The Structure of Corporate Culture
As an academic discipline, corporate culture is interdisciplinary in nature. As part of organizational and management theory—specifically, human resource management theory—it is linked to cultural studies (it is an applied branch of cultural studies), ethics, psychology, sociology, design theory, wellness studies, and more.
Corporate culture is a holistic yet complex, multifaceted phenomenon that is represented as a multilevel structure. There are various approaches to defining the structure of corporate culture and its levels. We identify two levels of corporate culture: 1) internal, deep, ontological (essential), unconscious—the corporate spirit; and 2) external—the level of actualization (“external manifestations” [26], formal characteristics) of corporate culture.
Corporate spirit – the spiritual state (climate) of the corporate environment (corporate relationships) as a result of the actualization of employees’ spirituality (meaning of life, values, morality) in the process of their interaction.
The manifestation (“external expressions”) of corporate culture. These include: norms and models of behavior and communication (communication, behavior, etiquette, language of communication, etc.), symbols, corporate identity (trademark, emblem, corporate colors, distinctive product design features, the exterior appearance of buildings and interior design, corporate attire, elements of office administration, etc.), the flag, anthem, rituals and holidays, history, myths, heroes, physical culture, etc.
It is also important to examine the structure and levels of corporate culture from the perspective of the components and factors involved in its formation.
We identify the following levels of corporate culture: 1) universal (national) culture; 2) corporate values; 3) manifestation (external forms of expression) of corporate culture.
An important condition, principle, and factor in the formation of corporate culture is ontological, deep-seated factors of general human (national) culture,in particular, a person’s worldview, meaning of life, spirituality, morality, values, beliefs, perceptions, attitudes, etc., which are, by their very nature, extra-organizational, supra-corporate elements of corporate culture.
The second level is defined by corporate values, which are embodied in the organization’s mission and, formulated on that basis, are influenced, on the one hand, by universal (national) culture, and on the other, by the organization’s values and business principles.
The third level – the level of actualization (“external manifestations” [26], external forms of expression, formal characteristics) of corporate culture.
Let us briefly focus on the analysis of the second and third levels of corporate culture, which determine the components and factors driving the development of the organizational foundations of corporate culture.
Corporate Values
Corporate Mission
The organization’s values, as the principles for shaping corporate culture, are formalized in the corporate mission and corporate business principles [26].
Defining the corporate mission is a key stage in shaping corporate culture. The organization’s mission serves as the conceptual, value-based, and methodological foundation for shaping goals, values, business principles, and other elements of corporate culture. It helps employees and the surrounding community identify and assess the organization’s social role, allowing them to view the organization from society’s perspective and evaluate its potential long-term development.
A corporate mission is the organization’s purpose, both in broad terms (for society) and in specific terms (in addressing certain functional tasks). When detailing the wording of a corporate mission, organizations often specify their market niche, indicate guaranteed quality of work, and highlight the capabilities the organization possesses to fulfill its mission. An organization should be recognizable by the wording of its mission. It should be noted that there are no universally accepted guidelines for defining a mission and its elements.
Let’s look at some examples of how an organization’s mission is formulated. For example, when analyzing Sony’s mission, it is described as “an innovative company that produces cutting-edge, technology-intensive products in the fields of electronics, digital systems, video equipment, and laser technologies using original methods; it is characterized by a unique approach to working with customers worldwide” [18].
A mission statement can be formulated concisely, in the form of a slogan, which makes it easier to remember. Examples: “What’s good for the country is good for General Motors, and what’s good for General Motors is good for the country” (General Motors), “To make people happy” (Walt Disney), “Progress is our main product” (General Electric Company), “Quality at a reasonable price” (Sears & Roebuck), “Empowering women” (Mary Kay Cosmetics).
Business Principles
Putting an organization’s mission into practice requires defining its core business principles. Generally, organizations aim to have no more than five, but sometimes there are examples of more detailed lists.
Here are some examples of how an organization’s core principles might be defined:
Merk:
- corporate social responsibility;
- continuous improvement in all aspects of the company;
- science-based innovation;
- honesty and integrity;
- profit, but profit derived from work that benefits humanity [15].
Sony:
- elevating Japanese culture and national status;
- to be an innovator—not to imitate others; to achieve the impossible;
- encouraging individual abilities and productivity [15].
IBM:
- strong convictions, values, and culture;
- respect for the individual (belief in individualism);
- lifetime employment;
- recruitment of high-caliber employees;
- career opportunities;
- extensive training;
- performance evaluation and interview system;
- grade and salary system;
- a holistic approach to employees;
- employee participation in management;
- maximum accountability;
- horizontal relationships;
- encouragement of differing viewpoints [5].
An important characteristic of the corporate culture of modern organizations is the process of dematerializing organizational values [26]. Defining “profit” as the primary reason (goal) for doing business is considered “vulgar and even harmful.” “The largest corporations have managed to become leaders because they strove for higher values.” If the principle of “making a profit” does appear, it is at the bottom of the list and with a significant qualification: “Profit, but profit from work that benefits humanity.”
For example, until 1983, General Motors proclaimed: “The company’s primary goal is to make money.” After 1983, it became: “General Motors’ primary goal is to produce products and services of such quality that our customers receive the highest level of satisfaction,” or, as the company’s mission states, “What’s good for the country is good for General Motors, and what’s good for General Motors is good for the country.”
The principle of “cutting-edge technology” is not dominant either. Cultural and spiritual values are dominant in defining business principles. At the forefront are attention to and respect for the individual—both the customer and the employee.
The business principles of Western and Japanese companies differ somewhat. Western management is characterized by a belief in individualism, while Japanese management is characterized by a belief in collectivism. The consciousness, traditions, and mentality of Ukrainian society attest to the need to combine the values of Western and Japanese corporate cultures[26].
In most successful companies , there are no requirements for discipline and diligence. An emphasis on discipline hinders creativity and the emergence of innovation. Despite the need for a certain degree of operational discipline, it is not considered one of the core business principles.
The above can be summarized as follows: “In recent decades, there have been significant shifts in the value system of employees. Values such as duty, discipline, and obedience are losing their significance. In contrast, values related to individual self-expression are on the rise. Therefore, motivation methods and management style must take into account creative activity, freedom of action, and responsibility…” [8].