South-Western - Management  
Tight Times A Test For Rah-Rah Firms
Topic Internal Environment and Culture
Key Words Corporate culture, motivation
InfoTrac Reference CJ107425799
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News Story

Working for a company with a high-loyalty, employee-friendly culture can be a fulfilling experience. Before you join such an organization, however, know the pitfalls. Such cultures are difficult to maintain, and corporate loyalty can blind workers to misdeeds, as in the case of Enron.

These cultures are especially evident in family businesses and direct-sales organizations like Mary Kay and Amway. They foster an emotional and social commitment to the organization that keeps people working and attached to the organization. Some larger companies have also managed to have "strong pride-builder cultures," like Microsoft and GM.

Personal connections and the pride employees feel about their jobs are more motivating than money. Employees at organizations with strong cultures are typically more independent, have less absenteeism, and stay in their jobs longer.

There can be too much of a good thing, however. At Enron, employees began to take pride in the money they earned as a company and as individuals, and that blinded them to ethical violations. They became self-serving.

High-loyalty cultures tend to be cyclical. They're difficult to maintain when business is down, particularly in publicly held companies. They depend on the personality of the leadership group. When a leader leaves, the culture can be jeopardized.

When companies need to cut benefits, pay or training to accommodate hard times, service declines and customers become dissatisfied. Corporate culture tends to take a hit then, also.

Questions
1.

What are the advantages of a high-loyalty, employee-friendly corporate culture, and why is it difficult to maintain?

Source "Tight Times A Test For Rah-Rah Firms," The Christian Science Monitor Sept. 8, 2003, p. 13.
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