The Significance of Organizational / Corporate Culture

                                Background Research

Why should we pay attention to such a ‘fuzzy’ concept as ‘Corporate Culture’?

 In a landmark study by Terrence Deal and Allan Kennedy, published in their pioneering book, “Corporate Culture: the Rites and Rituals of Corporate Life (Addison-Wesley) the authors found that – among nearly 80 companies, the consistently high performers were “strong culture” organizations. They proved that a correlation exists between a strong corporate culture and a healthy bottom-line.

Other studies have produced similar results. A study of 34 corporations, done by Daniel R. Denison, project director of the University of Michigan’s Institute for Social Research, has shown that ‘The cultural and behavioral characteristics of organizations have a measurable effect on a company’s performance.” The study’s results were later published by the American Management Association in its ‘Organization Dynamics’ publication under the title,” Bringing Corporate Culture to the Bottom Line.”

An intensive five year long research effort involving more than 100 companies done by noted consultant Rosabeth Moss Kanter, and presented in her pioneering book, “The Change Masters (Simon & Schuster) was described by Industry Week as follows, “None has gone this far in presenting evidence that companies characterized by an open culture…are successful in both human and business terms.”

 The conclusion we can arrive at from these studies is that attention to the organization’s culture is as important a matter as attention to other corporate indicators, such as finances, production, marketing, information technologies or human resources. A strong, positive and innovative corporate culture has proved to be one of the strategic prerequisites for successful organizational  performance.