Mikee Eusebio, Matthew Castellanos, Mikel Dominguez

Professor Worsham

MHR 3020: 09

5 April 2022

Corporate Culture and Its Effects on Uber

Broaden your understanding of corporate culture. What is it, how do organizations cultivate it and explore the broader ramifications of corporate culture within one of the following companies: Uber, Gucci, Amazon, News Corp (Rupert Murdoch’s media empire).

In December 2008, when two friends named Travis Kalanick and Garrett Camp failed to get a taxi in Paris, they created a smartphone application the following year that allowed others to request rides when no taxis were available. The company later expanded worldwide to employ thousands of drivers who use their own vehicles to pick up passengers. In its early lifetime, Uber has faced much controversy that led to different CEOs and management changes throughout the years.  

The corporate culture within Uber is distinct compared to other traditional companies because they faced turmoil and hardship. Throughout its years there have been sexual harrasment allegations, data breaches, and mishandling of personal information, ultimately costing the company almost $2 million in settlements. This failure resulted in a change to the current CEO Dara Khosrowshahi, who implemented adjustments that transitioned the general outlook of the company.      

Corporate culture defines many aspects of a company. The book Corporate Culture and Performance demonstrates that corporate culture began being noticed as early as the 1960s, when companies were being studied by business professionals. Many businesses have benefited from this and it has proven to be invaluable in company performance when used correctly. It has been noted that companies may not have been as successful if their culture were absent (Kotter & Heskett, 16). Rules such as the required attire, language, benefits, office hours, and furniture setup all makeup the culture of a business. It also relies heavily on coworkers holding each other accountable. This is how culture impacts decision-making and mental well-being within a business. But companies must be careful that it doesn’t develop a culture of conflict, where its employees may become confrontational or disagree among each other. Many promising companies have been brought down due to cultures of conflict.

 The cultural traits fall under the categories of Espoused values and norms, Enacted values and norms, and Assumptions. These categories explain the customs and courtesies within an organization. Espoused values and norms are normally stated for the public to see, such as websites and storefronts. Enacted values and norms and are cultures enacted by employees, based on the behaviors of their leadership. Assumptions can be a negative aspect of corporate culture. If a company gives excellent benefits to its employees, the employees and future hires begin seeing these benefits as part of its overall culture. Candidates who wish to work for the organization begin to concentrate more on the benefits, taking attention away from the organization’s main goals.

According to the website LumApps, “there are four types of organizational culture. There are clan, adhocracy, market, and hierarchy cultures”(Herman). Clan cultures are more group oriented, and are more welcoming to employees as the managers are seen as the teachers within the association. Adhocracy cultures strive for both managers and workers to be creative. Employees within this culture are more willing to take risks for the organization, since there are greater rewards for making products better. Market culture is more stressful, as there is more competition to achieve objectives. Finally, the hierarchy culture concentrates more on a “chain of command”, where workers follow procedures and report up the management chain for any issues they run into. A company will have one or a mix of these, each with their positives and negatives, where one is not better than the other.

As countries around the world become more prosperous, new companies will arise, and others will expand internationally. Individuals asked to travel abroad are faced with new customs within their host nation. The culture shock they experience is normal and shows that not every business operates on the same values as those one is familiar with. In the book The Value of Corporate Culture, it mentions that individuals generally are attracted toward ideals that mimic their own, and often do not respond well to drastic changes (Guiso, Sapienza, Zingales). A contingency plan should be set in place to deal with culture shock of international employees. Much conflict between members within a host country and its international members are due to internal cultural differences. With companies like Uber, it contained all groups of people, each with their own set of values.  

Since the early days of Uber seemed to have suffered from a weak negative corporate culture, new developments of company policy had to be implemented. A survey report showed that there were countless problems within the organization. Since a positive culture would have held employees accountable, the fact that there were many problems within the organization shows that the workers did not respect others’ boundaries. Without a strong culture, employee performance was also lacking. In the website LumApps, it describes that a strong positive culture will cause employees to work together and strive for achievement (Herman). The response to allegations of misconduct called for an overhaul of Uber’s previous cultural values, which concentrated more on individuality, and presented a more inclusive and friendly environment for its employees.

  In response to the allegations, the new CEO asked his employees to create and also vote on new cultural norms. This allowed employees to have more control, a practice in itself an example of a culture of inclusion. The new cultural values placed more emphasis on diversity, compassion, customer satisfaction, and idealism. One can gather that these new sets of values will strengthen productivity leading to an increase in its customer base. Since everyone’s voice is being heard, they are more likely to strive to reach their goals set forth by their managers.  

The change in direction of Uber helped the company withstand negative publicity. Without positive organizational culture, leadership is much more difficult. A manager will not be able to communicate their aspirations effectively, if workers don’t understand the core values of their organization. Corporate culture helps the company achieve its intentions while safeguarding the mental health of its employees.    

The mission and values of the strongest companies helps to drive motivation, but the most important component to cultivating a positive corporate culture is through practices instilled within the organization. It is important for these practices to align with company values, as it promotes consistency and uniformity. Several aspects within an organization contribute to the overall corporate culture, but the most prominent are hiring practices, incentive programs, and internal communication. In addition to these organizational practices, each team member influences the overall culture and environment. It is important to note that each team member makes significant contributions to the overall picture of the company culture, but it all starts with leadership encouraging a positive environment. Therefore, along with instilling strategic organizational aspects, organizations cultivate corporate culture by defining individual roles and by fostering shared responsibility toward a positive environment with all employees.

Companies cultivate their ideal company culture by implementing appropriate practices that start with the hiring process. The hiring process serves as a blueprint for the determination of their future success. According to The Managers Pocket Guide to Hiring Top Performers, it is important to hire individuals who can “acclimate to the organization’s culture, specific procedures, and how their job connects with other departments to benefit the organization” in order to “forge a closer relationship with [the manager] in the process” (Ennis, Chapter 6). Establishing good relationships leads to a healthy company culture, and can help new hires feel comfortable quickly within their new environment. Candidates for a job may have technical qualifications, but Ennis brings up a thought provoking idea that they must also be able to acclimate and connect with others in the company. Although hard skills are important to look for, they can be developed over time in a workplace. Soft skills are equally important, if not more crucial, because these are the traits that help individuals grow in their early stages, establish deep connections, and contribute to making an inviting space. Therefore, hiring managers play an important role in helping a company work toward their ideal corporate culture.

Companies also implement rewards as a way to cultivate positive company culture. Forbes provides an excellent example from Sweetgreen, in which they “promotes a positive corporate culture by offering special perks that help boost positivity and morale throughout the company” by engaging in acts such as providing “emergency financial support for employees during times of need” and hosting “a “Gratitude Night” to thank employees for making a positive impact on their customers” (Kohll). Sweetgreen employees may feel valued and motivated to return high-performing work back to the company. This is because these organizational incentives contain both surface and symbolic value. These types of incentives are objective benefits, but also symbolizes how much management is appreciative of their employees. The most successful companies around the world cultivate positive company culture by displaying admiration for each person that contributes to their success. Sweetgreen’s personalized and specific acts are what Uber fails to do, especially with their drivers. Each Uber driver is an employee of the company, and they deserve to be recognized for their work. If Uber incorporated more rewards and incentives, that will cycle back to corporate benefit because riders would get more memorable experiences from positive drivers.

The last important organizational practice that companies use to cultivate corporate culture is by working on internal communication, both formal and informal. Schein provides a real-world example of a successful company organizational structure in his book, Organizational Culture and Leadership, where he states that higher management “believed completely in open communication and the ability of people to reach reasonable decisions and make appropriate compromises if they openly confronted the problems and issues, figured out what they wanted to do, and were willing to argue for their solution and honor any commitments they made” in which the company saw growth for years to come (Schein, Chapter 8). Culture is a social construct, in which communication plays a big role in human interaction. Therefore, a heavy emphasis on clear and transparent communication is how companies may cultivate corporate culture. Companies take different approaches on this; some may host regular team bonding activities so that employees feel comfortable with one another, while others may schedule frequent meetings to touch base on all happenings. Conflict may happen in the workplace, but communication is important in order to identify the issue and analyze what could be improved on for prevention.

        Depending on whether or not companies decide to implement these organizational practices, it can result in either a positive or negative outcome toward the company culture. According to Schein, leaders should “design systems and procedures as reinforcement mechanisms,” in order to prevent the occurence of sending “conflicting signals that will stimulate subcultures that can become countercultures and create organizational conflict that will be hard to explain and manage until the conflicted leader leaves or is ousted” (Schein, Chapter 10). Companies like Uber that have a diverse range of employees, tend to work more towards incorporating ethical leadership. Keeping up consistent principles within a company motivates employees to follow by example and keep up a renowned publicity, in order to continue to attract more customers for years to come. Uber’s past CEO Travis Kalanick engaged in unethical acts that were inconsistent with the positive company values that he founded his business on. His actions will be expanded on in a later section, but Kalanick eventually became ousted, which resulted in being forced to drop his leadership position from the company that he founded. As a result, a company may lose hard-working employees and loyal customers, as any unethical act performed within a company is tied to their public image. Uber’s story is a prime example of why companies must uphold strong governance models, and ensure that leaders are setting a good example for their employees.

        Once higher management sets high expectations for their companies, and ensures that their employees feel valued, it is then up to each individual within a workplace to do their part to cultivate overall company culture. According to Harvard Business Review, in order “to achieve the desired culture, everyone must have a clear, consistent, common understanding of it — and everyone must work together in a deliberate and coordinated effort to cultivate it. While each person or group is accountable in their own way, everyone shares accountability for achieving the desired culture” (Yohn). Management has heavy influence on their employees, but it is ultimately up to each member of the organization to uphold the culture that aligns with the company mission and values. As individuals accept a job offer, it is their responsibility to engage in an appropriate manner, while constantly keeping the company’s vision in mind. Each contributing member of the organization represents the company; if one person is inconsistent, the ideal culture may not be upheld.

        In order for higher management to ensure that each member of the organization is productive and cohesive, they must clearly communicate the ethical guidelines, set high standards, and define individual responsibilities within each role to each employee. In return, “employees should provide feedback on existing culture-building efforts and ideas for new ones” and should be “enforcing routines and norms that interpret the desired culture” along with “aligning their attitudes and behaviors with the desired culture” (Yohn). All companies are constantly undergoing a learning process. Therefore, there are actions that each member of the organization can take in order to turn their vision into reality. Change is inevitable, and it is important to recognize that company culture can shift over time. Higher management can set a prime example, but it is important for them to allow their employees to give feedback as they are experiencing the culture firsthand. Each company takes a different approach to cultivating company culture; Uber’s story is a prime example of how poor execution on company culture can cause negative outcomes.

Uber was founded in 2009 by two individuals known as Travis Kalanick, and Garret Camp. Both individuals had previous entrepreneurship experience within their start-ups known as Red Swoosh who was co-founded by Kalanick, and StumbleUpon which was developed by Garret Camp. Their goal was to develop one of the first successful web-based transportation network companies in the world due to the frustration that consumers had with the lack of communication within the taxi industry. When entering the transportation industry, Uber took a different approach by being a first-mover in the industry. This allowed them to trial & find errors in several strategies to their business model to ensure that they were able to successfully revolutionize this taxi-replacement. According to Professor Henrivh Greve of INSEAD, being a first-mover allows a competitive advantage within other start-ups in overall success regardless if the service or product is inferior, due to being able to learn from mistakes and revise their product or service over time (Greve, 2014). As Uber then uncovered several needs that consumers demanded, they were able to fulfill these needs that other traditional taxi or transportation services failed to offer. Such as the ability to request a ride from anywhere, hassle-free payment transactions, and finally the privilege to ride with convenience. Uber soon rapidly became known internationally as a taxi-replacement service  through this ride-sharing business that revolutionized the transportation industry. However, as their start-up became successful, it came with several costs. Due to Uber’s hypergrowth, issues began emerging within the company that led to the company slowly deteriorating by issues stemmed by Uber’s CEO, Travis Kalanick revolving around lack of management, and skewed core values that employees were to abby with.

CEO of Uber, Travis Falinksy was known to be the primary driver for these ongoing issues due to failure of acknowledgment of management conflicts, as well as sexual harrasment cases, which led to little to no revisions. These claims rapidly became disruptive, it initially began with management issues, specifically Human Resources.  Employees then finally developed the courage to speak up about the poor core values that represent their company. In 2017 a Site Reliability Engineer, Susan Fowler, was a former Uber employee who left the company to join Stripe in the following month, a financial service company based in San Francisco. After several employees questioned her decision to leave this successful start-up company, she decided to write a blog on her experience at Uber. According to Fowler, after a couple of weeks into the company, Fowler’s manager began sending inappropriate messages to her that were clearly implying that he was trying to get her to have sex with him (Fowler, 2017). After Fowler reported him to Human Resources, she was then informed that it was in fact sexual harrasement. However, due to it only being his first-offense, and him being recognized as a high-performer in the company, they did not feel comfortable giving him any punishment. Human Resources continued to indirectly side with Fowler’s Manager regardless of his actions. Uber’s lack of management unfortunately allowed a loophole to managers that let them get away with similar sexual cases as described. As for the Human Resource department, the situation was handled poorly due to Uber’s lack of enforcement of sexual harrasment policies.This primarily stemmed from Uber's CEO, Travis Kalanick, who failed to intervene when sexual harrasment cases were rising within the company. We now ask ourselves, what drives Travis Kalanick to act this way?

Travis Kalanick embedded his core values into Uber, in which employees would have to abide by 14 company values that mainly revolved around self-success, and the idea of Social Darwinism. Uber has yet to disclose its core values to the public, after further confirmation from several employees, according to the firm Covington & Burling Uber’s core values involved; “Let Builders Build, Always Be Hustlin, Meritocracy, and Toe-Stepping” (Covington). These values did help propel Uber to become one of the most successful start-ups, however they revolve around individual contribution and rather refrain from a team-oriented organization. Due to Uber's extensive growth, it led to more demand for management. The hiring team at Uber took a satisficing approach, in which they were impulsively hiring. The impulsive hiring led to hiring candidates who prioritized individual contribution, refraining away from Uber’s “core values” of team-decision making. As these values continued to be followed, Uber’s organizational culture began to transition into a Hobbesian environment. Employees would often be too afraid to speak up on inappropriate acts due to top performers in the company doing little to no intervening and rather resort the problem to be the employee’s own personal problem. Uber’s value known as “toe-stepping” encouraged individuals to encourage employees to share their perspectives on ideas, regardless of how high they were in the company. In reality, this turned into employees breaking trust within one another due to them underhandedly telling upper-management of actions other ranked employees have committed in order for them to open up an opportunity to rank higher in the company. In Susan's Blog post, she stated that “it seemed like every manager was fighting their peers and attempting to undermine their direct supervisor so they could have their direct supervisor’s job” (Fowler). As this continued on, sabotaging other employees began to worsen as they believed Uber’s values justified this poor behavior. Uber as a corporate organization can withstand this behavior to a certain extent. As these actions continued to spiral out, employees that were victims to these sexual harrasment actions slowly began speaking up, leading up to the questioning of why there has been no intervention. Kalanick begins getting questioned on why these harassment claims, and lack of management conflicts have been ongoing for several months. Federal investigations began to get carried out and investor lawsuits quickly began to get filed. Employees transitioned from viewing Kalanick as one of the most successful entrepreneurs, to one of the most dysfunctional. According to Journalist Eric Newcomer, he states, “Uber’s executives sat around a hotel conference room table in San Francisco, trying to convince their CEO that the company had a major problem: him” (Bloomberg). This became a turning point in Uber’s corporate organization as Kalanick then realized that he was in fact the cause of all these ongoing claims. As stated by Mike Issac, “On June 21st of 2017, Travis Kalanick stepped down as chief executive of Uber'' (Issac, 2017). This resignation was primarily driven by Uber’s nine main investors who demanded for there to be a resignation such as Bill Gurly, founder of the venture capital firm Benchmark. Uber was now able to take a step forward and revise its corporate culture in order to move past its demoralizing history.  According to Journalist Tim Bradshaw, a former Uber investor stated to Financial Times, “He believed Mr. Kalanick should “step back” and “let a grown-up be CEO.”(Tim, 2017) Alluding to the investor’s perspective helps portray the frustration with Uber’s current corporate culture. Leading to the decision of what is best for Uber in order to reformulate their current conflicts.

        Uber came to the executive decision that previous CEO of Expedia, Dara Khosrowshahi would be the best fit to revise the management and organizational culture within Uber. Khosrowshahi implemented Lewin’s Model of Culture, which is a three stage long-term growth                          process that allows intervening within the roles of all employees in order to revise their organization culture.

Prior to implementing this model, Khosrowshashi decided to hire a law firm to further investigate into sexual harrasment allegations within Ubers’s San Francisco Headquarters. Investigator Perkins Coie gathered information regarding the complaints and stated, “Of the 215 claims, Uber said 54 were related to discrimination, 47 related to sexual harrasment, 45 to unprofessional behavior, and 69 to other types of claims” (Coie, 2017). The majority of claims took place at Uber’s headquarters, where it then led to 20 employees being fired in order to portray that the revised policies would now be heavily enforced.

        Khoshrowshashi then introduced the first stage of the management revision model which is described as “Unfreezing.” This stage is an introduction of what is going to occur within the company, it is then explained to all employees of all levels within the company. He was able to do this by administering meetings with all stakeholders and discussing the future plans to address its cultural failings within the company. These meetings allowed employees an opportunity to express their perspective on what guidelines they believe would help improve Uber’s workplace culture. Journalist Anita Balakrishnan reported that “Uber’s new CEO had employees write and vote on cultural guidelines for the workplace” (Balakrishman, 2017 ). Data stated that 12,000 employees responded back with new principles that they believe would help Uber’s culture. These new principles were going to be embedded into Uber’s new core values which would represent the entire organization. After further revision, Uber’s new principles of organizational culture were finalized, leading up to Stage 2 of Lewin’s Model: implementing changes. Uber’s revised core values encouraged team-based decision making by incorporating one of their core values to “value ideas over hierarchy.” This portrays Uber to see every employee equally, as they believe that one of the best ideas can originate from anywhere within the ranks of all Uber employees. This allows managers to seek ideas through their team and ideally be able to transition these ideas into actions. Another of Uber’s new core values stated “We act like owners” which encourages ownership to either succeed or fail within the company. These new core values promote a comfortable environment for all employees by encouraging action and accountability regardless of their actions resulting in failure or success. Finally, Stage 3 occurs by “Refreezing'' Uber's organizational culture. Uber officially attempts to promote this new culture among all employees by implementing an online “Leadership and Strategy” course developed by Frances Freis. This education effort was pushed out to train employees to naturally develop a strategic thinking approach while simultaneously improving leadership skills. Freis stated that, “Out of Uber’s 15,000 employees, more than 6,000 signed up for that class” (Freis, 2017 ). Employees within all ranks were also putting in the effort for Uber’s organization culture to transition into a positive environment.  Allowing Uber to continue pushing out their efforts in revising their culture.                 

        As any other successful start-up Uber will continue to encounter problems in the future. Khosrowshahi’s goal to revise Uber’s corporate culture is simply a long-term growth project that will remain as an ongoing effort. His main goal was simply to take initiative on an approach to attempt to fix most of the ongoing issues at Uber prior to his establishment. Uber’s start-up success will reign over most competitors as long as they continue to maintain an appropriate corporate structure. Their continuous growth will remain the same, while their new culture will continue to improve.

Works Cited

Bradshaw, Tim. “Uber President Resigns over Corporate Culture Differences.” Shibboleth                 Authentication Request, 20 Mar. 2017, http://proxy.library.cpp.edu/login?url=https%3A%2F%2Fwww.proquest.com%2Ftrade-journals%2Fuber-president-resigns-over-corporate-culture%2Fdocview%2F1902177443%2Fse-2%3Faccountid.  (Global Newsstream Database)

Denise, Yohn Lee. “Company Culture Is Everyone's Responsibility.” Harvard Business Review,                 9 Feb. 2021, https://hbr.org/2021/02/company-culture-is-everyones-responsibility.

Ennis, Sarah. The Manager's Pocket Guide to Hiring Top Performers. 1st edition, HRD Press,                 2002. (CPP Database)

Fowler, Susan. “Reflecting on One Very, Very Strange Year at Uber.” Susan Fowler, Susan                 Fowler, 22 May 2017, https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber.

Frei, Frances. “Everything Starts with Trust.” Harvard Business Review, 31 Aug. 2021,                          https://hbr.org/2020/05/begin-with-trust.

Gale, Adam. “I Was Hired to Fix Uber's Toxic Culture - and I Did. Here's What I Learned.”                 Frances Frei Interview on Fixing Uber's Toxic Culture, ManagementToday, 3 July 2020, https://www.managementtoday.co.uk/i-hired-fix-ubers-toxic-culture-i-did-heres-i-learned/leadership-lessons/article/1688566.

Guiso, L, Sapienza, P, Zingales, L. The Value of Corporate Culture. Elsevier. 1999. (CPP                         Database)

Herman, Milton. “What Are the 4 Types of Corporate Culture? Choose Yours.” LumApps,                 28 Feb. 2022, https://www.lumapps.com/blog/corporate-culture/types-of-corporate-culture/.

Isaac, Mike. “Inside Uber's Aggressive, Unrestrained Workplace Culture.” The New York Times,         The New York Times, 23 Feb. 2017, https://www.nytimes.com/2017/02/22/technology/uber-workplace-culture.html.

Kohll, Alan. “How to Build a Positive Company Culture.” Forbes, Forbes Magazine, 10 Dec.                 2021, https://www.forbes.com/sites/alankohll/2018/08/14/how-to-build-a-positive-company-culture/?sh=b3d6ba749b5b.                                                                                  

Kotter, J., Heskett, J.  Corporate Culture and Performance. The Free Press. 1992. (CPP                         Database)

Macduffie, John Paul. “How Uber Can Reset Its Corporate Culture.” Knowledge at Wharton, 5                 June 2017,         https://knowledge.wharton.upenn.edu/article/uber-can-reset-corporate-culture/.  (University of                 Pennsylvania Database)

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