Where Does Bad Corporate Culture Come From, and Can It Be Corrected?

Bad corporate culture arises naturally from human nature, lack of management savvy, and bad or clueless management behavior. Corporate culture is built from the combined experiences of the members of the organization, the quality of their interactions with each other and outsiders, the results of the organization’s efforts, and the psychological tone set by top management and every level of management beneath it. All of these factors are expressed in, and some are caused by, management behavior, and poor management behavior will always affect the culture negatively. The good news is that you can work to correct and improve the culture at your own level.

Understanding the fundamentals of human nature and the psychological origins of poor management behavior is key to being a truly “savvy” manager. One key factor working against being a good manager is the natural difficulty of keeping one’s perspective in a sustained group. While the classical groupthink phenomenon is one possible outcome, another is loss of personal perspective, often acquired through bad experiences. This problem comes from bad experiences with others, especially those we perceive to have power over us (managers).

Pain can make a person lose their perspective. Once one has been abused or injured, psychologically or otherwise, by another person, the remembered pain makes the incident loom large in one’s memory, and restoring proper perspective takes understanding and introspection. The perspective that is lost that most negatively affects managers is the knowledge that, at the most basic levels of motivation, everyone wants to feel good about themselves and wants to feel they are making a positive difference in their job. Keeping this fact foremost in our thinking is key to being an effective manager and getting the most from one’s subordinates. It also helps one delegate more effectively and manage one’s time more efficiently.

Psychological pain can come from common sources. All it takes, for example, is one boss treating you like you don’t know anything, making you do meaningless work, responding to their own insecurities by giving you punitive assignments because they feel threatened by something you said, or actually taking out their own past bad experiences and psychological issues on you, and the pain (frustration, feeling of being devalued, etc.) you experience will amplify the memory of the experience in your mind. It is human nature to recall much more vividly our painful past experiences, as it is a natural survival trait that helps us avoid recurrences, but it can also cause us to lose the perspective that the good experiences outweigh the bad by a huge proportion.

Painful experiences make people wary long after the original incidents. Once abused, most people will tend to be overly watchful for similar circumstances, even after the original incident is forgotten. They can become conditioned to expect similar treatment from other bosses even though they only experienced the abuse from one of many, and, worse yet, they may wind up emulating the bad behavior (forcing, for example) because it is their most memorable reference to how bosses act. In essence, they lose perspective and begin overgeneralizing (another aspect of human nature) and thinking that most or all bosses act badly, or that this is the way to manage others. It can happen to almost anyone, but the knowledge that it doesn’t have to is the starting point for being a better manager.

Common bad management behaviors reveal the prevalence of loss of perspective and an all-too-common poor understanding of human nature. The forceful, “Do it because I said so” management style is a good example. While management research has repeatedly shown that “forcing” and “command-and-control” style management are only appropriate in relatively rare circumstances, many people retain the mistaken opinion that it makes up a large part of the management function. Even the U.S. Army has found that command-style management is only of value in certain circumstances, as when one is leading a squad of inexperienced 18-year-olds into enemy fire, and is much less effective in other circumstances. The savvy commander knows a squad is far more effective with every member contributing their knowledge, perception, and creativity, among other assets, to accomplishing the mission. They also know that they need to engage their subordinates in a positive way to get the benefit of those assets. They often achieve this by maintaining a culture of teamwork, collaboration, and mutual respect in their organization.

A savvy manager understands that conditioning, a form of unconscious learning, can happen to anyone including them, and can be countered. It is easy to become conditioned to expect abuse or just poor quality management behavior from one’s superiors, and, in the absence of better knowledge and understanding, it is easy to model such behaviors in one’s management of others. I believe this accounts for the seemingly large number of bad experiences most of us acquire working in large bureaucracies. We can, however, counter our conditioning once we understand what is happening to us, and consciously replace it with real knowledge.

Changing or countering one’s conditioning is possible. Some of the best managers have undoubtedly taken the time and exercised the introspection to think through their beliefs about management, trace them back to past experiences and learning, and establish better ways of thinking, in effect reconditioning themselves to be better managers. A person may do this once in their life, or many times, but it is always an extremely productive (though not necessarily easy) undertaking.

Culture originates in the behavior of individuals. Organizational culture is built on the behaviors of the members of the culture, and poor management behavior at any level naturally affects the levels subordinate to it – “crap rolls down hill”, as they say. An abusive or clueless top or middle manager can create a culture of negativism and poor performance that extends beneath them all the way to the bottom of the organizational pyramid, and even to supplier organizations. Anyone who has worked in more than a couple of bureaucracies has most likely experienced or witnessed this syndrome.

Culture can be changed for the better. A savvy, positive thinking manager can create a constructive culture of productivity, creativity, and even fun among their subordinates, and achieve superior results, even amidst an otherwise negative culture. It is far easier, however, if the overall culture is at least tolerant, if not actually supportive, or if the manager setting the cultural tone and making the change is isolated from the rest of the organization in significant ways.

Changing culture in a positive direction is rarely easy. As W. Edwards Deming said, however, “quality can be no better than the intent at the top.” A good manager can move the culture of the organization beneath her or him in positive and more productive directions, but if a negative cultural tone is persistently coming from above, he or she will have to fight constantly to maintain that more positive cultural beneath them, and may be criticized and even undermined by their less savvy peers, who may feel threatened by their improved results. For this reason, an organizational culture will rarely be better overall than is determined by the behavior of the topmost management. Middle managers who buck a strongly negative culture often eventually burn out and leave the organization, are unrecognized and fail to be promoted, or give up their management role. While they “stick to their guns”, however, their results will tend to be superior, their employees happier and more productive, and their jobs more satisfying.

Bad corporate culture happens, but it can be corrected. In summary, while it is natural for bad organizational culture to develop, this tendency can be countered and a more positive and productive organizational culture can be produced, though it requires savvy and introspective management. It is within the power of each of us to do the introspective work and be more savvy, as managers or rank and file employees, and I highly recommend it. I also recommend, as you do this important work, to record your thoughts and experiences in a journal for later review. In doing so you will improve yourself, and give yourself increased capacity to influence your organizational culture in in more positive directions.

Personal note – My wife wanted me to include more of the personal anecdotes that have led me to these conclusions (which are by no means comprehensive), but I don’t want to write an entire book here. (perhaps at a later time – I’ve many times considered pursuing a Ph.D. in Organizational Behavior …)

As always, I welcome your comments and questions, as I always learn from them.



24 Responses to Where Does Bad Corporate Culture Come From, and Can It Be Corrected?

  1. dan barnett says:

    I liked your blog and I think a few of your personal anecdotes would be interesting. I found myself searching corporate culture today in an effort of understand a little better if the trend of many companies might be devaluing their own employees. Unfortunately, I believe I have joined a company who does not value their own salespeople and a prevailing corporate culture seems to emerge the longer I am there. I would think the cost of training new salespeople constantly would be a huge waste of company resources, yet there is constant turnover as though there is this endless supply of salesmen that they continue to hire in the hopes they find company drones to carry on. Aren’t salesmen the primary source of revenue for a product driven company? I am so personally disappointed that I have misjudged and have been misled by this company and will have to start my career search all over again. Unfortunately, this prevailing company culture starts at the top and I’m starting to recognize it’s festering infection into other areas including production and quality control. I do not have the energy to try to change this attitude with a national company and I’d rather expend my energy seeking other employment. What a shame.

  2. timprosser says:

    Thanks for your comment, Dan.
    You are probably making a correct assessment of your situation, and there is undoubtedly a better assignment for you out there. You didn’t say exactly how big (tall) the company you’ve joined is, but it gets harder to change the culture the farther one is from the top – the ultimate source of culture in almost all companies. I agree that the attitude that any function in a company is more disposable than another is a bad one, and creates an imbalance that inevitably undermines the firm’s success. Salespeople are a key conduit for some of the most important information a company uses: knowledge of what the customers do with the product, what they want and don’t want, and what they do or did as a substitute before they used your product, for example. I am sure you can find a company with a more positive culture, and which appreciates and gains the full benefit of sales people such as yourself. Such companies are out there, and I would bet they are among the most successful in their industries.
    Best of luck, and thanks again for the comment. – Tim

  3. As to the bad corporate management.. Firstly there are positive and negative management styles that reflect one’s own management or actual personal morality ..

    As to the overall really bad corporate management.. tend to be as a mostly general false tendency even these days to hire your friends into managerial positions.. bad friends who cannot be rebuked, chastised generally,, incompetent, ineffective friends with bad values like the person who hired them.. and alcoholics like to be with alcoholics too..

    We have had 2 years of a great examples of this with the election of Stephen Harper and the new Conservative party of Canada who broke his promises and had initially said he would not hire his friends like the other parties, but next he hired hundreds of them into government jobs, mostly unqualified persons still too like Preston Manning of Consumer Affairs..

  4. timprosser says:

    Thanks for your comment, “thenonconformer”.
    The thrust of my entry above is that management skill is very personal, and that bad culture is a result of poorly understood and managed human nature. I want to encourage managers and would-be managers to do the introspective work and study that builds a foundation for good management skills.
    I agree that nepotism in any form, hiring friends and/or relatives, is a poor and clueless way to build an organization, and bound to produce lackluster results. Your point that nepotism brings in extra and inappropriate considerations based on the extra-business relationships is an excellent one, and occurs all too frequently. Such a situation certainly results in a degraded environment for decision making
    Thanks again – Tim

  5. […] to be willing to put time and energy into it; unfortunately, as Timothy F. Prosser observes in this recent On Effective Management post, “It is easy to become conditioned to expect abuse or just poor quality management behavior from […]

  6. Nice internet site. hope to visit again:D

  7. […] Where does bad corporate culture come from and can it be corrected […]

  8. Brad says:

    There should also be notation of corporations that succeed in turning a poor corporate culture to a good or positive one, and how they accomplish this. Also, the opposite is true – going from a good corporate culture to a negative or bad one. An example of this is The Mark Travel Corporation, parent of Funjet Vacations and operator of Southwest Airlines Vacations. The leader in the past was Bill LaMacchia, and he garnered admiration and respect throughout the industry and established a positive and nurturing environment. His son, Bill LaMacchia Jr. took the reigns about five or six years ago, and the corporate culture has deteriorated to the point where the company is largely ineffectual and has been shrinking as opposed to its history of growing. This company is an illustration of how a poor corporate culture can have not only a negative impact on employees, but on the business, as well.

  9. timprosser says:

    Thanks, Brad.
    While I’m sure there are corporations that have turned a lackluster culture into something much more effective, I tend to think the normal pattern runs in the other direction. Startup companies are usually highly founder-driven, with a culture that is very focused and people-oriented. When the company reaches a larger size bureaucratic tendencies appear, but the culture can still be driven by the founder(s) and hold onto the original principles and vision that made it successful in the first place. At the point where the founder or prime mover leaves or management turns over for some reason (being bought out, for example) the culture changes significantly, and usually not for the better. After more time has passed the company may, in its continuing success, become rigid and detached from the founder’s principles. After all, why change when you’re finding success doing what you’ve always done? Eventually the company either becomes an industry leader, becoming rigid and lacking in innovative thinking, or it is bought up by a larger, possibly more successful, and most likely more rigid organization. It is rare, I believe, to see a company going the opposite direction, actually re-inventing itself, and I also bet it is *extremely* rare in organizations of more than 1000 employees.

    The story you relate is a pretty standard one. Children of founders rarely accept the mantle of authority well, and the very act of rejecting their parents, as most teenagers do in their development, can make the children of founders quite different from their parents (though there are plenty of other factors). I have seen grandchildren of company founders do significantly better than their parents (the founders’ offspring), on a number of occasions, but frequently be too late on the scene to prevent the company falling to the level where it was bought out or otherwise had to get out of the original business. The transition from a good, principled and productive culture to a more bureaucratic one seems to be a part of the natural life cycle of business.
    While I’m sure a lackluster culture can be turned around, I expect the actual occurrence of this is quite rare.

  10. timprosser says:

    By the way, I am *very* interested in accounts of companies bucking the trend/pattern, especially if they are large (> 100 employees) and established (highly ranked in their markets). — Tim

  11. Informative and useful article, Thank You very much for this post

  12. […] originates in the behavior of individuals. Corporate culture stems from the behavior of employees and arises naturally from the lack of […]

  13. Excellent website you have here but I was curious about if you
    knew of any community forums that cover the same topics discussed here?
    I’d really love to be a part of group where I can get opinions from other knowledgeable individuals that share the same interest. If you have any suggestions, please let me know. Cheers!

    • timprosser says:

      Thanks for the compliment, Jonas. It saddens me that a topic with such powerful influence on business results is virtually ignored by academia. I googled “organizational behavior forums” and found a lot of listings, but a quick scan confirmed that OB is still divided between other, more formally-organized topics including psychology, sociology, and business management, meaning that if you want to get a degree in it you have to secure multiple academic sponsors and basically design your own program. (Personally I think anthropology, history, archeology, and other topics should be involved as well – this is a broadly integrated, complex study of humanity, after all.) I think our failure to integrate these many topics is part of the reason business management is not taught very well, and that the quality of business management is of poor quality, at least in US businesses. In my MBA program there was only a single OB course and, while it was a great course, it couldn’t come close to the depth I wanted. I had been writing about OB (from the angle I do now) for years before I entered the program, and it was disappointing that this top rank business school couldn’t offer more than that. The alternative was to finish the MBA, find an academic sponsor (or two), and get their help custom-designing a cross-disciplinary doctoral program. Since I had a family to support I did not take that option, but I continue observing, thinking, and writing. The few forums I’ve scanned on OB were typically something put up by a grad student, not very focused on the important management skill areas such as personal interaction, office politics, etc.. There must be some good forums, though, and I’d like to find them, but I’m not having much luck. Please let me know if you find some that are active and have good ideas and discussion. I will post another reply here if I come up with some better options. Thanks again for your comment.

  14. k coffee says:

    Hi there, i read your blog occasionally and i own a similar one and i was just wondering if you get a lot of spam responses?
    If so how do you stop it, any plugin or anything
    you can suggest? I get so much lately it’s driving me insane so any support is very much appreciated.

    • timprosser says:

      Hello K, I have found WordPress’s spam filtering to work *very* well. I almost never get a spam comment but if I look at the spam folder it usually has dozens of them. I only have to deal with a few spam comments per month, thanks to WordPress.

  15. This is the 2nd blog, of your blog I personally went through.
    But yet I love this particular 1, “Where Does Bad Corporate Culture Come From, and Can It Be Corrected?

    | Musings on Effective Management” the best. All the best -Erik

    • timprosser says:

      Thanks, Eric. I try to write about the things I would research if I could go back to school to pursue my dream, a Ph.D. in Organizational Behavior directly focused on business environments. I have a top B-school MBA, though it was over 20 years ago, and I try to write about topics that hit me hard in the corporate world in which I work, but which I don’t remember being covered much at all in the B-school. Thanks so much for your compliment and letting me know what you liked.
      BTW, I think changing a corporate/organizational culture is probably one of the toughest thing a manager can attempt, and he or she will likely fail unless they have a deep understanding of the fundamentals of human nature and group psychology.
      Good luck to you and thanks again — Tim

  16. Ken Worthen says:

    I find this very interesting and have experienced this myself during 24-years of submarine service in the United States Navy. Change of command would transfer the current skipper to a new duty location and assign a new skipper to the unit. I have seen this swing both ways too many times and it has a huge effect on personnel, performance and morale. My wife works at Safeway and the store recently brought in a new manager. Needless to say the morale of the employees continues to plummet every day and it appears this guy is clueless, does not care and worse is likely unaware of how bad things have become for the employees. I will say however, that it also appears based on policies and such that this atmosphere is originating from poor corporate culture at the top. Is there a company or is there resources that evaluate corporate cultures at the business end where the employees and customers either suffer or benefit from the actions of corporate management and policies and ultimately the organization itself either struggles to survive or grows healthily?

    • timprosser says:

      Unfortunately I can’t cite any specific organizations that evaluate corporate culture, and believe (somewhat cynically, I admit) that a company management that is particularly clueless or downright awful would NOT see the value in such an investigation, and might see enough personal risk to block it even if someone else insisted on it. For that reason I expect that any available data has accumulated informally and secretly in the hands of the sufferers, and remains quite anonymous to protect their jobs.
      If anyone knows of such a service, or organizational behavior studies that might get to the same concepts, please let me know.
      Thanks for your nice comment, Ken, and good luck — Tim

  17. fewwordswoman says:

    I have just a couple of observations from a 30 year career in independent banking, one of the most “down-sized” industries in the U.S.

    First, thank you for your article. It gives me a sense of affirmation after fighting the mid-level management fight with three financial institutions. I have actually used the term “emotional IQ” during those years.

    My first experience was with a company that valued the individual. I can tell you that leadership doesn’t just come from management at any level. If inspired, and given the freedom to express ideas, employees at all levels will demonstrate leadership. There is nothing, short of motherhood, more satisfying than watching a subordinate flourish and succeed.

    I would add to what others have said that nearly everyone has a valuable skill set. The artful manager recognizes those skills and employees them to the benefit of both the employee and the company.

    I later experienced what happens when a company decides to sell and has a need to eliminate salaries. There has to be a better, kinder way to accomplish this than the “my way or the highway” approach. Write-ups, corrective actions, probations and impossible work loads ruin the morale of everyone concerned.

    I lost a couple of jobs simply because I refused to create some infracton and falsely write up employees when they were performing well, sometimes under difficult circumstances. Oh well, I’m retired now and have great friendships with past employees and I sleep well every night.

    • timprosser says:

      Thanks so much for your comments. It is always encouraging for me to hear that other experienced business people have observed the same elements of human nature that I have, and gained an understanding of what works best and what doesn’t work well for anyone in an organizational setting. I believe bad management most often happens because the people in charge are ill-suited to managing others, often in spite of a good business education. As an alumnus of the University of Michigan Ross School of Business said at the end of his speech some years back on the annual alumni day (this was the keynote speaker, incidentally), “If you are a bozo coming into this place, you are a bozo going out of it, and don’t think any different.” I interpreted him to be saying “If you don’t have the right personality to be a manager, no business school is going to fix that.” As it was, the audience of about 600 students and faculty were dead silent, trying to absorb what he had said, before finally breaking into the applause he so richly deserved. I don’t know how many got the message that day, but I was pumping my fist up in the “nosebleed section” of the auditorium, saying “YESSSS!” My years in business since then have only underlined this lesson, but I’ve seen no improvement on this score in the field of business education, sadly.
      Thanks again for your comment and best of luck to you in your retirement. (Have you considered writing? I’d be happy to publish an article on your experience here.) — Tim

  18. nen says:

    Have you ever thought about including a little bit more than just your articles?
    I mean, what you say is valuable and everything. However think of if you added
    some great pictures or videos to give your posts more,
    “pop”! Your content is excellent but with
    pics and clips, this blog could definitely be one of the greatest
    in its field. Very good blog!

    • timprosser says:

      Thanks so much for the very nice compliments. Actually I would love to do more production work on my blogs and include video, audio, and photos, but as it is I don’t have time to write about all the things I want to – I have dozens of drafts as I can never finish them all. I have to do what I can, and I’d first like to put a lot more relevant links in my articles, with video etc. beyond that. Maybe if I ever retire I’ll be able to do more but … I came up with a retirement plan last year: I’ll retire when I’m 102! That sounds like a real win-win … unfortunately it doesn’t help me do a better job of blogging. I’m sure I’d find time if I got a book/publication offer. 😉 So .. I am so glad you find my work here of value – that means a great deal to me. If and when I can I will add more to the content, and I apologize for not doing more all aong. I just have to focus my time for the biggest “bang for the buck”. Thanks again — Tim

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