Management Matters
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Management Matters

Why Don’t Managers Think Company Culture Is Important?

The question itself might strike you as a bit odd…you might be a manager who thinks of company culture as being very important. Do a websearch on the term “corporate culture”, as I did, and you’ll get 1.8 billion hits. It’s difficult to name an outlet in the business media that doesn’t have regular articles on corporate culture.

Photo by RF._.studio from Pexels

When I ask my Kent State University B-school students this question (as I have for the past several years), almost none of them argue the premise of the question, that I’m wrong in presuming that managers do, in fact, think corporate culture is important. Few of them, it seems, have worked for organizations that saw a link between the organization’s culture and the organization’s performance.

On the other hand, just this afternoon, I interviewed, via Zoom, the owner of a family-owned manufacturing company near Cleveland. The organization was the top small company in the Plain Dealer’s 2020 Top Place to Work survey. The company placed in the top 50 when it first participated in the survey several years ago and has improved each year since. When I asked about the strategic value of his company’s strong, positive culture, he pointed to its ability to attract and retain talented job candidates. He was also emphatic about the relationship between his company’s culture and the fact that it’s quadrupled its revenues over the past few years.

It’s apparent, then, that the answer to the question starts with, “Well, some do and some don’t.” According to my students, those who don’t tend to see culture as related only to “employee happiness” and “good morale”. These managers tend to see attention to culture and attention to efficiency and financial performance as two different things. Further, in these managers’ views, one can create and sustain a strong, positive culture or one can run the business well but those two goals can’t be achieved together, unless the company commands the resources of a Google or a Microsoft. Most managers will at least give lip service to the value of high employee satisfaction but the fact that they see it as separate from good company performance hinders their understanding of the relationship between culture and performance. All to say, managers who see “culture” and “employee satisfaction” are doing themselves and their company’s stakeholders a disservice.

For this reason, I spend a fair amount of time telling my students that improved employee morale is not a goal of creating a strong, positive culture. It is a happy by-product…but it’s not the goal. Just as increased hot dog sales at the stadium is a happy by-product but not the primary goal of putting together a championship baseball team. Rather, a strong, positive culture is worth the effort and expense to develop because it provides a sustained competitive advantage for the organization.

Though there are many, Southwest Air is arguably the best example of a company that is successful because of its hard-to-imitate culture. As of last year, the company has realized 47 consecutive profitable years. Other airlines fly the same planes, have gates at the same airports, pay the same for fuel. Why can’t they emulate Southwest Air’s success? Clearly, Southwest Air has something the other airlines don’t have and can’t easily get and that’s a strong, positive culture. Less well known is the organization I mentioned above. But, like Southwest Airlines, that small company realizes the strategic importance of a strong, positive culture. All to say, managers who don’t think culture is important are failing to maximize shareholder value.

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George Bohan

George Bohan

Born and raised in the South, living in Ohio. Writes about politics, management, and religion.