It was the young, ambitious MIT graduate's first day at General Electric. His greeting: a gruff, grizzled supervisor, who handed him a broom.

"With all my engineering credentials and my new suit," says the engineer,"I couldn't believe this jerk expected me to sweep the floor. But since I was new to the job, I did as he asked. It was the best lesson I ever learned in my life."

The message of this hazing rite is clear, say organizational experts Terrence Deal and Allan Kennedy: "You may know a lot, but here your vast knowledge of ideas needs to be matched with an intimate knowledge of this place--from the ground up."

Company rituals such as GE's--and the stories that circulate about them--are a central part of the corporation's "internal culture." That blueprint for "the way we do things around here" can make the difference, claim Deal and Kennedy, between business success or failure.

"Every organization has a culture," they write in Corporate Cultures: The Rites and Rituals of Corporate Life (Addison-Wesley, 232 pps., $14.95), "a cohesion of values, myths, heroes and symbols that has come to mean a great deal to the people who work there. Whether weak or strong, culture has a powerful influence throughout an organization; it affects practically everything--from who gets promoted and what decisions are made to how employes dress and what sports they play."

A weak culture can result in low morale and wasted effort; a strong one "can have an amazing impact. In the extreme, we estimate that a company can gain as much as one or two hours of productive work per employe per day."

Deal, 42, a high-school-principal-turned Harvard professor, and Kennedy, 38, a nuclear-physicist-turned-management consultant, base the conclusions on their study of the cultural values of 80 companies (including DuPont, Chubb Insurance, 3M, Hewlett-Packard and Johnson & Johnson).

Eighteen of the corporations had "qualitative beliefs or values," such as "IBM means service" and "Productivity through People." "All of these strong-culture companies," they write, "were uniformly outstanding performers. Although this was far from a scientific survey . . . these strong cultures, we thought, were on to something. And so were we."

Deal and Kennedy then explored the origin and dissemination of corporate values. "We wanted to see what had made America's great companies not merely organizations, but successful, human institutions."

What they found is a solution--"as American as apple pie"--to the problem of declining productivity.

Kennedy asserts straightaway that he's "a little bit bugged by the faddish attention to Japanese management styles. Our cultures are so radically different.

"How can you ask a country based on rugged individualism, of pioneers and cowboys, to mimic the Japanese?"

Instead, says Deal, "We should look back to our own history for the answers; to the original concepts and ideas that made institutions like NCR, GE, IBM and others great. We need to remember that people make businesses work.

"And we need to relearn old lessons about how culture ties people together and gives meaning and purpose to their day-to-day lives."

Strong corporate cultures are particularly important, they claim, in tough economic times. During the Depression, notes Kennedy, "IBM and Procter & Gamble didn't have layoffs. They are among the most paternalistic companies, with cradle-to-grave care about their people. And it's almost self-evident that it paid off."

The "real problem with managers today," says Deal, "is that they are not aggressive enough in trying to influence the behavior around them. Most business schools train people in technical competence, but teach very little about the spirit, soul and heart of a corporation.

"Managers need to tap into the cultural network, take responsibility for their people, give them what they need to do their jobs well and manage in a way that makes (employes) feel good about themselves. Then they're bound to be more productive."

Although "people want to be productive, do well and get ahead," he says, they often are "very confused" in companies with weak cultures. They just don't know what is required of them and how they're expected to handle it. Many feel cheated."

Strong-culture companies remove a great degree of that counterproductive uncertainty, says Kennedy, "because they provide structure and standards and a value system in which to operate. Employes have a clear picture of what it takes to get ahead."

Six basic elements, the researchers say, shape each corporation's culture:

* Business Environment: The "marketplace reality" of what a company does, its competitors, technology, regulations, etc.

* Values: The basic concepts and beliefs of a corporation that define for employes "If you do this, you too will be a success."

* Heroes: People who personify the culture's values and provide tangible role models.

* Rites and Rituals: Systematic and programmed routines of corporate life. "In mundane manifestations they show employes the kind of behavior expected of them. In ceremonies, they provide visible and potent examples of what the company stands for."

* Cultural Network: An organization's primary means of communication, where 90 percent of the real business goes on.

Within each company is a "hidden hierarchy of power," they note, comprised of varied characters vital to the culture.

Storytellers--"Like myths in a tribal setting," their tales "explain and give meaning to the workaday world."

Priests--"The designated worriers and guardians of the culture's values" who listen to confessions and offer guidance, often harking back to historical precedents.

Whisperers (their examples are Nixon's John Erlichman and LBJ's Clark Clifford)--Develop "a symbiotic relationship with a key figure . . . and are often powers behind the throne."

Gossips--"Cultural troubadours" who aid the hero-making process and entertain others with details of corporate current events.

Spies--Keep their fingers on the pulse of the company and attach themselves to managers who, in turn, will protect them.

These characters--not memos and meetings--are responsible, say Kennedy and Deal, for the majority of corporate communications. And within this vital "cultural network," it is often the little things that count.

"In strong-culture companies, nothing is too trivial," they write. "Any event that occurs in a work context is an event to be managed. When IBMers want coffee they will share it with a client or colleague . . . because they are encouraged to see their time as too valuable to waste in a roadside diner.

"Tandem Corp. (California computer firm) is renowned for its Friday-afternoon 'beer busts' which everyone attends."

Without these "expressive events," they contend, "any culture will die." And if ritualizing small events is important, ritualizing major events--such as transitions--is vital.

"This is especially true of firings or forced retirements," they write, "where unraveling can start if transition rituals are inappropriately staged or absent. If people tend to see the firing as arbitrary and unfair, they become confused and upset. In one fell swoop, the culture is called into question."

Other "signs of a culture in trouble":

* Inward focus: "Companies invariably get in trouble when they stop paying attention to what is going on in the real world, particularly when they start doing things to placate the boss or to look good or to score points off others around them."

* Inconsistency: "The worst thing a manager can do. The troops pick up on this."

* Fragmentation: When separate departments have different standards and values and don't respect one another, the result is "confusion and frustration."

* Emotional outbursts: "The most serious symptom. When a culture is weak or in trouble, people get frightened . . . [which]shows up in emotional outbursts."

Companies with "cultural malaise" often hire an expert who, like a priest, helps clarify values and establish rites to relieve anxiety and foster the security and high morale that results in increased productivity.

"People have to realize there's nothing wrong with people enjoying themselves at work," says Deal. "There's a whole body of academic work that shows people do better when they're enjoying themselves.

"In our culture, play and work are seen as opposite poles, with play as somehow inferior. We don't say 'he's only working,' but we'd say 'he's only playing.' But play is a serious human activity. Many scientific advances have come through play.

"Play bonds people together, reduces conflict and creates new vision and cultural values."

"We also need more heroes," says Kennedy. "Heroes are great motivators who show that the ideal of success lies within human capacity. They epitomize the best that people can be and are the stuff and hope of culture.

"The foundation of employe motivation rests on the recognition that we all need to feel important. If companies would treat people like heroes even for a short time, they might end up being heroes."