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					                          Corporate Culture:

Impact of corporate culture on customer relations and social responsibility




                        Dhanasekhar Damodaram




          Course: PSY/428 – Organizational Psychology -UOP

                         Instructor: Mary Saadat

                           07th December’2002
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                                        Introduction

       Corporate culture is an identity which aims to unite an often incongruous mix of

people and products towards a collective single mission. Corporate culture can be defined

as the moral, social, and behavioral norms of an organization based on the beliefs,

attitudes, and priorities of its employees and stakeholders. Every organization has its own

unique culture or value set. Some organizations don't consciously try to create a certain

culture. The culture of the organization is typically created unconsciously, based on the

values of the top management or the founders of an organization. Culture drives the

organization and its actions. It is somewhat like the operating system of the organization.

It guides how employees think, act and feel. It is dynamic and fluid, and it is never static.

A culture may be effective at one time, under a given set of circumstances and ineffective

at another time.

       The importance of corporate culture is growing as the result of several recent

developments. Companies are encouraging employees to be more responsible and act and

think like owners. Today, organizational leaders are paying more attention to corporate

culture and it is being addressed in the organization's mission, vision, and goal

statements, and emphasized in every aspect of the business and company training.

                   Impact of corporate culture on customer relations

       A company’s culture is greatly influenced by the management team within the

organization as they set the policies and practices for the organization. However, all

employees within an organization contribute to an organization’s culture. One of the key

challenges to the management team is to ensure front-line people keep up their spirits and

customer focus, especially in the frequently busy and pressured environments in which

they work. This requires a customer focused leadership. Leaders who are enthusiastic

about customers are critical to service success. Providing faster, friendlier, helpful
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customer service at lower cost will help build customer satisfaction and loyalty to the

company. Leaders should make sure that their organization views customers as assets and

build a corporate culture that is focused on customer needs and wants.

       Customer-focused cultures can be shaped, through considerable investment on

recruiting, training and rewarding. Organizations should set company values and

standards and share that with every employee through programs like induction training

which outlines the mission and values of the organization. The corporate culture should

encourage by rewarding employees who take customer initiatives. This helps to generate

customer-conscious behavior and encourage others to take similar initiatives. Also, if

such awards conducted publicly, it will help to lift staff morale. Effective service

companies take great care to recruit the right people. Customer service staff needs to

display knowledge and skill: nothing turns off the customers more than staffs that don’t

know the answers to their questions or handle their requests and problems

unsympathetically.

       Leaders must set service standards which helps everyone in the organization to

understand what to aim for and to build a culture that is customer focused. Corporations

that are successful in customer relationship understand that staying closer to the customer

is a must. This involves frequent contact, through surveys and feedback. Defining

standards and setting goals and ensuring that they are met and maintained helps corporate

to build and maintain a customer oriented culture.

                  Impact of corporate culture on social responsibility

       Companies are recognizing the growing influence of pressing issues in building

sustainable, successful businesses. The interaction between these issues and business

operations reveal the benefits that can come from addressing these issues – and the

penalties that can result from ignoring them. Social responsibility addressed
                                                                   Corporate Culture 4
comprehensively, can deliver the greatest benefits to a company and its stakeholders

when integrated with business strategy and operations.

       The current crisis involving U. S. corporations has reverberations far beyond the

particular companies and executives involved in the alleged wrongdoing. The actions of

these multinational corporations directly affect the well-being of their shareholders,

employees, retirees, suppliers and customers here and abroad. Their actions have also

influenced, in varying ways, the direction, reception and forms of capitalism developing

internationally.

       In every organization the leadership team is responsible for the overall corporate

governance of the organization. This includes defining and monitoring the strategic

direction of the company and developing and communicating a code of ethics that reflects

the corporate culture, values and principles of the company to shareholders, employees,

suppliers and the general community. The senior management and employees should be

guided by the company's values and principles statement to act with integrity and fairness

to improve the company's reputation and performance.

       Business ethics is rapidly moving beyond compliance to now influence corporate

principles and decision-making, strengthening employee commitment, corporate

reputation and financial performance. Also, community consciousness embraces a new

model that bridges traditional areas of volunteerism with commercial-community

relationships across many business functions, from sourcing and site selection to the

development and delivery of products and services. Integrated community based

strategies aligns business goals with community needs.

       An organization’s mission, vision and values help to set the principles on which a

company is based. Effectively setting these building blocks creates a framework for

corporate decision-making, employee recruitment and retention. Also, governance and
                                                                       Corporate Culture 5
accountability ties social responsibility directly to a company’s senior management, who

bears the responsibility for overall business strategy, practices and policies. Through

better transparency and reporting, greater accountability can improve corporate decision-

making, marketplace reputation and access to capital.

       Workplace policies and practices shape corporate culture and guide relationships

among employees and between an employer and his staff. With an increasingly mobile

workforce, new legal requirements and global business operations, companies should

recognize that responsible workplace practices and policies help to attract, train and retain

committed and productive employees. Even in economic downturns, responsible

downsizing plays a part in preserving a corporate culture and employee morale.

                                        Conclusion

       In many companies there is a strong dominant culture that is pervasive throughout

the organization and across business units or even regions. This kind of organization is

said to possess a high level of cultural integration. Organizations develop cultures

whether they try to or not. Understanding organization culture in an objective manner can

give business an advantage to align culture with its strategic goals, and to make

organizational changes in practices or values.
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                                           Reference

DuBrin, A. J. (2000). Applying psychology: Individual and organizational effectiveness

       (5th ed.). Boston: Prentice Hall.

Dessler, G. (2001). Management: Leading people and organizations in the 21st century.

       New Jersey: Prentice Hall.

Kochan, T., Scully, M, Van Mannen, J., & Westney. D. (2001). Applied organizational

       psychology. (Customized for the University of Phoenix). Cincinnati, OH: South-

       Western College Publishing.

				
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