Corporate culture is established over a long period of time which makes it difficult for business managers to alter it.
As culture is formed by the subjective views of employees which are ingrained in their minds they perceive the company, it often leads to considerable resistance to change of corporate culture. People always tend to resist change because ‘things have always been done that way here’.
But the good news is that corporate cultures are not static, so they can be changed over time.
When there is a need for changing corporate culture?
Once a certain corporate culture is established, it will be self-perpetuating. It means that newly appointed employees will need to adapt to the demands of their new roles despite not liking it in the first place.
Here are a few examples when it might be necessary to change organizational culture:
- Workforce changes. Organizational culture isn’t static. It adapts alongside its workforce, goals, and external pressures. As personnel come and go, the company’s aims evolve, and competitive dynamics shift, so does the cultural landscape. Increasingly competitive and globalized markets necessitate greater delegation of authority and embrace of fresh perspectives. ‘New blood’ injects new ideas, while cultural, legal, and social changes demand cultural adaptability and growth.
- Mergers and acquisition. Mergers and acquisitions often involve navigating cultural complexities. The desire for synergy and economies of scale drives these actions, but seemingly perfect pairings can crumble in reality. Clashes in management styles and corporate cultures are common culprits. Imagine a task-oriented organization merging with a role-based one. Differing expectations and team dynamics can lead to friction. One organization may struggle with the other’s approach to authority and flexibility. This can result in a hybrid culture emerging, with some individuals adapting and others choosing to leave. In extreme cases, the business may falter, or management may be forced to split the entities back up for commercial reasons
- New objectives. Introducing new objectives can be challenging, especially when it threatens traditional power structures or demands increased flexibility and responsibility. Individuals accustomed to a certain level of authority might feel threatened by decentralization. Embracing new roles and challenges can be daunting. Often, a hybrid culture emerges organically, with those unable to adapt seeking new opportunities outside the organization. In a worst-case scenario, the business could face significant struggles, or management might be compelled to re-evaluate the new objectives due to commercial viability concerns.
Example 1: When in the late 1990s, Daimler, the German can company, merged with Chrysler, the American car company, the two businesses found themselves at war with one another as soon as they merged into Daimler-Chrysler caused by incompatibilities of company cultures.
How to change corporate culture?
Changing corporate culture is not easy after all. High-ranged business leaders such as Chief Executive Officers (CEOs) have a huge influence on the organizational culture.
Directors and lower-level managers can try to do the following things to change corporate culture:
- The new way. Establish mission statement and vision statement, so everybody knows where the business wants to be. Build trust in the organization to introduce the new corporate culture. Train staff on the new value system. Change the staff reward system by quitting rewarding ‘the old way’.
- Outreach. Establish new objectives and communicate them. Communicate the vision and mission, so everyone moves in the same direction and stands for the same values.
- Role modelling. Effective leaders have to lead by example so they can drive and develop the desired culture. Who is appointed to senior staff? They are likely to share the same values and beliefs as the directors.
- Engagement. Concentrate on the positive aspects of change. Workers must be engaged and excited by the new culture. Obtain the full commitment of all levels of the business: from managers to lowest level employees. Encourage bottom-up participation.
- Ethical code of conduct. Upper management sets in how they treat employees and make decisions. Established strategies on social and environmental issues.
Additional strategies that could be adopted include having leaders share knowledge and expertise in supporting workers in building a healthy business culture.
Constraints to changing corporate culture
Once a business organization knows that it must change its culture, there will be conflicting viewpoints, or constraints on making these changes. Here are a few of those specific constraints:
- Costs. Transforming culture does not happen on a shoestring budget. Training and development expenses can climb rapidly, especially for initiatives with significant operational shifts. Implementing an omnichannel presence for a traditionally brick-and-mortar retailer? Be prepared for significant investments in staff training and technological infrastructure. Similarly, embracing remote work models or diversifying operations requires equipping employees with new skills and tools, pushing up the financial ante.
- Resistance to change. Introducing cultural change often meets the headwinds of employee resistance. This stems from various anxieties: the fear of the unknown, concerns about job security, or simply a comfortable inertia towards the familiar. Imposing change from above only amplifies these anxieties, breeding resentment and further entrenching resistance. Remember, lasting cultural shifts flourish through genuine buy-in, not forced adoption.
- Public opinion. Organizational culture operates within a broader ecosystem, shaped by the expectations of stakeholders, the media, and public opinion. Imagine trying to instill a culture of carefree risk-taking among doctors – a profession expected to prioritize caution and meticulousness. Similarly, external pressure groups can influence cultural norms, adding another layer of complexity to the change process.
- National cultures. For multinational giants spanning diverse cultural landscapes, forging a unified yet flexible cultural identity becomes a delicate dance. Deeply ingrained national customs and work styles can clash with top-down initiatives, sparking resistance and resentment. Forcing an American leadership style onto a team in Australia, accustomed to a more collaborative approach, is likely to create friction and impede progress.
- Management. Managers may be an obstacle to change. Paradoxically, the very individuals tasked with driving cultural change can inadvertently stand in its way. Managers often strive for stability and predictability, making them hesitant to embrace the inherent turbulence of transformation. Add to this the potential for conflicting visions between senior and junior leadership, and the risk of subcultures sprouting within the organization escalates.
In summary, corporate culture can also apply to the attitudes of workers towards change in general. If employees are totally resistant to change, they can jeopardize the future success of the firm.
