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Corporate culture and sustainable competitive advantage

Abe Thebyane
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Culture happens and all organisations have a culture. The issue is whether this corporate culture is consciously affirmed, nurtured and developed over time or if it 'just happened' based on the way 'things are done' in the organisation. By nurturing and developing your organisation's corporate culture, you can mould it into what you want it to be: a "true differentiator and the ultimate competitive weapon. If you ignore your culture, it will develop anyway and the result can be positive or negative.

John Kotter and James Heskett - in their book Corporate Culture and Performance -researched 207 large US companies in 22 different industries over an 11-year period. They found those companies that actively promoted constructive cultures saw revenue increases of 682% over that time versus 166% at companies that did not manage their cultures well. Corporate culture is vitally important to a business' sustainability because it is a key contributor to organisational performance. As Peter Drucker puts it, "Culture eats strategy for lunch".

Culture happens and all organisations have a culture. The issue is whether this corporate culture is consciously affirmed, nurtured and developed over time or if it 'just happened' based on the way 'things are done' in the organisation. By nurturing and developing your organisation's corporate culture, you can mould it into what you want it to be: a "true differentiator and the ultimate competitive weapon. If you ignore your culture, it will develop anyway and the result can be positive or negative.

What is 'corporate culture'?

Someone once defined corporate culture as 'the way we do things around here'. Robert Redfield, an anthropologist, defines 'corporate culture' as "shared understanding made manifest in act and artefact".

The above definitions emphasise that behaviours make a corporate culture visible. This might tempt one to view corporate culture as being simply about behaviours. Values, on the other hand, are the beliefs that people hold dear. These beliefs shape how they view the world and thus influence their behaviour, in a fundamental way, in all situations. A values-driven corporate culture is what we should aim for simply because values define what is true and noble about people.

How do you know what corporate culture you have?

It's all about measurement as you cannot manage what you cannot measure. I suspect the reason why many people do not do anything about their organisational culture is because they don't know how to measure it. Gill (2014) has identified 70 instruments used to measure organisational culture.

Schein (2009) states that one needs to understand that corporate culture is constructed from three levels:

  1. Artefacts-visible organisational structures and processes (hard to decipher),
  2. Espoused values-strategies, goals and philosophies (espoused justifications), and
  3. Underlying assumptions which are unconscious, taken-for-granted beliefs, perceptions, thoughts and feelings (ultimate sources of values and action).

Values and norms - dominant as they are - are only the intermediate levels of the multi-layers model of culture proposed by Schein (2009). Quantitative instruments are used to evaluate these. Artefacts, the most superficial manifestations of culture and qualitative instruments, are used to measure these.

So in deciding what instrument to use to measure corporate culture, first you need to decide what layer of culture you will be focusing on - norms and values, artefacts or basic assumptions.

How to measure corporate culture

It is stated that questionnaires designed to assess corporate culture as shared values include the organisational culture profile, the organisational culture index and the corporative emphasis scale. The main advantage of this category of instruments is their commensurate measurements scheme where individual preferences and organisational values are assessed along the same dimensions enabling estimations of congruency.

These measures have been useful in the study of person-organisation fit as predictor of work attitudes and behaviours. Focus on shared values – as a determinant of culture - means that an organisation can have the same culture across organisational entities and geographies. Focusing on corporate culture as a pattern of behaviours and norms, the organisational culture inventory and the culture gap survey questionnaires can be used.

Because their layer of culture is about ways of thinking, behaving and believing that members of a social unit have is common, this layer of culture is more sensitive than values to inter-organisation variations and learning processes. Compared to values, behavioural norms are easier to learn and could be readily influenced by the organisation through management practices. Because of their sensitivity to change and inter-organisation variations, behavioural norms questionnaires produce information that is particularly useful in interventions.

Corporate culture is too critical for a sustainable competitive advantage to be left to its own devices. HR professionals should take the lead in enabling their organisations to take corporate culture seriously. Being a custodian of the values and culture of their organisations, HR should enable line managers to nurture, shape and develop the culture of their organisations consciously. Understanding how to measure and develop the required culture is a competence that HR professionals - especially HR business partners - should develop.

Reference list

1. Delobbe, N. Haccoun, R. and Van den Bergh, C. Measuring core dimensions of organizational culture: A review of research and development of a new instrument. York University-Toronto

2. Gill, A. (2014) A culture of change. Financial world. A publication of IFS University 2014

3. Schein, E.(2009) The Corporate culture survival guide, Jossey-Boss


Abe Thebyane is the Group Executive: Human Resources at the Nedbank Group. He has a BAdmin, Postgraduate Diploma in Management (Human Resources) and an MBA. He joined the group, and was appointed to the group executive committee, in February 2011 as head of group HR. Abe has 29 years' experience in HR, which he acquired through the various senior and executive positions he held in large corporations in SA. Prior to joining the group, he was executive head: human resources at Anglo American Platinum Limited for six years and before that he was executive director: human resources at Iscor Limited.


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