He's right,of course.

A good corporate culture is a longer-lasting competitive advantage because it's much harder to copy than products, business processes or marketing techniques.

Unfortunately it's also a fragile thing - just one bad management appointment can corrupt it because other managers have either to fight fire with fire or accept that the unscrupulous appointee will take over.

And the corporate eco-system limits how good a company's behaviour can be:
* for example if company A uses conservative accounting and company B uses aggressive accounting, there's a risk that B will for a few years have a more favourable share price and can use this to take over A.
* we can all think of similar examples in marketing.

So accounting standards, codes of practice and, above all, alert and far-sighted shareholders are essential both to preserve a good culture and to improve a poor one.

Posted by: Philip Chalmers on April 3, 2003 03:32 AM

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