Corporate Culture
'….is the pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.' (Schein, 1984:3) (Westwood, R.I., p.185)

The Meaning of Culture
Culture refers to stable patterns of behavior representative of a defined human group. Culture provides predictability in these persistent patterns: how to dress, how to meet people, how to stand and look at other people, and so on. A shared culture also defines for a group the important issues and values in life. Culture is not given by nature but shaped through a series of human decisions made over a long period of time. (Neher, W.W., p.129)

How does a corporate culture begin to develop?
First, an organization's culture can often be traced to its founders. The nature of an organization's culture is usually shaped by the founders' personalities, values and belief systems.

Second, corporate culture often develops out of an organization's experience with the external environment. The struggle to adapt to the external environment results in favoring certain values and practices over others.

Third, culture also develops from the need to maintain effective working relationships among organization members. Depending on the nature of the organization's business, and the characteristics of the types of people it must hire, different expectations and values may develop.

Beliefs, attitudes and values - key manifestations of culture - which are held by members of an organization are naturally shaped by external and internal forces. Internal shapers include procedures for selection and recruitment of personnel, management and decision-making style, and social and technical systems within the organization. Externally, social, political, legislative, economic, and technological systems constitute forces impinging upon the organization, placing constraints upon its activities or motivating and directing the way it conducts its business.

While culture is itself influenced by these environmental forces, it also conditions the organization's response to them. Thus, corporate culture is both a cause and consequence of various forces. (Furnham, A., p.90-91)

Importance of corporate culture
A set of shared beliefs, values, and expectations, help organization members to arrive at some common interpretations of organizational life. They are provided with a framework for 'making sense' of things and for deriving a sensible and workable definition of the situation. In this way people are oriented to think and behave in a shared, common direction, and one that is aligned with the goals and interests of the organization.

This is the assumed potential force of corporate culture. If organization members truly have internalized a set of common organizational values, they can be relied upon to act in line with those values and in a way that is conducive to organizational goals and requirements. Furthermore, they will do it willingly, and without the need for an externally imposed bureaucratic control system or other coercive device. The corporate culture provides an internalized, self-directed control system that then acts as the social glue for the organization.

Members are socialized into corporate cultures and have the values constantly reinforced through various symbolic elements. (Westwood, R.I., p.186)

Defining corporate culture
According to Deal and Kennedy (1982), corporate culture has a number of specific elements: a widely shared philosophy in the business environment, shared values, specific rites and rituals, and clear, albeit informal, lines of communication. Corporate culture has much to do with internalizing shared beliefs and behavioral norms (Meek, 1988).

There are other definitions and meanings of corporate culture:
· Observed behavioral regularities when people interact, such as the language used and the rituals around deference and demeanor (Goffman, 1959)
· The norms that evolve in working groups, such as the particular norms of a 'fair day's work for a fair day's pay' that evolved in the Bank Wiring Room in the Hawthorne studies (Homans, 1950)
· The dominant values espoused by an organization, such as 'product quality' or 'price leadership' (Deal and Kennedy, 1982)
· The philosophy that guides an organization's policy toward employees and/or customers (Ouchi, 1981; Pascale and Athos, 1981)
· The rules of the game for getting along in the organization, 'the ropes' that a newcomer must learn in order to become an accepted member (Ritti and Funkhouser, 1982)
· The feeling or climate that is conveyed in an organization by the physical layout and the way in which members of the organization interact with customers or other outsiders

Source: Taguiri and Litwin (1968)
(Furnham, A., p.92-93)

Four Dimensions of Corporate Culture
1. The power distance dimension (POW)
LOW HIGH
(Australia, Israel, Denmark, Sweden, Norway) (Philippines, Mexico, Venezuela, India, Brazil)
* Less centralization * Greater centralization
* Flatter organization pyramids * Tall organization pyramids.
* Smaller wage differential. * More supervisory personnel
* Structure in which manual and * Structure in which white-collar
clerical workers are in equal jobs jobs are valued more than blue- collar jobs
2. The masculinity / femininity dimension (MAS)
LOW HIGH
(Sweden, Denmark, Thailand, Finland) (Japan, Australia, Venezuela, Italy, Mexico)
* Sex roles are minimized. * Sex roles are clearly
differentiated
* Organizations do not interfere * Organizations may interfere to
with people's private lives. protect their interests.
* More women in more qualified jobs. * Fewer women in qualified jobs.
* Soft, yielding, intuitive skills are * Aggression, competition, and
rewarded. justice are rewarded.
* Social rewards are valued. * Work is valued as a central life
interest.

3. The individualism / collectivism dimension (IND)
LOW HIGH
(Venezuela, Columbia, Taiwan, Mexico, Greece) (United States, Australia, Great Britain, Canada)
* Organization as 'family'. * Organization is more impersonal.
* Organization defends employee * Employees defend their own self-
interests. interest.
* Practices are based on loyalty, sense * Practices encourage individual
of duty, and group participation. Initiative.

4. The uncertainty avoidance dimension (UNC)
LOW HIGH
(Denmark, Sweden, Great Britain, United States) (Greece, Portugal, Japan, Peru, France)
* Less structuring of activities. * More structuring activities.
* Fewer written rules. * More written rules.
* More generalists. * More specialists.
* Variability. * Standardization.
* Greater willingness to take risks. * Less willingness to take risks.
* Less ritualistic behavior. * More ritualistic behavior.

Source: Adapted from Hofstede (1981)
(Furnham, A., p.100)

Japanese Corporate Culture
In Japan, a company sees itself as a cohesive group of individuals working together toward a common goal. In its view, people come first - before production gains, before technological developments, and, in emergencies, even before profits. No enterprise can be better than the people engaged in it. The Japanese organization, regardless of its size, is in effect a community of motivated people.

To a Japanese joining a company as a salariman (white-collar worker), the latter is like a corporate family. The company acts as a surrogate family in return for its employees' loyalty and diligence. It maintains a paternalistic attitude toward its employees, in a relationship that has been called 'welfare corporatism'. The company will provide these individuals and their families with security and welfare during and after their working lives. In reciprocation, employees feel that it is their responsibility to fully co-operate with the management. Hence, to them, joining a company implies entering a lifetime relationship.
The Japanese system of corporate management is characterized by:
1. Lifetime employment
2. Emphasis on harmony and consensus
3. Rank and status ( job position, salaries )
4. Job rotation to produce generalists
5. The ringi system
6. Task sharing and team work

1. Lifetime employment
Introduced in 1955, lifetime employment is a corollary of the long-time commitment which the company expects from its employees and of the continuous on-the-job training that the company provides employees with, especially the management cadre. It is believed that managers who are life members of the same corporate family are more likely to commit sincerely to their own and the company's growth.

In actual fact, lifetime employment is offered mostly by the larger corporations and to specific members of the organisation who constitute an inner core of management. This cadre may comprise 30 - 40% of a company's entire workforce. Females and contract workers are often excluded from this benefit, and in dire economic times, companies usually reduce the numbers of employees who do not hold lifetime positions while retaining the inner core of management. However, even those managers who benefit from lifetime employment, soon find out that when they hit 50 years old, they are likely to be transferred to company subsidiaries and subcontractors to complete their remaining service to the company.

On the contrary, smaller domestic companies cannot afford the luxury of offering its employees the system of lifetime employment. This is reflected in their records of high staff turnover.

2. Emphasis on harmony and consensus
One major concern of Japanese managers is harmony within the company, and how to raise the morale, desire to work, and esprit de corps of the whole workforce. As a result, managers focused on devising ways to motivate all workers, whatever their backgrounds and thinking, to work harmoniously together, instead of making everyone abide by one common yet inflexible management policy. They believe that in order to create a harmonious working climate, the Oriental axiom "Silence is golden" must be followed.

In Japan, individuality is not admired as it detracts from the well-being of the group. For the same reason, spontaneity, whether of thought or action, is discouraged. Within the group, a smooth surface appearance is to be preserved at all costs, even if individual members feel internal turmoil. A Japanese will withhold his opinions and beliefs if they conflict with those of the collective, as these views are likely to cause embarrassment and loss of face to his counterparts. The Japanese believe that it is more important to express empathy and support for others, and obstacles will eventually be overcome through combined effort and co-operation. In other words, collective consensus is crucial and group well-being takes precedence over individual happiness.

3. Rank and status ( job position, salaries )
In Japanese organizations, age and seniority are respected and it is assumed that there is a direct correlation between age and wisdom. Rank and status determine social etiquette, including the form of greetings (younger and junior employees use more polite salutations, bow first and give a lower bow to older and senior people); the appropriate position for a person to sit at a meeting (the senior person is situated farthest away from the door); who leaves meetings first (the most senior leaves first).

In general, a Japanese worker's wages are increased and he is promoted in accordance with the length of his service in the company. Personal expertise or capabilities usually are secondary considerations. Following the Japanese selection process, all employees who have worked a prescribed number of years become eligible for promotion. They all will have to undergo an exhaustive selection process. Those who pass are immediately promoted while those who fail will be given another opportunity later on. If an employee repeatedly fails and a younger person is promoted over him, the older person's wages remain slightly higher because he has served the company a longer period of time.

The concept of seniority is also demonstrated in a system whereby senior members of the company (senpai) are responsible for training and guiding junior colleagues (kohai). This relationship will persist through each individual's time with the company and encompass both professional and social matters. Such an arrangement tend to generate close ties between employees within the company as an individual may be Person A's senior while being a junior under Person B.

4. Job rotation to produce generalists
Most potential managers are recruited into a large organization as generalists rather than specialists. Once they have worked for a period of two years, it is common procedure to rotate them between a series of jobs.

This is to allow the general manager to gain experience and knowledge in a number of departments and functions; in a way, transforming them into specialist generalists. It also allows the managers the opportunity to extend their network, getting to know more colleagues from different divisions, and also seeing a larger picture of the company's operations and management procedures. Getting along with people is a prerequisite for advancement into senior management ranks, hence job rotation facilitates and places emphasis on the promotion of team work and co-ordination among members of different departments within the company. In addition, job rotation allows candidates for senior positions to be monitored and assessed by other managers.

5. The ringi system
The ringi system is one method of finalising policy decisions employed by large Japanese companies. The process of decision-making is bottom up rather than the top-down manner adopted by most bureaucratic organizations.

Ringi (requesting a decision) is a written recommendation urging a specific course of action. The written proposal is passed from employees at the lower levels up through the corporate administration - supervisor, section chief, department head, and so on - to the top managers. Individuals express agreement by stamping a personal seal (hanko). The top management then decides whether or not to adopt the proposal into their corporate policies. The ringi system is said to allow managers at lower levels to inform their superiors of 'grassroots' feelings. Usually before the ringi is written, informal discussions (nemawashi) are held repeatedly among the managers at similar seniority levels to communicate and exchange viewpoints to ensure consensus decision-making.

Although these individuals do not directly get to make corporate decisions and planning policies, their opinions and suggestions are taken into consideration by the top management when the latter executes actual business decisions.

6. Task sharing and team work
The Japanese place much emphasis on collective spirit in their work responsibilities, they are more concerned about getting the task accomplished than to measure individual merit and demarcate job assignments.

In the offices of large organizations, the close proximity and layout of desks encourage team working and frequent communication between staff and sectional heads. Desks are arranged so that work teams in a department are next to and facing each other. This is to ensure rapid and effective two-way communication among team members. Work assignments are outlined each day and the work is to be shared between teams of several members so that no single individual bears the sole responsibility for the work.

For a quick view, we have categorized the elements of Japanese corporate culture into Deal and Kennedy's (1982) components of corporate culture:

1) Business environment / marketplace
· participatory decision-making
· aversion to conflict and risk

2) Values
· homogeneity
· modesty, not to lose face
· sense of obligation for favours / indebtedness
· loyalty, diligence, hard work
· harmony, conformity
· prudence, egalitarianism

3) Heroes
· Usually the founders of the companies

4) Rites and rituals
· numerous office gatherings and social functions e.g. cherry blossom viewing party
· mandatory after-work drinking parties which employees' spouses will not be invited
· company athletic teams to foster team spirit

5) Cultural networks, processes and roles that transmit, maintain and educate newcomers in the culture
· the seniority-based system of consultation between senior employees (senpai) and junior workers (kohai)
· newcomers usually begin performing menial tasks such as organize office functions and simple filing work
Strengths of the Japanese corporate culture

1. Employment Stability
Through the system of lifetime employment and treating workers as members of the corporate family, Japanese companies have ensured its employees the kind of security and welfare they sought. With a secure and conducive work environment, workers are motivated in their work attitudes and more willing to co-operate with the top management in work issues and personnel policies. They will be more likely to contribute ideas and opinions to aid the top management's decision-making as they are certain that the latter will not disregard their feedback.

However, in recent times, many Japanese companies begin to deplore the system of lifetime employment, marking it as a burden to company resources as those who hold lifetime positions are senior managers who earn high salaries. Adding to that, the young Japanese generation is now more adventurous, thus changing jobs on a more frequent basis compared to their older counterparts. The concept of long term commitment to a company may no longer appeal to the present-day workforce.

2. High Rapport and Morale among Employees
By promoting team effort and co-operation among workers, a sense of camaraderie exists within the corporate environment. Employees feel attached to their work teams as they establish rapport through the experience of working collectively and in turn are motivated to make more contributions. In addition, the organizational climate is one that is supportive as employees are not competing against each other since promotion is based on seniority. In fact, the criteria for further job advancements include the ability to get along with people. After work, co-workers usually go for relaxation activities such as drinking bouts, which is another form of social networking.

Weaknesses
1. Suppressing individual creativity and creating employee dependency
The emphasis on groupism in most Japanese companies has stifled room for individual creativity and resulted in overdependence on the company. The subservient Japanese employee can expect to enjoy the company's protection and benefits so long as he performs at the standardized level, not rising above the average level and not distinguishing himself in any particular way. The company not only pays him a fixed salary each month but also provides him with all resources and facilities he needs for his work. This creates an unhealthy psychological reliance on the company.

For newcomers who cannot fit in and challenge conventional thinking, they are deemed to disrupt the morale of the workforce and are often rated low in their performance by the top management. The ostensible reason for prejudice against these workers is that they are unable to adapt themselves to the organisation. In this way, the management often overlooks the potential and capabilities of these workers. Thus these sources of talent and expertise often go untapped.

2. Improprieties
The practice of giving favours is considered proper in Japan; it is all part of showing respect to one's seniors and maintaining good terms with co-workers as well as top managers. The higher the boss, the more expensive the gift. In certain contexts, business executives of a company take the executives of other companies upon whom they depend on, out for expensive dinners, golf outings and special activities.

These acts of 'ingratiating with top leaders' create feelings of indebtedness / gratitude among managers and other employees and result in an unhealthy corporate climate. Managers may then base their corporate decision-making on personal grounds rather than according to the company's procedures. They may give special treatment to certain subordinates in return for expensive gifts and favours done. Managers can no longer execute policy decisions on objective grounds but on personal preferences. This is where the problem of bribery enters. Feelings of unfairness and depravity arise as decisions on assigning job tasks and promotion become arbitrary. In the long term, the company's reputation and survival may be at risk as crucial business planning is permeated with individual interests and personal gains. In reality, many Japanese corporations have fallen victim to corruption and forced to declare bankruptcy.


3. Discriminatory practices against women
There is strict division between men and women; the common thinking is that women are to assume subordinate roles to their male counterparts. It is rare for a woman, even if she has an outstanding academic record, to be appointed to a key position as a top manager. In fact, she can expect to reach the glass ceiling very quickly and subsequently watch her male subordinates get promoted past her at rapid speed.

Such discrimination is not only unfair to the women, it also becomes an impediment for them to make effective contributions to the development of the company. Lack of motivation and unequal treatment only serves as a self-fulfilling prophecy. Female employees just don't see the justification for their commitment to the company since they are not regarded as full members of the work team. From the company's viewpoint, training women and giving them skilled jobs seems hardly worth the effort since they will eventually marry and resign to take care of their own families.

Suggestions for organizational change:

1. Need for greater transparency and accountability
The practices of showering gifts and favours on top management as well as employees should be curbed to the standard that there is little chance for bribery to take place. Occasional exchanging of gifts is innocuous, as it is also important to build harmony and foster good working relationships with workers. However it should not be thought as a mandatory activity in order to enhance one's career prospects.

Companies should also open up its books to government and public scrutiny to allow greater degree of accountability and transparency. They should refrain from continuing their corporate planning and decision-making behind closed doors; inflexible preservation of one's face in times of crises may prove to be detrimental to the process of salvaging its economic survival in this changing world.
2. Be more open to dissent, identify problem areas
Top managers need to be more open-minded toward employees' feedback, placing less emphasis on whether or not these views conflict with the status quo. Employees should not feel hesitant when offering their views on the company's business strategies or other corporate matters, as sometimes good advice flows from these unconventional ideas. In order to devise sound planning strategies, companies have to identify their problem areas first, sometimes through the feedback generated from the lower-level workers. Constant facade of smooth operations tends to cover up 'defects' of the entire system and leave the problem zones unsolved.

Conflict in the context of exchanges of ideas and opinions may be necessary to improve the company's policies and ways of doing things. What is improper or incorrect must be rectified at once and not concealed for the sake of conformity and maintaining consensus.

3. Correct traditional thinking towards female workers
Japanese organizations need to alter their traditional perceptions of female members of the workforce. Like their male counterparts, women are equally capable of shouldering heavy responsibilities and performing skilled work. They should not be penalized because of their gender. The corporate environment should no longer be one that is male-dominated, more women ought to be allowed to participate in strategic planning and policy-devising activities, not just at the administrative and technical levels. This will ensure a more balanced pool of talent and expertise for the long-term benefits of the organization.

Conclusion:
As we can see, the formulae behind Japan's economic success have become somewhat obsolete. What was feasible in corporate management decades ago may not be practical in meeting the challenges of the corporate environment in the next millennium. People change, and so do their wants and needs. Japanese corporations can no longer rely on long-term employee benefits to ensure workers' devotion, and rigid emphasis on conformity and harmony so that a superficial appearance of oneness can emanate. Clearly, Japan is in need of a new corporate identity but first, the management team needs to alter their mindset toward the traditional tools of the nation's corporate culture and begins to allow some spontaneity and transparency into play.

In seeking a change in corporate culture however, the management has to bear in mind that it is a process that will be fraught with difficulties mainly because there will be people who will feel threatened and thus resist any form of change. To overcome this resistance takes time and require effective communication within the organization.

An atmosphere of perceived "crisis" in the organization has to be created. Without dissatisfaction with the current state, there is little incentive for managers to change familiar patterns of behavior. Organizational members need a clear sense of where the organization is headed and their role in the future. To do that, communication is necessary, whether it be at the top-down, bottom-up or horizontal level. Informal and formal forms of communication using various channels aid in that process. Management need to model, through their own actions, the kinds of values and practices they want infused in their organization. In essence, by setting an example of themselves lends credibility to the changes which are required.
It is also important to motivate and encourage people to show a positive response to organizational change. Feedback plays a part in the process, as do recognizing and rewarding people for positive actions.

Bibliography:
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The book adopts an economical approach to understand the nature of traditional Japanese firms, it focuses on the external factors influencing these organizations, such as the effects of trade unions, labour markets and the role of the government. It also looks into managerial efficiency and the Japanese motivation system, expounding on corporate loyalty and work incentives that are relevant to Japanese workers. Extensive tables and
mathematical equations are employed to illustrate the author's findings.

2. Furnham, A. (1997). Corporate Culture Shock. What is Corporate Culture? pp.89-119. Singapore: Times Book International.
This is a guidebook about how to survive organizational change. It is written in a simple manner for easy reading. What is culled from this book is the chapter that explains what is corporate culture. The definitions and components of corporate culture as well as the various examples of corporate culture can be found in this book.

3. Graves, D. (1986). Corporate Culture-Diagnosis and Change. London: Frances Pinter (Publishers)
It compares corporate cultures through the study of the ways companies reinforce their cultures through senior management training. To examine the role of leadership, 4 case studies are presented and interviews with the chief executives of the 4 organizations are included. Using these 4 organizations as basis, differences and similarities in behavior, attitudes and values in the sphere of management training are then illustrated.

4. Hasegawa, K. (1986). Japanese-Style Management, An Insider's Analysis. Tokyo: Kodansha International Ltd.
The author seeks to examine the various important aspects of Japanese management methods, while at the same time searching out its strengths as well as its weaknesses. Questions such as how Japan managed to attain a booming economy despite the scarcity of resources and being devastated by war, and most importantly, whether foreign executives can apply the tenets of the Japanese management system to suit their own organizational needs are answered.

5. Hunt, B. & Targett, D. (1995). Japanese culture and Japanese management. The Japanese Advantage? : Competitive IT Strategies Past, Present & Future. pp38-54. Great Britain: Butterworth-Heinemann Ltd.
The contents of the book deals mostly with how the Japanese have gained an advantage in information technology and how its culture and ways of corporate management are conducive for effective competition against their Western counterparts. The book also provides case studies of several successful Japanese corporations, such as the All Nippon Airways Ltd, for further analytical purposes.

6. Japanese Corporate Culture. (Internet website: http://www.japan.corporate.htm , 15 Sept 1997)
This Internet website offers a succinct description of the Japanese corporate culture. The main points of that culture are: devotion to the company, lifetime employment, group decisions and gift-giving. Prejudices such as the discrimination against women in Japanese organizations are also highlighted. The article concludes with the necessity for organizational change in Japan due to economic and competitive pressures.

7. Kotter, John.P. Corporate Culture and performance [videorecording]. Boston: Nathan / Tyler, 1992.
This videorecording is meant to be a training program for management. It comes with a questionnaire and a seminar guide. There are exercises for participants in the program to simulate discussion. The main points are: a description of corporate culture, low performance and adaptive cultures, the process of cultural change and the role of the change agents.

8. Neher, W.W. (1997). Organizational Communication. Organizational Culture. pp.128-140. USA: Allyn & Bacon.
This textbook explains organizations with an emphasis on communication. Four theories of organizational communication are described, with the relevant chapter on organizational culture being culled for this study. This chapter highlights the concept and elements of organizational culture. The communication implications of organizational culture in terms of context, organizational shape and structure, message behavior, methods and modalities of communication and communication activities are also explained.

9. Odaka, K. (1986). The Advantages and Disadvantages of Japanese Management. Japanese Management: A Forward-looking Analysis. pp 51-71. Tokyo: Asian Productivity Organisation
The concept of groupism is explained here and the flaws inherent in Japanese's management groupistic practices are also highlighted. The book also attempts to propose some specific remedies to revitalise Japanese management and improve on some of its corporate practices in order to better adapt to the modern world.

10. Westwood, R.I. (1992). Organisational Behaviour: Southeast Asian Perspectives. Organisational Commitment and Culture. pp.184-190. Hong Kong: Longman Group (Far East) Ltd.
This textbook gives a Southeast Asian perspective on organizational behaviour. It describes and explains the cultural aspect in Asian organizations that defines the meaning and experience of work. The structure of such organizations is clearly defined as well as the power and politics behind these. The management of process within Southeast Asian organizations such as decision-making, handling of conflict and change is also explained. What is drawn from this textbook for this article is the chapter on organizational culture.