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9. The Dark Side of Corporate Culture

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Corporate Culture
This chapter is in the book Corporate Culture
9Throughout this book, we have discussed and examined how corporate cul-ture can be an intangible asset, a source of strategic and competitive advan-tage, and a driver of superior financial performance. However, corporate culture also has a dark side: if managed incorrectly or left unmanaged, it can lose its positive aspects and become dysfunctional or toxic. This chapter deals with situations in which culture becomes a liability, not an asset.We begin by revisiting the concept of dysfunctional culture, which was introduced in Chapter 1. We then identify dysfunctional cultural syndromes that companies can suffer from that in turn create problems with respect to the functionality of one or more of the five key dimen-sions of culture we described in Chapters 4 to 8: customer orientation, people orientation, performance standards and accountability, innovation and change, and company process orientation. Next, as in prior chapters, we examine and analyze selected companies with dysfunctional cultures to gain insight into how this unfortunate condition occurs and its con-sequences. We have selected some very important case examples of how companies (at various stages of their history) mismanaged their culture. Specifically, we discuss AIG, the once-great and powerful company that is the poster child for the financial collapse experienced in 2008–09. We explain how IBM, generally regarded as a company with an outstanding positive culture, mismanaged customer orientation in the 1980s and fell from grace. We discuss how American Express created a highly dysfunc-tional environment through low productivity and an excess of politically The Dark Side of Corporate Culture
© 2020 Stanford University Press, Redwood City

9Throughout this book, we have discussed and examined how corporate cul-ture can be an intangible asset, a source of strategic and competitive advan-tage, and a driver of superior financial performance. However, corporate culture also has a dark side: if managed incorrectly or left unmanaged, it can lose its positive aspects and become dysfunctional or toxic. This chapter deals with situations in which culture becomes a liability, not an asset.We begin by revisiting the concept of dysfunctional culture, which was introduced in Chapter 1. We then identify dysfunctional cultural syndromes that companies can suffer from that in turn create problems with respect to the functionality of one or more of the five key dimen-sions of culture we described in Chapters 4 to 8: customer orientation, people orientation, performance standards and accountability, innovation and change, and company process orientation. Next, as in prior chapters, we examine and analyze selected companies with dysfunctional cultures to gain insight into how this unfortunate condition occurs and its con-sequences. We have selected some very important case examples of how companies (at various stages of their history) mismanaged their culture. Specifically, we discuss AIG, the once-great and powerful company that is the poster child for the financial collapse experienced in 2008–09. We explain how IBM, generally regarded as a company with an outstanding positive culture, mismanaged customer orientation in the 1980s and fell from grace. We discuss how American Express created a highly dysfunc-tional environment through low productivity and an excess of politically The Dark Side of Corporate Culture
© 2020 Stanford University Press, Redwood City

Chapters in this book

  1. Frontmatter i
  2. Contents v
  3. Preface vii
  4. Part I. The Role of Corporate Culture and Culture Management in Organizational Success
  5. 1. Corporate Culture 3
  6. 2. Culture Management Foundations 26
  7. 3. Culture Management Process and Tools 46
  8. Part II. Management of the Key Dimensions of Corporate Culture
  9. 4. Managing the Customer Orientation Dimension of Culture 75
  10. 5. Managing the People Orientation Dimension of Culture 92
  11. 6. Managing the Performance Standards and Accountability Dimension of Culture 109
  12. 7. Managing the Innovation and Change Dimension of Culture 133
  13. 8. Managing the Company Process Orientation Dimension of Culture 152
  14. 9. The Dark Side of Corporate Culture 174
  15. Part III. Leading Culture Management and Transformations
  16. 10. Leading Culture Management and Culture Transformations 193
  17. Notes 221
  18. Index 235
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https://doi.org/10.1515/9780804777544-010

Chapters in this book

  1. Frontmatter i
  2. Contents v
  3. Preface vii
  4. Part I. The Role of Corporate Culture and Culture Management in Organizational Success
  5. 1. Corporate Culture 3
  6. 2. Culture Management Foundations 26
  7. 3. Culture Management Process and Tools 46
  8. Part II. Management of the Key Dimensions of Corporate Culture
  9. 4. Managing the Customer Orientation Dimension of Culture 75
  10. 5. Managing the People Orientation Dimension of Culture 92
  11. 6. Managing the Performance Standards and Accountability Dimension of Culture 109
  12. 7. Managing the Innovation and Change Dimension of Culture 133
  13. 8. Managing the Company Process Orientation Dimension of Culture 152
  14. 9. The Dark Side of Corporate Culture 174
  15. Part III. Leading Culture Management and Transformations
  16. 10. Leading Culture Management and Culture Transformations 193
  17. Notes 221
  18. Index 235
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