When culture changes…

In one of our earlier posts, we spoke about how culture is in the DNA of an organization. It is created from within and deeply engrained in the psyche of an organization. Therefore it is difficult to change culture arbitrarily as and when needed. A better course of action is to intentionally create it from the get go.

Nevertheless, there are times when the culture of a family business undergoes radical changes. This usually happens when there is a generational shift in personalities and attitudes towards the business. If the succeeding generation has a stronger will than that of the incumbent and is inclined to impose a different way of life the organization shifts its culture dramatically.

Another instance of a dramatic culture shift is when there is addition or deletion to the existing order. For example, when an influential new CEO takes over the reins, there is a definite change. Alternatively, when a strong leader leaves the organization, there is a phase of disorientation, especially if that leader has been the source of authority and a key custodian of the corporate culture.

Sometimes, families relocate to different cities and even different countries for various reasons. When families are transplanted to newer geographies with different cultures, their internal culture assimilates much from the new external environment resulting in a hybrid culture over a period of time.

Often, we find companies changing when they are exposed to international markets. When companies seek to do business abroad, they are prepared to be flexible and work with what they find, while their internal culture acts as a strong locus of control that keeps them grounded in times of uncertainty. Many joint venture relationships teach both partners cross-cultural lessons that inevitably take root and change each entity’s DNA in some way.

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