Assessment, Evaluation, Improvement: Success through Corporate Culture - Sonja Sackmann - ebook

Assessment, Evaluation, Improvement: Success through Corporate Culture ebook

Sonja Sackmann

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Opis

This report by Prof. Dr. Sonja Sackmann, University Bw, Munich, provides an overview of state-of-the-art knowledge with regard to the link between corporate culture and performance as well as approaches that have been used to assess and measure culture in organizations. It discusses different understandings of culture and how they lead to different ways of assessing it. Current methods of culture assessment are compared. The comparison is arranged according to the respective focus on the cultural layer of analyses (e.g., norms, values, beliefs, and assumptions), the origin of dimensions and the purpose of assessment. Most of these approaches are single-method instruments. Along with multiplemethod approaches, they are described and discussed individually, followed by a short assessment of their strengths and weaknesses. In addition, the report provides a more general evaluation of issues related to the assessment of culture and its link to performance, as well as the most promising approaches. These considerations lead to recommendations for the assessment of corporate culture with links to performance.

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Bibliographic information published by the Deutsche Nationalbibliothek
The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data is available on the Internet at http://dnb.d-nb.de.
© 2010 E-Book-Ausgabe (EPUB) © 2006 Verlag Bertelsmann Stiftung, Gütersloh
Responsible: Monique Lampe, Gabriele SchölerCopy editor: Heike HerrbergProduction editor: Christiane RaffelCover design: Nadine HumannCover illustration: Fotolia/Andrej PolTypesetting and Print: Hans Kock Buch- und Offsetdruck GmbH, Bielefeld
ISBN : 978-3-86793-235-6
www.bertelsmann-stiftung.de/verlag
Inhaltsverzeichnis
Titel
Impressum
To the Reader
Preface
1. Introduction
2. Culture and Performance
3. Diversity in the Conceptualization and Assessment of Culture in Organizations
3.1 Three different perspectives of culture
3.2 The nature of culture
3.3 Levels and components of culture
3.4 Dimensions of culture
4. Overview of Existing Assessment Approaches
5. Assessing Corporate Culture: Single-Method Approaches
5.1 Survey Instruments
5.2 Inductive Approaches
6. Assessing Corporate Culture: Multiple-Method Approaches
6.1 The approach oft the Bertelsmann Stiftung
6.2 Culture Orientations
6.3 Value Culture and Corporate Performance
6.4 WerteManagementSystem
6.5 Culture Assessment
6.6 Schein’s approach to culture analysis
6.7 Ethnography
7. Evaluation
7.1 Perspectives of culture
7.2 The nature of culture
7.3 Levels and components of culture
7.4 Dimensionality of culture
7.5 Type of collected data
7.6 Presentation of results
7.7 The culture-performance link
7.8 Conclusions and suggestions for the assessment of corporate culture
7.9 Most interesting approaches
8. Recommendations
8.1 Interest-based approach of cultural analysis
8.2 Combination of firm-specific and comparative cultural analysis
References
Websites
The Author
The Bertelsmann Stiftung
To the Reader
Corporate culture and leadership as success factors were at the forefront of the 2003 Carl Bertelsmann Prize. Not least due to globalization, the related internationalization and increased competition, the question of whether, and to what extent, the corporate culture and economic success of a business are related has a greater importance than before and is still in the interest of corporate leaders. Even companies that belong to the most successful worldwide in their respective industries and leave no doubt that they consider their specific culture as it is lived in, and supported by, the company relevant for their success, are moved by the question of how this corporate culture as a success factor and leadership instrument of the future can be correlated with performance parameters. And which consequences can result from such an assessment?
The “International Network Corporate Culture,” founded as a follow-up to the 2003 Carl Bertelsmann Prize by ten multinational Europe-based companies, dedicated its first working phase to this context. While the network dealt with the link between corporate culture and success, the Bertelsmann Stiftung commissioned a study to investigate existing international models that assess this link with a view to their practicability, relevance, and set of criteria. The aim of the study, produced by Professor Dr. Sonja A. Sackmann, a professor at the University of the Federal Armed Forces in Munich, was to assemble the best practice models. Major questions were these: How broadly do they define the term “corporate culture?” and how relevant are they in practical terms? The pivotal point for understanding corporate culture was the ten-dimensional model defined by the Bertelsmann Stiftung for the Carl Bertelsmann Prize.
One of the most important results of the study was the insight that a direct connection between corporate culture and success can be established with the surveyed models. Yet only a few practically relevant and operable models exist for companies to apply. Any kind of assessment requires that the aim be defined in advance. Determining the corresponding criteria is also of utmost relevance for the practicability and usability. Professor Sackmann’s study provides an introduction to the topic, a brief overview over the current state of research, and a detailed survey of 25 models and instruments to assess the link between corporate culture and success with a view to the respective framework conditions and their relevance for a company. The study concludes with considerations on how to apply the instruments in a meaningful and useful manner.
Grateful acknowledgments are hereby made to the members of the “International Network Corporate Culture” for the many constructive contributions they made, based on the entrepreneurial experiences that led to this study; and to the project team at the Bertelsmann Stiftung. In particular, I express my gratitude to Professor Sackmann for her meticulous analysis and for the valuable impulses with which the work of the “International Network Corporate Culture” was enriched beyond her written contribution.
Liz Mohn Vice President of the Executive Board and Member of the Board of Trustees of the Bertelsmann Stiftung, Gütersloh
Preface
That a company’s specific culture can contribute to its economic success has become a well-known maxim. Moreover, a number of academic surveys show which factors (and in which specification) are especially relevant for success. A great number of companies that achieve sustained success are proof of the link. Just as many other companies spectacularly fail because they underestimate or even neglect the interdependence between culture and success.
Investment into corporate culture is “worth it,” say those who have already successfully made such investments and would like to promote them further in the future. Yet such investments are usually connected with costs, be it HR development measures or expenses for work-life balance measures, be it that concepts of financial participation of employees are introduced or intensified, be it information campaigns to promote transparency within or outside, be it complex customer or investor relations programs, be it commitment to non-profit projects to realize the social responsibility of the company.
Yet what tangible revenues, ideally visible on the balance sheet, are opposed to these costs? To what extent can the impact of “soft” factors, such as participative management, customer and shareholder orientation, continuity of leadership, the promotion of intrapreneurship, social responsibility etc. be empirically assessed and evaluated? Are there methods that do not just measure individual aspects of corporate culture (for example, the human capital factor) but are based on a more holistic concept of corporate culture?
What are the opportunities-and what are the risks-connected with this? And what are the consequences in terms of practically applying whatever kind of a “corporate culture index” to the daily entrepreneurial routine? In what form can assessment models and tools be used as a kind of “early warning system” for atmospheric crises that might ultimately threaten the economic success of an enterprise? When does an entrepreneur or CEO have to intervene and redirect in order to ensure that the corporate culture continues to help guarantee the innovative force and thus also high productivity?
Beyond all assessments of visible and verifiable interdependencies between the culture and the economic success of a company, one factor should not be overlooked: a measurement is only the description of a specific state. Ideally, data prove that the present state is an optimum. Normally, however, even in the “best” companies an assessment shows at least sporadic weaknesses and the need for improvement. From the entrepreneurial perspective, such an analysis must aim at determining potential for improvement and developing mechanisms to make sustained use of such potential.
- Is there, for example, the need for improvement in specific “individual disciplines,” or do specific values require consolidation through institutionalized processes?
- Can the results of assessments of corporate culture, and the corporate culture itself, lead to a change of the overall strategy of a company? Could corporate culture thus also initiate or promote innovation? Or could it alternatively hinder it, following the motto, “If everybody is satisfied, there is no need to change”-a “no-go” argument against the innovative force necessary for a company. If it does so, how then to shape culture so that it promotes rather than hinders change?
- And how does this again impact the entire corporate culture? Have new strategies and/or structures led to changing the existing culture; can, perhaps, even “parallel” cultures develop, which include features that, transferred to the original culture, might have a positive effect on the company as a whole?
The real work thus starts after the assessment, in line with late management guru Peter Drucker’s famous dictum, “If you can’t measure it, you can’t manage it.” It is important to clarify that each assessment is already an intervention which raises expectations. To justify these is the responsibility of a transparent management that has the willingness to openly communicate positive as well as negative results or measures respectively.
Only a series of repeated assessments at different moments and the changes implemented based on their results could show the development process and a dynamically developing corporate strategy and culture, which must harmonize flexibility and adaptability with a certain amount of stability and continuity. The willingness to change and innovative power require a kind of “permanent creative unrest” in the company. Yet this unrest is based on a scope of value conformity and security for each employee and other stakeholders which each company has to define for itself in order to provide that unrest is not perceived negatively or as a threat.
Against this background companies ought to find their own ways beyond academic insight and consultants’ advice. Individual companies already have highly complex but solid systems in place that can be pragmatically and flexibly applied to determine the link between their specific corporate culture and the economic success. Such instruments must be further developed and applied in a strategically meaningful way.
We would like to thank the members of the “International Network Corporate Culture” for their varied and highly enlightening input to our discussion. In particular, we would like to express our sincerest gratitude to the author of the study, Professor Sonja A. Sackmann, whose comments have, far beyond this study, enriched our reflections on the link between corporate culture and success.
Monique Lampe and Gabriele Schöler Project Managers, Competence Center “Corporate Culture/Leadership,” Bertelsmann Stiftung
1. Introduction
In the early 1980s, the concept of culture gained prominent attention by both managers and organizational researchers alike. Methods were developed to understand, assess, and change corporate culture in the hope for better performance and, ultimately, to gain competitive advantage. These hopes were frequently accompanied by managers’ expectations of quick fixes, of gaining control of the corporate culture (Kilmann et al. 1985) and fast changes on the basis of a superficial understanding of the concept of culture applied to organizational settings.
Since that time, the concept of corporate culture has been further refined, though without reaching any consensus on how to best assess or measure it (e.g., Ashkanasy et al. 2000; Mackenzie Davey and Symon 2001). Similar definitions of culture result in different kinds of operationalization by different authors and yield outcomes that are difficult to compare. In addition, stated and expected positive links between corporate culture and performance are to some extent established but still need further systematic investigation.
This report aims to provide an overview of state-of-the art knowledge with regard to the link between culture and performance (chapter 2) as well as to existing approaches that have been used to assess and measure culture in organizations. Chapter 3 discusses different understandings of culture that are based on different interests in culture and ultimately lead to different ways of assessing it. Chapter 4 provides an overview of existing methods of culture assessment arranged according to their focus on the cultural layer of analysis (e.g., artifacts, practices, norms, values, beliefs, and assumptions), the origin of dimensions (e.g., generated by organizational members vs. external experts) and the purpose of the assessment (gaining an understanding of the cultural context and/or intervention).
Most of these approaches are single-method instruments described and discussed in more detail in chapter 5, while chapter 6 focuses on multiple-method approaches to understanding and/or changing corporate culture. These descriptions include the underlying definition of culture, its operationalization, the purpose of its use, the context(s) in which it was applied, potential links to performance with its specific operationalization and results, and a short assessment of its strengths and weaknesses. In chapter 7, we will give a more general evaluation of issues related to the assessment of culture and its link to performance and of the most promising approaches. These considerations lead to recommendations for the assessment of corporate culture with links to performance (chapter 8).
I would like to thank Birte Horstmann and Martin Friesl for their assistance in the research and compilation of instruments and Silke Agricola for her efforts and patience in integrating the graphics, checking references and finalizing the format of this document.
2. Culture and Performance
The growing interest in the concept of culture among managers was and still is grounded in the hope and assumption that the availability of an additional tool will help to ensure a firm’s success. Several scholars have nurtured this hope in the past. Silverzweig and Allen (1976) observed in their study that changes in culture increased performance in six of eight firms. The research by Ouchi and Jaeger (1978) and Ouchi (1980) suggested that a unitary vision, a focus on humanistic values with a concern for people, and consensual decision-making promotes financial success. Peters and Waterman (1982) attributed superior performance of the researched firms to their specific and “strong”’ corporate culture-findings that were questioned in follow-up studies only a few years later (e.g., Reynolds 1986; Hitt and Ireland 1987).

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