Practical Wisdom on Corporate Culture from Peter Drucker

Peter Drucker was one Management expert who always talked about practical ideas. His views were blunt and straight. There was no great serious research. His observations were based on evidence gathered from industrial practices. His ideas on Corporate Culture are very significant indeed. This article is an attempt to discuss the dimensions of some of his ideas in detail.


Corporate culture is a very important aspect. There have been hundreds of articles on this subject. However, we always simple and directly understandable ideas to anchor them in the Indian context. We do have good practical advice from Peter Drucker on this subject too. A few quotes are taken directly from the book "Managing for the Future", Tata McGraw-Hill Publishing Company Limited, pages 191-193. The quotes are then taken as points to be discussed in specific contextual references.

" There is an urgent need in most mechanical industries in the U.S. ( and even more in those of Europe) to change drastically the way new products and new models are conceived, designed, made and marketed, with the process eventually being telescoped into months from years"

"What these needs require are changes in behavior. But "changing culture" is not going to produce them. But today's Japan and today's Germany are unmistakably Japanese and German in culture, no matter how different this or that behavior. In fact, changing behavior works only if it can be based on the existing "culture".

"If you have to change habits, don't change the culture. Change habits".

Now, let us come to the Indian context and then discuss some well-known examples. For this purpose, we will focus on a) Managing corporate culture in the cement/ automobile industry b) Managing corporate culture in the service industry c) Managing corporate culture in the construction industry and d) Managing corporate culture in the very large organizations.

Managing corporate culture in the cement/ automobile industry

In India, we have certain aspects of corporate culture that are singularly distinct in nature. For example, we still have a paternalistic approach in so many family-managed organizations. This does mean that the owners/ founders would take a rather holistic approach of the individual family's economic needs and do all that is possible to give support. For example, there are still very good family-managed companies that give loans for the sons or daughters to be educated abroad. This gives the company of voluntary co-operation and dedication of a very tall order.

Translated into action, let this author illustrate what this author saw in one family-managed cement company at Tirunelveli, a district headquarter town, in South Tamil Nadu. This author had gone there to get some information about HR practices. He had full permission from the Management. Though the HR Chief was so busy, he entrusted the job to a very young HR executive who was so helpful. The other subordinates were very traditional and did not know much about modern HR practices. Yet, they had a kind of native intelligence and there was a good climate of transparency. Not a single person ever complained anything negative about any aspect of the company's HR practices.

Three years down the line, one was able to see good Performance Appraisal practices put in place and this had the buy-in from all people, across the board. The entire supervisory personnel were taken into confidence and were trained in the new process. This is exactly what should happen. The same organization has the best technology available in the cement industry and has a formidable brand name for its product, that finds huge acceptance at the retail level too.

A similar experience was seen by this author in the TVS group. This paternalistic group has a pronounced family-oriented culture. It works like this. No employee would need to be told what to do. He would do more than necessary. So, where does the scope for motivation arise? It does not, in any way.

Yet, the huge auto component group has the most advanced technology and has mastered it. In fact, in the Foundry Division at Sholinghur, Vellore District of Tamil Nadu, the technology is so advanced that even the eighth standard pass buy trained workman can work through any technical problem without any difficulty.

This is exactly what we need in any situation. Corporate culture can work if it is based on the existing culture. We need to just change habits. It can happen with remarkable ease when the employees are productively engaged and trained. For instance, the TVS group has implemented Total Quality Maintenance(TPM) and Total Quality Management ( TQM), practices. In the latter, for example, the Plan, Do, Check and Act also called the PDCA cycle, is one that improves a huge amount of analytical skills on the shop floor. Now, this happens as a matter of routine.

Managing corporate culture in the service industry

The Chettinadu culture of treating the foreigners with respect and then introducing them to all their cultural practices and to their unique food, is now an industry by itself. The Tamil Nadu Tourist Development Corporation has a collaboration with the locals and this is traditionally done in Karaikudi. The foreigners get to stay in air-conditioned houses, built on the traditional Chettinad culture. Not a single aspect of the culture has been changed. Yet, the most modern practices of customer relationship management are put into practice.

The result? Hundreds of thousands of foreigners come flocking to just enjoy the culture. Similarly, one understands that the traditional Rajasthani culture is showcased to the foreigners and not a single aspect is changed. There is no "westernization". There is no need, either. There are thousands who flock to Rajasthan to see Rajasthan in thousands. Take the "God's own country" called Kerala. The traditional boat races in Alleppey are simply superb to watch. This rich cultural practice has not undergone even a small change. Yet, there are thousands who come to see it.

At Big Bazaar and Reliance Fresh, there are the most modern IT practices put in place. The employees are trained in whatever it needs to serve the customer. They are also trained to be kind and considerate to customers, in the most traditional way. Nothing changes, except the habits. This is exactly what Peter Drucker had advocated.

Managing corporate culture in the construction industry

The Indian construction industry is now the most modern. There are flats and apartments that have come up in the big cities, with the best of "Western" interior design. Yet, every house would have a small space for Pooja, in the traditional Indian style. Even those who belong to the Christian or Muslim religions have a small space for this.

Similarly, there are specific aspects of culture that are still sought to be preserved. For example, in Chennai, there are flats with huge pillars in the typical traditional rural style. In fact, such pillars are seen even in some corporate offices. Yet, such houses and corporate houses would have the latest IT and Management practices firmly in place. The habits have been changed so successfully and there is absolutely no way in which the "Corporate Culture" is sought to be changed. It is always based on whatever culture prevails in a particular place.

For that matter, no change in food habits is also seen in companies. In the canteens of several companies, one would always find the local food items. There is no attempt to even introduce a single "western" food item like the pizza or burger, even in the places where the executives have their lunch.
Hence, in the construction industry, the most modern construction methods are followed, even when the local cultural ways of living are sought to be kept intact.

Managing corporate culture in very large organizations

Tata Consultancy Services (TCS) is one example of an Indian multinational organization operating in so many countries. it has on its rolls people of several nationalities. There is no attempt to change any culture anywhere.

However, the "habits" of thinking at least five years into the future, being nimble-footed and agile, learning the most modern technologies and entering into so many verticals by building excellent competencies across the board, are sought to be put in place, as "givens" across the entire organization. One is also told that the former CEO of TCS, who is now the Chief of Tata Sons, Mr. N. Chandrasekharan, is recognized as one who can remember the names of some 5000 employees. He would call them at any point in time and ask for progress on any project. He would also inquire about his or her family.

There is always an Indianness that is never sought to be disturbed. In fact, this is also the practice at WIPRO and the Infosys Technologies, where the culture is very much focussed on the building of some good competencies. Indian Railways is another example. The most modern technology is now sought to be introduced in the passenger trains. Yet, the employees are the same. Of late, one does see the impact of modern technology everywhere.


Changing habits for building corporate Cultures is very good practical advice from Peter Drucker. We have several examples of how this has already been done across the country. In the years to come, this will become more pronounced and more solid in terms of effectiveness.


Author: Umesh21 Mar 2019 Member Level: Platinum   Points : 2

Today the whole world is racing towards modernization and scientific advancements and new challenges are coming on the ways. The companies which are able to mitigate these challenges by changing their style of working are successfully marching ahead and are dynamically correcting themselves to take advantage of the market demand. So, corporates will have to find new ways to do business in changing business scenario and the capability of changing and modelling the organisation in that particular path.

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