Types of Culture
There is no best or worst type of culture, any business that has been around long enough to have a recognisable culture, must be successful just to have survived. But each type of culture can have advantages and disadvantages, and as circumstances change, then unless the disadvantages can be overcome the long term existence of the business can be jeopardised.
Centralised or Leader Centric Culture.
Here the leader, who is likely to be a successful entrepreneur, sets the culture. Often, a company's founder has great influence in the initial values and principles in- stilled. For example, many people know about Richard Branson and Walt Disney, two very strong figures who emphasized quality and service in their respective companies, but at the same time created businesses with different cultures. Disney was and is authoritarian in nature, whilst Virgin is much more inclusive, more like a club.
The leader is:
- a model of how to operate within the firm
- a symbol of who gets ahead
- a guardian of the status quo
- a product of the culture
Risk taking culture
It could of course be argued that virtually all business decisions involve risk taking, after all the outcome is never completely certain. But there is a huge difference between playing it safe and risk taking.
In a risk taking culture outspoken and non-conformist staff members are never sanctioned or even fired for breaching the firms normal methods of behaviour, in fact if the risk they take pays off, they can be highly rewarded. Leaders will praise an employee's willingness to take a chance.
The major advantage of a risk taking culture is that it can lead to rapid innovation of new ideas, methods and products. But this does mean that there is a need to support individuals with good ideas or innovations to see and to see entrepreneurship as a natural part of the workplace. And if the idea fails, learn from the failure and move on.
But risk taking is not necessarily a good thing, in fact a recent survey of business executives has found that 89 per cent believe a culture of encouraging and rewarding excessive risk contributed to the financial crisis sweeping the world, and governments are now trying to find ways to limit the risks taken by financial institutions.
Socially Aware Culture
A socially aware business is one that is aware of the impact of the firms activities on all stakeholder groups and will therefore act in a way that minimises negative effects upon and bring greatest benefits to these stakeholder groups.
The Co-operative Bank is a good example of a socially aware business, it does not invest in non-ethical investments such as tobacco companies, and arms manufacturers. The Co -op Bank (CFS), says that its values include:
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Being customer focused
We always aim to satisfy our customers and exceed their expectations where
we can.
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Making work fun
We're proud of CFS and know that we can contribute to making it a great place to work.
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Social responsibility
We're committed to leading the way on ethical, environmental and community issues.
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Openness and honesty
We work hard to earn credibility and trust from our customers and each other.
There are a number of advantages to adopting this type of culture, these include:
- Winning custom from the ethical consumer
- Avoidance of bad publicity which may damage the brand
- Reduction of risk (The co-op bank has avoided most of the impact of the recent banking crisis)
- Attracting high quality staff who are committed to maintaining the culture
