Corporate culture is an ever-popular topic, among CEOs and consultants, leaders of pricey seminars and organizational psychologists, and analysts who size up potential mergers and acquisitions. But for all the attention it gets, the culture of commercial enterprises is far from a stable concept.

Corporate culture is generally taken to be some combination of the attitudes, beliefs, values, norms and customary practices that underlie the workings of an organization. Companies differ widely in what they make of this broad array of big concepts.

Some notions of corporate culture focus on the workings of the organization. "The way things get done around here," is how Terrence Deal and Allan Kennedy put it when they coined the phrase in the title of their groundbreaking 1978 book Corporate Cultures.

Other formulations of organizational culture revolve around the people crucial to a company´s success - its employees. Software maker SAS says its corporate culture is based on the philosophy that "if you treat employees as if they make a difference to the company, they will make a difference to the company."

Still other enterprises focus on the trappings of their culture. Google, the gleaming exception to the dot-com bust, spends much of its Web page on corporate culture enumerating the hip accoutrements of its Mountain View, Calif., headquarters, dubbed the Googleplex: lava lamps, bicycles in the halls, saw-horse desks and workers and their dogs clustered like servers.

Companies may not agree on what´s essential to corporate culture, but their top managers believe that culture cannot be neglected. Corporate culture is the most critical of 11 factors that can contribute to the creation of an ideal workforce, beating out training and development, competitive salaries and benefits, according to executives responding to a Veritude Workforce Data Insights survey.

Corporate Culture Should Reflect Broader Cultural Trends.
Whatever the significance of culture to a company, human resources plays an important role in priming the organization to maintain the company´s values while remaining open to positive change.

"There´s a tendency for companies to repel cultural change like the body´s immune system throwing off a virus," says Robert Shoemake, director of programs and operations for the Center for Ethical Business Cultures at the University of St. Thomas-Minnesota in Minneapolis.

To enable positive change, for example, HR may need to remind executives that in a labor market where skilled employees are regaining power, companies may no longer be in a position to dismiss employee requests for improvements in work-life balance. "A gym is nice if people have the time to use it," says Michael Burchell, a consultant with Great Places to Work Institute in Wilmington, Del.

"Culture is about symbols, signs and heroes, but many organizations don´t talk about these things," says Burchell. "Human resources has to ask, ´What are the stories that get told?´ " To bring home the value of employees´ labor to the public, Medtronic, a maker of medical devices, periodically puts on employee town meetings where the invited guests are patients whose lives have been saved by the company´s products.

Special Situations Call for Special Attention in Cultivating Culture.
Cultural concerns are often shunted aside when companies are undergoing big changes, whether through internal growth, a merger, or other special situation. That presents a danger that human resources should push top management to address.

"During the growth phase, the cultural message can be lost or diluted," says Wayne McVicker, a founder of the dotcom Neoforma Inc. and author of Starting Something: An Entrepreneur´s Tale of Control, Confrontation and Corporate Culture. "We made a conscious decision to bring in managers to coalesce the culture in certain workgroups."

Rapidly growing companies like Starbucks - which has 9,000 coffee shops worldwide and a goal to expand to 30,000 - know that if the culture sours in their service-centered business, the game´s over. So the Seattle-based company is spending to keep smiles on the faces of its customer-engaging employees. Even Starbucks´ counter help is paid above minimum wage and receives health coverage; the company spends more on employee health costs than on its coffee supply, chairman Howard Schultz has said.

It often falls to HR to ensure that companies don´t neglect culture in the due-diligence process when a deal is under consideration. "Our successful acquisitions had little to do with product compatibility and almost everything to do with cultural compatibility," says McVicker.

Business Ethics Come to the Forefront of Culture.
Ethics is no new frontier for corporate culture, but it´s taken on added significance in the wake of recent corporate governance scandals. "Corporate culture has become a very big thing in business ethics," says Michael Hoffman, executive director of the Bentley College Center for Business Ethics in Waltham, Mass. "Because the culture will trump whatever compliance rules and regulations a company has, every time."

Human resources executives may find that their departments can have the most influence on the ethical culture that sets the context for the behavior of individual contributors.

"What do you do with an employee who exceeds sales goals, but operates in a way that´s a little bit sleazy?" says Shoemake. "Do they get promoted or sanctioned? Unless you´re willing to punish high performers who operate outside your values, those values don´t mean much."

About the Author

John Rossheim is a journalist in Providence, Rhode Island who writes about workplace issues, employment trends and changing relationships between employers and workers.  John regularly contributes to Workforce Insights, an online resource about emerging labor trends and issues produced by Veritude.

About Veritude

The article originally appeared in Workforce Insights on Veritude.com. Veritude provides strategic human resources - the talent, technology and tactics that growing firms need in order to anticipate and adapt to changes in the workplace. Veritude is a wholly owned subsidiary of Fidelity Investments Company. Headquartered in Boston, the company serves clients throughout the United States and Canada and is part of Fidelity´s ongoing investment and leadership in outsourced HR services. To review other articles, research and expert analysis relevant to HR professionals seeking to stay informed, please visit www.veritude.com.  For more information, contact: inquiry@veritude.com or call: 1-800-597-5537. 

^©2005 Veritude,LLC.  Reprinted with permission.