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Corporate Culture Matters At These Companies: Yahoo! Inc. (YHOO), AOL, Inc. (AOL)

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Yahoo! Inc. (YHOO)Yahoo! Inc. (NASDAQ:YHOO)‘s CEO made the headlines when she seemingly removed the ability for employees to work remotely, a big culture change for a tech company. The move highlights how social issues can often be more important than money when it comes to running a business. As an investor, corporate culture is something that should be watched.

Working from home

Yahoo! Inc. (NASDAQ:YHOO)’s relatively new CEO Marissa Mayer came from rival Google Inc (NASDAQ:GOOG) to much fanfare. One of the big issues was that she was expecting. She gave birth and then worked from home for a time while taking care of her newborn. News that she has seemingly rescinded the company’s work from home privilege came as something of a shock to me.

The obvious reason of it looking like a double standard aside, part of the corporate culture of so many technology companies is the flexibility of work schedules. In fact, there’s a great deal of research supporting the notion that today’s younger workers crave the ability to better meld work and home life. The ability to work from home is a key aspect of that.

Moreover, what used to be considered a perk is, at this point, almost an assumed right at the types of technology companies Yahoo! Inc. (NASDAQ:YHOO) is competing against for talent. While Mayer believes the move will foster a more creative and collaborative work environment, it could also lead to a culture change that drives creative people away.

Culture Club

Corporate culture is tricky and can be hard to discern from the outside. However, take one step into a company, or compete against them directly, and it can quickly become obvious. The pluses and minuses of a culture can also spread like wildfire to new employees. For example, a driven culture quickly leads less aggressive types to leave and pushes self starters to work even harder. Less positive corporate cultures have a similar effect, but in a negative way.

A bum merger

One of the places that corporate culture most often causes friction is mergers and acquisitions. Take the AOL, Inc. (NYSE:AOL) and Time Warner Inc (NYSE:TWX) marriage. While it started out as AOL, Inc. (NYSE:AOL) buying Time Warner, a struggling AOL and infighting between the leaders of the two companies led to publicly noted strife.

An anonymous quote from a Time Warner executive for a 2003 LA Times article shows how bad it got: “We’ve all got to stop shooting at the AOL, Inc. (NYSE:AOL) people and give them a chance. They’re working really hard trying to fix this thing.” Time Warner eventually wound up being the lead entity as AOL, Inc. (NYSE:AOL)’s walled garden approach to the Internet had clearly passed its prime. AOL, Inc. (NYSE:AOL) was spun off as a separate company in late 2009 after a rocky marriage that lasted less than a decade.

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