One company may decide to buy another for its people, its clients, its products, its technology or a combination of all four. But how often does a company acquire another for its culture? Read more
If the US Department of Justice does push its accusations of gross negligence against BP to trial, disinterested observers can look forward to a detailed exploration of the oil company’s culture and management.
As I wrote in my first column as FT management editor in 2011, the report issued by Barack Obama’s national commission into the Deepwater Horizon disaster reads like a guide to the challenges of implementing cultural change, fighting complacency, running a collaborative “extended enterprise”, and managing risk. BP’s own 2010 accident investigation report, based on an investigation by Mark Bly, the group’s head of safety and operations, took a far narrower view. There are 69 references to culture in the national commission report, for instance; there are none in BP’s, and the only discussion of management is focused on specific operational issues. Read more
As his job security plummets in line with Barclays’ share price, Bob Diamond is haunted by what he said in the BBC Today Business Lecture last year about culture:
Culture is difficult to define, I think it’s even more difficult to mandate – but for me the evidence of culture is how people behave when no one is watching.
But Mr Diamond didn’t suddenly wake up to the importance of a strong corporate culture after becoming chief executive of Barclays. He’s been talking about it for years and mainly with reference to his “no jerk” rule at Barclays Capital, the investment banking arm he used to run and that was home to the trading “dudes” skewered in the Libor-fixing scandal. Here he is talking about the rule in an interview with The Times last December:
If someone can’t behave with their colleagues and can’t be part of the culture, it doesn’t matter how good they are at what they do, they have to be asked to leave. You know what a jerk is when you see it. If we ever ignore the rule it always comes back to haunt us.
It will be a shame if bitter and partisan debate over whether Rupert Murdoch is “a fit person to exercise the stewardship of a major international company” obscures the more important conclusion of the UK parliament’s culture, media and sport committee on phone-hacking: that he and his son James were wilfully blind to what was going on.
Whether BSkyB, controlled by the Murdoch-owned News Corp, is a “fit and proper” owner of a broadcasting licence is a question for Ofcom, the regulator, which has now entered an “evidence-gathering” phase of its probe.
But as even the dissenting members of the committee said on Tuesday, if the “fit person” line had been omitted from the report, they would have voted unanimously to back it, including the charge that the Murdochs oversaw a culture of wilful blindness. Read more
It is hard to believe now but there was a time before the credit crisis that the culture of investment banks had not always been linked to reckless greed and buccaneering.
Yes their darker dealings, regulatory failings and rising conflicts of interest were apparent to anyone with a passing familiarity with Wall Street or even the film of the same name. But there was also a positive side. Read more
To misquote from the work of Hanns Johst, the Nazi playwright: “When I hear the words corporate culture, I reach for my pistol.”
Few other management themes encourage as much cant and hypocrisy from companies, and as much waffle from those who study them. Yet a healthy corporate culture is vital to the well-being of most organisations. I’d go further and say that given the complexity of the largest multinationals – and the impossibility that their chief executives know what is happening in every corner of the companies they purport to run – the right culture is indispensable.
This is why Wednesday’s New York Times op-ed, in which Goldman Sachs’ Greg Smith resigns in spectacular fashion as executive director and head of the firm’s US equity derivatives business in Europe, the Middle East and Africa, is so interesting and – for Goldman – so potentially damaging. Read more