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RIGHT CULTURE CAN DOUBLE
CORPORATE PROFITABILITY
Organisational culture plays a organisation’s culture is a combination For example, Apple is known for foster-
bigger role in a company’s of these four. ing a culture of innovation among its
financial performance than employees, which fits into its overall
generally believed. Compa- The survey indicates the clan culture— business strategy of developing innova-
nies with a strong connect between collaboration and mentorship—is the tive gadgets and solutions for consum-
strategy and culture are likely to be most dominant among Indian ers. Back home in India, the success of
twice more profitable than their peers, corporates. The dominance, however, the Godrej Group is widely believed to
says a recent study by Tata Strategic decreases with the increase in the size have been supported by its focus on
Management Group. (revenues) of the organisation. The employee development, welfare and
market culture—competing, goal-ori- mentorship, which are typical ele-
The study says a company whose cul- ented—becomes dominant as the firm ments of a predominantly clannish cul-
ture is strongly aligned with its strat- becomes bigger. ture. The ICICI Group, on the other
egy is likely to report a profit margin hand, is highly regarded for its focus on
of 11.5 per cent against 4.8 per cent “A winning strategy in itself is nothing sensing the pulse of customers and its
reported by firms whose organisational if it is not supported by right cultural result orientation, typical of a market
culture and strategy are not in sync attributes. Employees in a company culture.
with each other. that operates in a competitive con-
sumer market are expected to oper- More than three quarters (87 per cent)
The study is based on a survey of top ate differently than colleagues working of industry leaders claim to plan their
management (chief executive officers for, say, a commodity manufacturer,” culture with their evolving business
(CEOs), managing directors, directors says Raju Bhinge, CEO, Tata Strategic plans but many fail to achieve the
and chief people officers) across 96 Management Group, a management alignment. Only 69 per cent of the re-
companies from various sectors and of consultancy firm that operates as a spondents claimed alignment between
different sizes. The responses are division of Tata Industries. their culture and business strategy. A
based on the perception of the top third of the respondents admitted the
leadership about their organisational He says culture is often the unspoken culture existing in their organisation
culture and its fit with the firm’s mar- variable impacting corporate perfor- was not something they had envi-
ket strategy. The study is skewed to- mance, but its impact is rarely mea- sioned as a business leader.
wards large firms, with half of the re- sured due to its intangible nature. The
spondents (49 per cent) reporting an- study is an attempt to quantify the link Firms in the automotive, engineering
nual revenue of Rs 500 crore or more and the results confirm the strong link- and metals sectors reported full align-
last financial year. ages between a firm’s culture and its ment between their strategy and
market performance. organisational culture. In comparison,
The study uses the Organisational Cul- more than half of the respondents in
ture Assessment Instrument (OCAI) “The organisational culture affects the logistics, services (telecom, hospitality
framework developed by Kim Cameron way employee interact with each and consulting), and power and infra-
and Robert Quinn of the University of other, with customers and other stake- structure sectors feel their culture is
Michigan. According to OCAI, there holders, besides their perception of either weakly aligned or not aligned at
are four major cultures: clan, the organisation. This, in turn, impact all with their strategy. (Source : BS)
adhocracy, hierarchy and market. Any other stakeholders’ perception about
the company,” adds Bhinge.
18 PR COMMUNICATION AGE August 2015
