Corporate culture defined differently outside the U.S.

Executives in Europe, Australia and Canada define corporate culture very differently from their counterparts in the U.S., a global survey shows. According to the survey, titled "People Power," 65 percent of U.S. respondents defined corporate culture as "the ethos of a company," or the principles that underlie the company's actions, as opposed to a company's management of people or management style. Survey respondents from companies outside the U.S. primarily described corporate culture in terms of "shared values or team spirit."

"People Power" reveals attitudes about corporate culture and other issues held by top executives at companies based in Australia, Canada, France, Germany, Holland, the U.K. and the U.S. More than 500 directors and senior vice presidents from five industry sectors (financial services; medium-sized manufacturing firms; telecommunications, communication and courier services; pharmaceuticals; and hospitality) responded to the survey conducted for Proudfoot PLC, an international management consulting firm.

Other key findings of the survey were:

Internal communication is a stumbling block for culture change worldwide. Internal communication tops the list of processes that need improving when major change is implemented in a company. A notable exception was in the responses from French companies, where 89 percent were very satisfied with communication, compared with an average of 25 percent in other countries.

Corporate culture is viewed as a key to success. More than half of all executives surveyed (52 percent) felt that corporate culture contributes a great deal to the success of their companies.

Nearly half of the respondents (48 percent) placed culture change at the top of the list of major changes they had faced in the last three years. This was followed by competitiveness (23 percent) and financial management (14 percent).

Most companies do not quantify the effects of corporate culture. Only 38 percent of companies indicated that they measured the effects of their efforts to change corporate culture, yet 86 percent claim their culture change programs are successful. Methods of measurement included employee surveys (the most common practice overall), meetings, independent surveys and informal feedback.

Only 28 percent of U.S. respondents said their firms were making "a great deal" of use of their employees to improve company performance. Overall the majority of executives surveyed (55 percent) felt that companies made only a fair amount of use of their employees in achieving this goal.

More than two-thirds of companies (69 percent) had implemented formal quality or other improvement processes in the last three to five years, and approximately two-thirds of those used consultants to help them. Ninety percent of respondents believed that quality processes had been well-integrated into the business. The main impact of formal processes was improved customer care and service (30 percent) and improved quality control (30 percent). The greatest impact on business success was felt in the areas of improved financial performance (37 percent) and improved cost control or savings (27 percent).

When asked about wider techniques to improve business performance, mixed levels of satisfaction were reported. More than two-thirds felt techniques (such as continuous improvement, re-engineering and total productive maintenance) complement each other very well or fairly well. However, more than half of the companies experienced resistance to change when trying to introduce new performance improvement techniques and nearly 75 percent said that when they introduced new techniques, other previously installed techniques suffered or experienced shortfalls in results.

There is a widespread use of non-financial data to measure company performance. Nearly two-thirds of companies (63 percent) said they used non-financial data to measure the success of their companies and share such information with investors.

Hospitality firms worldwide have strongest sense of company culture; 51 percent of hospitality companies described their corporate culture as "very strong," compared with a 43 percent average across other industry sectors and only 37 percent among manufacturing companies. Corporate culture also plays a greater part in business success in the hospitality sector than in any of the other sectors surveyed.