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 Corporate Culture 2 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 Corporate Culture 3 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. Corporate Culture 6 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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