12.4 Corporate culture and management style

Finally we turn to the “soft” and “intangible” side of organizations. The concept of culture was explained in Chapter 5. We emphasized that, when entering a new organization, the consultant has to find out as much as possible about its specific culture. This is done in order to develop a full understanding of the values and motives underlying managerial and employee behaviour, and so assess the organization’s potential for making improvements. Organizational culture may be found to be one of the causes, or even the main cause, of the difficulties experienced (e.g. due to the conservatism of senior management and the impossibility of submitting new ideas). In such a case, culture may even become the central theme on which the assignment would focus.7

Consulting in corporate culture became extremely popular at the beginning of the 1980s, in particular in the United States. Some consultants have not escaped the danger of regarding and prescribing cultural change as a panacea: “Corporate culture is the magic phrase that management consultants are breathing into the ears of American executives”, wrote The New York Times in 1983.8 Nevertheless, in warning against the corporate culture fad we must not throw out the baby with the bathwater. Interest in corporate culture and in the impact of culture on long-term organizational performance is basically a positive phenomenon, needed for a balanced approach to organizational problems. If organizational culture is ignored, a sophisticated planning or management information system is unlikely to lead to any improvements in performance.

A change in corporate culture will rarely be an explicitly stated task in a consulting assignment. Yet in some situations corporate culture requires the consultant’s special attention, for example:

●when a company is in difficulties. A strong traditional and intransigent culture may prevent the company from assessing its condition realistically and proceeding with changes that have become inevitable.

●when a company has grown very rapidly. There may be various problems. The original culture of a small family company may have become a straitjacket. There may be many new managers and workers, coming from different cultures. Growth by acquisitions may lead to serious cultural clashes.

●when major technological and structural change is planned. Revolutionary changes in products, technologies, markets, and so on have strong cultural implications.

●when there seems to be a conflict between the company’s culture and values that prevail in the environment, for example, if the public increasingly expects a company to behave in ways that are contrary to its culture.

●when the company’s operations are internationalized and it has to adapt to foreign cultures.