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Corporate Culture and Performance Paperback – May 16, 2011

4.3 out of 5 stars 12 customer reviews

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Editorial Reviews

From Kirkus Reviews

An attention-grabbing audit by two Harvard Business School professors of the role that culture (broadly defined as the shared attitudes, behavioral patterns, and values that cohesive human groups pass on from one generation to the next) can play in the capacity of major corporations to succeed or fail in the marketplace. The accessible study compiled by Kotter and Heskett is noteworthy on several counts. For one thing, it is based on empirical rather than anecdotal evidence, gathered from a canvass of more than 200 blue-chip enterprises in 22 industries, covering an 11-year span through 1990. For another, the authors measure performance against such valid bench marks as annual growth in net income, average returns on invested capital, and appreciation in stock prices. Last but not least, they refuse to advance a one- size-fits-all theory. While willing to state that corporate culture can have a significant impact on a company's reported results over the longer term, Kotter and Heskett caution that there's as much art as science in evaluating its contribution. Indeed, they assert that cultures adequate for one economic context may prove disastrous in another--as can those identifiable as arrogant, bureaucratic, and/or insular. The authors point out, for example, that K mart's lack of a customer-service ethos cost it dearly in competition with Wal-Mart. What's really needed, they argue, is an adaptive culture that automatically aligns an organization's interests with those of employees, investors, patrons, and other key constituencies. Drawing on case studies from their four-year research program, Kotter and Heskett outline practical ways in which top-down direction can motivate corporate personnel to pursue this objective. Down-to-earth analyses and advisories from authors who grasp the substantive differences between leadership and management. The reader-friendly text has a wealth of helpful tabular material throughout. -- Copyright ©1992, Kirkus Associates, LP. All rights reserved. --This text refers to an out of print or unavailable edition of this title.


Michael H. Walsh President, Tenneco Inc. As one who's up to his neck in the challenge of making change in a mature, multi-billion dollar organization, I found this book to be immensely insightful and reinforcing.

Edgar H. Schein Massachusetts Institute of Technology A landmark research study and a truly remarkable book that must be on every CEO's and senior manager's essential reading list.

Nicholas J. Nicholas, Jr President and CEO Time Warner Inc. A substantial follow-up to the culture studies of the early 80s. The authors describe the characteristics of low and high performing corporate cultures and the arduous process required to migrate from the former to the latter. Compelling reading for all leaders concerned with renewing the vitality of their institutions.

Peter C. Browning Chairman and CEO, National Gypsum Company Excellent book! Sheds new light on the themes of leadership and culture and produces some surprising conclusions about how they do and do not contribute to successful organizations. A must read!

Walter R. Trosin Vice President, Merck & Co., Inc. Adds realism and fills in many blanks in earlier studies of corporate culture. It will have practical application at every level of the organization and will excite controversy, discussion and re-evaluation of the typical corporate succession planning and executive selection process.

Donald J. Schuenke Chairman and CEO, Northwestern Mutual Life To a corporate world that values strong and strategic cultures, Kotter and Heskett bring another dimension--the need to guide positive culture change in the corporation. This book should challenge every corporate leader in America.

Thomas N. Urban Chairman and President, Pioneer Hi-Bred International, Inc. Having passed through five years of significant change in a sixty-five year old company, I found the dissection of the relationship between culture and performance fascinating. It will provide an intellectual framework for even more detailed analysis of specific situations.

John B. McCoy Chairman, Banc One Corporation A solid roadmap for understanding the roots of culture and the powerful influence it has on business.

Richard C. Bartlett President, Mary Kay Cosmetics, Inc. This book takes a long needed look at the lingering culture theories of the 80s and puts teeth in them. It is must reading for my competitors, or they'll soon be seeing a pink Cadillac gaining in their rearview mirrors!

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Product Details

  • Paperback: 224 pages
  • Publisher: Free Press; Reprint edition (May 16, 2011)
  • Language: English
  • ISBN-10: 1451655320
  • ISBN-13: 978-1451655322
  • Product Dimensions: 6 x 0.7 x 9 inches
  • Shipping Weight: 14.2 ounces (View shipping rates and policies)
  • Average Customer Review: 4.3 out of 5 stars  See all reviews (12 customer reviews)
  • Amazon Best Sellers Rank: #303,830 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

Format: Hardcover
Most popular and influential books on business management present the highly personal observations, interpretations, opinions, and conclusions of the author. The author's tenets - often in the form of a "newly discovered" business trend or critical success factor that business executives can ignore only at their own peril - seem objective and impersonal because they are supported by real-world examples that provide strong evidence in their support. Examples that do not support the premise are conveniently ignored or dealt with in a cursory, simplistic manner.
Basically, these books are the result of sharp minds drawing conclusions from their own experience. This approach is certainly valuable and has contributed many valuable ideas about the various means of improving business performance - and probably many more faulty notions that have led management up the garden path.
John Kotter and James Heskett's "Corporate Culture and Performance" sits at the other end of the spectrum from this norm. The book is in effect a report on their scientific investigations of a hypothesis. The authors set out a number of hypotheses and then test them against the hard data of long-term business performance. In doing so, they present solid insights into some of the conventional wisdom spouted by management consultants and authors of business books.
The fundamental source of their hypothesis is the question "What is the relationship between corporate culture and business performance?" The fruits of their research yield important observations on the nature of this relationship.
The authors' well-structured research study, and their sharp analytical abilities permit them to trek deep into the jungle of issues surrounding corporate culture.
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Comment 39 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
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Format: Hardcover
If you buy into the argument that the only responsibility of a business is to its stockholders and that paying attention to areas outside of this will result in a lesser-performing company, the research of two Harvard Business School professors suggests just the opposite. John Kotter and James Heskett studied the performance of 207 large firms over an 11-year period. They wrote of their findings:
"Corporate culture can have a significant impact on a firm's long-term economic performance. We found that firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin. Over an eleven-year period, the former increased revenues by an average of 682 percent versus 166 percent for the latter, expanded their work forces by 282 percent versus 36 percent, grew their stock prices by 901 percent versus 74 percent, and improved their net incomes by 756 percent versus 1 percent."
Consider that final finding again: The companies that paid attention equally to customers, stockholders, and employees outperformed those that didn't in growth of net income over the 11-year period by a factor of 756. Paying attention to more than just returning profits to stockholders can have a huge payoff.
Heskett and Kotter's research presented in this book is important reading for anyone tracking company performance in relation to its culture.
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Format: Hardcover Verified Purchase
This book, while very academic, gives a solid understanding of several theories about corporate culture and its effects on performance (both short-term and long-term). Rather than starting out with an agenda, they studied hundreds of companies taking analyst's and insider's opinions for information about the culture and then looked at the results. Probably the best finding was that the most successful cultures were those that valued all three interests- customers, shareholders, and employees- consistently.
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Format: Paperback
Written like an academic textbook but well done and readable. There are a lot of insights but the biggest problem that I had with this book is that their data doesn't support their conclusions. A few pages into the book they present a scatter diagram of their data and admit that the plot doesn't look like there is an correlation. The correlation between corporate culture and performance is there, to be sure, but it is a very, very weak correlation. They then spend 200 pages exploring the reasons for this correlation. I also wasn't satisfied with how they define high performing companies versus low performing companies. All of the companies in their study increased revenues, profits and stock values over the period of the study, so every company was successful. The high performing companies were much more successful than the low performing companies, but the low performing companies were clearly successful. I would have rather seen data comparing companies that fail to companies that succeed instead of companies that succeed to different degrees. The authors present a lot of interesting ideas on how culture can affect business performance, but I just don't think they proved anything with their data.
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Format: Hardcover Verified Purchase
This book was rating the different top 10 companies that followed a set of rules and regulations of success within the business environment. And the ratings of the different 10 companies who didn't.follow the the set rules and regulations; and tabulated each company's success rating outcome.
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