Academic journal article Journal of Economics & Management

Corporate Culture Diagnostics in Management Control: Evidence from Ukraine

Academic journal article Journal of Economics & Management

Corporate Culture Diagnostics in Management Control: Evidence from Ukraine

Article excerpt

(ProQuest: ... denotes formulae omitted.)

Introduction

The modern world is characterized by increasing chaos and uncertainty. As a result, the economy is becoming turbulent, volatile, dynamic and prone to crisis. The current global economic and financial crisis constantly escalates. In this context, Stiglitz stressed [Stiglitz 2012] that after every crisis there was an explanation that contradicted the next crisis or at least it showed that the previous explanation was inadequate. The result is an increase in state outlined risks at the international, country and company levels. Management control of corporate culture can be a powerful tool in stabilizing the chaotic environment [Kuznetsova 2011]. In author's opinion the role of information in the functioning of society, which is always important, has dramatically increased with the development of ICT and their expansion into all areas of life [Żelazny 2015].

It is important to form the assessment results not only of its current state, but also of the trends and prospects of development that helps to make the informed management decisions aimed at addressing problematic issues and weaknesses in the corporate culture management and take advantage of the company. Therefore, it is an urgent need to diagnose corporate culture as an object of management control and a subject of profitability and stable growth through the launch of cultural control mechanisms.

The research aim is to create a model of corporate culture diagnostics for simulation in management control. This model must provide comprehensive diagnosis of the corporate culture condition by: 1) the 3 structure levels (basic underlying assumptions, espoused beliefs and values, visual artifacts); 2) intensity of display of the functions that define the purpose of corporate culture for the company. The objective of using this model is to increase the efficiency of corporate culture as an additional quality tool of profitability and stability of the company.

To answer the research questions described above the paper is organized as follows. In the section 'theoretical background' is described the existing research on corporate culture and includes the literature review of corporate culture diagnostics and the levels and indicators of corporate culture diagnostics. In the next section the research method is selected. This is followed by the description of the model of corporate culture diagnostics defining the levels and indicators of assessment. The most important research results are introduced in the successive part. The key contributions are presented in the concluding section.

1. Theoretical background

A preliminary study of the literature [Bozeman, Kingsley 1991; Mohan 1993; Levin, Gottieb 2009; Schein 2009; Levy, Lammare, Twining 2010; Cameron, Quinn 2011; Jackson 2011] has helped to define the most fundamental research issues of corporate culture diagnosis in international science including the clinical research method [Schein 2009] and the method of corporate culture diagnosis [Cameron, Quinn 2011]. It is necessary to evaluate these developments critically in terms of their effectiveness under the current conditions of formation of the knowledge-driven economy in the world, information support of society and general instability of the economic system.

Schein [2009] proposed to investigate corporate culture with the use of clinical research. While doing so, he draws attention to the fact that only this method can detect group members' deep understanding. According to Schein, effectiveness of culture is determined in accordance with formation of its components as follows: level 1 is the basis of corporate culture which includes the basic underlying assumptions fundamental for external manifestation and determining espoused beliefs and values as well as visual artifacts; level 2 is espoused beliefs and values which are based on the basic underlying assumptions and create visual artifacts; level 3 is visual artifacts: the rules and norms of behavior which are established based on the declared values. …

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