July 21, 2024

Create A Business Plan

Interesting Business

Ten Parameters of Good Corporate Culture

Ten Parameters of Good Corporate Culture

Sometime in the 1980s, I read a book written by Manfred Kets de Vries who claimed to have found six types of corporate cultures. The most intriguing thesis of the book was that actually most organizations are not sick, but not entirely healthy: the so-called lingering organizations. The other five types of organizations are: the dramatic organization, the depressive organization, the paranoid organization, the coercive organization, and the schizophrenic organization.

The dramatic organization is hyperactive, impulsive, very adventurous and dangerously unrestrained. The decision-makers base their ideas on intuition and impressions instead of facts. The leaders use their charisma to concentrate all the power in the top. They can therefore undertake very risky operations. They do these things to create a completely different environment without really considering the existing business environment. Their goal is unlimited growth. The man in the top wants to be the center of everything. He wants to show what a good leader he is. Without really considering the reality, this kind of behavior can easily result in great disasters.

The depressive organization is characterized by apathy, lack of self-confidence and conservatism. The communication climate is passive and aimless. The activities are implemented according to predetermined programs and routines. The employees are never asked to show initiative. In stable markets, long established companies can withstand many crises despite their depressive state. They can survive as long as the technology and the competitive pattern remain the same. The environment of these organizations is usually protected with trade agreements and fixed tariffs.

The paranoid organization is characterized by extreme suspicion at the top. This is mirrored by the extreme emphasis on procedures which are aimed to collect information and exert control. A complex information system is created to analyze all the dangers of the outside world. Procedures are written down in detailed manner and everybody is obliged to continuously write reports. This need to regulate everything and be alert all the time results in ‘the institutionalization of suspicion’. There are a lot of meetings to collect the same information from different people. The advantage is that the leaders will get the right information, but the side effect is that mutual trust is diminishing. A lot of precious time and energy is lost while the morale is decreasing all the time.

The coercive organization is addicted to rituals. Every move is literally planned. The implementation of the plans is carefully monitored; all activities are usually routine activities. The emphasis is laid on correctness and completeness when the predetermined methods are used. Rituals have become norms. Just like in the paranoid organization, the coercive organization depends on formal control and information systems. There is, however, one important difference; coercive organizations are really meant for monitoring budgets and productivity. The paranoid organization on the other hand, is mainly interested in things which lie outside its span of control.

Like the depressed organization, the schizophrenic organization is suffering from lack of effective leadership. The leaders of a schizophrenic organization are not doing a good job. They are afraid to establish new contacts because they had bad experiences in the past. These leaders have reached a stage in their career in which they are not interested in leading anymore. If they are lucky, this problem is solved by the middle managers, but these middle managers are usually only interested in their own interests. The average middle manager will usually become servants who just want to win the favors of their directors. The directors are constantly in doubt, because they don’t know which proposals to accept from their subordinates. A consequence is that plans are implemented half-heartedly and actions depend on the mood of the day. Lack of consistent and consequent leadership is the most important characteristic of the schizophrenic organization.

The lingering organizations, finally, usually have problems with the central values, norms, and beliefs. If the leaders are not trying to disseminate these aspects or are even against it, subcultures will be created which are not independent. Other characteristics of lingering organizations are: internal company politics is more important than efficiency, promises and deals are oftentimes neglected and the leaders are not really interested of their employees.

So, what are then the characteristics of truly healthy organizations? Here are ten parameters of good corporate culture:

1. Pride of the organization:
Employees defend their company against unjustified critique and they say that they like working for their company;
2. Orientation towards (top) achievements:
‘In our company, everybody tries to do a better job’ and ‘our company is number one and that should stay so’;
3. Teamwork and communication:
Employees listen well and try to understand the ideas/opinions of others and employees and managers really try to help each other;
4. Supervision and leadership:
Managers are really interested in the problems of others and it is customary to ask help when needed;
5. Profit orientation and cost awareness:
All expenditures are evaluated if they are effective or not and all members are strongly thinking about profit;
6. Employee relationships:
Employees are not trying to better themselves from the mistakes of other employees and new employees are accepted quickly;
7. Client and consumer relations:
Everything is oriented towards a better service for the customer;
8. Honesty and safety:
Safety rules are strictly implemented and everybody sees company properties as being sacred;
9. Education and development:
Everybody supports education and training programs and the company really tries to develop its employees
10. Innovation:
Systems and procedures are constantly being pursued and new ideas are always welcome.