Corporate Culture and Values: Genesis and Sources of L'Oreal's Entrepreneurial Orientation

By Fayolle, Alain; Basso, Olivier et al. | Journal of Small Business and Entrepreneurship, Spring 2008 | Go to article overview

Corporate Culture and Values: Genesis and Sources of L'Oreal's Entrepreneurial Orientation


Fayolle, Alain, Basso, Olivier, Legrain, Thomas, Journal of Small Business and Entrepreneurship


Introduction

In France, education excellence, which is regularly assessed through mechanisms of "mathematical Darwinism" (Barsoux and Lawrence, 1991), is a key factor of social success. Degrees obtained in prestigious schools offer a fast track to rewarding professional positions. Elites who come out of ENA, Ecole Polytechnique and the French Grandes Ecoles are traditionally destined to work for the state or large private companies, not to become entrepreneurs. This pattern originates from the traditions and history of this country, culturally influences all the layers of society and shapes the behaviour of French people (e.g. Suleiman, 1977; Crozier, 1982).

As opposed to other national cultures, especially the cultures of Anglo-Saxon countries, the "Hexagon" does not promote venture creation nor entrepreneurial behaviour in general. It is a commonly accepted opinion that the culture of venture creation traditionally arises from the family environment rather than other types of environments (Fayolle, 2004; Fayolle and Filion, 2006). In France, having a close parent (father or mother) who owns their own company doubles or triples the probability of an individual becoming an entrepreneur.

Large French companies as well as individuals and institutions bear the weight of this entrepreneurial "counter-culture," a phenomenon that is amplified by the size factor and its natural corollary: bureaucratisation. The larger companies grow, the larger their volume of trade, the more structured and rigid their rules and operating modes will become: this means more control and formal coordination mechanisms and less autonomy for individuals. This of course hampers flexibility, reactivity, individual initiative-taking and the seizing of new opportunities (e.g. Thornberry, 2001).

It is difficult to explain, in view of these adverse conditions--both cultural and bureaucratic--how some large French companies manage to retain collective qualities and capacities to behave entrepreneurially. The issue is a complex one as an entrepreneurial orientation or behaviour usually relies on several variables linked to the managing team, the corporate strategy and policy, the organisation, the management of human resources, and the firm's corporate culture (Basso and Legrain, 2004 ; Basso, 2004). Our perspective on the question here is therefore limited and calls for further development. We have focused on the case study of a large French group to build our hypothesis. This exploratory work supports the assumption of the predominant role of the founder-manager's values in the emergence and persistence of a strong entrepreneurial culture likely to shape the firm's collective behaviour (Hofstede, 1985).

First of all, we will highlight the strong links between the values held by its emblematic manager Francois Dalle and the firm's corporate culture, and then we would like to put into perspective the values/culture association with the entrepreneurial orientation and behaviour of L'Oreal.

Founding Values and Corporate Culture of L'Oreal

A value can be defined as: "an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence. A value system is an enduring organization of beliefs concerning preferable modes of conduct or end-states among a continuum of relative importance." (Rokeach, 1973: 5). In other words, a value acts as an ideal principle that the members of a community refer to in order to base their judgement, and decide which course of action to adopt. As such, it mixes cognitive, affective and behavioural elements which continually interact and are revealed in the actions and behaviours of the members of an organization. Because organizations do not form spontaneously or accidentally, the beliefs, values, and assumptions of founders or key players infuse the whole organization and shape the learning experiences of the group members during the start-up stage (Schein, 1983). …

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