Management Skill Berde, Csaba Management Skill

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1. References

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Daft, R.L.(1997): Management. 9th Ed. The Dryden Press, Fort Worth.

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9. fejezet - 9. Corporate culture

The subject of corporate culture is usually covered in the framework of internal organizational environment considering most foreign professional literatures. One reason to study the subject was the Japanese push forward mainly in the field of automobile and microelectronic industry after the II.World War. Many authors (including Ouchi, 1981) have described cultural and corporate differences as main causes for the corporal advantages. According to Williams (2011) the internal environment consists of the trends and events within an organization that affect the management, employees, and organizational culture. Internal environments are important because they affect what people think, feel, and do at work.

According the functional approach (such as Berde-Láczay, 2005), the subject of internal culture is structured into the theme of corporate management. Regarding this field, basic principles to study were prepared by Schein (1992). Culture is „A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered  valid and, therefore, to be taught to new members as the correct way to perceive, think, and  feel in relation to those problems (Schein, 1992). „Organizational culture, sometimes called corporate culture, is a system of shared beliefs and values that develops within an organization and guides the behavior of its members.  This may be considered as a social glue that brings members of the organization together. Similarly to the personality’s skill, the corporate itself also has its kind of personality, and the heart of it is the culture (Schein, 1999).  

According to Berde-Láczay (2005) inside the term of culture in general (which is the sum of produced material and intellectual goods of humans) corporate culture is originated from the community in which we work together to achieve corporate objectives. Only such corporates, which operate for a long term and relatively independent, have their cultures. For the development of the culture it is inevitable that the unit itself should gain numerous common experiences, such preliminary beliefs namely develop as a result of common learning procedure based on experiences (Lawrence-Lorsch, 1967).

There are diverse functions of corporate culture. According to Smircich (1983), it has 4 functions:

  • It provides organizational identity for the members.

  • It facilitates collective commitment.

  • It promotes social-system stability.

  • It shapes behavior by supporting employees make sense of their surroundings.

The culture is a product of human coexistence and common work, which has numerous components. Culture has it material components, those which were produced, applied at work, but usually the spiritual products form a wider set. Although material goods become worn out, spiritual goods may stand the test of time, and sometimes it may spread from generation to generation in mostly those corporates, which are strong enough to survive. Culture may operate as a whole but it is usually build up of sub-cultures as the organization itself is made up of different elements. Since elements are numerous and diverse, the classification of the components seemed necessary. Schein (1980, 1985, 1994) split up the organizational culture into the following levels:

9.1. ábra - Figure 1. The levels of culture (based on Schein(1980, 1985, 1994))

The two figures approach the subject of the culture from two points. The apple approach illustrates that the core elements are the fundamental assumptions, and the further components may be understood from inside, such as covering element, totally 5 elements are included. The later approach represents a hierarchy of 3 main group of elements, where basic assumptions represent the core, these are difficult to access because usually exist unconsciously. The second level, the values are conscious objectives, philosophies. Goods, produces (artifacts) are on the exhibition level; these are the surface, easy to recognize still sometimes hard to understand. A typical other figure, which usually symbolizes this structure is an iceberg, where visible parts (artifacts) arise from the water, still other parts lie beneath and these are not visible.  From visible signs we may draw conclusions on the real content of the culture. This symbol of the iceberg also lets us know the unconscious part of the culture, which usually is not obvious for us. Sometimes members of a society do not aware of the levels of the private culture until they directly face another one (Fisher, 1981).

Williams (2011) emphasizes some most important parts of a culture:

  • A primary source for corporate culture is the company founder. Founders like Bill Gates, Steve Jobs created organizations in their private images and imprinted them with their beliefs, attitudes and values. When they are not in the organization anymore they often turn into be heroes.

  • The second way of identifying culture is to recognize and celebrate heroes. These are organizational people admired for their quality and results in the company. Jan Carlzon of the Scandinavian Airlines or Lee Iacocca of the Chrysler may be considered of corporate heroes. Their heroic nature originates from their behavior when they acted or reacted well in difficult situations (such as the former leaders in the time of the oil crises).

  • To maintain and strengthen culture organizational workmates tell each other organizational stories to make sense of organizational events and changes and to emphasize beliefs, decisions, etc.

Berde-Láczay (2005) detailed further elements of the corporate culture:

  • Culture not equals with the qualifications of corporate members but it must be stated that professionalism may strongly influence the established culture. Cultures of professions exist alone (since it is typical of a medical doctor, a lawyers, etc.), and cultural signs of a professional field may also be well identifiable.

  • Traditions may also form an important part of the culture. To have a culture organizational past is necessary. Traditions originating form the past may mean the roots of organizational order of values and norms.

  • Festivities, events (ceremonies) strongly connect to the culture. These are repeatedly organized actions, which represent and strengthen basic values, enable to identify objectives, heroes, key actors or the system of values. This promotes the belief that different components of the culture may be in relationship with each other. Almost all organizations have ceremonies (solely-such as birthday celebrating or connected to a social phenomenon, such as Christmas or Easter celebration). These may play a vital role in the life of the organization, since they introduce (new) roles of the members, lead new members into the organization, create statuses, and promote the identification with the roles, the organization, and increase cohesion (Tosi et al, 1986).

  • The culture of management, the authority has a multiplying effect. Its style, sophistication, elegance or even inhumanity, cruelties equally affect all members. Basically, they dominate the internal culture in two ways: humanity usually strengthens moral, ethical values and behavior and inhumanity (together with manipulation, hostility) may result in the weakening of the same values.

  • A typical element of the culture is language, professional jargon of the organization. Phrases, which are nowhere else used and understood, are signs of the identification with the organization and the acceptance of the culture.

  • Symbols may also represent values, shared beliefs of the organization. Physical logos, company cars, open space rooms representing equality, uniforms representing conservative values describe and exhibit most important sign of the organizations (Daft, 1992).

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