The corporate culture of companies is increasingly influenced by the Internet. In the virtual workplace managers and employees operate remotely from each other. Will the virtual workplace change the corporate norms, communication styles, and behaviour of employees?
Can we still speak about corporate culture if employees mainly work together in a virtual office? The critical issue of corporate culture is at the core of each web company, but employees find it very difficult to identify what it is.
Most managers would like to see their employees physically at their workplace and may ask `How can I manage them if I cant see them? On the other hand, web companies monitor every single activity of their employees. Employees may complain about being spied and feel stressed about that.
The most critical factor in building a successful corporate culture is the behaviour of corporate leaders, who acts as a role model for everyone else. In the case of Netpowerhouse the role of the CEO in the web company will be illustrated. What kind of leadership qualities do web companies require? And how to relate to employees on a distance? There is a new kind of leadership, focussing on speed, flexibility and risk-taking, which encourages new communication lines in and outside the company.
The Christos Cotsakos Case
In his drive to create a Netpowerhouse, Christos Cotsakos (CEO) is building a corporate culture that is in the opinion of Business Week (2000, February 7), "edgy, a bit bizarre- and often brilliant." Costakos believes that a remarkable corporate culture is crucial for his web broker company E*Trade. He defines the corporate culture of his company as being "a lust for being different." His objective is to build a company with people who are wildly creative, very competitive and yet so closely knit that they are almost a family. To bond his team and his customers, he organises a day of racing Formula One cars to make executives move faster. Or his managers attend a cooking school, where they have to depend on one another to whip up a gourmet dinner.
Salaries and rewards
Often web companies have young employees. The six founders of SmartHaven, producer of mobile intelligent agents in Amsterdam, decided that they should all have the same salary level. They appointed a few experts from abroad with a higher salary. In the virtual workplace, a new kind of underclass may occur: the low paid employees doing very boring work. Thus, for example, in call centres, the employee is monitored all the time.
One of the core principles of Cisco Systems is frugality. This means that the employees demand a part of the company budget as if it is their own money. Therefore, nobody gets a business class ticket on international flights. To fly business class would not represent the right culture to customers. Many Cisco managers drive a company car, but none of the employees has a personal driver.
Employees working remotely may feel isolated from social activities. They want to experience the informal and tacit aspects of the culture of the online counterpart, that special tingling of the senses that employees experience in the real world. One way to solve this problem is the use of `emoticons or smileys. Smileys in Japanese computer networks (excuse me! (ô^;>), Im sorry (_o_), , how sad (T.T) ) differ from those used in American or European networks (sad :-) , happy face :^) ). In Japanese online communities only a few people `speak. The majority listen, due to the reluctance to speak to strangers and to participate in a group that has developed without them, fear of being evaluated and receiving criticism by others they do not know (Aoki, 1995).
Connectedness of employees
There is a cultural pitfall in telecommunication; in Italy, for example, the working culture is rather affective. Expressive communication isnt possible when working at a distance or video conferencing. Working at a distance may cause anxieties in terms of performance and evaluation. To improve the connectedness of employees, some web companies introduced the old Japanese management concept Keiretsu. Keiretsu reflects strong collaborative networks in Japanese industry and government agencies with mutual shares, overlapping board positions, exchange of employees and information, and a central position of the bank. In the virtual world the Keiretsu concept refers to the strong connectedness of the various market players, e.g. business architects, banking institutions, and technology providers. The modern equivalent of Keiretsu or a Chaebol (Korean conglomerate) is the `Incubator represented in e.g. CMGI and Newconomy. See also the new article of Alexis Laurent
It is remarkable to see that web companies are starting the same kind of employee-empowering measures as real companies. The core problem faced by most web companies is not a lack of culture; its too much culture. According to Kleiner (2000), young web companies already have two significant and strong cultures, one of hype and one of craft. As companies mature into mainstream corporations, other cultures those of finance, labour relations, marketing, and bureaucracy overwhelmed the cultures of hype and craft. In the following case of Arthur Andersen, we will see that the culture of hype and craft is at work in the dress code of an e-business team.
Arthur Andersen Case
In the AA company , the Internet section is called the E-business team. This team has a dress code specific to the Internet community. In the London office, the Silicon Valley outfit (khaki trousers and button-down shirt) is the usual dress. The E-business team members are glad they are not obliged to wear a suit. Or as one of the employees said: "If I visit a web company in a dark blue suit with tie, I feel uneasy. The boys working over there are dressed in T-shirts. A suit and tie would be overdressed. It is important to get connected with the customer and speak on the same interaction level. With a suit, it is as if a representative of the old world is visiting the new world. It creates a barrier to communicating efficiently with the customer."
In Business Week (2000, September 11) the corporate culture in web companies is described as a dot.com sensibility that derides business-suited executives, or as one of the e-managers argued "Suits arent necessarily bad. When theyre working for you." The following case shows the culture of hype and craft in a German workplace:
Case Firmensitz C
In 1995 bezog die Firma fur digitale Postproduktion von Filmen das Haus F und wuchs seither von zwolf auf 72 Angestellte. Die sitzen bis weit nach Mitternacht vor Specialcomputern namens fire and inferno .Ihre engen Kammern sind mit 30 Millionen Mark teurem Equipment ausgerustet, heissen Suiten (u.a. das Vulkan-Zimmer), und diese durften sich die zwischen 25 und 35 Jahre jungen IT-Fachleute selbst einrichten (Focus, 2000).
More often, the traditional secretary is replaced by a virtual assistant. Service- and knowledge oriented jobs in e.g. sales, marketing, and consulting, fit well in the virtual workplace.
New office structures occur in web companies, such as the `hoteling strategy of Ernst&Young in Washington D.C. where workstations and meeting rooms in nearby hotels are being used. By using this strategy, managers focus less on the office and more on the customer. Or the `hot desking strategy of IBM where about 20.000 sales and services managers share offices with four other colleagues. Cisco Systems has several thousand employees sharing a variety of office spaces around the world. Or `telework centres in residential areas, offering more technology than a manager has at home, with a minimum of commuting time, while maximising productivity time.
Three years in the same job is like eternity in the ICT world. Due to the scarce labour market, potential managers are willing to take high risks. Managers would rather start their own company and work on their self-expression, than have the security of a big company. In fact, any individual with a mobile phone and Internet connection can start a global company, at any place on earth. The modern employee `works where his mind is.
Tools to build a virtual corporate culture
Managers of virtual employee teams may use the following tools to compensate for the lack of social context, physical proximity, and norms of behaviour (Cascio, 2000). Virtual managers should have an open, positive attitude, the ability to delegate effectively, and show a result-oriented management style towards their employees. Managers who need control are unlikely to be effective in the virtual workplace. Managers need effective (in)formal communication skills to interact with employees on a distance.
Companies such as Lotus, IBM and Hewlett-Packard developed employee oriented tools to facilitate the conversion from the real to the virtual workplace.
written guidelines, training, and networks of peers enhance the transition process. Hewlett-Packards guidelines for virtual workplaces includes issues such as who can participate, family and household issues, remote office setup, and administrative processes
training of virtual employee teams in issues such as the use of software to enhance team performance. The virtual employee should make the right judgement when to use e-mail (for correspondence, reports etc.)
computer-based chatroom to discuss and evaluate current projects
social protocol for virtual teams with information on common cultural values
virtual collaborative tools, to exchange ideas without criticism, agree on activities, and meeting deadlines
virtual socialisation tools to disclose appropriate personal information, apologise for mistakes, and volunteer for roles
virtual communication tools, e.g. the use e-mail typography to communicate emotion, acknowledge the receipt of messages, and respond within one business day. The employee should not only rely on e-mail communication, because this is a one-way communication tool.
technical tools to organise audio- and video meetings, and create a natural balance with face-to-face communication.
virtual punctuality tools to schedule virtual meetings with punctuality. Attendance must be enforced strictly to ensure that all team members participate. One could agree that all team members are available on certain hours to enforce teleconferences or bilateral telecommunication.
Company leaders have to recognise that virtual workplaces, instead of needing fewer employees, require better supervisory skills among existing employees.
Virtual teams operate in the absence of authority and social context, resulting in great insecurity and the feeling of `out-of-sight is out-of-mind among employees
The Internet is already the home base of many employees, and their personal location on earth is less relevant.
If web company leaders are able to handle the new corporate web culture, employees may benefit of a more effective organization and personal insecurity can be eliminated
The success of a web company is not based on technology, but on the human beings who make it happen and trust in it.
In the virtual workplace, employees need to change their mindset. They have to make a transition from managing time (activity-based) to managing projects (results-based)
Aoki, Kumiko (1995)
Virtual Communities in Japan: Their Cultures and Infrastructure
Asia-Pacific Exchange Journal , March 1995, Vol. 2, no.1
Cascio, W. (2000)
Managing a virtual workplace.
Academy of Management Executive , Vol.14, no.3, pp. 81-90
Arbeite, wie du willst!, nr. 36, September, pp.96-98