effective. This in turn requires broad consultation and cultural
change.
4. Develop a supportive corporate culture
In order to ensure that the organization and its people give their backing to the
sustainable development policies, an appropriate corporate culture is essential.
In the process of implementing sustainable development or environmental management
policies, many companies have experienced a kind of organizational renewal. The
increased participation of employees not only generates practical ideas, but also increases
enthusiasm for the programme itself. Most customers and employees enjoy being part of
an organization that is committed to operating in a socially responsible manner.
Implementing sustainable development objectives will probably require managers to
change their attitudes. This may be accomplished only after retraining. For example,
some executives may feel that their sole responsibility is to maximize the wealth of the
enterprise’s owners. As a result, they may have difficulty understanding the sustainable
development concept and in accepting it as a legitimate business objective.
Meanwhile some managers may not be accustomed to identifying the need for ecoefficient
practices such as energy efficiency and recycling. Some may never have
explicitly considered the effect of their actions on any stakeholder group other than
shareholders. Others may resist changing the way in which their performance is
measured.
Managers of multinational corporations may not think it appropriate to redesign their
programmes in order to ensure that contribute to sustainable development in poorer
countries.
Effective communication is essential. Internally, all levels of management, and all
employees, must understand the policies and objectives that have been established. For
business enterprises, this means broadening the outlook of many people, including some
senior executives. Dr Frank Frantisak of Noranda Inc. emphasizes the importance of
communication:
The fundamental need in Canadian corporations is the promotion of environmental
consciousness throughout the whole organization, from senior management down to the
plant floor. Environmental concerns need to be part of everyday communications and
decision-making at all levels. Executives need to be regularly asking division managers:
Is your operation in compliance? What progress is being made with your action plan?
Division managers need to be putting these questions, in turn, to the plant and facility
staff.
Employees can have a strong influence on corporate culture and on a company's
environmental performance. The DRT International survey of European companies
reports that:
Just over half of the companies surveyed invite direct suggestions from employees on
environmental issues. About 80% of the companies that invite suggestions have changed
their products or processes as a result, while only 54% of all respondents have made such
changes. This happens not only in environmentally advanced countries such as
Switzerland and Norway, but also in Hungary, where employees are keen to tackle the
country’s considerable environmental problems.
The concept of sustainable development requires organizations to develop a culture that
emphasizes employee participation, continuous learning and improvement. The
International Chamber of Commerce explains the process of continual improvement thus:
…To continue to improve corporate policies, programmes and environmental
performance, taking into account technical developments, scientific understanding,
consumer needs and community expectations, with legal regulations as a starting point
and to apply the same environmental criteria internationally.
Internal reporting systems can have a significant effect on corporate culture. They must
be designed to reinforce positive behaviour with respect to sustainable development.
They also need to be linked to the enterprise’s recognition and promotion systems,
The active and visible involvement of senior executives and directors can be a powerful
force in forming attitudes, and in creating a supportive culture in which sustainable
business practices can flourish. Executives are the people who set the policies and the
norms by which business is done.
Equally, it is important that the board provide an oversight in the allocation of
responsibilities for sustainable development objectives. This umbrella role should include
ensuring that responsibilities are assigned in a manner that holds key executives
accountable. It also means ensuring that reward and promotion systems recognize those
people who achieve, or help to achieve, sustainable development objectives.
5. Develop measures and standards of performance
The implementation of sustainable development objectives, and the preparation of
meaningful reports on performance, require appropriate means of measuring
performance.
Management control, as well as external reporting, depends in part on the availability of
timely information about company operations. This is needed in order to allow
management to assess performance against external and internal performance standards,
using appropriate performance measures. Information systems will therefore need to be
reviewed, to enable the necessary reports to be provided to management.
The measures used to assess and report on performance will be influenced by the
company’s sustainable development objectives, and by standards that have been
established by government and other public agencies. For example, performance targets
may be set in terms of emission levels and energy usage per tonne of output, or perhaps
working hours lost due to accident or illness. The information generated must be in the
right units if actual performance is to be compared with the set targets. This might require
new measuring procedures to be introduced.
In many cases, companies are ahead of governments in establishing sustainable
development performance criteria. However, as society becomes more aware of
environmental issues and exerts more pressure for action, government can be expected to
take on a more influential role.
There is a significant opportunity for the business sector to work with governments in
establishing performance measures and standards, and to help develop reporting and
monitoring systems that are cost-effective and which meet the needs of both the public
and business.
While external standards, measures and reporting systems are needed, they take time to
develop and implement, especially if consultation is required. Businesses should not wait
for such standards to be developed before setting sustainable development objectives and
measuring the sustainability of their activities.
6. Prepare reports
The next step in the process is to develop meaningful reports for internal management
and stakeholders, outlining the enterprise’s sustainable development objectives and
comparing performance against them.
Directors and senior executives use internal reports to measure performance, make
decisions and monitor the implementation of their policies and strategies. Shareholders,
creditors, employees and customers, as well as the public at large, use external corporate
reports to evaluate the performance of a corporation, and to hold the directors and senior
executives accountable for achieving financial, social and environmental objectives.
Regulators and government officials add to the task by requiring an ever-expanding
degree of disclosure, in order to ensure compliance with their regulations.
While financial reports continue to be a fundamental component of corporate reporting,
they are now only one of many types of report issued annually by a corporation.
It is important to narrow the gap between the way economic activity is measured and the
way in which the use of natural resources is evaluated. For example, financial statements
do not illustrate the degree to which an enterprise invests in pollution control and
conserves resources. As a result, companies that do not invest in environmental
protection may present financial statements with lower costs and higher earnings than
those which do.
The system needs incentives, and reliable information, in order to ensure that there are
rewards for positive actions. It is ironic that business activity which destroys habitats and
pollutes air, land and water produces ‘income’ and contributes to gross national product.
Decision-makers within businesses and governments need a more relevant reporting
system.
A system that provides a meaningful picture of a company’s sustainability achievements
is essential for strengthening accountability. This is necessary if an effective relationship
is to be maintained with stakeholder groups.
Internally, several companies now ask their line managers to include in their regular
reporting procedures a statement on whether they have achieved the environmental and
sustainable development targets. Similarly, the board of directors should receive periodic
reports from senior management on whether these objectives have been achieved.
External reporting on sustainable development issues can take a number of different
formats. Some organizations are experimenting with special reports for particular
stakeholder groups, such as employees. Others provide a general-purpose report on
environmental activities. Still others include the subject of environmental and social
issues in a separate section of their annual reports.
Every business enterprise should publish, at least once a year, an external ‘sustainable
development report’. Ultimately, a universal format for such reports will be desirable. In
the meantime, managers and boards of directors should decide on the organization and
content of reports.
7. Enhance internal monitoring processes
On an ongoing basis it will be important to develop mechanisms to help directors and
senior managers ensure that the sustainable development policies are being implemented.
Performance monitoring is well established as an important element of the management
process. In many areas, it is directly linked to reporting. The key to any system’s
effectiveness is whether the management monitors operations and outputs on an ongoing
basis.
Monitoring can take many forms, such as:
Reviewing
 reports submitted by middle managers;
Touring
 operating sites and observing employees performing their duties;
Holding
 regular meetings with subordinates to review reports and to seek input on
how the procedures and reporting systems might be improved;
Implementing
 an environmental auditing programme.
Organizing internal environmental audits is a practical way to monitor the
implementation of management policies. For example, many organizations now perform
internal audits to monitor compliance with environmental policies and legislation. These
normally require multidisciplinary teams of experts (for example engineers, auditors and
scientists) who possess the necessary knowledge and experience, both in auditing and in
the areas being audited.
The following definition of environmental auditing was developed in 1989 by the
International Chamber of Commerce’s working party on environmental auditing:
A management tool comprising a systematic, documented, periodic and objective
evaluation of how well environmental organization, management and equipment are
performing, with the aim of helping to safeguard the environment by:
(i) Facilitating management control of environmental practices;
(ii) Assessing compliance with company policies, which would include meeting
regulatory requirements.
In Europe, the Commission of the European Community has adopted guidelines on
environmental auditing of industrial activities. Such audits are voluntary but must follow
EU guidelines, including the publication of a statement on the audit results by the
company, verified by an accredited auditor. The objective is to give companies more
control over their environmental performance, and to increase public awareness.
Management leadership
Establishing sustainable development objectives, systems and monitoring mechanisms
requires leadership on the part of senior management, and a commitment to continuous
improvement.
The role of the board
Without the active involvement of the board of directors, it will be difficult for an
organization to implement sustainable business practices. Corporations are encouraged to
establish a ‘social responsibility committee’, responsible for setting corporate policies on
sustainable development and for dealing with issues such as health and safety, personnel
policies, environmental protection, and codes of business conduct.
This list is not all-encompassing. The committee’s exact responsibilities should be
dictated by individual business circumstances. Nevertheless, there may be a need to
establish a ‘minimum’ set of responsibilities.
It is important that corporate sustainable development policies be implemented
consistently throughout an organization. Too many business enterprises observe variable
levels of corporate ethics and integrity, depending on the country in which they are
operating. This double standard is inconsistent with the concept of sustainable
development, and ensuring that it does not prevail is an important role of the directors.
The board also has a role in monitoring the implementation of its policies. It should
receive regular reports on how the policies are implemented, and should be accountable
to its stakeholders on the company’s performance against these policies.
Self-assessment
The first step for businesses in adopting sustainable development principles is to assess
their current position. Management should know the degree to which the company’s
activities line up with sustainable development principles. This requires evaluating the
company’s overall strategy, the performance of specific operations, and the effect of
particular activities.
This process should compare the company’s current performance with the expectations of
the stakeholders. Management philosophies and systems should be reviewed; the scope of
public disclosures on sustainability topics should be analyzed; and the ability of current
information systems to produce the required data should be evaluated.
Various self-assessment devices are available to help this process, such as the GEMI and
CERES questionnaires, as well as material tailored to specific industries – for example,
the North American chemical industry’s ‘Responsible Care’ programme.
Deciding on a strategy
Once managers have gained an understanding of how its own operations shape up, they
should gauge the performance of other, comparable organizations. Comparisons against
the standards set by other industries and environmental groups can be instructive.
This task should be relatively easy if there is reasonable public disclosure, organized
industry associations and co-operative sustainable development programmes. However, if
these structures do not exist, management could approach other businesses to discuss
sharing information and possibly establishing an industry group.
Management should then consider ways to narrow the gap between the current state of
the corporation’s performance and its objectives for the future. A strategy will need to be
developed, outlining where the company hopes to position itself relative to its
competitors and its stakeholders’ expectations.
A general plan is needed to describe how and when management expects to achieve that
goal, together with the various milestones it will reach along the way.
Senior management should review and approve the strategy and the plan before
submitting them to the board of directors for final approval. Because of the pervasiveness
of sustainable development, it is essential that members of the senior management team
(representing all facets of the company's activities) ‘buy in’ to the project. Anything less
than full commitment may doom the plan to failure.
Strategy implementation
Once the strategy and the general plan have been approved, detailed plans should be
prepared indicating how the new strategy will affect operations, management systems,
information systems and reporting. These should set out measurable goals to be achieved
in each area, and explain how progress will be monitored. They should also specify
spending and training requirements.
These plans should be developed through consultation with employees throughout the
organization, possibly with the assistance of outside specialists. It will be a timeconsuming
and dynamic process, which will entail frequent modifications as input is
obtained from several sources.
Once finalized, the plans should be approved by senior management and, ideally, by the
board of directors as well.
Small business and private company considerations
Applying the proposed framework will be a challenge for all enterprises, but smaller
businesses may encounter additional challenges. Besides sustainability reporting, smaller
businesses will have to adapt to the new corporate climate with less in-house expertise,
fewer resources and less formal management structures than larger corporations. It will
be difficult for them to keep abreast of ever-changing regulatory requirements.
Fortunately, small businesses can find much of the expertise they require through
industry associations, chambers of commerce, corporate environmental groups (such as
GEMI in the USA), national and international business-government groups (such as the
European Green Table), management consultants and universities.
There is also a growing body of literature, some of which deals with the experiences of
companies that have integrated sustainable development into their operations.
The limited resources of small businesses can be offset by co-operative ventures with
other companies. These may, for example, take the form of committees which monitor
developments and serve as a forum for exchanging ideas. To the extent that different
companies have similar stakeholders, they can compare notes on their stakeholders’
needs and expectations and how they plan to address them.
These cooperative ventures could be more complex, and include formal industry
programmes dealing with matters such as performance standards, monitoring and
technological research.
Once the expertise and resource issues have been addressed, the generally less formal
management structures found in small businesses can be a positive advantage. There will
be fewer people to educate within the enterprise, and there will usually be less resistance
to change. In addition, there are usually no formal committees to whom the new
strategies must be ‘sold’, and no lengthy review and approval procedures to slow the
process down. The ‘hands on’ management style common to smaller businesses can also
aid the monitoring function: management will be well positioned to spot problems and to
make the necessary adjustments.
The road to implementing a sustainable development philosophy will be different for
smaller businesses, but with ingenuity, perseverance and cooperation, they can achieve

Summary and Conclusion

This study examines the influence of corporate culture on organisational
commitment. Specifically, this study examines four dimensions of corporate
culture, namely teamwork, communication, reward and recognition and training
and development on employees’ commitment towards the organisation.
The results show that all dimensions of corporate culture chosen in this study have
significant influence on organisational commitment. The results are consistent to
the results of previous studies (such as Ooi and Arumugam, 2006) that signify the
importance of these dimensions. The key finding in this study is company’s
corporate culture practices are positive towards employees’ commitment and this
in turn, lead to the organisational success. Therefore, other organisations are
encouraged to practice these dimensions of corporate culture in yielding better and
long lasting results. This study is not without limitations. First, this study used a
case study approach focusing on In summary, the findings in this study provide
some understanding on the importance of corporate culture on organisational
commitment. This study provides knowledge on the influence of corporate culture
implemented in a organisation.
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