HBO Session 2: Corporate Culture

Key Insights:

"Corporate culture stands for pattern of assumptions that have been developed over time by a corporation and have been proven successful."

 An interesting question raised was. When do companies decide to change the Corporate Culture?

The answer lies in the definition of corporate culture above. When companies feel that the financial performance in the past has been going down, there is perhaps a flaw in the corporate culture. A change in culture thus can turn around a below average or an average performing company to an exceptional performer. Jack Welch's change to the culture of GE reaped future benefits in the financial performance.

 Chris Aregyris has explained this in a wonderful way. ASSUMPTIONS made by the founders stand for the CULTURE of the organization. These assumptions decide the ACTION/values/beliefs adopted by the organization. These actions yield to RESULTS/behaviour/performance of the firm. So if the company suffers a serious setback in results/financial performance of the company it is just not the action/values that needs to be re visited but also perhaps the assumptions/culture of the company. The ENRON debacle is one of the examples where the culture of the company failed completely. 

 My contribution:

Having a healthy corporation culture does not ensure the retention of the employees. Mindtree's culture has been appreciated by most of it's ex-employees. But still it has higher attrition rate than most it's rival companies. I had read a survey on attrition rate in Indian IT companies. The factors like on-site opportunities, job security and brand name took precedence over the company culture.