Corporate Culture Analysis and Comparison

Corporate Culture Analysis and Comparison Modern business entities have evolved continuously from their predecessors of several generations in terms of corporate culture as much as they have evolved technologically. In the modern age of business, the success or failure of corporations is often substantially a function of variables and concerns that are difficult to address on a case-by-case basis, even within a single-office corporate venture.

The growth of corporate business entities into multiple-site organizations, and later, into trans-national organizations further complicated the concept of promoting beneficial strategic goals and the policies and approaches to achieve those objectives within large business organizations. As the contemporary business environment expands into the global range for more and more companies, defining, establishing, and clearly promoting a specific corporate culture is essential to allow business strategists to replicate and promote concepts, approaches, and policies that work while eliminating those that are identified as being counterproductive.

Generally, corporate cultures can reflect a traditional focus on maximizing productivity and profit, and for the most part, nearly all corporations incorporate elements of those traditional concerns within their corporate culture to the extent they maintain a purposeful corporate culture. Alternatively, corporate cultural identities can also be the product of specific interests (such as social altruism or environmental conservation) that lie wholly outside the realm of ordinary business concerns of the organization.

Corporate cultures can also evolve naturally and without any purposeful involvement (or in some cases, even outside of the awareness) of corporate management; moreover, that is equally true of productive and beneficial elements of corporate culture and of unproductive and damaging elements. In principle, corporate culture is a form of organizational identity that plays a similar role within business organizations to that played by a philosophy or life maintained by individuals.

Furthermore, the age of globalization, 'round the clock news cycles, and perpetual Internet access has increased the importance of corporate culture by greatly magnifying the likely consequences of both positive and negative press, particular with respect for the competition for customers. It has also already had a significant impact on recruitment efforts since prospective employees can now learn more about potential employers than they ever could before with comparable ease and convenience.

Contemporary business analysts have linked specific types of corporate cultures to customer satisfaction as well as to employee attitudes through empirical analyses. Even more importantly, they have also identified exactly how corporate cultural characteristics affect the former directly as a function of the latter. On one hand, it is difficult to overstate the importance of corporate culture on the conduct and profitability of modern business organizations; on the other hand, there is a wide range of specific concerns or corporate values capable of resulting in successful enterprises.

Naturally, certain companies will focus directly on customer satisfaction as the cornerstone of a corporate culture; others might emphasize operational efficiency and rely primarily on the quality of their products toward the same end. In that regard, the Mercedes-Benz Corporation ("Mercedes-Benz") and the Toyota Motor Company ("Toyota") represent different types of corporate culture. Both are designed to maximize the quality of their products and corporate profits, but their respective corporate cultures focus on different approaches toward achieving similar objectives.

Toyota Corporate Culture Since 2001, Toyota has adhered to a corporate culture called "The Toyota Way"; it is supported by two "pillars" and encompasses the following general principles: (1) maintaining a corporate philosophy or sense of purpose, (2) long-term planning; (3) problem-solving processes, (4) adding value to the company through employee development, and (5) recognition of organizational learning as a direct function of root problem solutions (Liker, 2003; Russell-Walling, 2005). The two supporting pillars of the corporate culture are respect for people and continuous improvement in connection with which the company has established specific principles for maximizing both.

In that regard, Toyota corporate culture emphasizes the willingness to take on challenges, continual improvement (kaizen), a managerial approach of first-hand observation or "go and see" (genchi genbutsu), respect, and teamwork (Liker, 2003; Russell-Walling, 2005). More particularly, the Toyota corporate culture consists of 4 concepts comprising 14 management principles.

The first category is a long-term philosophy; the second category is the belief that the right results are achievable through the right processes; the third category is the notion that developing employees is the key to adding value to the organization; and the fourth category is the dependence of organizational learning on the process of continually solving root problems (Liker, 2003). The long-term philosophy component of Toyota's corporate culture is the principle that long-term organizational benefits outweigh short-term benefits, including short-term financial concerns.

The right-results-through-the-right-process component of Toyota's corporate culture consists of management principles 2 through 8: (2) bringing problems to the surface is the key to maintaining a continuous process flow; (3) avoid overproduction through a pull system to coordinate the production of materials and subcomponents to reduce overproduction; (4) maintaining a consistent and level workload (heijunka) to avoid uneven production levels and overworking employees and equipment; (5) establishing a culture of quality control (jidoka) according to which every employee along the production line has the independent authority to stop production to address quality issues; (6) continuous improvement and employee empowerment through task and process standardization; (7) emphasize visual control to eliminate hidden problems; and (8) reliable and fully tested technology that best facilitates the production process and employees (Liker, 2003).

The add-value-to-the-organization-through-employee-development component of the Toyota corporate culture consists of management principles 9 through 11: (9) cultivate leaders who understand the work, live the corporate philosophy, and are capable of teaching it to others; (10) success is the result of establishing exceptional teams composed of exceptional individuals; and (11) respect the extended partnership and supplier network by challenging them and encouraging them to focus on the same quality-oriented and problem solving processes as in use at Toyota (Liker, 2003).

Finally, the dependence-of-organizational-learning-on-continuous-root-problem-solution component of the Toyota corporate culture consists of management principles 12 through 14: (12) genchi genbutsu ("go see for yourself") to thoroughly understand situations that require managerial attention; (13) make decisions slowly, deliberately, through consensus, and deliberately after considering all options and implications but implement those decisions swiftly once made (nemawashi); and (14) develop an organizational focus on learning through relentless reflection (hansei) and continuous improvement (kaizen) (Liker, 2003).

In keeping with the Toyota corporation's focus on the first-hand go and see (genchi genbutsu) management approach, it has implemented 10 specific steps within that principle (#12) that were originally introduced at the company's technical center (Liker, 2003).

According to those steps, Toyota managers are all expected to maintain their perspective with respect to long-term objectives; assign definitive tasks; consider and respond to objectively validated information and data; fully exploit the knowledge and experience of others to obtain, transmit, and analyze information; disseminate information expeditiously; report, consult, and inform others expeditiously; recognize and understand your own shortcomings; strive relentlessly toward continuous improvement; extend analyses beyond common wisdom, rules, and standards; protect the health and safety of everyone in the organization (Liker, 2003).

Mercedes-Benz Corporate Culture Mercedes-Benz has a long history of engineering expertise that was its principle corporate identity since the early decades of the 20th century (Kinicki & Williams, 2005).

Precision engineering and product quality are still valued defining concepts at Mercedes-Benz today, but by the late 20th century, one of the (positive) consequences of its long-time dedication to engineering precision was the ability of the company to transition into becoming one of the most successful manufacturers of high-end luxury automobiles favored by some of the most influential and wealthy customers in the world (Kinicki & Williams, 2005).

At Mercedes-Benz, the focus on product quality and precision engineering predates the contemporary understanding of corporate cultures and continues to be a central principle to which the company is dedicated to uphold. However, the evolution of the company into a high-end market required changes to the relatively narrow operation-oriented technical corporate cultural traditions. Specifically, the toward the latter decades of the 20th century, Mercedes-Benz analyzed modern studies about corporate success in general, in the automobile industry, and very specifically, within the high-end market consumer segment (Kinicki & Williams, 2005).

The principal goals established by Mercedes-Benz in that regard included positioning the company as a specific choice of a discriminating clientele rather than one of several companies competing for their choice by default and establishing an internal corporate environment that was conducive to increasing positive interactions between employees and customers based on studies of the customer service value of maintaining happy employees (Russell-Walling, 2005). Mercedes-Benz also incorporated social psychology analyses to determine exactly what types of services and benefits would be most appreciated by its customers.

Finally, Mercedes-Benz designed a corporate culture intended to achieve those objectives by directly applying those principles while simultaneously retaining its traditional corporate tradition and reputation for high-quality precision engineering (Russell-Walling, 2005). Early in its research into the available literature on customer satisfaction, Mercedes-Benz discovered that the concept that retaining existing customers is much more economical and profitable than acquiring new customers (Russell-Walling, 2005). The so-called "customer satisfaction barometer" measures the willingness of customers to continue their relationship with business organizations in the future.

Mercedes-Benz determined that an annual increase in the score of a corporation of a single statistical point on the customer satisfaction barometer five years consecutively corresponded to more than an 11% increase in profitability (Ross, 2002). Mercedes-Benz also determined that generating positive attitudes among its employees was essential to achieving high employee retention rates and to maintaining a positive work environment (Russell-Walling, 2005).

The company determined that this is particularly important with respect to the quality of customer service interactions and to the willingness of employees to conduct customer relations in the manner most conducive to retaining customers for the long-term. Essentially, Mercedes-Benz determined that employee satisfaction, in large part, determined the company's success at retaining both quality employees and also its success retaining customers thereby (Russell-Walling, 2005).

Mercedes-Benz began soliciting the opinions of employees by inquiring anonymously into such things as whether or not they enjoy their work, whether or not they derive personal satisfaction from their work, whether or not they are proud of the company, whether they consider themselves overworked, whether they are physically comfortable at work, whether they are treated well by supervisors, and most importantly, whether those factors influence their attitude about working for Mercedes-Benz (Russell-Walling, 2005).

As a result of those inquiries, Mercedes-Benz established specific guidelines implementing measures designed to maximize employee contentment and to generate positive attitudes in all of those areas (Russell-Walling, 2005). Similarly, the research review conducted by Mercedes-Benz determined that several factors that it had not anticipated as being influential also affected employee morale (Russell-Walling, 2005).

In addition to the factors such as those included in its preliminary surveys that pertain mainly to the actual operational aspects of individual employee involvement in the organization, there are also macroscopic factors not ordinarily considered as important to employees that also play a direct role in employee satisfaction.

For example, Mercedes-Benz began including questions about whether or not employees "feel good" about the company, whether or not they approve of strategic choices of the company from the perspective of effective competition, whether or not they understand the corporate business strategy, and whether or not they feel their vocational efforts are connected to the corporate strategy (Russell-Walling, 2005).

In addition to carefully considering the views and attitudinal factors responsible for a positive workplace from their employees' perspective, Mercedes-Benz also initiated a comparable effort to increase its understanding of its market and its clientele. With respect to the former, Mercedes-Benz began analyzing and comparing the market values and profits of its industry competitors. It began analyzing the business designs of competitors who were successful as well as those of competitors who were not successful.

With respect to the latter, Mercedes-Benz began examining patterns of consumer habits and changes in the priorities of its customers and clientele to determine how those patterns affect spending. Finally, Mercedes-Benz analyzed the relationship between and among those factors to identify what elements of business design correspond to increasing the ability of the company to maximize customer satisfaction and generate profit by following.