A Study of Espoused Corporate Cultural Factors and Their Relationship with Business Success

Reshoring of manufacturing companies is vital to the United States’ economy. Although one may assume that all of the business reshored will be large companies, statistics show that small businesses comprise the largest share of the U.S. economy. Small businesses make up 99.7% employer firms. Yet, 80% of entrepreneurs and small businesses who start will fail within the first 18 months.

This study defines the key success variables of the espoused culture for selected Fortune 500 companies that could be used by entrepreneurs and small businesses to emulate their continued successes. The method to define the key success variables was to define the espoused culture of manufacturing companies with Standard Industrial Classification major group codes 29 (Petroleum Refining and Related Industries), 35 (Industrial and Commercial Machinery and Computer Equipment), and 37 (Transportation Equipment).

Espoused culture is a company’s vision, mission, and values. Forty percent of the companies had a mission statement and 65% had a vision statement, 92.5% had values listed on their company’s website. Companies that have a published mission had an increase in revenue and profit by 5.5% and 11.8%, respectively. Companies that have published core values had an increase in revenue and profit by 37.9% and 48.8%, respectively. Companies that have a published vision had an increase in revenue and profit by 39.3 and 23.3%, respectively. The variables determine correlation of employee indicators and financial performance. The regression analysis showed variables that would be best at predicting profit and revenue. These five variables were Customer Focus; Benefits and People; External Focus and Shareholders; Value, Financial, and Profits; and lastly Innovations, Learning, and Technologies.

From the espoused culture, culture types defined as Clan, Adhocracy, Market, or Hierarchy were identified. Any mix of culture can have success in revenue and profit. Yet, not all culture types lead to success in employee morale. From the culture analysis, companies that had a Market culture had the lowest leadership measurement and employee indicators. A Clan blend culture had the highest employee morale and leadership measurement. This research has discovered the impact of many variables and their correlation to company success.