Definition of corporate culture
Corporate culture is, to a large extent, a result, but on the other hand, a prerequisite for a high level of ethical and psychological culture within an organization. It is an integral characteristic of business relations within the organization and of business relations within the “organization–external environment” system
We can begin our discussion of corporate culture with the following parable. A passerby approached some stonemasons and asked, “Why are you working?” The first craftsman replied, “To earn a living,” the second said, “To cut stones,” and the third said, “To build this magnificent temple.” If we consider these answers in the context of an organization, only the third answer—which is rooted in a strong corporate culture—enables the organization to operate successfully.
The formation and development of corporate culture are essential for the effective operation of a modern organization. In particular, without a strong corporate culture, an organization cannot achieve long-term success.
An analysis of the concept and phenomenon of corporate culture requires a preliminary definition of the term “culture.”
The Philosophical Dictionary provides the following definitions of the concept. Culture – (from the Latin cultura – cultivation, development, upbringing, education, reverence) – 1) the care, improvement, and refinement of a person’s physical, mental, and spiritual strengths, inclinations, and abilities, and thus the degree of their development; 2) the totality of methods and techniques for organizing, implementing, and advancing human life activities and ways of human existence; 3) the totality of material and spiritual achievements at a specific historical stage of society and humanity, embodied in the results of productive activity.
When analyzing an organization’s activities—particularly its technological, economic, and business activities—it is advisable to consider approaches that apply the term “culture” to spiritual values and the term “civilization” to material values.
Summarizing various approaches, we offer the following definition: culture – the totality of material and spiritual values, as well as the methods of their creation, and the ability to use and transmit them.
The development of civilization and scientific and technological progress has led to the need to strengthen the influence of culture, spiritual values, and morality on the technical, economic, and business spheres of human (societal) activity. This was the reason for the rapid development of corporate culture at the end of the 20th century.
The term “corporate culture” was first used in the 19th century by German Field Marshal Moltke, who used it to describe relationships within the officer corps.
Attempts to examine and, in particular, develop the concept of corporate culture can be seen in the 1950s and 1960s, but serious research on the issue began in the 1980s. In Ukrainian organizational theory, the analysis of corporate culture began in the 1990s.
In contemporary academic literature, there is no single, unambiguous definition of the term “corporate culture.” Here are some examples of definitions of the phenomenon and concept of corporate (organizational) culture
- a unique set of norms, values, and beliefs that determine how groups and individuals come together within an organization to achieve its established goals (D. Eldridge, A. Crombie);
- one of the means of carrying out organizational activities through the use of language, folklore, traditions, and other methods of conveying the core values, beliefs, and ideologies that guide the activities of enterprises (I. Morgan);
- reflects the customs characteristic of an organization; the organizational climate (M. Mescon);
- a system of values and beliefs shared by all employees of the firm that determine their behavior and the nature of the organization’s operations (E. Utkin).
Corporate culture, as a cultural phenomenon, is primarily defined by the value system of the organization and its employees. It represents an integral characteristic of the organization (its values, behavioral principles, and methods of evaluating performance).
Based on an analysis of approaches to defining the essence and content of corporate culture, the following definition of the concept can be provided.
Corporate culture is a system of values, convictions, beliefs, perceptions, expectations, and their symbols, as well as business principles, behavioral norms, traditions, rituals, etc., that have developed within an organization, which shape the “corporate spirit,” define the general framework for relationships and behavior within the organization, and are accepted by the majority of the organization’s employees.
Within management theory, corporate culture is viewed as a powerful strategic tool that enables all organizational units and individuals to align with common goals; to mobilize employee initiative, foster loyalty to the organization, and improve communication and behavior.