Abstract

Diploma work has suggested that understanding corporate culture as a

management philosophy is essential to managing an organisation in improving its

overall performance. Using questionnaire survey, this study examines the

influence of corporate culture on organisational commitment. Specifically, this

study examines four dimensions of corporate culture, namely teamwork,

communication, rewards and recognition and training and development on

employees’ commitment towards the organisation. The results show that all

dimensions of corporate culture chosen in this study are important determinants in

motivating the employees to be committed to their organisation. The findings

implicate that an organisation needs to be aware of the importance of these

dimensions in providing a favourable working environment to its employees in

attaining their full commitment for organisational success.

CORPARATE CULTURE

1. Introduction

Despite all due diligence, commitment, and application, the culture may not

change or it may not change in the intended direction, or even in an appropriate

direction. It is an expensive and long process without guaranteed results.

Changing a culture can take between three to six years during which profitability

can be seriously affected (Toolpack, 2001). However, those companies that

successfully changed their cultures reap enormous rewards. One way to mitigate

the downside during the long-term culture change is to implement incrementally.

Consider approaches such as Morgan’s (1996) 15% Solution which advocates

incremental change within an individual’s 15% sphere of influence. Multiple

incremental changes, in the same direction (towards the same attractors) can

organically change corporate culture from within. As an executive, identifying,

understanding, and influencing the organizational culture can ensure corporate

agility and financial success. As a potential employee, catching a glimpse of the

true culture of an organization will help one decide if the company is a place

where one can contribute and flourish. In both cases, misunderstanding the culture

can lead to disaster. Corporate cultures have both gross and subtle manifestations

that provide clues to the underlying norms and beliefs. Paying attention to the work

practices, environment, communication paths, and even the level of humour in a

company, will give one a hint of the dominant organizational culture. Identification

and understanding the culture is necessary to affect any minute or large scale

changes in response to market imperatives. If one does not have a clear picture

of the culture one cannot effectively modify it.

This diploma work touches on four key questions in relation to corporate culture:

· What is corporate culture?

· Why is it important to understand the corporate culture?

· How can one identify the corporate culture?

· Can corporate cultures be changed?

Corporate culture is the personality of the organization: the shared beliefs, values

and behaviours of the group. It is symbolic, holistic, and unifying, stable, and

difficult to change.

Made up of both the visible and invisible, conscious and unconscious learnings

and artefacts of a group the culture is the shared mental model. This model is

taken for granted by those within the group and is difficult for outsiders to

decipher. It is important to remember that the corporate culture is not the ideals,

vision, and mission laid out in the corporate marketing materials. Rather, it is

expressed in the day-to-day practices, communications, and beliefs. According

to Borgatti (1996) a strong culture:

· Is internally consistent

· Is widely shared, and

· Makes it clear what appropriate behavior is.

Resulting in an organization with a vision that everyone understands to which

everyone is committed. Whenever human beings gather and particularly when

individuals with a common purpose begin working together, work strategies and

thinking processes will develop and an organizational culture will be created. Most

corporate or organizational cultures have key features in common with the larger

culture in which they exist. For example, corporate cultures in America all have

some similar underlying thread. Corporate cultures in other countries also have a

unifying, cross-company flavour. However, even within a social culture, each

corporate culture is unique. Put more simply, corporate culture is the way things

get done in an organization. It is what drives action in the organization, guiding

how employees think, act and feel. It is the systematic set of assumptions that

define day-to-day working behaviour. Corporate culture can also be looked at as a

system with inputs from the environment and outputs such as behaviours,

technologies and products. It “is dynamic and fluid, and it is never static. A culture

may be effective at one time, under a given set of circumstances and ineffective at

another time. There is no generically good culture. There are however, generic

patterns of health and pathology.” (Hagberg & Heifetz, 2000) According to BOLA

(2001) culture is the shared beliefs, values and norms of a group and it includes:

· the way work is organised and experienced

· how authority exercised and distributed

· how people are and feel rewarded, organised and controlled

· the values and work orientation of staff

· the degree of formalisation, standardisation and control through systems there is

· the value placed on planning, analysis, logic, fairness etc

· how much initiative, risk-taking, scope for individuality and expression is Given

· rules and expectations about such things as informality in interpersonal

relations, dress, personal eccentricity etc

· differential status

· emphasis given to rules, procedures, specifications of performance and results,

team or individual working.

In the beginning corporate culture is shaped by the leaders and by the purpose

for with the company has been created. It then develops within the constraints of

the environment, technology, values of the leadership, and performance

expectations. “The initial culture is altered by the design variables of the company,

experiences of the company, management’s leadership style, the structure of the

company, the nature of the tasks of the groups, the way decisions are made, and the

size of the company. In addition, the developing culture is affected by the internal

integrity of the company, the climate, and how well the company is competing in

the marketplace, its effectiveness.” (DeWitt,2001)

While there may be a dominant organizational culture that is pervasive throughout

the company, this level of cultural integration is rare. More often there are many

cultures and sub-cultures (the basis for silos in organizations) which may be of

differing strengths and which may have differing levels of influence. “Subcultures

may share certain characteristics, norms, values and beliefs or be totally different.

These subcultures can function cooperatively or be in conflict with each other.”

(Hagberg & Heifetz, 2000).

1. Importance of corporate culture

Corporate culture is a hidden mechanism of coordination directing each

individual towards the common goal. The goal and the ways of achieving the

goal cannot be changed without understanding key attractors and drivers in the

culture. The causes of many profitability and responsiveness issues in corporations

are not found in the structure, in the leadership, or in the employees. The problems

are found in the cultures and sub-cultures of the organization. Understanding the

culture of an organization facilitates: · Hiring employees that will succeed in the

organization (lowering recruitment, development, and human resource

maintenance and management costs).

- “the culture of an organisation affects the type of people employed, their career

aspirations, their educational backgrounds, their status in society.” (BOLA, 2001)

- “the only trustworthy predictor of on-the-job success is how closely an

individual’s work habits match the organizational culture…” (Giles, 2000)

Creating policies and assignments to increase profitability and respond to

market demands. Having a firm grasp of a company’s culture and its nuances gives

an executive the edge.

- “New policies and assignments should consider the organizational culture and

should be communicated in a manner congruent to the existing work strategies and

beliefs. Learning how to communicate to the above listed tendencies can give an

executive enormous power. “(Giles, 2000)

- “If the organization wants to maximize its ability to attain its strategic objectives,

it must understand if the prevailing culture supports and drives the actions

necessary to achieve its strategic goals.” (Hagberg & Heifetz, 2000) . Making

significant changes to the corporation in response to real threats to its continued

existence.

- “Understanding and assessing your organization's culture can mean the difference

between success and failure in today's fast changing business environment”

(Hagberg & Heifetz, 2000)

- “Many companies have turned themselves around, converting imminent

bankruptcy into prosperity. Some did it through financial gimmickry, but the ones

who have become stars did it by changing their own culture.” (Toolpack, 2001)

- “The power of cultural change is strong -- strong enough to turn an aging

dinosaur into a state-of-the-art profit-maker… Because people working in different

cultures act and perform differently, changing the culture can allow everyone to

perform more effectively and constructively.” (Toolpack, 2001)

· Facilitating mergers, joint ventures, and acquisitions.

- Being able to merge and reinvent corporate cultures plays a critical role in

national and international takeovers, joint ventures and mergers. If the cultures

cannot be merged or reinvented then the business will fail. (Wilms, Zell, Kimura

and Cuneo, 1994) Decisions to form joint ventures are made on economic

grounds. Their failure to succeed relates to the key noneconomic factor, the

corporate cultures involved. Increasing profitability and growth.

- Understanding, shaping, nurturing, and proclaiming cultural aspects can increase

corporate profitability and growth.

“Companies that display specific facets of corporate culture grow 10 times faster

than companies that don't. The average net sales growth for so-called high-culture

companies is 141 percent, compared with 9 percent growth at "low-culture"

companies” (Kosan, 2001)

1.1 Indicators of corporate culture

Corporate culture can be identified and analyzed and there are several

consulting firms in North America making significant profits doing just that. Many

focus on identifying workforce attitudes, behavioural preferences, and the work

environment including structure, physical artefacts, and communication channels.

All agree that attention must be paid to the intangible (unconscious) as well as

the tangible (conscious) aspects including the deeply rooted basic assumptions

that are often taken for granted by those inside the organization. “Organisational

culture may be visible in the type of buildings, offices, shops of the organisation

and in the image projected in publicity and public relations in general…An

organisation’s culture may be imperceptible, taken for granted, assumed, a status

quo that we live and participate in but do not question” (BOLA, 2001) Another key

indicator is the true reward structure: not what the reward and recognition

programs advertise but how and why people are really rewarded. “What

management pays attention to and rewards is often the strongest indicator of the

organization’s culture. This is often quite different than the values it verbalizes or

the ideals it strives for.” (Hagberg & Heifetz, 2000). Other artefacts, key to

identifying aspects of a particular culture, include:

· Architecture and décor. What does the actual physical environment look like? Is

it a pleasant airy space with areas intended to encourage chats over coffee? Are

employees working in cubicles with management offices along the windows?

Remember to consider the type of work being done when looking at the

environment.

· The clothing people wear. Is the dress formal or informal? Does dress change

depending on the day or the week or interaction with external clients? Does the

official dress code say one thing but employees dress a different way?

· Organizational processes and structures.

· Rituals, symbols and celebrations.

· Commonly used language and jargon.

· Logos, brochures, company slogans. (Hagberg & Heifetz, 2000)

To confirm that the analysis of the artifacts is creating a true picture of the

corporate culture, talk to employees who have been with the company for between

four and six months and who are planning to stay. Find out what they have run up

against, identified, and learned to work with and around. Their continued existence

and happiness in the organization depends on their being able to integrate with the

existing culture. They have a vested interest and will have identified key cultural

aspects that may not be obvious in the artifacts and may be invisible to those who

have been there over a year.

It is widely recognized that cultural differences between the partners of a merger

are one of the most common reasons for failure in mergers. This may happen

during pre-merger negotiations or during post-merger integration. Despite all Due

Diligence, the two partners of a merger fail to form a new successful unit that is

able to exploit all synergies. Often, the term ‘corporate culture’ is used to

describe issues like objectives, personal interests, behaviors etc. Many problems in

cooperation and teamwork are blamed to culture. However, in a merger, ‘culture’

is more than making the people from both partners work together smoothly. The

development of a new, shared culture is a critical factor for merger success. It is

possible to manage this process in a structured way.

Corporate Culture is embedded deeply in the organization and in the behavior of

the people there. It is not necessarily equal to the image the company gives itself in

brochures and on the website. Therefore, it is difficult to determine an

organization's culture from the outside. Especially in pre-merger negotiations

– when time and confidentiality are critical factors while trust still needs to be

established

– it can be a challenging task to find out if the cultures of the potential partners fit

together.

Culture:

Assumptions

Believes

Values

Norms

Styles

Mechanisms:

Rewards

Systems

Structures

Capabilities

Strategy:

Products

Services

Customers

Colleagues

Behavior

Customers

Suppliers

State

Society

Competitors

Shareholders

Corporate culture is determined by a variety of different factors:

- Artifacts

- Management styles

- Norms

- Values

- Believes

- Assumptions

The concept of corporate culture is best described by the sentence

The way we do things around here.

There is no one right culture for an organization. There are only cultures that fit

more or less to the particular situation of the organization.

In practice, several cultures can exist within one organization. This may more often

happen in larger, diversified companies, when some divisions / departments start to

develop their own ways to do things.

In the result, there are three types of cultural differences

-Cross-national differences (especially in

cross-boarder mergers),

- Cross-organizational differences,

- Cross-functional differences.

In practice we can find problems of cultural fit in following areas:

- Organizational values

-Management culture and leadership styles

-Organizational myths and stories

-Organizational taboos, rituals

-Cultural symbols

Cultural problems can develop unexpected dynamics in such situations:

1. Realization of differences

2. Stressing and evaluation of differences

3. Mutual stereotyping

4. Mutual blaming

5. Battle for cultural dominance

Giles (2000) provides a series of questions to identify the dominant corporate

culture.

· Is the company primarily market based, technology based, customer

based or owner based.

Also helpful in identifying and understanding corporate culture are corporate

culture models including:

Proponent Components of Model

Rensis Likert · autocratic

· benevolent autocratic

· consultative

· participative

Burns and Stalker · mechanistic · organismic

Henry Mintzberg · simple structure

· machine bureaucracy

· divisionalized

· professional bureaucracy

· adhocracy

Roger Harrison · power

· role

· task

· personal

Each of these models provides a framework in which a corporate culture can be

analyzed.

1.2 Changing a corporate culture

Changing a corporate culture is a complex, long-term, and expensive

undertaking that will either revitalize or kill the company. It should not be

undertaken lightly. Culture change must be driven by a powerful, transformational

reason: The competition is succeeding and you are not: Your company will fail if it

does not change. “For change to be successful there needs to be a compelling

reason to change, a clear vision of what the change will be, and, a sensible first

step.” (Tribus, 2001) Tan (2001) outlines four instances where corporate cultures

need to be changed:

1. When two or more companies of varied backgrounds merge and continuous

conflict among people of different groups are undermining their performance;

2. When an organisation has been around for a long time and its way of working

are so entrenched that it is hindering the company from adapting to changes and

competing in the marketplace;

3. When a company moves into a totally different industry or areas of business and

its current ways of doing things are threatening the survival of the organisation;

and

4. When a company whose staff are so used to work under the favourable

conditions of economic boom but could not adapt to the challenges posed by an

economic slowdown.

Corporate culture cannot be changed through changing a policy or issuing an edict.

It can also not be accomplished overnight. “The only way to change organizational

culture overnight is to fire everyone and hire a new staff with the working

behaviors you now want.” (Giles, 2000) Culture change requires consistency of

message, goal, direction, and leadership to succeed. To change a culture one needs

to change the images and values, the evaluative, and the social elements of the

organization. This requires a strong leader who knows where they want the

company to go, why they want it to go there, can articulate both these points, and

who has the power to drive the change throughout the organization. This leader, in

all the proponents of change in the organization, must consistently and obviously

“model the behavior they want to see in others. If they do not send a consistent

message and keep that message clear and dominant over time, cultural change may

be seen as just another fad.” (Toolpack, 2001)

Given strong leadership, Bijur (2001) has identified the five aspects of a successful

change.

1. Values: values that drive the organization toward the realization of a

shared vision. Motivation: understand what motivates people. Make them

stakeholders in the change.

3. Shared Ideas and Strategies: create an environment that enables the

sharing of ideas and strategies and encourages change.

4. Goals: clear and unambiguous goals, frequently communicated and

discussed. Clear link between individual and corporate goals.

5. Performance Ethic: a reward and recognition system that instills in the

organization a performance ethic.

Changing a culture is an incremental endeavour. The organization should move,

in a non-linear fashion, from stability, through chaos, to the realignment with new

values, beliefs, norms, and artefacts. The climate must engender organic

change, exploration, learning from failure and must adjust as the new culture

emerges, anchored to leader-established values, goals, and behavioural guidelines.

“Leaders of organizations must lay value foundations, cultural anchors and

behavioral guidelines so that growth and development are harmonious and

congruent, and not mechanistic, haphazard, harmful, or destructive. Creative

conflict and patterned disequilibrium are the paradoxical dynamics for culture,

development, and growth in organizational life.” (Stupak, 1998). Despite all due

diligence, commitment, and application, the culture may not change or it may not

change in the intended direction, or even in an appropriate direction. It is an

expensive and long process without guaranteed results.

Changing a culture can take between three to six years during which profitability

can be seriously affected (Toolpack, 2001). However, those companies that

successfully changed their cultures reap enormous rewards.

One way to mitigate the downside during the long-term culture change is to

implement incrementally. Consider approaches such as Morgan’s (1996) 15%

Solution which advocates incremental change within an individual’s 15% sphere

of influence. Multiple incremental changes, in the same direction (towards the

same attractors) can organically change corporate culture from within.

Organisational commitment

Organisational commitment is often referred to employees’ psychological

attachment to the organisation (Mowday, 1979; Mowday et al. 1982)1. There are

three components of organizational commitment, namely, affective commitment,

continuance commitment and normative commitment (Meyer and Allen, 1991).

Affective commitment refers to employees’ positive emotional to the organisation.

An employee who is affective committed strongly identifies with the goals of the

organisation and tends to remain with the organisation (Kanter, 1968; Mowday et

al., 1982). Continuance commitment refers to the employees’ commitment to the

organisation due to their perceived high cost of losing organisational membership.

This includes loss of economic costs such as pension accruals and social costs such

as friendship ties with colleagues (Meyer and Allen, 1991). Of consequence, the

employees remained with the organisation because they have to.

Normative commitment refers to the employees’ commitment to the organisation

due to their feelings of obligation (Meyer and Allen, 1991) which could be derived

from many sources.

Normative commitment could also derive before the employees join the

organisation through their families or socialization processes that requires loyalty

to one organisation. Of consequence, the employees stayed with the

organisation because they ought to.

Meyer and Allen (1991) argued that these components are not mutually exclusive.

This implied that employees could be simultaneously committed to an organisation

in an affective, continuance and normative commitments at varying levels of

intensity. Employees could at any point of time have a commitment profile that

reflected high or low levels of all components (Meyer et al. 2002). These different

profiles would eventually lead to different effects on workplace behaviour.

Employees’ commitment profile could be influence by many factors, one of it

being corporate culture.

Corporate culture involves with social expectations and standards as well as the

values and beliefs that individuals hold central and that bind organisational groups

(Lawson and Shen, 1998). It is a pattern of basic assumptions invented, discovered

or developed by a given group as it learns to cope with its problem of external

adaptation and internal integration (Schein, 1992). These values are then

being taught to new members in the organisation as the correct way to think and

feel in relation to these problems. Culture is looked upon as a reward of work

(Peters and Waterman, 1982). A large body of the management and business

literature has examined the link between corporate culture and organisational

performance. This body of literature has identified various dimensions of corporate

culture related to organisational performance (such as Meyer and Allen, 1991;

Ricardo and Jolly, 1997; Lau and Idris, 2001; Meyer et al. 2002). These include

communication, training and development, rewards and recognition, effective

decision-making, risk taking for creativity and innovation, proactive planning,

teamwork and fairness and consistency in management

practices (Ricardo and Jolly, 1997; Lau and Idris, 2001). Within these dimensions,

four important dimensions of corporate culture are teamwork (Morrow, 1997;

Osland, 1997; Karia and Ahmad, 2000; Karia and Ashari, 2006), communication

(Nehers, 1997; Myers and Myers, 1982), training and development (Karia, 1999;

Karia and Ahmad, 2000; Acton and Golden, 2002) and rewards and

recognition (Zigon, 1997; Allen and Helms, 2002).

Figure 1 illustrates the framework that underpins this study. The framework posits

that corporate culture could influence organisational commitment. This framework

is based on Lau and Idris’s (2001) four dimensions of corporate culture. The four

dimensions are teamwork, communication, training and development and rewards

and recognition. These four dimensions are selected because they have been

selected as those likely to have the greatest effects on employees’ behaviour

(Ricardo and Jolly, 1997;Lau and Idris, 2001). It is expected that these dimensions

of corporate culture influence the organisational commitment. Therefore, the four

dimensions of corporate culture becomes the independent variable.

Organisational commitment could be influenced by corporate culture because it

reflects the relative strength of employees’ attachment or involvement with their

organisation (Lau and Idris, 2001). Organisational commitment could either derive

from affective commitment, continuance commitment and normative commitment.

Therefore, organisational commitment is the dependent variable in this study.

Figure 1: Framework of this study

1.3.1 Hypotheses

A body of the literature has examined the link between teamwork and

organisational performance (Karia and Ahmad, 2000). These studies found that

teamwork is one of the important dimensions in influencing organisational success

as well as achieving good relationship between workers and managers. The results

indicate that an organisation that practices some levels of teamwork often

experienced an increase in employees’ commitment to the organisation. It is

expected that similar results would appear in this study. Therefore, the following

null hypothesis is developed:

Corporate culture• Teamwork• Training and development• Communication

• Rewards and recognition

Organisational

commitment

H1: There is no significant relationship between teamwork and organisational

commitment.

Another body of the literature has examined the link between communication and

organisational performance (Neher, 1997; Myers and Myers, 1982).

Communication refers to the sending and receiving messages by means of symbols

and sees organisational communication as a key element of organisational climate

(Drenth et al., 1998). Studies examining this issue found that the manner in which

the organisational goals and employees’ role in advancing these goals are

communicated to employees strongly organisational commitment (Robbins, 2001;

Brunetto and Farr-Wharton, 2004). This led to the following null hypothesis:

H2: There is no significant relationship between communication and organisational

commitment. Another body of the literature has examined the link between

training and development and organisational performance. The studies that have

examined this dimension found that this dimension plays an important role since it

facilitates the updating skills, lead to increase commitment, well-being

and sense of belonging and consequently led to the strengthening of organisational

competitiveness (Cherrington, 1995; Bartlett, 2001) particularly, organisational

commitment. Therefore, the following null hypothesis is developed:

H3: There is no significant relationship between training and development on

organizational commitment.

Studies have also examined the link between rewards and recognition and

organizational performance. Rewards and recognition refer to something that

increases the frequency of an employee’s action (Zigon, 1997). This dimension is

considered a motivating factor in helping employees build feelings of confidence

and satisfaction (Keller, 1998) and should closely align to organisational strategies

(Allen and Helms, 2002). Studies that examined this issue found consistent

influence that rewards and recognition influence employees’ commitment and in

turn influence organisational success (O’Driscoll and Randall, 1999; Zhang, 2000;

Karia and Ashari, 2006).

H4: There is no significant relationship between rewards and recognition and

organizational commitment.

1.4 Research Design

This study focuses on corporate culture and its impact on organisational

commitment. Specifically, this study looks into whether:

1. Teamwork influence organisational commitment.

2. Training and development influence organisational commitment.

3. Communication influence organisational commitment.

4. Rewards and recognition influence organisational commitment.

This study examines these issues by way of a questionnaire survey.

2. Analysis of managing the company's corporate culture

Corporate culture is a key component in the achievement of an organization's

mission and strategies, the improvement of organizational effectiveness, and the

management of change. Culture is rooted in deeplyheld beliefs. It reflects what has

worked in the past. It is a pattern of shared beliefs, attitudes, assumptions and

values, which may not have been explicitly articulated. Corporate culture shapes

the way people act and interact and strongly influences how things get done. It

encompasses the organization's goals, behavioural norms, and dominant

ideologies. Culture can be expressed through the organization's myths, heroes,

legends, stories, jargon, rites, and ritual.

Corporate culture can work for an organization by creating an environment that is

conducive to performance improvement and the management of change. It can

work against an organization by erecting barriers that prevent the attainment of

goals. The impact of culture can include conveying a sense of identity and unity of

purpose to members of the organization, facilitating the generation of commitment

and shaping behaviour by providing guidance on what is expected.

Managers of oil and gas companies live within the corporate culture. They must

understand it as a basis for diagnosing and solving problems and for developing

new policies or procedures. They may be involved in managing the culture in times

of change or during crises.

Culture is manifested in the form of norms, the unwritten rules of behaviour and

values, what is regarded as important, expressed as beliefs on what is best or good

for the organization and what ought to happen.

Values can be implicit or articulated in value statements. The value set of an

organization may only be recognized at the top level, or shared so that the

enterprise could be described as value-driven. Statements describing general

principles of behaviour may support them. Other manifestations of culture include

artifacts, the tangible aspects of an organization that people hear, see, or feel;

management style, the way in which managers behave and exercise leadership and

authority; organizational behaviour, the way in which people act and interact in the

organization, the structure of the organization, the process and systems used in the

organization; and, organizational climate, the working atmosphere of the

organization. This can be described as the explicit culture and was defined by

Payne and Pugh as a concept "reflecting the content and strength of the prevalent

values, norms, attitudes, behaviours and feelings of a social system". Corporate

culture is a system that is continuously affected by events and influences over time.

These derive from the organization's external environment and from its internal

processes, systems, and technology (Armstrong, 1991).

This paper is a critical analysis of managing the company's corporate culture to

enhance organizational efficiency, productivity, and efficient service system. It

seeks to sensitize the library managers through divergent views and opinions on

how they can manage the corporate culture of their organizations, and to apply the

basic principles of corporate culture management to Oiland gas companies

management.

The current interest in corporate culture began in the 1980s with the work of

writers such as Allen and Kraft (1982), Deal and Kennedy (1982), and above all

Peters and Waterman (1982). Academics had drawn attention to its importance

much earlier, however. Indeed, Allaire and Firsirotu (1984) showed that, more than

twenty years before the work of Peters and Waterman, there was already

substantial academic literature on organizational culture. Blake and Mouton

(1969), for example, were already arguing that there was a link between culture

and excellence in the late 1960s.

Turner (1986) traced the "culture craze" of the 1980s to the decline of standards in

manufacturing quality in the USA and the challenge to its economic pre-eminence

by Japan. He comments that the concept of culture holds out a new way of

understanding organizations, and has been offered by many writers as an

explanation for the spectacular success of Japanese companies. Bowles (1989),

among others, observes that there is an absence of a cohesive culture in advanced

economies in the West, and that the potential for creating systems of beliefs and

myth within organizations provides the opportunity for promoting both social and

organizational cohesion. The case for culture was best summed up by Deal and

Kennedy (1983), who argued that culture rather than structure, strategy, or politics

is the prime mover in organizations.

Silverman (1970) contended that organizations are societies in miniature and can

therefore be expected to show evidence of their own cultural characteristics.

However, culture does not spring fully formed from the desires of management.

Allaire and Firsirotu (1984) argue that it is the product of a number of different

influences: the ambient society's values and characteristics, the organization's

history and past leadership, and factors such as industry and technology.

Culture, as Elridge and Crombie (1974) state, refers to the unique configuration of

norms, values, beliefs, ways of behaving and so on, that characterize the manner in

which groups and individuals combine to get things done. Culture defines how

those in the organization should behave in a given set of circumstances. It affects

all, from the most senior manager to the humblest clerk. They and others judge

their actions in relation to expected modes of behaviour. Culture legitimizes certain

forms of action and proscribes other forms. This view is supported by Turner

(1971), who observes that cultural systems contains elements of "ought" which

prescribes forms of behaviour or allow behaviour to be judged acceptable or not.

Handy (1986) identifies four types of culture: power, role, task and person. He

relates each of these to a particular form of organizational structure.

• A power culture is frequently found in small entrepreneurial organizations

such as some property, trading, and finance companies. Such a culture is

associated with a web structure with one or more powerful figures at the center,

wielding power.

• A person culture is rare. The individual and his or her wishes are the central focus

of this form of culture. It is associated with a minimal structure, the purpose of

which is to assist those individuals who choose to work together. A person culture

can be characterized as a cluster or galaxy of individual stars.

• A role culture is appropriate to bureaucracies, and organizations with

mechanistic, rigid structures and narrow jobs. Such cultures stress the importance

of procedures and rules, hierarchical position and authority, security and

predictability. In essence, role cultures create situations in which those in the

organization stick rigidly to their job description (role),and any unforeseen events

are referred to the next layer up in the hierarchy.

• Task cultures, on the other hand, are job– or project– oriented, with the onus on

getting the job at hand (the task) done rather than prescribing how it should be

done. Such types of cultures are appropriate to organically structured organizations

where flexibility and teamwork are encouraged. Task cultures create situations in

which speed of reaction, integration, and creativity are more important than

adherence to particular rules or procedures, and where position and authority are

less important than the individual contribution to the task in hand.

Handy (1986) believes that it is these last two forms of culture, role and task,

which are most frequently found in organizations. Handy's categorization of types

of culture is useful for giving a picture of different organizational cultures. It

serves to highlight both the difficulty of clearly defining cultures and the profound

implications of the cultural approach to organizations. These implications fall

under four main headings:

1. Deal and Kennedy (1983) argue that behaviour, instead of reacting

directly to intrinsic motivators, is shaped by shared values, beliefs, and

assumptions about the way an organization should operate, how rewards should be

distributed, the conduct of meetings, even how people should dress.

2. If organizations have their own identities, personalities, or cultures, are there

particular cultural attributes that are peculiar to top performing organizations?

3. Sathe (1983) argues that culture guides the actions of an organization's

members without the need for detailed instructions or long meetings to discuss

how to approach particular issues or problems, and reduces the level of ambiguity

and misunderstanding between functions and departments. In effect, it provides a

common context and a common purpose for those in the organization. This is only

true when an organization possesses a strong culture, and when the members of the

organization have internalized it tothe extent that they no longer question the

legitimacy or appropriateness of the organization's values and beliefs. 4. One of the

most important implications is that as Barratt (1990) observed, "values, beliefs and

attitudes are learnt, can be managed and changed, and are potentially manipulable

by management." O'Reilly (1989) is one of those who clearly believes this is the

case. He argues that it is possible to change or manage a culture by choosing the

attitudes and behaviours that are required, identifying the norms or expectations

that promote or impede them, and then taking action to create the desired effect.

2.1. Managing corporate culture

Because corporate culture is based on taken-for-granted assumptions and beliefs, it

can be an elusive concept. There may not be a single culture, but a number of

cultures spread throughout the organization, and this does not make "managing"

the corporate culture easier. There is no such thing as a "good" or "bad" culture,

but only cultures that are appropriate or inappropriate.

The strength of culture clearly influences its impact on corporate behaviour. Strong

cultures have more widely-shared and more clearly expressed beliefs and values

than do weak ones. These values will probably have been developed over a

considerable period of time and they will be perceived as functional in the sense

that they help the organization achieve its purpose.

Culture is learned. Schein (1983) suggests that it is learned in two ways. First,

there is the trauma model, in which members of the organization learn to cope

using defense mechanisms. Second, there is the "positive reinforcement" model,

where things that work become embedded and entrenched. Learning takes place as

people adapt to and cope with external pressures, and as they develop successful

approaches to carrying out organizational goals. The nature of those goals largely

determines the way it goes about its business, and this in turn affects the way the

corporate culture develops and is manifested within the organization. Against this

background, organizational members, with the values, philosophy, beliefs,

assumptions, and norms of top management playing a dominant role, create

corporate culture.

This view of the creation of corporate culture is applicable to the

oil and gas company and its employees in this age of electronic library. For

developed and industrialized nations. But the story is not the same in the

developing world; there is a technology gap being developing nations and the rest

of the world. The developing world is faced with the serious challenge of

nosediving economies resulting in large-scalepoverty. Few developing countries

are thinking seriously about issues such as digital libraries and the skills required

for staff members in those libraries.

According to Armstrong (1991) approaches to managing corporate culture and

achieving cultural change in oil and gas company are:

• Reorganization to facilitate integration, to create departments or jobs which are

responsible for new activities or to eliminate unnecessary layers of management.

Some libraries have created ICT units. Other departments such as cataloging have

reorganized to integrate the use of ICT, and specialists such as system engineers

are recruited to enhance the smooth running of the ICT operation.

• Organizational development to help the organization respond to change.

• Communication to get the message across

• Increase the identification of staff with the firm and therefore enhance their

commitment. This could be helped as easily as by creating a website with staff

pictures, departments, and job titles.

• Provide the opportunity for all levels of staff to become more involved in

the organization's affairs. Participatory management will help to improve the

corporate culture. The sense of belonging will result in the increase in company’s

productivity.

• Generate ideas from staff to develop the business, improve the levels of

customer service, and increase productivity.

• Training can help form new attitudes about customer service quality, managing

and motivating people, or productivity; to increase commitment to the firm and its

values; to review and challenge assumptions, and to improve skills or teach new

skills.

• Recruitment of new employees to fit the desired culture or to reinforce the

existing culture. Performance management to ensure that managers, supervisors,

and staff are aware of their objectives and are assessed on results, and that

performance improvement programmes consisting of self-development, coaching,

counseling, and training are used to capitalize on strengths or overcome

weaknesses.

• Reward management to enhance the cultural assumption that rewards should be

related to achievement

2.2 Analysis of corporate culture factors

Culture is not static. As the external and internal factors that influence

culture change, so culture will change. However, cultural change will be slow,

unless there is some major shock to the organization (Burnes, 1991). This in itself

may not be a problem, if other factors also change slowly. In addition, like Handy

(1986), Allaire and Firsirotu (1984) argue that, to operate effectively and

efficiently, an organization's culture needs to match or be appropriate to its

structure. As Handy (1986) commented "experience suggests that a strong culture

makes a strong organization, but does it matter what sort of culture is involved?

Yes, it does. Not all cultures suit all purposes or people. Cultures are founded and

built over the years by the dominant groups in an organization. What suits them

and the organization at one stage is not necessarily appropriate for ever – strong

though that culture may be."

For a variety of reasons, organizations may find that their existing culture is

inappropriate or even detrimental to their needs. In such a situation, many

organizations have decided to change their culture. Many writers advocating

culture change, including Peters and Waterman (1982) with their seven steps to

excellence, take a very prescriptive line. Others appear to underestimate the

difficulty involved in changing culture. There are other writers, however, who

while sharing the belief that culture can be changed, take a more considered view.

One of the more influential, Schein (1985), believes that before any attempt is

made to change an organization's culture, it is first necessary to understand it.

Schein's approach is to treat culture as an adaptive and tangible learning process.

His approach emphasizes the way in which an organization communicates its

culture to new recruits. It illustrates how assumptions are translated into values and

how values influence behaviour. Schein seeks to understand the mechanisms used

to propagate culture, and how new values and behaviours are learned. Once these

mechanisms are revealed, he argues, they can then form the basis of a strategy to

change the organization's culture. The work of Schein (1985), Schwartz and Davis

(1981), Cummings and Huse (1989) and Dobson (1989) provide organizations

with the guidelines and methods for evaluating the need for and undertaking

cultural change. Schein's work shows how an organization's existing culture can be

revealed. Schwartz and Davis' shows how the need for cultural change can be

evaluated and the necessary changes identified. Finally, the work of Cummings

and Huse (1989) and Dobson (1989) shows how cultural change can be and is

implemented.

The cultural analysis is a tool for identification and overcoming of cultural

differences between partners in mergers. A detailed analysis shows differences and

common grounds between the people of both organizations. Thus, it allows

improving interaction and communication.

Characteristics of Culture. Perception of other Organization Own Perception

True False True False

Democratic

Bureaucratic

Authoritarian

Open for changes

Traditional

Responsible for people

Team-orientated,

cooperative

Hierarchical

Transparent processes

on all levels

International Focus

Egoism of departments

Long-term orientation

Answers from organization A Answers from Organization B Difference: Potential

cultural problems

Example for cultural analysis for identification of cultural differences

This analysis can be performed by comparing both partners’ perceptions of various

features of corporate culture. The difference in perceptions of particular

characteristics of cultures indicates potential conflicts. Another important step is

the establishment of a new cultural basis on which the new culture can develop.

The name of the new organization may take a key role in this process. The new

name is a symbol for the changes that come along with the merger, and it indicates

how much both old companies contribute to the new one.

Moreover, it is necessary to harmonize and to communicate all other elements that

influence culture, e.g. reward systems, systems for performance measurement.

Organizations that want to integrate both old cultures have to take care that no

partner gets advantages or disadvantages. In order to avoid the backwards looking

‘us vs. them’-thinking, it is advisable to form new teams with people from

both organizations. Practical experience has shown that at least 25% of staff should

be allocated to new / other teams. Only than, everybody will realize that inevitable

changes are on their way.

Other approaches to avoid cultural problems:

Newsletters and hotlines

Realistic predictions of development,

milestones and outcomes of the merger

Workshops

Surveys, questionnaires and feedback

analysis

Integration teams

Building of new teams

Mutual evaluation in and between mixed

teams

2.3 Positivism Is Realist.

To Hegelian idealists only “reason” is real and everything else is purely perception

— ideas of the mind: rocks and trees do not exist. To others rocks, bodies, and

trees are very real—one may see, touch,

taste, and smell them. Rocks are tangible observables, as are many organizational

phenomena like policy manuals, charts, memos, incentive plans, budgets, and

employees. Other things, such as atoms, base-pairs, gravity waves, and black

interstellar matter, are tangible unobservables. In organizations things that are in

some sense tangible may not be directly observable to scientists who are

“outsiders”—the myriad day-to-day insider communications, transactions, and

behavioral events may qualify as tangible unobservables. Many other things in

organizations, are intangible unobservables, such as cognitions, attitudes, values,

norms, corporate culture assumptions, networks, and so forth—though some may

be potentially detectable in the future. If realism means focusing only on tangible

observables, what Manicas (1987) calls “empirical realism,” the Received View

could appear realist since it tries to avoid anything metaphysical. But compared to

scientific realists, who may define tangible and intangible unobservables as “real,”

the Received View is decidedly not realist because it was born in opposition to

idealism and metaphysical unobservables, and its belief in the strict separation of

theory and observation terms means that theory terms are always unreal (otherwise

they would be observation terms). In conclusion, saying that the Received View is

realist is false, as Hunt concludes, though in fact most working natural scientists

and most current organizational positivists all accept unobservables as real,

suggesting thattheir logic-in-use is in fact mostly scientific realist, as that term is

variously defined,10 and that they do not follow the Received View.

2.4 Questionnaire design

The questionnaire used in this study is adapted from Lau and Idris (2001) and Ooi

and Arumugam (2006) with some modifications to suit the context of this study.

The questionnaire consists of six sections. The first section requests the

respondents to complete 8 questions related to training and development. These

include employees are encouraged to accept education and training within the

organisation, availability of resources for employees’ education and training within

the organisation, employees are trained to use quality management tools, specific

work-skills training given to employees, management’s concern for employees’

career development, opportunities for training and adequacy time spent on training

session. Section B consists of 8 questions related to reward and recognition. These

include improved working condition to recognise employees’ quality improvement

efforts, compensation system encourages team and individual contribution,

rewards and recognition based on work quality, suggestions appropriately

rewarded and recognised, rewards and recognition clearly communicated,

innovative employees being rewarded and recognised, emphasise on performance-

related rewards and organisation equitable in hiring, compensation, recognition and

promotion. Section C requests respondents to respond 8 questions on teamwork.

These include work within department is appointed around groups, comfortable to

work in team rather than individual, workplace decisions based on consensus,

cooperation within departments, sharing of ideas, cliques look after

themselves, job participation and interpersonal cooperation. Section D requests

respondents to complete 8 questions on communication. These include

management regularly provides feedbacks among teams, continuously improve

communication between management and staffs, effective communication,

freedom of speech, communication as tool to shape corporate culture, availability

of internal communication strategy, communication sharing and open

communication. Section E requests the respondents to respond to questions related

to organizational commitment. This section is adapted from Mowday et al. (1979)

with some modification which defines the extent the employees are with the

organisation, their desire to remain with the organisation and their willingness to

expense effort on behalf of the organisation. These include willingness to put great

deal of effort beyond what is normally expected, speak highly of organisation,

loyalty, willingness to accept any tasks, care about the fate of the organisation,

trust, organisational goals, strive for maximum commitment, organisation

achievement and fair treatment. The respondents are asked to provide their

responses using a 5-point scale from 1 (strongly disagree) to 5 (strongly agree).

The last section, Section F requests respondents’ demographic profile such as age,

marital status and gender among others. Questions in Section F are asked in

categorical form.

2.5. Data collection

One hundred and eighty seven questionnaires were distributed to the company’s

employees in all 11 departments. Each department were distributed 17

questionnaires. However, 3 staffs volunteered to participate in the study. This led

to a total sample of 190. The respondents were approached by the

researcher at their respective departments. The respondents were encouraged to

complete the questionnaire on the spot or to return the questionnaire after 2 days.

The questionnaires were handcollected by the researcher after 2 days. All 190

questionnaires distributed were collected and complete.

2.6 Research Construct

Dimensions of corporate culture are assessed by way of a series of questions that

require participants to indicate, using a 5-point scale from 1 (strongly disagree) to

5 (strongly agree), their opinions of teamwork, communication, rewards and

recognition and training and development. For each respondent, the responses to

questions in each dimension are aggregated and an average response was

calculated as a score to represent the respondent assessment of the dimensions.

To assess the level of organisational commitment, the respondents are asked to rate

the degree of organisational commitment using a 5-point scale of 1 (strongly

disagree) to 5 (strongly agree). The mean scores of the 10 variables related to

organisational commitment are used as an indication of the level of organisational

commitment. A reliability test was performed before distributing the questionnaire

to the respondents. The results show that the reliability for teamwork is 0.830,

training and development (0.889), communication (0.897) and rewards and

recognition (0.907). The results also show that the reliability for organisational

commitment based on 10 items is 0.924. The results indicate that all variables in

this study are reliable.

3. Positivism is reificationist.

Reification is defined as elevating metaphysical terms to object or status (Hunt

1994). Given that the Received View insists that theory terms are not real, as noted

above, positivists surely may not be accused of reification, as Hunt elucidates. It is

possible that scientific realists and organizational positivists might appear to be

reifying, but this is also not true. Scientific realists, knowing full well that

reification is considered a gross error by philosophers (Angeles 1981), consider

theory terms real even though they are not “thing-like.” Thus Levin (1991) uses the

example of hammering nails—the hammer and nails are thing-like real; the force

driving the hammer is real but not thinglike. As Rescher (1987, p. 3) says,

“Whatever is needed to provide an adequate account for the existence or the nature

of something real is itself real and, as such, actually exists.”11 Thus, given that the

hammer is real, the theory term, force, is also real. Organization scientists

generally view people as having needs, attitudes, and cultural assumptions and

since the forces implied by these terms drive real observable behavior, it follows

that in scientific realist epistemology such terms are real. The fact that organization

science, in practice, accepts unobservables, such as attitudes, needs, and networks

as real, measurable, and having an effect, clearly separates it from the Received

View and makes it scientific realist. Thus, postpositivists are wrong, whether they

are aiming at positivists, scientific realists, or organization scientists (defined as

either positivists or realists). Culture helps account for variations among

organizations and managers, both nationally and internationally. It helps to explain

why different groups of people perceive things in their own way and perform

things differently from other groups. However, all members of staff help to shape

the dominant culture of an organization, irrespective of what senior management

feel it should be. Culture is also determined by the nature of staff employed and the

extent to which they accept management philosophy and policies or pay only "lip

service". It is therefore necessary that managers live within the corporate culture.

Understand it as a basis for diagnosing and solving problems and for developing

new policies or procedures. And they may well be involved in managing the

culture in times of change or during crises. The type of activity the organization

carries out largely determines the way it goes about its business, and this in turn

affects the way the corporate culture develops and is manifested within the

organization. Against this background, organizational members, with the values,

philosophy, beliefs, assumptions, and norms of top management playing a

dominant role, create corporate culture.

Teamwork, cooperation, and helpfulness between workers can be of substantial

value. There are many examples (workers with complementary skills can increase

output and productivity by helping each other on individual tasks. Similarly, the

sharing of information between different workers or work groups often greatly

enhances the efficiency of production. While cooperation of workers is beneficial

to the term, the exertion of cooperative effort is usually costly to a worker.

Moreover, it is typically hard to identify, let alone to verify, whether or not a

worker has helped a co-worker or shared information. Hence, incentives for

cooperation are difficult to provide. Unless workers are intrinsically motivated,

therefore often face inefficiently low levels of worker cooperation.

Yet, empirical evidence as well as carefully designed experiments suggest that

workers sometimes do cooperate and that a large part of this cooperation is driven

by so-called \conditional cooperation", that is, a preference to cooperate

conditional on the cooperation of others.

Could it be that the existence of conditional cooperators mitigates (or even solves)

the above described cooperation problem within firms? The answer is not

immediately clear since the same empirical evidence suggests that workers'

preferences are heterogenous, where a sub-stantial fraction of workers reveal

purely selfish behavior. In case cooperation is efficient and labor markets are

competitive, that employ cooperative workers should pay high wages due to high

output. This attracts sel.sh types. Consequently, it has been conjectured in the

literature (Lazear 1989, Kandel and Lazear 1992) that there can exist no separating

equilibrium in which workers self-select into di®erent .rms if preferences are

private information. Moreover, labor market competition should eventually erode

all cooperation, since conditionally cooperative workers no longer voluntarily exert

team effort in the presence of types. Cleanest evidence for conditional cooperation

comes from laboratory experiments (Fischbacher, GAachter, and Fehr 2001,

GAachter and ThAoni 2005, Fischbacher and GAachter 2006, Kosfeld, Fehr,

andWeibull 2006). Frey and Meier (2004) and Heldt (2005) provide field evidence

for conditional cooperation. A recent discussion of the experimental work, also in

view of policy implications, is given by GAachter (2006). Empirical studies that

document conditional cooperation in real labor environments include Ichino and

Maggi (2000) and Bandiera, Barankay, and Rasul (2005).

Lazear (1989) argues in a tournament setting where workers can be either

cooperative (doves) or selfish (hawks). He shows that types do not self-sort,

concluding \that dovish firms should use personality as a hiring criterion. Hawks

will attempt to pass themselves of as doves, feigning a noncompetitive personality.

It is rational for dovish firm to limit the work force to genuine doves" (Kandel and

Lazear (1992) provide similar arguments in a profit sharing model.

While the above arguments are correct, we show in this paper that the conjecture is

wrong. In addition, we impose the following cutoff rules: whenever a worker is

indifferent between exerting and not exerting effort, he exerts effort; whenever a

worker is indifferent between exerting only team effort and exerting only

individual effort, he exerts only individual effort.

Intuitively, workers behave optimally within a firm if they maximize their

expected utility given the firm's contract, the equilibrium strategies of the other

workers, and the common beliefs. In a perfect Bayesian equilibrium, workers'

effort choices must form a Bayesian equilibrium in every subgame and thus for all

possible contracts w. Based on these equilibrium outcomes each worker computes

his expected utility upon accepting a particular contract and chooses the contract

that maximizes his utility over the set of offered contracts.

Although preferences are private information, contract choices might serve as a

signal. Equilibrium beliefs are required to be consistent with worker's acceptance

decisions and Bayes' rule whenever this is possible. If a contract is never accepted

in equilibrium, beliefs are undetermined and can be set arbitrarily.

A competitive equilibrium is now a set of offered contracts which, given that

workers behave optimally, satisfies the following requirements. First, the

equilibrium set of offered contracts contains no irrelevant contracts that are never

accepted in equilibrium. Second, no firm offers a contract that makes expected

losses in equilibrium. Otherwise, the firm could increase its expected profit by

withdrawing the offered contract. Third, competition for workers is modeled by

free entry. A set of offered contract then forms an equilibrium only if no firm can

enter the market by offering a new contract that attracts workers and yields non-

negative expected profit. This is formally captured in Definition 2.

De.nition 2 (Competitive Equilibrium) Given that workers behave optimally for all

possible sets of offered contracts, a competitive equilibrium is a set of offered

contracts.

A competitive equilibrium has the following properties. Since .rms can employ any

number of teams, there is no rationing. Because there is an in.nite number of

workers, workers in a symmetric equilibrium can be sure to .nd a co-worker when

accepting a contract that is optimally accepted with strictly positive probability.

Consequently, all workers of the same type receive the same equilibrium utility.

Let u µ denote the equilibrium utility of a type-µ worker. We call a competitive

equilibrium a separating equilibrium if there exists no offered contract that is

accepted with strictly positive probability by both types of workers. A worker's

type can then perfectly be inferred from his contract choice. In all other equilibria

there exists at least one contract that is accepted by both types of workers with

strictly positive probability. In this case we say that there is pooling in equilibrium.

Whether a set W¤ of contracts can be supported as a competitive equilibrium

depends on workers' reaction towards a newly offered contract w0 62 W¤. This

reaction in turn depends on workers' beliefs upon accepting the new contract, on

the Bayesian equilibria they expect to be played within firms, and on whether they

expect to find a colleague. As common in screening and signalling models, there

exist multiple equilibria that are based on particular out-of-equilibrium beliefs.

Further, there can arise coordination problems concerning the Bayesian equilibria

within .rms and workers' acceptance decisions. To rule out implausible competitive

equilibria we employ the following equilibrium re.nements. Refinement 1 (Beliefs)

Consider a competitive equilibrium W¤ and suppose an additional

contract w0 62 W¤ is offered. Suppose further that u¤

µ > max(e;~e)

uµ(w0; e;~e)

for all (e;~e)

and uµ0(w0; e;~e) . u¤

µ0 for some (e;~e) with µ 6= µ0. Then .(µjw0;W¤ [ w0) = 0.

Refinement 1 applies Cho and Kreps's (1987) intuitive criterion to rule out the

situation that

workers might not accept a newly offered contract only because they then believe

their co-worker to be of a certain type. Precisely, if a particular type of worker

always gets strictly less than his equilibrium utility by accepting a new contract, he

should never accept this contract.

3.1 Role and interrelations of the Corporation

Corporation is established on the basis of merging of CMAR JSC and

Kazinvest LLP and it has JSC legal form. The Corporation is an institute of

development and it preserves the status of FSD Kazyna Company. Interrelations

between the Corporation and FSD Kazyna are defined by Provision 7 of

Memorandum about basic principles of activity of the “Fund of stable development

“Kazyna” joint-stock company, confirmed by the resolution of the Government of

the Republic of Kazakhstan dated April 15, 2006 N 286.

Corporation as FSD Kazyna Company has its basic objective, which consists in

facilitation of improvement of national competitive capacity and successful

integration of Kazakhstan economy in global system via organization and

coordination of concentrated efforts on the basis of effective state-private dialogue.

In respect of the state management bodies the Corporation has recommendatory

and consulting function, without the right if intervention and implementation of

regulative, supervisory, control and other functions, which belong to exclusive

competence of the state management bodies of any level.

In respect of the private sector the Corporation as an institute of development

operates as provider of state technical (expert-consulting) assistance to the private

sector agents – associations, enterprises, laboratories, farming enterprises,

consulting, educational establishments and other.

While implementing its activity, the Corporation closely interacts with other

development institutions regarding the questions of both strategically and operative

character, via realization of projects/programs, the network of representative

offices abroad and in the regions, regular exchange of information, discussion of

initiatives, joint developments and other.

Financing of the Corporation activity is implemented from the funds of authorized

capitals, consolidated by CMAR JSC and Kazinvest LLP, and also from additional

funds of the state budget, which are appropriated for special programs/projects of

support of initiatives and events of private and state sectors in the sphere of trade

and investments of non-primary sectors of economy. .

The Corporation services regarding support in the sphere of trade and investments

(informational-consulting services, training services, organizational services etc.)

are rendered on mixed basis. Services, rendered within the frameworks of state

programs of target support of higher priority branches/spheres and financed from

the funds of the state budget and own funds of the Corporation, are free of charge.

The Corporation is entitled to render services on the basis of expenses

reimbursement and on commercial basis. The list of services, rendered on

commercial basis and on the basis of the expenses reimbursement, and also

formation mechanism of prices for such services are confirmed by FSD Kazyna.

3.2 Implementation arrangements

Implementation structures and instruments are necessary for the purpose of

putting export strategy into practice. Export promotion Corporation should become

such structure. This Corporation shall implement general coordination of efforts,

including those of other organizations and development institutes give information

about investment possibilities in Kazakhstan as well as abroad for both domestic

investors and trade partners. It means that among other things the Corporation will

play a role of connecting link between the wants of the real sector and analytical

agencies.

The following instruments are planned to be used in order to implement the

Corporation activity:

Close cooperation with interested parties

Close contact with all parties, affecting the export development (business-

associations, enterprises, state bodies, academic circles, NPO) is necessary for the

purpose of revelation of “bottlenecks”, problems, which prevent the development

of domestics goods export, and also for the purpose of elaboration of the

development strategy and necessary measures regarding its realization.

International cooperation

Cooperation at the international level includes realization of joint projects,

attraction of international experts, technical assistance and also exchange of

experience.

Teams of national and international expertise

According to all projects one suggests to attract highly-qualified experts,

including those of international level for the purpose of conducting the projects

expertise and making strategic decisions.

In addition, it is necessary to form own expertise of the Corporation via

intensive training (distance training, on-job training, intramural courses) with

attraction of international/foreign expertise

Development and realization of projects

Working on the projects and also its monitoring are implemented from the

beginning of the development stage till realization.

It is also necessary to perform constant development of own methods and

adaptation of advanced methods and instruments on planning and realization of

projects, and also to put elaborated methods into practice.

Work with branches/enterprises, which have the biggest export potential

The Corporation will execute work on revelation of branches/enterprises, which

have the biggest export potential. Identification of such branches is implemented

on the basis of their competitive capacity, state and potential possibilities for

export of international level products..

Mixed policy of tariffs for the Corporation services – from the expenses

reimbursement to commercial transactions.

Services, rendered by the Corporation, should not be free of charge, however,

their majority (for example some training courses, informational bulletins,

publications etc.) are planned to be furnished at prime cost. At the same time the

services of commercial character should be furnished at market prices, that will be

the source if the Corporation income. Besides of that, the Corporation should aim

at rendering predominantly those services, which are in the least presented by

private sector.

3.3 Instruments of the conception realization

The companies, which are planning to come to international markets and to

export their production, face the variety of problems. Potential exporters are ready

for some of these problems such as tariff barriers. However, other problems arise

and it is often difficult for exporters to solve them on their own. These problems

may include non-tariff trade barriers in the form of standards, technical regulations,

sanitary and phytosanitary measures and procedures of compliance evaluation.

Compliance with these requirements and standards is difficult and expensive

process for exporters.

One of the significant tasks, set in front of an exporter, is effective work

regarding accumulation of information about demands of a potential counterparty,

its paying capacity, and also evaluation of specific conditions, which are typical for

particular regional market, at the stage of export contract preparation.

Preparation of the companies for their coming to international markets is very

complicated, usually long and expensive process, however, this stage is

determinative one in subsequent activity of the company. The Corporation task is

to give all possible support to an enterprise, which has high export potential,

especially at that stage when it faces the most difficult barriers of international

trade while possessing insufficient experience.

Taking into consideration international experience of export support, one may

suggest the following kinds of services, which will be the most useful for potential

exporters:

Organization of training seminars

Assistance to enterprises during fulfillment of requirements of the

global market

Informational and consulting provision

Let us define each of them.

Organization of training seminars

Trainings and seminars are especially useful at the first stages of the company

preparation for international trade. Seminars will be specially developed according

to the needs of export-oriented enterprises, that will allow these companies to

penetrate the global market with the least losses. It is also reasonable to conduct

panel sessions, necessary for discussion of export problems, legislation gaps,

projects on improvement of the country export orientation.

Theme are of the courses may cover the following issues:

preparation of necessary export documentation

customs procedures

export activity licensing

conditions of transportation

methods of international settlement

evaluation and insurance of risks

development of export strategy

market analysis

international quality standards

export possibilities

export management

development and advancement of products

It is not the full list of the themes for seminars, which should be conducted for

export development.

Beside from general educational-outreach programs, it is necessary to work out

the base for individual trainings, which shall be conducted for separate enterprises.

Specific feature of such trainings consists in the fact that the final program is

elaborated jointly with a customer and consider all his requirements and desires

regarding the course.

Owing to such trainings a company will be able to do the following: receive

initial information and advice regarding the way of export plan development,

determine export possibilities and make initial evaluation of a market or markets,

where it should fixate. Courses and consulting of the professionals will help a

company-exporter to determine the strategy of coming to the market regarding

goods and services, which this company wants to export, and also to determine

potential partners in the markets.

In addition, the Corporation will create a widespread data base of laboratories,

specialized research centers, experts, including international ones, which have

specialization in various industry branches. These data bases will work in open

access for exporters. Via such data bases it will become simpler to solve the

problem of the lack of qualified specialists and experience exchange.

Methodology on conduction of Buyers-Sellers Meeting

Preparation to the Buyers-Sellers Meeting starts from the survey of the

product/service demand. Demand survey is conducted on the basis of trade flow

analysis of the product (countries and the clients in those countries are defined).

Methods of the survey – questioning and interviewing of organizations, which are

potentially interested or ready to buy products of Kazakhstan (of region). Survey

defines the products that clients are ready to purchase in Kazakhstan (in region).

Further, analysis is carried out on the basis of survey results and potential

suppliers are defined (seller). Demand survey is conducted on the basis of

questionnaire, which is drawn out with consideration of the results of demand

survey. According to the results, profiles of companies are designed with product

identification, contact details and other relevant data, which could be potentially

interesting for clients.

On the basis of information, received in the process of the research,

matchmaking of sellers and clients is conducted and participants of the Meeting are

defined. All participants, defined in the process of matchmaking, are confirmed for

their interest in and readiness for taking the part in the Meeting. As the

confirmation for participation is received, for every participant time schedule of

meetings is prepared.

Meeting organizational points are: hall selection, preparation of materials,

distribution of invitations, and other organizational works.

Meeting could take up 2-3 days, depending on a number of participants,

defined in the process of matchmaking.

Conduction of the meetings will require expenses, related to publishing of

materials for meeting participants, premise rent and payments for translators’

services.

Results of the meetings are recommended to design in the form of

publications, which will include results of trade flow analysis, profiles of

companies – participators, profiles of clients, and description of the Meeting’s

algorithm. Mass media should give coverage to the event.

Methodology on export promotion of pilot industries products that have high

export potential index

Conduction of this kind of assessment requires involvement of foreign

experts. Preliminary diagnostics will allow selecting those companies, which have

high export potential and are ready to develop their export capacity.

Then, a team of foreign and national experts conducts more detailed audit of

companies that were selected according to results of preliminary assessment. On

the basis of the audit conclusions, individual programs on export promotion are

developed. Implementation of the individual programs is realized by the

companies in a group, under the supervision of foreign expert and assistance of

national expert.

The Program on promotion is not limited just by the work with groups of

companies, but provides events on the industry level, such as trainings (formal and

informal), information distribution, and general consultations.

Expenses for foreign and national expertise – industrial or marketing, are to be

calculated on the basis of 90 people and 3-4 visits in Program realization period.

Period of realization is 2-3 years, depending on an industry or a company.

This Program supposes conduction of 4 arrangements for whole industry, such

as trainings and consultations that require expenses for premise and equipment

rent, delivery materials and translation services.

Individual program arrangements include travel and residence expenses of

employees, purchase of information, preparation of general information for

companies with involvement of national consultancy (for example, country and

industrial brochures, informlist), and translation of the materials in foreign

languages.

Annual conduction of specialized events for selected group of companies, such

as trade missions, participation in exhibitions/fairs, etc., require expenses for:

premise rents, floor spaces in exhibitions, design of exhibition stands, participation

fees, and co-finance for travel fees of participators.

For media coverage, the project should consider about two events per year that

supposes payments for publications in national and foreign press, and participation

in radio and television programs. Publication of such materials, as exporter

directories and references is recommended to publish twice a year.

Conduction of round tables and forums on national and local levels is necessary

as well, which main objective is the discussion of problems identified during the

programs’ implementation.

The program implementation, in the first place, will assist companies to

improve the export performance or to become an exporter. On the second place,

through continual collaboration of national and foreign experts, it will allow

developing of national expertise in the area of export promotion. The industry as a

whole, have an opportunity to improve its competency through trainings,

information and practical events.

4. Descriptive Statistics

This section presents the descriptive statistics of the dimensions of corporate

culture and organizational commitment. The results are shown in table 1. The

results show the mean score for organizational commitment is 3.903. The results

indicate that most respondents have high commitment towards their organisation.

Table 1 also show that the respondents provide the highest mean score for

training and development (3.7954) followed by communication (3.7738) and

teamwork (3.6651). On the other hand, the respondents provide the lowest mean

score for rewards and recognition (3.5027).

Table 1: Descriptive statistics of corporate culture and organisational

commitment

Variable Mean score

Organisational commitment 3.9030

Training and development 3.7954

Communication 3.7738

Teamwork 3.6651

Rewards and recognition 3.5027

Hypothesis 1 states that there is no significant relationship between teamwork

and organisational commitment. Hypothesis 1 is tested using Pearson’s correlation.

Table 2 presents the results of testing hypothesis 1.

Table 2: Teamwork and organisational commitment

Teamwork Organisational commitment r 1 0.523

Teamwork p 0.000N 190 190r 0.523 1

Organisational commitment p 0.000N 190 190

The results show that there is a significant relationship between teamwork and

organizational commitment (p=0.000). Such results are consistent with Morrow

(1997). The results indicate that teamwork is important in facilitating employees’

ability to work together in completing a task. Such finding is also consistent with

Osland (1997). Therefore, hypothesis 1 is rejected.

This section presents the results of testing hypothesis 2. Hypothesis 2 states that

there is no significant relationship between training and development and

organisational commitment. Hypothesis 2 is tested using Pearson’s correlation.

Table 3: Training and development and organisational commitment

Teamwork Organisational commitment r 1 0.392

Training and development p 0.000 N 190 190 r 0.392 1

Organisational commitment p 0.000

N 190 190

Table 3 presents the results of testing hypothesis 2. The results show that there is a

significant relationship between training and development and organisational

commitment (p=0.000). The results support the results of previous studies

(O’Driscoll and Randall, 1999; Zhang, 2000; Karia and Ashari, 2006) that indicate

proper training and development enable employees to do the right things the first

time. The findings imply that organisation that provides training and development

to their employees would lead to higher job satisfaction and commitment towards

the organisation. Hypothesis 2 is therefore, rejected.

Hypothesis 3 states that there is no significant relationship between

communication and organisational commitment. Hypothesis 3 is tested using

Pearson’s correlation.

Table 4: Organisational communication and organisational commitment

Communication Organisational commitment

r 1 0.754

Communication p 0.000 p 0.000N 190 190r 0.754 1

Organisational commitment p 0.000N 190 190

Table 4 presents the results of testing hypothesis 3. The results show that there is a

significant relationship between communication and organisational commitment

(p=0.000). The results indicate that communication is a dominant dimension of

corporate culture. The results imply that communication is important in improving

employees’ commitment which in turn influences organisational commitment.

Such finding is consistent with Ooi and Arumugam (2006). Therefore,

hypothesis 3 is rejected.

Hypothesis 4 states that there is no significant relationship between rewards and

recognition and organisational commitment. Hypothesis 4 is tested using Pearson’s

correlation.

Table 5: Rewards and recognition and organisational commitment

Rewards and recognition Organisational commitment

r 1 0.499

Rewards and recognition p 0.000N 190 190r 0.499 1

Organisational commitment p 0.000N 190 190

Table 5 presents the results of testing hypothesis 4. The results show that there is a

significant relationship between rewards and recognition and organisational

commitment (p=0.000). The results indicate that rewards and recognition is a

motivating factor in influencing employees’ commitment because both elements

have motivating effects on people at work. Such finding is consistent to

O’Driscoll and Randall (1999) who found that rewards offered by an organisation

would have a positive effect on employees’ commitment towards their work and

their organisation. Therefore, hypothesis 4 is rejected.

4.1 Mergers and corporate culture

It is a problem in many mergers that the more powerful partner imposes his culture

on the less powerful one. This is done without any evaluation which culture would

be the more suitable one for the new organization. This approach may lead to a

successful merger and integration quickly in some situations. In other

situations, however, this approach will destroy much of the value that was

expected to grow from the merger. Especially when both partners are very

different, it needs a closer evaluation, which culture will be best for both

together.Why is corporate culture that important?

Corporate culture influences the performance of an organization, since it

determines:

The way the organization tackles problems

and questions

Peoples’ attitude to changes

The way people interact with each other

The way the organization interacts with

stakeholders

Peoples’ commitment to strategy

A perfect integration (which is rarely achieved in practice) would develop a new

culture form both former cultures of the partners. Ideally, this new culture should

include the best elements from both organizations. Reality often

looks different. We can distinguish the following types of cultural integration:

Cultural Pluralism

Cultural Resistance

Cultural Takeover

Cultural Blending

Cultural pluralism and cultural blending do not work in most cases. The results are

cultural resistance followed by a cultural takeover. The problem in mergers is that

people from very different organizations (and cultures) are expected to work

together, to discuss, and to solve complex strategic and operative tasks. It is very

difficult to impose a new culture that does not have the acceptance of the people.

This perceived attractiveness of cultures can have the following impact on the

integration process:

Assimilation (potentially smooth transition) low

Deculturation (alienation) low

Separation (culture collision or multiculturalism) high

Integration (culture collision or satisfactory integration) high

Perceived attractiveness of own culture Perceived attractiveness of other culture

In summary, the rules for cultural implementation of a merger is as follows:

To impose an unwanted culture is a good solution in very few cases.

Integrating cultures are much harder to achieve; however, in the long term they

promise much better results.

Checklist „Mergers and Corporate Culture“

Develop a strategy for cultural integration already in pre-merger phase.

Decide if you want to go on with one of the existing cultures or if you prefer an

integration

culture.

Analyze and describe the existing cultures. Differences and common

elements of both cultures show up only in direct comparison. Thus, you can also

identify cultural barriers, differences in communication and other potential

problems.

Decide which role the new culture shall play in the merged organization.

Determine, why you decide for a particular culture and what you want to achieve

with it.

Establish ‘bridges’ between both companies. In order to achieve mutual

understanding, there is nothing better than cooperation.

Establish a basis and mechanisms for the new culture. This includes a

supporting

system of rewards and sanctions.

Be patient People take time to be acquainted to a new cultural reality.

Establishing a solid corporate identity is vital for companies in today s

overcrowded market. Because consumers are increasingly overwhelmed by the

number of choices presented to them, it is crucial to differentiate your product or

service from the competition. Corporate identity merges strategy, culture, and

communications to present a memorable personality to prospects and customers.

The term is closely linked to corporate philosophy, the company s business

mission and values, as well as corporate personality, the distinct corporate culture

reflecting this philosophy, and corporate image. The main objective of corporate

identity is to achieve a favorable image among the company s prospects and

customers. When a corporation is favorably regarded this is likely to result in

loyalty. If the corporate identity is the self-portrayal of a company, then the

corporate image is the perception of an organization by the audience. The closer

the corporate image is to the corporate identity; the closer the public s perception

of a company is to how the company defines itself, making for superior corporate

communication. For example, most companies have access to the same

technology.

If they want to further distinguish themselves, the strategy must rely on another

factor than technology: the user experience. As the audience s focus changes

constantly, corporate strategies must move in the same direction as the customer.

Different Types of Corporate Identity The type of corporate identity will determine

the characteristics that link the product to its company or brand. According to

Wally Olins, one of the world s leading branding consultants, there are three

kinds of corporate identity. The identity can be monolithic, meaning

that the whole company uses one visual style and that the consistency between the

corporate identity and the product identity is very strong, the product reflecting the

corporation directly. The identity can also be endorsed where the subsidiary

companies (brands) have their own style, but the parent company remains

recognizable in the background. In this case, the link between the corporation and

its different brands may take the shape of a common factor, tying the different

brands together. Finally, there is the branded corporate identity in which the

subsidiaries have their own style, and the parent company is not recognizable. The

products represent the brand identities rather than the corporate identity. All the

same, a strong general corporate identity remains of great importance, as it defines

the guidelines and strategies of the subordinate brands. Therefore the identities of

the products of each brand are consistent with the main corporate identity and

values. Different Types of Corporate Identity The type of corporate identity will

determine the characteristics that link the product to its company or brand.

According to Wally Olins, one of the world s leading branding consultants, there

are three kinds of corporate identity. The identity can be monolithic, meaning

that the whole company uses one visual style and that the consistency between the

corporate identity and the product identity is very strong, the product reflecting the

corporation directly. The identity can also be endorsed where the subsidiary

companies (brands) have their own style, but the parent company remains

recognizable in the background. In this case, the link between the corporation and

its different brands may take the shape of a common factor, tying the different

brands together. Finally, there is the branded corporate identity in which the

subsidiaries have their own style, and the parent company is not recognizable. The

products represent the brand identities rather than the corporate identity. All the

same, a strong general corporate identity remains of great importance, as it defines

the guidelines and strategies of the subordinate brands. Therefore the identities of

the products of each brand are consistent with the main corporate

identity and values.

4.2 Sustainable development: a business definition

The concept of sustainable development has received growing recognition, but it is

a new idea for many business executives. For most, the concept remains abstract

and theoretical.

Protecting an organization’s capital base is a well-accepted business principle. Yet

organizations do not generally recognize the possibility of extending this notion to

the world’s natural and human resources.

If sustainable development is to achieve its potential, it must be integrated into the

planning and measurement systems of business enterprises. And for that to happen,

the concept must be articulated in terms that are familiar to business leaders.

The following definition is suggested:

For the business enterprise, sustainable development means adopting business

strategies and activities that meet the needs of the enterprise and its stakeholders

today while protecting, sustaining and enhancing the human and natural resources

that will be needed in the future.

This definition captures the spirit of the concept as originally proposed by the

World Commission on Environment and Development, and recognizes that

economic development must meet the needs of a business enterprise and its

stakeholders. The latter include shareholders, lenders, customers, employees,

suppliers and communities who are affected by the organization’s activities.

It also highlights business’s dependence on human and natural resources, in

addition to physical and financial capital. It emphasizes that economic activity

must not irreparably degrade or destroy these natural and human resources.

This definition is intended to help business directors apply the concept of

sustainable development to their own organizations. However, it is important to

emphasize that sustainable development cannot be achieved by a single enterprise

(or, for that matter, by the entire business community) in isolation. Sustainable

development is a pervasive philosophy to which every participant in the global

economy (including consumers and government) must subscribe, if we are to meet

today’s needs without compromising the ability of future generations to meet their

own.

4.2.1 Implications for business

It has become a cliché that environmental problems are substantial, and that

economic growth contributes to them . A common response is stricter

environmental regulation, which often inhibits growth. The result can be a trade-

off between a healthy environment on the one hand and healthy growth on the

other. As a consequence, opportunities for business may be constrained.

However, there are some forms of development that are both environmentally and

socially sustainable. They lead not to a trade-off but to an improved environment,

together with development that does not draw down our environmental capital.

This is what sustainable development is all about - a revolutionary change in the

way we approach these issues.

Businesses and societies can find approaches that will move towards all three goals

- environmental protection, social wellbeing and economic development - at the

same time.

Sustainable development is good business in itself. It creates opportunities for

suppliers of ‘green consumers’, developers of environmentally safer materials and

processes, firms that invest in eco-efficiency, and those that engage themselves in

social well-being. These enterprises will generally have a competitive advantage.

They will earn their local community’s goodwill and see their efforts reflected in

the bottom line.

Practical considerations

While business traditionally seeks precision and practicality as the basis for its

planning efforts, sustainable development is a concept that is not amenable to

simple and universal definition. It is fluid, and changes over time in response to

increased information and society’s evolving priorities.

The role of business in contributing to sustainable development remains indefinite.

While all business enterprises can make a contribution towards its attainment, the

ability to make a difference varies by sector and organization size.

Some executives consider the principal objective of business to be making money.

Others recognize a broader social role. There is no consensus among business

leaders as to the best balance between narrow self-interest and actions taken for the

good of society.

Companies continually face the need to trade off what they would ‘like’ to do and

what they ‘must’ do in pursuit of financial survival.

Businesses also face trade-offs when dealing with the transition to sustainable

practices. For example, a chemical company whose plant has excessive effluent

discharges might decide to replace it with a more effective treatment facility. But

should the company close the existing plant during the two or three-year

construction period and risk losing market share? Or should it continue to operate

the polluting plant despite the cost of fines and adverse public relations? Which is

the better course of action in terms of economy, social wellbeing and the

environment? Moreover, many areas of sustainable development remain

technically ambiguous, making it difficult to plan an effective course of action. For

example, the forestry industry has had difficulty defining what constitutes

sustainable forest management. Some critics believe that simply replacing trees is

not enough, because harvesting destroys the biodiversity of the forest. Clearly,

more research will be needed to resolve such technical issues.

From a broader perspective, however, it is clearly in the interest of business to

operate within a healthy environment and economy. It is equally plain that, on a

global basis, growing and sustainable economies in the developing countries will

provide the best opportunities for expanding markets.

To some, sustainable development and environmental stewardship are

synonymous. In the short term, sound environmental performance is probably a

reasonable objective for most businesses, with sustainable development as a longer

term goal. However, this can lead to confusion. In the developed world, the focus

is on environmental management, while in developing countries, rapid and

sustainable development is paramount.

The global economy is coming under growing pressure to pay for the restoration of

damaged environments. But this economic engine is being asked to help solve

other pressing problems at the same time. The challenge is to solve all of these

problems in a sustainable manner, so as to generate continuing development.

Despite ambiguities about definitions, there is now widespread support for

sustainable development principles within the business community. However, for

that support to grow, it will be important to recognize and reward initiatives that

are being taken to turn the concept into reality.

William Mulligan, environmental affairs manager at Chevron Corporation, reflects

the view of many in the business community who believe that the environment is

now a major issue - one which presents both challenges and opportunities.

‘Over the last decade, we have seen many polls confirming the importance of the

environment to Americans,’ he says. ‘Only an irresponsible company would

dismiss this trend as a passing fad or fail to recognize the need to integrate

environmental considerations into every aspect of its business. Environmental

excellence has to become part of strategic thinking. It is in our best economic

interests to do so. In fact, whenever we are forced to change, we often find

opportunities.’ This positive change in attitudes and practices is echoed by the

Organization for Economic Cooperation and Development, which says: ‘There is

now a realistic prospect of harmonizing environmental and economic

considerations, and thus of gradually incorporating these objectives in policy.’

Many executives have demonstrated that pursuing sustainable development

strategies makes good business sense. For example, a 3M manufacturing plant

scaled down a wastewater treatment operation by half, simply by running cooling

water through its factories repeatedly instead of discharging it after a single use.

Meanwhile Dow’s ‘Waste Reduction Always Pays’ programme, which began in

1986, has fostered more than 700 projects, and saved millions of dollars a year.

And in a Westinghouse metal finishing factory in Puerto Rico, the company

reduced ‘dragout’ - the contamination accidentally carried from one tank to another

- by 75% simply by shaking the tank to remove solids before releasing the

chemical to the next tank. Pacific Gas and Electric decided that energy

conservation was a more profitable investment than nuclear power, and

McDonald’s made its well-publicized move from plastics to paper the cornerstone

of a much broader, but less visible, waste reduction strategy.

There are other significant developments too, Elkington points out. Many consumers are

now prepared to pay more for environmentally responsible products. And the emergence

of ethical investment funds has thrown the spotlight onto corporate environmental

performance.

Also significant, says Elkington, is that companies are changing from within, rather than

simply responding to external pressure from consumers and environmentalists.

Enhancing management systems

The concept of sustainable development needs to be incorporated into the policies and

processes of a business if it is to follow sustainable development principles. This does not

mean that new management methods need to be invented. Rather, it requires a new

cultural orientation and extensive refinements to systems, practices and procedures.

The two main areas of the management system that must be changed are those concerned

with:

A greater accountability to non-traditional stakeholders;

Continuous improvement of reporting practices.

Developing an effective management framework for sustainable development requires

addressing both decision-making and governance. The concept of sustainable

development must be integrated both into business planning and into management

information and control systems. Senior management must provide reports that measure

performance against these strategies.

Governance is increasingly important because of the growing accountability of the

corporation and its senior management. Information and reporting systems must support

this need. Decision-making at all levels must become more responsive to the issues

arising from sustainable development.

Seven steps are required for managing an enterprise according to sustainable

development principles. These are set out below.

1. Perform a stakeholder analysis

A stakeholder analysis is required in order to identify all the parties that are directly or

indirectly affected by the enterprise’s operations. It sets out the issues, concerns and

information needs of the stakeholders with respect to the organization’s sustainable

development activities.

A company’s existence is directly linked to the global environment as well as to the

community in which it is based. In carrying out its activities, a company must maintain

respect for human dignity, and strive towards a society where the global environment is

protected.

At the beginning of this century, company strategies were directed primarily towards

earning the maximum return for shareholders and investors. Businesses were not

expected to achieve any other social or environmental objectives. Exploitation of natural

and human resources was the norm in many industries, as was a lack of regard for the

wellbeing of the communities in which the enterprise operated. In short, corporations

were accountable only to their owners.

Today, business enterprises in developed countries operate in a more complicated, and

more regulated, environment. Numerous laws and regulations govern their activities, and

make their directors accountable to a broader range of stakeholders. Sustainable

development extends the stakeholder group even further, by including future generations

and natural resources.

Identifying the parties that have a vested interest in a business enterprise is a central

component of the sustainable development concept, and leads to greater corporate

accountability. Developing a meaningful approach to stakeholder analysis is a vital aspect

of this management system, and one of the key differences between sustainable and

conventional management practices.

The stakeholder analysis begins by identifying the various groups affected by the

business’s activities. These include shareholders, creditors, regulators, employees,

customers, suppliers, and the community in which the enterprise operates. It must also

include people who are affected, or who consider themselves affected, by the enterprise’s

effect on the biosphere and on social capital.

This is not a case of altruism on the company’s part, but rather good business. Companies

that understand what their stakeholders want will be able to capitalize on the

opportunities presented. They will benefit from a better informed and more active

workforce, and better information in the capital markets.

In identifying stakeholder groups, management should consider every business activity

and operating location. Some stakeholders, such as shareholders, may be common to all

activities or locations. Others, such as local communities, will vary according to business

location and activity. Finally, the stakeholder analysis needs to consider the effect of the

business’s activities on the environment, the public at large, and the needs of future

generations.

After the stakeholders have been identified, management should prepare a description of

the needs and expectations that these groups have. This should set out both current and

future needs, in order to capture sustainable development concept. The key is to analyze

how the organization’s activities affect each set of stakeholders, either positively or

negatively.

Developing these statements of needs and expectations requires dialogue with each

stakeholder group. To this end, some companies have established community advisory

panels. Similar groups made up of employees, shareholders and suppliers have been used

to help management better understand their needs and expectations.

Because the needs of stakeholder groups are constantly evolving, monitoring them is an

ongoing process.

The stakeholder analysis may reveal conflicting expectations. For example, customers

may demand new, environmentally safe products, while employees might be concerned

that such a policy could threaten their jobs. Shareholders, meanwhile, may be wary about

the return on their investment. A stakeholder analysis can be a useful way to identify

areas of potential conflict among stakeholder groups before they materialize.

2. Set sustainable development policies and objectives

The next objective is to articulate the basic values that the enterprise expects its

employees to follow with respect to sustainable development, and to set targets for

operating performance.

Senior management is responsible for formulating a sustainable development policy for

its organization, and for establishing specific objectives. Sustainable development means

more than just ‘the environment’. It has social elements as well, such as the alleviation of

poverty and distributional equity.

It also takes into account economic considerations that may be absent from a strictly

‘environmental’ viewpoint. In particular, it emphasizes maintaining or enhancing the

world’s capital endowment, and highlights limits to society’s ability to substitute manmade

capital for natural capital.

Nevertheless, a policy on environmental responsibility is a good first step towards the

broader concerns of sustainable development.

Management should incorporate stakeholder expectations into a broad policy statement

that sets out the organization’s mission with respect to sustainable development. This

policy statement would guide the planning process and put forward values towards which

management, employees and other groups such as suppliers are expected to strive.

Drafting a policy statement that is both inspirational and capable of influencing behaviour

is a challenging task. However, the benefits justify the effort.

The following policy statement was developed by the Dow Chemical Company:

The operating units of the Dow Chemical Company are committed to continued

excellence, leadership and stewardship in protecting and conserving the environment for

future generations. This is a primary management responsibility as well as the

responsibility of every employee worldwide. We are sensitive to the concerns of the

public and accountable to them for our decisions and actions. We believe in the

responsible integration of environmental and economic considerations in all decisions

affecting our operations. We are continuously reducing our emissions to protect human

health and the environment. Our goal is the elimination of wastes and emissions.

Policy statements like this one should be developed and implemented in a way that

visibly involves directors and senior management.

A survey by DRT International of European companies found that half of the respondents

have board members who are responsible for environmental issues. The report adds:

The amount of time spent on environmental issues at board level varies greatly between

countries and sectors. The greatest involvement is found in the chemical and

pharmaceutical industries and in utilities. These sectors devote significant resources to

planning green strategies and establishing sophisticated environmental management

systems. The lowest involvement is in tourism and financial services, where none of the

companies surveyed had board-level appointments.

There are many benefits in actively involving the board of directors in the development

of a sustainable development policy. It is the board of directors that determines overall

priorities and sets the tone for management and employees. By itself, the board’s

commitment will not guarantee that a sustainable development policy will be effectively

implemented. However, the absence of that commitment will certainly make it difficult to

implement the policy.

While statements of broad policy on sustainable development are important, senior

management and directors should supplement their policy statement with a series of

specific objectives. For example, the following statement of policy and objectives,

developed by Northern Telecom, illustrates the desirable scope and level of specificity:

Recognizing the critical link between a healthy environment and sustained economic

growth, we are committed to leading the telecommunications industry in protecting and

enhancing the environment. Such stewardship is indispensable to our continued business

success. Therefore, wherever we do business, we will take the initiative in developing

innovative solutions to those environmental issues that affect our business.

We will:

Integrate environmental considerations into our business planning and decisionmaking

processes, including product research and development, new

manufacturing methods and acquisitions/divestitures;

Identify, assess and manage environmental risks associated with our operations

and products throughout their life cycle, to reduce or eliminate the likelihood of

adverse consequences;

Comply with all applicable legal and regulatory requirements and, to the extent

we determine it appropriate, adopt more stringent standards for the protection of

our employees and the communities in which we operate;

Establish a formal Environmental Protection Program, and set specific,

measurable goals;

Establish assurance programs, including regular audits, to assess the success of

the Environmental Protection Program in meeting regulatory requirements,

program goals and good practices;

To the extent that proven technology will allow, eliminate or reduce harmful

discharges, hazardous materials and waste;

Make reduction, reuse and recycling the guiding principles and means by which

we achieve our goals;

Prepare and make public an annual report summarizing our environmental

activities;

Work as advocates with our suppliers, customers and business partners to jointly

achieve the highest possible environmental standards;

Build relationships with other environmental stakeholders - including

governments, the scientific community, educational institutions, public interest

groups and the general public - to promote the development and communication

of innovative solutions to industry environmental problems;

Provide regular communications to, and training for, employees to heighten

awareness of, and pride in, environmental issues.

It is important that sustainable development objectives be clear, concise and, wherever

possible, expressed in measurable terms. Establishing measurable objectives is essential

if management and others are to be able to assess whether their business activities have

met the established objectives.

In setting these objectives, management will need to determine the appropriate level of

aggregation. For example, one objective might be to set measurable performance targets

for waste reduction at all operating locations. This goal would then be supported by more

detailed objectives for each operating location.

After the sustainable development objectives have been established, management should

compare its competitive and financial strategies against these targets. In some areas,

business strategies will be consistent with the sustainable development objectives. In

others, existing strategies may be incomplete or in conflict with them. Consequently,

strategies may have to be modified.

It is important to ensure that the sustainable development objectives that are established

complement the enterprise’s existing competitive strategies. In other words, sustainable

development should provide an additional dimension to business strategy. It provides

senior management with an additional benchmark against which business strategies and

performance should be assessed.

An effective external monitoring system is necessary for directors and senior

management, in order to ensure that sustainable development policies, objectives and

management systems are appropriate for the complex and rapidly changing world in

which their business operates. Information should be gathered on key subjects, including:

New and proposed legislation;

Industry practices and standards;

Competitors’ strategies;

Community and special interest group policies and activities;

Trade union concerns;

Technical developments, such as new process technologies.

For many enterprises, monitoring and influencing external developments means

becoming more actively involved in the public policy process. A commitment to

sustainable development involves helping to formulate policies that shape external

developments, so that industry-wide sustainable development objectives are achieved.

To this end, responsible business enterprises are taking leadership roles in industry

associations, working with government and special interest groups to achieve positive

results for both the enterprise and the stakeholders.

The monitoring of external developments is particularly complex for companies selling to

export markets, and even more so for those with production facilities in several countries.

Many multinational corporations subscribe to the International Chamber of Commerce

principles on environmental management. These include adherence to international

environmental performance standards. However, monitoring all the relevant international

developments can be a daunting task.

This external monitoring can be integrated into a firm’s strategic management process, or

else carried out as a separate exercise. Some corporations have social policy committees

whose scope covers sustainable development issues. Others have environmental

committees with a narrower focus.

3. Design and execute an implementation plan

It is important to draw up a plan for the management system changes that are needed in

order to achieve sustainable development objectives.

Translating sustainable development policies into operational terms is a major

undertaking that will affect the entire organization. It involves changing the corporate

culture and employee attitudes, defining responsibilities and accountability, and

establishing organizational structures, information reporting systems and operational

practices.

These changes are normally so substantial that a three-to-five-year plan with one year

milestones will be needed.

Managing this type of organizational change requires leadership from senior

management. The board of directors, the chief executive officer and other senior

executives must be actively involved in the process. They need to lead by example, and

to set the tone for the rest of the organization.

As a starting point, after the board and senior management have established their

sustainable development objectives, these should be communicated to the various

stakeholder groups. Some organizations have ongoing consultation arrangements with

stakeholders which facilitates this process. There is little point in embarking on a

programme to meet stakeholders’ needs without first consulting stakeholders to ascertain

what those needs are.

It is also important to determine any modifications that should be made to the

organization’s systems and processes in order to ensure that day-to-day activities are

performed in a manner that is consistent with these objectives.

The enterprise’s organizational structure should then be reviewed to determine who

should take specific responsibility for the sustainable development objectives. In some

cases, environmental management committees have been established; in others, a specific

department has been established under the leadership of a senior environmental

executive.

Some organizations incorporate statements of environmental responsibility into the job

descriptions of managers and staff. Clearly defining accountability is essential to

successful implementation.

Cultural change and retraining should complement the new goals. Reward systems and

incentives reflecting the new corporate values should also be considered.

Business planning processes should be modified to reflect the sustainable development

priorities, the expanded stakeholder consultation process, and external monitoring needs.

Management information systems should be enhanced, in order to ensure that

management and employees receive the information they need to assess their

performance against the objectives.

Marketing activities should consider customers’ needs regarding sustainability. This will

require changes to the organization’s market research efforts. This feedback can affect

the way products are designed, produced, packaged, marketed and promoted. In some

cases, new markets may be added or existing markets redefined.

Meanwhile production processes and operating procedures must be assessed against

regulations, industry practices or internal standards, in order to determine areas for

improvement. This represents an opportunity for the company to develop innovative

production processes.

Regulatory requirements are easily identifiable, although they continually evolve.

Sustainable development criteria are less precise, and are generally not yet clearly

manifested in regulations. The use of industry practices as performance norms is

expanding rapidly, and in some cases these standards exceed regulatory requirements.

The chemical industry’s ‘Responsible Care’ programme is one example of industry

standards that companies can use to foster improvements in their processes and practices.

Another popular tool is benchmarking.

At the same time, managers responsible for procurement must reassess their choice of

suppliers, in terms of their products and the way in which they are produced, to ensure

that the company’s sustainable development objectives are fostered through its

purchasing activities.

Financial planning should consider the capital requirements for process changes, as well

as possible tax incentives and the financial effect of new mechanisms such as credits for

waste recovery.

A successful implementation plan depends on ‘rethinking the corporation’ if it is to

respond to the paradigm shift associated with sustainable development. It is important to

address not only the positive forces for change but also barriers and sources of resistance.

While the basic management framework may remain intact, substantial changes will

probably be needed in the culture, the organization and its systems. The plan must have

full ‘buy-in’ if it is to be effective. This in turn requires broad consultation and cultural

change.

4. Develop a supportive corporate culture

In order to ensure that the organization and its people give their backing to the

sustainable development policies, an appropriate corporate culture is essential.

In the process of implementing sustainable development or environmental management

policies, many companies have experienced a kind of organizational renewal. The

increased participation of employees not only generates practical ideas, but also increases

enthusiasm for the programme itself. Most customers and employees enjoy being part of

an organization that is committed to operating in a socially responsible manner.

Implementing sustainable development objectives will probably require managers to

change their attitudes. This may be accomplished only after retraining. For example,

some executives may feel that their sole responsibility is to maximize the wealth of the

enterprise’s owners. As a result, they may have difficulty understanding the sustainable

development concept and in accepting it as a legitimate business objective.

Meanwhile some managers may not be accustomed to identifying the need for ecoefficient

practices such as energy efficiency and recycling. Some may never have

explicitly considered the effect of their actions on any stakeholder group other than

shareholders. Others may resist changing the way in which their performance is

measured.

Managers of multinational corporations may not think it appropriate to redesign their

programmes in order to ensure that contribute to sustainable development in poorer

countries.

Effective communication is essential. Internally, all levels of management, and all

employees, must understand the policies and objectives that have been established. For

business enterprises, this means broadening the outlook of many people, including some

senior executives. Dr Frank Frantisak of Noranda Inc. emphasizes the importance of

communication:

The fundamental need in Canadian corporations is the promotion of environmental

consciousness throughout the whole organization, from senior management down to the

plant floor. Environmental concerns need to be part of everyday communications and

decision-making at all levels. Executives need to be regularly asking division managers:

Is your operation in compliance? What progress is being made with your action plan?

Division managers need to be putting these questions, in turn, to the plant and facility

staff.

Employees can have a strong influence on corporate culture and on a company's

environmental performance. The DRT International survey of European companies

reports that:

Just over half of the companies surveyed invite direct suggestions from employees on

environmental issues. About 80% of the companies that invite suggestions have changed

their products or processes as a result, while only 54% of all respondents have made such

changes. This happens not only in environmentally advanced countries such as

Switzerland and Norway, but also in Hungary, where employees are keen to tackle the

country’s considerable environmental problems.

The concept of sustainable development requires organizations to develop a culture that

emphasizes employee participation, continuous learning and improvement. The

International Chamber of Commerce explains the process of continual improvement thus:

…To continue to improve corporate policies, programmes and environmental

performance, taking into account technical developments, scientific understanding,

consumer needs and community expectations, with legal regulations as a starting point

and to apply the same environmental criteria internationally.

Internal reporting systems can have a significant effect on corporate culture. They must

be designed to reinforce positive behaviour with respect to sustainable development.

They also need to be linked to the enterprise’s recognition and promotion systems,

The active and visible involvement of senior executives and directors can be a powerful

force in forming attitudes, and in creating a supportive culture in which sustainable

business practices can flourish. Executives are the people who set the policies and the

norms by which business is done.

Equally, it is important that the board provide an oversight in the allocation of

responsibilities for sustainable development objectives. This umbrella role should include

ensuring that responsibilities are assigned in a manner that holds key executives

accountable. It also means ensuring that reward and promotion systems recognize those

people who achieve, or help to achieve, sustainable development objectives.

5. Develop measures and standards of performance

The implementation of sustainable development objectives, and the preparation of

meaningful reports on performance, require appropriate means of measuring

performance.

Management control, as well as external reporting, depends in part on the availability of

timely information about company operations. This is needed in order to allow

management to assess performance against external and internal performance standards,

using appropriate performance measures. Information systems will therefore need to be

reviewed, to enable the necessary reports to be provided to management.

The measures used to assess and report on performance will be influenced by the

company’s sustainable development objectives, and by standards that have been

established by government and other public agencies. For example, performance targets

may be set in terms of emission levels and energy usage per tonne of output, or perhaps

working hours lost due to accident or illness. The information generated must be in the

right units if actual performance is to be compared with the set targets. This might require

new measuring procedures to be introduced.

In many cases, companies are ahead of governments in establishing sustainable

development performance criteria. However, as society becomes more aware of

environmental issues and exerts more pressure for action, government can be expected to

take on a more influential role.

There is a significant opportunity for the business sector to work with governments in

establishing performance measures and standards, and to help develop reporting and

monitoring systems that are cost-effective and which meet the needs of both the public

and business.

While external standards, measures and reporting systems are needed, they take time to

develop and implement, especially if consultation is required. Businesses should not wait

for such standards to be developed before setting sustainable development objectives and

measuring the sustainability of their activities.

6. Prepare reports

The next step in the process is to develop meaningful reports for internal management

and stakeholders, outlining the enterprise’s sustainable development objectives and

comparing performance against them.

Directors and senior executives use internal reports to measure performance, make

decisions and monitor the implementation of their policies and strategies. Shareholders,

creditors, employees and customers, as well as the public at large, use external corporate

reports to evaluate the performance of a corporation, and to hold the directors and senior

executives accountable for achieving financial, social and environmental objectives.

Regulators and government officials add to the task by requiring an ever-expanding

degree of disclosure, in order to ensure compliance with their regulations.

While financial reports continue to be a fundamental component of corporate reporting,

they are now only one of many types of report issued annually by a corporation.

It is important to narrow the gap between the way economic activity is measured and the

way in which the use of natural resources is evaluated. For example, financial statements

do not illustrate the degree to which an enterprise invests in pollution control and

conserves resources. As a result, companies that do not invest in environmental

protection may present financial statements with lower costs and higher earnings than

those which do.

The system needs incentives, and reliable information, in order to ensure that there are

rewards for positive actions. It is ironic that business activity which destroys habitats and

pollutes air, land and water produces ‘income’ and contributes to gross national product.

Decision-makers within businesses and governments need a more relevant reporting

system.

A system that provides a meaningful picture of a company’s sustainability achievements

is essential for strengthening accountability. This is necessary if an effective relationship

is to be maintained with stakeholder groups.

Internally, several companies now ask their line managers to include in their regular

reporting procedures a statement on whether they have achieved the environmental and

sustainable development targets. Similarly, the board of directors should receive periodic

reports from senior management on whether these objectives have been achieved.

External reporting on sustainable development issues can take a number of different

formats. Some organizations are experimenting with special reports for particular

stakeholder groups, such as employees. Others provide a general-purpose report on

environmental activities. Still others include the subject of environmental and social

issues in a separate section of their annual reports.

Every business enterprise should publish, at least once a year, an external ‘sustainable

development report’. Ultimately, a universal format for such reports will be desirable. In

the meantime, managers and boards of directors should decide on the organization and

content of reports.

7. Enhance internal monitoring processes

On an ongoing basis it will be important to develop mechanisms to help directors and

senior managers ensure that the sustainable development policies are being implemented.

Performance monitoring is well established as an important element of the management

process. In many areas, it is directly linked to reporting. The key to any system’s

effectiveness is whether the management monitors operations and outputs on an ongoing

basis.

Monitoring can take many forms, such as:

Reviewing reports submitted by middle managers;

Touring operating sites and observing employees performing their duties;

Holding regular meetings with subordinates to review reports and to seek input on

how the procedures and reporting systems might be improved;

Implementing an environmental auditing programme.

Organizing internal environmental audits is a practical way to monitor the

implementation of management policies. For example, many organizations now perform

internal audits to monitor compliance with environmental policies and legislation. These

normally require multidisciplinary teams of experts (for example engineers, auditors and

scientists) who possess the necessary knowledge and experience, both in auditing and in

the areas being audited.

The following definition of environmental auditing was developed in 1989 by the

International Chamber of Commerce’s working party on environmental auditing:

A management tool comprising a systematic, documented, periodic and objective

evaluation of how well environmental organization, management and equipment are

performing, with the aim of helping to safeguard the environment by:

(i) Facilitating management control of environmental practices;

(ii) Assessing compliance with company policies, which would include meeting

regulatory requirements.

In Europe, the Commission of the European Community has adopted guidelines on

environmental auditing of industrial activities. Such audits are voluntary but must follow

EU guidelines, including the publication of a statement on the audit results by the

company, verified by an accredited auditor. The objective is to give companies more

control over their environmental performance, and to increase public awareness.

Management leadership

Establishing sustainable development objectives, systems and monitoring mechanisms

requires leadership on the part of senior management, and a commitment to continuous

improvement.

The role of the board

Without the active involvement of the board of directors, it will be difficult for an

organization to implement sustainable business practices. Corporations are encouraged to

establish a ‘social responsibility committee’, responsible for setting corporate policies on

sustainable development and for dealing with issues such as health and safety, personnel

policies, environmental protection, and codes of business conduct.

This list is not all-encompassing. The committee’s exact responsibilities should be

dictated by individual business circumstances. Nevertheless, there may be a need to

establish a ‘minimum’ set of responsibilities.

It is important that corporate sustainable development policies be implemented

consistently throughout an organization. Too many business enterprises observe variable

levels of corporate ethics and integrity, depending on the country in which they are

operating. This double standard is inconsistent with the concept of sustainable

development, and ensuring that it does not prevail is an important role of the directors.

The board also has a role in monitoring the implementation of its policies. It should

receive regular reports on how the policies are implemented, and should be accountable

to its stakeholders on the company’s performance against these policies.

Self-assessment

The first step for businesses in adopting sustainable development principles is to assess

their current position. Management should know the degree to which the company’s

activities line up with sustainable development principles. This requires evaluating the

company’s overall strategy, the performance of specific operations, and the effect of

particular activities.

This process should compare the company’s current performance with the expectations of

the stakeholders. Management philosophies and systems should be reviewed; the scope of

public disclosures on sustainability topics should be analyzed; and the ability of current

information systems to produce the required data should be evaluated.

Various self-assessment devices are available to help this process, such as the GEMI and

CERES questionnaires, as well as material tailored to specific industries – for example,

the North American chemical industry’s ‘Responsible Care’ programme.

Deciding on a strategy

Once managers have gained an understanding of how its own operations shape up, they

should gauge the performance of other, comparable organizations. Comparisons against

the standards set by other industries and environmental groups can be instructive.

This task should be relatively easy if there is reasonable public disclosure, organized

industry associations and co-operative sustainable development programmes. However, if

these structures do not exist, management could approach other businesses to discuss

sharing information and possibly establishing an industry group.

Management should then consider ways to narrow the gap between the current state of

the corporation’s performance and its objectives for the future. A strategy will need to be

developed, outlining where the company hopes to position itself relative to its

competitors and its stakeholders’ expectations.

A general plan is needed to describe how and when management expects to achieve that

goal, together with the various milestones it will reach along the way.

Senior management should review and approve the strategy and the plan before

submitting them to the board of directors for final approval. Because of the pervasiveness

of sustainable development, it is essential that members of the senior management team

(representing all facets of the company's activities) ‘buy in’ to the project. Anything less

than full commitment may doom the plan to failure.

Strategy implementation

Once the strategy and the general plan have been approved, detailed plans should be

prepared indicating how the new strategy will affect operations, management systems,

information systems and reporting. These should set out measurable goals to be achieved

in each area, and explain how progress will be monitored. They should also specify

spending and training requirements.

These plans should be developed through consultation with employees throughout the

organization, possibly with the assistance of outside specialists. It will be a timeconsuming

and dynamic process, which will entail frequent modifications as input is

obtained from several sources.

Once finalized, the plans should be approved by senior management and, ideally, by the

board of directors as well.

Small business and private company considerations

Applying the proposed framework will be a challenge for all enterprises, but smaller

businesses may encounter additional challenges. Besides sustainability reporting, smaller

businesses will have to adapt to the new corporate climate with less in-house expertise,

fewer resources and less formal management structures than larger corporations. It will

be difficult for them to keep abreast of ever-changing regulatory requirements.

Fortunately, small businesses can find much of the expertise they require through

industry associations, chambers of commerce, corporate environmental groups (such as

GEMI in the USA), national and international business-government groups (such as the

European Green Table), management consultants and universities.

There is also a growing body of literature, some of which deals with the experiences of

companies that have integrated sustainable development into their operations.

The limited resources of small businesses can be offset by co-operative ventures with

other companies. These may, for example, take the form of committees which monitor

developments and serve as a forum for exchanging ideas. To the extent that different

companies have similar stakeholders, they can compare notes on their stakeholders’

needs and expectations and how they plan to address them.

These cooperative ventures could be more complex, and include formal industry

programmes dealing with matters such as performance standards, monitoring and

technological research.

Once the expertise and resource issues have been addressed, the generally less formal

management structures found in small businesses can be a positive advantage. There will

be fewer people to educate within the enterprise, and there will usually be less resistance

to change. In addition, there are usually no formal committees to whom the new

strategies must be ‘sold’, and no lengthy review and approval procedures to slow the

process down. The ‘hands on’ management style common to smaller businesses can also

aid the monitoring function: management will be well positioned to spot problems and to

make the necessary adjustments.

The road to implementing a sustainable development philosophy will be different for

smaller businesses, but with ingenuity, perseverance and cooperation, they can achieve

Summary and Conclusion

This study examines the influence of corporate culture on organisational

commitment. Specifically, this study examines four dimensions of corporate

culture, namely teamwork, communication, reward and recognition and training

and development on employees’ commitment towards the organisation.

The results show that all dimensions of corporate culture chosen in this study have

significant influence on organisational commitment. The results are consistent to

the results of previous studies (such as Ooi and Arumugam, 2006) that signify the

importance of these dimensions. The key finding in this study is company’s

corporate culture practices are positive towards employees’ commitment and this

in turn, lead to the organisational success. Therefore, other organisations are

encouraged to practice these dimensions of corporate culture in yielding better and

long lasting results. This study is not without limitations. First, this study used a

case study approach focusing on In summary, the findings in this study provide

some understanding on the importance of corporate culture on organisational

commitment. This study provides knowledge on the influence of corporate culture

implemented in a organisation.

REFERENCES

Adeyoyin, S. O. (2005). ICT literacy among the staff of West African

university libraries: a comparative study of anglophone and francophone

countries. The Electronic Library ( in press).

Allaire, Y. and Firsirotu, M.E. (1984). Theories of oganizational culture.

Organization Studies 5(3):193-226.

Allen, F.R. and Kraft, C. (1982). The organizational unconscious: how to

create the organizational culture you want and need. Englewood Cliffs, NJ:

Prentice-Hall.

Armstrong, M. (1991). A handbook of personnel management practice. 4th

ed. London: Kogan Page.

Barratt, E.S. (1990). Human resource management: organizational culture.

Management Update 2(1):21-32.

Blake, R.R. and Mouton, J.S. (1969). Building a dynamic corporation through

grid organization development. Addison-Wesley: Reading.

Bowles, M. (1989). Myth, meaning and work organization. Organization

Studies 10(3) :405-423.

Burnes, B. (1991). Managerial competency and new technology: don't shoot

the piano player--he's doing his best. Behaviour and Information Technology

10(2):91-109.

Cummings, T.G. and Huse, E.F. (1989). Organization development and

change. West: Minnesota.

Deal, T. and Kennedy, A. (1983). Culture: a new look through old lenses.

Journal of Applied Behavioural Science19(4):497-507.

“Managing the Library's Corporate Culture for Organizational Efficiency,

Productivity, and Enhanced Service,”

Samuel Olu Adeyoyin. Library Philosophy and Practice, Vol. 8, no. 2 (Spring

2006)

13

Deal T. and Kennedy, A. (1982). A Corporate Cultures. Adison-Wesley,

Reading.

Dobson, P. (1988). Changing culture. Employment Gazette, December:657-

650.

Elridge, J.E.T. and Crombie, A.D. (1974). A sociology of organization. George

Allen and Unwin: London.

Filby, I. and Willmott (1988). Ideologies and contradictions in a public

relations department. Organization Studies 9 (3):335-351.

Handy, C. (1986). Understanding organizations. Penguin: Harmondsworth.

Iromantu, O.C. (1998). Challenges and opportunities for the information

revolution in Nigeria. Nigerian Library Association, Annual General Meeting,

Abuja. 4-8 May.

Meek, V.L. (1982). Organizational culture: origins and weaknesses.

Organization studies 9(4):453-73.

Meyer, M.W. and Zucker, I.G. (1989). Permanently failing organizations.

Beverley Hills, CA: Sage.

Mullins, L. J. (1999). Management and organizational behaviour. London:

Pitman.

O'Reilly, C. (1989). Corporations, culture and commitment. California

Management Review. 31(4), 9-23.

Payne, R. L. & Pugh, D. D. (1976). Organizational structure and climate. In

M. Dunnette (Ed.), Handbook of industrial and organizational psychology

(pp. 1125-1172). Chicago: Rand McNally.

Peters, T.J. and Waterman, R.H. (1982). In search of excellence: lessons

from America's best-run companies. Harper and Row: London.

Salaman G. (1979). Work organizations. Longman: London

Sathe, V. (1983). Some action implications of corporate culture: a

manager's guide to action. Organizational Dynamics Autumn:4-23.

Schein, E. H. (1984). Coming to a new awareness of corporate culture.

Sloan Management Review, Winter.

“Managing the Library's Corporate Culture for Organizational Efficiency,

Productivity, and Enhanced Service,”

Samuel Olu Adeyoyin. Library Philosophy and Practice, Vol. 8, no. 2 (Spring

2006)

14

Schein, E. H. (1983). Organizational dynamics. Summer

Schein, E. H. (1985) Organizational culture and leadership: a dynamic view.

Jossey-Bass: San Francisco.

Schwartz, H. and Davis, D. (1981). Matching corporate culture and strategy.

Cambridge MA: MAP Concept Paper.

Silverman, D. (1970). The theory of organizations. Heinemann: London.

Turner, I. (1990). Strategy and organization. Manager Update 1(3):193-206.

Uttal, B. (1983). The corporate culture vultures. Fortune, Oct. 17

Van Maanen J. and Kunda, G. (1989). Real feelings: emotional expression

and organizational culture In B. Staw and I. Cummings (eds.): Research in

Organizational Behaviour 11:43-103.

Andrews, Dorine C. (1996). Can Organizational Culture be Reengineered?

[on-line]. Available: http://www.c3i.osd.mil/bpr/bprcd/5304.htm.

Bijur, Peter. L. (2001). Changing the Corporate Culture: A Competitive

Imperative [on-line]. Available: http://www.worldenergysource.com/texart.html.

BOLA: Business Open Learning Archive. (2001).What is this thing called

organisational culture [on-line]. Available:

http://sol.brunel.ac.uk/~jarvis/bola/culture/culture.html.

Borgatti, Stephen, P. (1996). Organizational Culture. [on-line]. Available:

http://www.analytictech.com/mb021/culture1.htm.

Cannaday, Major John E. (1997, March). Application of the Organizational

Culture Concept to Assess USAF Organizations. [on-line]. Available:

http://www.au.af.mil/au/database/research/ay1997/acsc/97-0607H.htm.

Carnegie Endowment for International Peace. (1994, April). The World

Bank:

Its Role, Governance and Organizational Culture. [on-line]. Available: http:

www.ceip.org/files/publications/worldbankpaper.asp.

DeWitt, Daniel J. (2001). The Changing Corporate Culture [on-line].

Available: http://www.informanet.com/corpculture.htm.

Giles, Russ. (2000). Identifying and Influencing Organizational Culture

[online].

Available:

http:www.alliesconsulting.com/resources/articles/idinflcult.html.

Hagberg, Richard and Heifetz, Julie. (2000). Corporate Culture /

Organizational Culture: Understanding and Assessment. [on-line]. Available:

http://www.hcgnet.com/html/articles/understanding-Culture/html.

Halley, Alexis A. (1998). Applications of Boundary Theory to

Organizational

and Inter-Organizational Culture [on-line]. Available:

http://www.hbg.psu.edu/Faculty/jxr11/halley.html.

Handy, C. (2001).Typologies of Organisational Culture [on-line]. Available:

http://sol.brunel.ac.uk/~jarvis/bola/culture/harrison.html.

Harrison, Stephen J. (2001). Police Organizational Culture: Using Ingrained

Values to Build Positive Organizational Improvement [on-line]. Available:

http://www.pamij.com/harrison.html.

Hickok, Thomas A. (2001). Downsizing and Organizational Culture [on-line].

Available: http://www.pamij.com/hickok.html.

Hodas, Steven. (1993, September). Technology Refusal and the

Organizational Culture of Schools [on-line]. Available:

http://epaa.asu.edu/epaa/v1n10.html.

Kosan, Lisa. (2001, February). E-business eats up culture [on-line].

Available:

http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2685118,00.ht

ml.

Lakos, Amos and Gray, Chris. (2001). Personalized Library Portals as an

Organizational Culture Change Agent. [on-line]. Available:

http://www.lita.org/ital/1904_lakos.html.

Mallak, Larry, Dr. (2000). Organizational Culture [on-line]. Available:

http:/www.wmich.edu/~emrl/Organizational%20culture.htm.

Martin, Joanne. (2001, February). Meta-theoretical Controversies in

Studying

Organizational Culture. [on-line]. Available:

http://gobi.stanford.edu/researchpapers/detail1.asp?Paper_No=1676.

McNamara, Carter. (2001). Organizational Culture [on-line]. Available:

http://www.mapnp.org/library/org_thry/culture/culture.htm.

Morgan, Gareth. (1996, October). Creating Quantum Change [on-line].

Available: http:// www.imaginiz.com/speeches/quantum.html.

Morgan, Gareth and Zohar, Asaf. (1996, October). Achieving Quantum

Change: Incrementally!! The Art of High Leverage Change [on-line].

Available: http:// www.yorku.ca/faculty/academic/gmorgan/0695home.html.

Morgan, Gareth and Zohar, Asaf. (1996, October). Key Principles for

Managing Change (7/7) [on-line]. Available:

http://www.yorku.ca/faculty/academic/gmorgan/0695keys.html.

Morgan, Gareth. (1997). Images of Organization. California: SAGE

Publications Inc.

Schein, Edgar. (2001). Organizational Culture and Leadership [on-line].

Available: http://www.tnellen.com/ted/tc/schein.html.

Shove, Elizabeth. (1999). Organisational and Cultural Change in

Construction: A Pilot Study. [on-line]. Available:

http://www.lancs.ac.uk/users/scistud/org_cult_res.htm.

Stupak, Ronald, J. (1998). Symposium on Organizational Culture: Theory,

Practice, and Cases [on-line]. Available:

http://www.hbg.psu.edu/Faculty/jxr11/stupakintro.html.

Tan, Victor S.L. (2001, September). Changing corporate culture [on-line].

Available: http://adtimes.nstp.com.my/jobstory/2001/sept22c.htm.

Toolpack Consulting. (2001). Organizational Culture. [on-line]. Available:

http://www.toolpack.com/culture.html.

Tribus, Myron. (2001). Changing the Corporate Culture: Some Rules and

Tools [on-line]. Available:

http://deming.ces.clemson.edu/pub/den/change_cult.pdf.

Tuler, Seth, Machlis, Gary E., and Kaperson, Roger E. (2001). Mountain

Goat

Removal in Olympic National Park: A Case Study of the Role of

Organizational Culture in Individual Risk Decisions and Behavior [on-line].

Available: http://www.fpic.edu/RISK/vol3/fall/fuler.htm.

Wilms, Wellford W., Zell, Deone M., Kimura, Osamu, and Dunco, Dennis.

(1994). Reinventing Organizational Culture Across International Boundaries

[on-line]. Available: http://cbi.gsia.cmu.edu/newweb/1994WorkingPapers/94-

3wilms/wilms.html.