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Equipment and Other Physical Objects include tools and objects people use to build and make, the clothes they wear, the structures they live and work in, the products they trade or sell, and the art they create and cherish. This is the level of physics and chemistry, equipment, hardware, engineering, and technology. In some organizations this level is significant—such as in a chemical plant. In other organizations this may be quite insignificant. This is a level where the clearest analysis occurs and where you find the facts of science.
The Systems That Coordinate Equipment includes operating stems, processes, procedures, and methods. It is where you find the software to control hardware, and where most training dollars are spent. The prototype system is a living organism, with complexfeedback mechanisms, and that unique quality of living systems, homeostasis—the ability to maintain a stable internal state. This level holds the key to efficiency.
The Authority Structure that connect systems with people includes authority, competition, organizational structures, markets, information, productivity, and profits. Humans have refined some aspects of this level into economics, politics, laws, democracy, and ethics. Included here are competitive forms of decision-making such as win-lose, or combat. The key aspect of this level is power and control. In its crudest form it involves dominance and submission.
These first three levels contain everything that is not distinctively human. For example, everything contains matter—physics and chemistry. All living systems, and many non-living systems, have processes. Power and control, the dominant features of most human cultures, are also present in most animal species.
Communication that connects people is the first that is distinctively human. Only people have complex language and writing. Communication includes listening, understanding, dialogue, relationships, and teamwork. It also includes empathetic forms of decision-making.
Experience—Creating Motivation and Trust is the quality of human experience. This includes what we cherish in life, and feelings such as trust, caring, safety, satisfaction, pride, and engagement. It also includes our spiritual or sacred side.
Corporate culture is actually the container for the vision, mission and values. It is not synonymous with them. In a thriving profitable company, employees will embody the values, vision, and strategic priorities of their company.
Business leaders often assume that their company's vision, values, and strategic priorities are synonymous with their company's culture. Unfortunately, too often, the vision, values, and strategic priorities may only be words hanging on a plaque on the wall.
Corporate culture is actually the container for the vision, mission and values. It is not synonymous with them. In a thriving profitable company, employees will embody the values, vision, and strategic priorities of their company..
Companies need a good definition of corporate culture before they can begin to understand how to apply it in order to succeed in business.
2. The Impact of a Corporate Culture on Business
Because a company's culture affects everything in it—including profits—culture is the real bottom line. A company with a well-developed culture, open to all that its members want to bring, easily outperforms competitors.
The survey, conducted by Harvard University in the United States in the 90's, has showed the results as followed3:
Culturally strong companies averaged 571% higher gains in operating earnings than those more culturally deprived over the the eleven years.
Companies with highly rated cultures averaged 417% higher returns on investment than their less culturally robust counterparts.
Companies with strong cultures saw their stock prices increase 363 % more than their culturally challenged peers over the time span of the study.
A great example of a well-developed corporate culture can be The Trader Joe’s store nationwide network. The success of Trader Joe’s markets is the result of a unique business model that has built a national chain of neighborhood grocery stores.
The combination of innovative products along with a service-oriented culture has created a loyal customer base that continues to grow nationally. Today, Trader Joe's has over 270 stores in 22 states with revenues exceeding $5 billion.
While other retailers have developed internal organization cultures that are unique and support their products, service, and internal management philosophy, the Trader Joe's culture is one in which customers are integral to creating the shopping experience. By delivering a shopping experience that is “innovative,” “unique,” and “interesting,” and products that are “hard-to-find,” “great tasting” from “around the world,” they have been able to differentiate themselves from their closest competitors4.