What is meant by Organizational Culture, what are its importance and affects on the organization.

Question

What is meant by Organizational Culture, what are its importance and affects on the organization.

Answer 1

Organizational culture, is not the same as corporate culture. It is a wider and deeper concept, something that an organization 'is' rather than what it 'has' (according to Buchanan and Huczynski). It comprises the attitudes, experiences, beliefs and values of an organization. It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Organizational values are beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another"[1]Senior management may try to determine a corporate culture. They may wish to impose corporate values and standards of behavior that specifically reflect the objectives of the organization. In addition, there will also be an extant internal culture within the workforce. Work-groups within the organization have their own behavioral quirks and interactions which, to an extent, affect the whole system. Roger Harrison's four-culture typology, ad apted by CHarles Handy, suggests that unlike organizatinal culture, corporate culture can be 'imported'. For example, computer technicians will have expertise, language and behaviors gained independently of the organization, but their presence can influence the culture of the organization as a whole.

Strong/weak cultures

Strong culture is said to exist where staff respond to stimulus because of their alignment to organizational values.

Conversely, there is weak culture where there is little alignment with organizational values and control must be exercised through extensive procedures and bureaucracy.

Where culture is strong—people do things because they believe it is the right thing to do—there is a risk of another phenomenon, Groupthink. "Groupthink" was described by Irving L. Janis. He defined it as "...a quick and easy way to refer to a mode of thinking that people engage when they are deeply involved in a cohesive ingroup, when members' strivings for unanimity override their motivation to realistically appraise alternatives of action." This is a state where people, even if they have different ideas, do not challenge organizational thinking, and therefore there is a reduced capacity for innovative thoughts. This could occur, for example, where there is heavy reliance on a central charismatic figure in the organization, or where there is an evangelical belief in the organization’s values, or also in groups where a friendly climate is at the base of their identity (avoidance of conflict). In fact groupthink is very common, it happens all the time, in almost every group. Members that are defiant are often turned down or seen as a negative influence by the rest of the group, because they bring conflict.

Innovative organizations need individuals who are prepared to challenge the status quo—be it groupthink or bureaucracy, and also need procedures to implement new ideas effectively.

Classification schemes

Several methods have been used to classify organizational culture. Some are described below:

Geert Hofstede

Geert Hofstede[2] demonstrated that there are national and regional cultural groupings that affect the behavior of organizations. Hofstede identified five dimensions of culture in his study of national influences:

Power distance - The degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.

Uncertainty avoidance reflects the extent to which a society accepts uncertainty and risk.

individualism vs. collectivism - individualism is contrasted with collectivism, and refers to the extent to which people are expected to stand up for themselves, or alternatively act predominantly as a member of the group or organization. However, recent researches have shown that high individualism may not necessarily mean low collectivism, and vice versa. Research indicates that the two concepts are actually unrelated. Some people and cultures might have both high individualism and high collectivism, for example. Someone who highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-sufficiency

Masculinity vs. femininity - refers to the value placed on traditionally male or female values. Male values for example include competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions.

Long vs. short term orientation - describes a society's "time horizon," or the importance attached to the future versus the past and present. In long term oriented societies, thrift and perseverance are valued more; in short term oriented societies, respect for tradition and reciprocation of gifts and favors are valued more. Eastern nations tend to score especially high here, with Western nations scoring low and the less developed nations very low; China scored highest and Pakistan lowest.

Deal and Kennedy

Deal and Kennedy[3] defined organizational culture as the way things get done around here. They measured organizations in respect of:

Feedback - quick feedback means an instant response. This could be in monetary terms, but could also be seen in other ways, such as the impact of a great save in a soccer match.

Risk - represents the degree of uncertainty in the organization’s activities.

Using these parameters, they were able to suggest four classifications of organizational culture:

The Tough-Guy Macho Culture. Feedback is quick and the rewards are high. This often applies to fast moving financial activities such as brokerage, but could also apply to a police force, or athletes competing in team sports. This can be a very stressful culture in which to operate.

The Work Hard/Play Hard Culture is characterized by few risks being taken, all with rapid feedback. This is typical in large organizations, which strive for high quality customer service. It is often characterized by team meetings, jargon and buzzwords.

The Bet your Company Culture, where big stakes decisions are taken, but it may be years before the results are known. Typically, these might involve development or exploration projects, which take years to come to fruition, such as oil prospecting or military aviation.

The Process Culture occurs in organizations where there is little or no feedback. People become bogged down with how things are done not with what is to be achieved. This is often associated with bureaucracies. While it is easy to criticize these cultures for being overly cautious or bogged down in red tape, they do produce consistent results, which is ideal in, for example, public services.

Charles Handy

Charles Handy[4] (1985) popularized the 1972 work of Roger Harrison of looking at culture which some scholars have used to link organizational structure to Organizational Culture. He describes Harrison's four types thus:

a Power Culture which concentrates power among a few. Control radiates from the center like a web. Power Cultures have few rules and little bureaucracy; swift decisions can ensue.

In a Role Culture, people have clearly delegated authorities within a highly defined structure. Typically, these organizations form hierarchical bureaucracies. Power derives from a person's position and little scope exists for expert power.

By contrast, in a Task Culture, teams are formed to solve particular problems. Power derives from expertise as long as a team requires expertise. These cultures often feature the multiple reporting lines of a matrix structure.

A Person Culture exists where all individuals believe themselves superior to the organization. Survival can become difficult for such organizations, since the concept of an organization suggests that a group of like-minded individuals pursue the organizational goals. Some professional partnerships can operate as person cultures, because each partner brings a particular expertise and clientele to the firm.

Edgar Schein

Edgar Schein,[5] an MIT Sloan School of Management professor, defines organizational culture as:

"A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems".

According to Schein, culture is the most difficult organizational attribute to change, outlasting organizational products, services, founders and leadership and all other physical attributes of the organization. His organizational model illuminates culture from the standpoint of the observer, described by three cognitive levels of organizational culture.

At the first and most cursory level of Schein's model is organizational attributes that can be seen, felt and heard by the uninitiated observer. Included are the facilities, offices, furnishings, visible awards and recognition, the way that its members dress, and how each person visibly interacts with each other and with organizational outsiders.

The next level deals with the professed culture of an organization's members. At this level, company slogans, mission statements and other operational creeds are often expressed, and local and personal values are widely expressed within the organization. Organizational behavior at this level usually can be studied by interviewing the organization's membership and using questionnaires to gather attitudes about organizational membership.

At the third and deepest level, the organization's tacit assumptions are found. These are the elements of culture that are unseen and not cognitively identified in everyday interactions between organizational members. Additionally, these are the elements of culture which are often taboo to discuss inside the organization. Many of these 'unspoken rules' exist without the conscious knowledge of the membership. Those with sufficient experience to understand this deepest level of organizational culture usually become acclimatized to its attributes over time, thus reinforcing the invisibility of their existence. Surveys and casual interviews with organizational members cannot draw out these attributes--rather much more in-depth means is required to first identify then understand organizational culture at this level. Notably, culture at this level is the underlying and driving element often missed by organizational behaviorists.

Using Schein's model, understanding paradoxical organizational behaviors becomes more apparent. For instance, an organization can profess highly aesthetic and moral standards at the second level of Schein's model while simultaneously displaying curiously opposing behavior at the third and deepest level of culture. Superficially, organizational rewards can imply one organizational norm but at the deepest level imply something completely different. This insight offers an understanding of the difficulty that organizational newcomers have in assimilating organizational culture and why it takes time to become acclimatized. It also explains why organizational change agents usually fail to achieve their goals: underlying tacit cultural norms are generally not understood before would-be change agents begin their actions. Merely understanding culture at the deepest level may be insufficient to institute cultural change because the dynamics of interpersonal relationships (often under threatening conditions) are added to the dynamics of organizational culture while attempts are made to institute desired change.

Arthur F Carmazzi

Arthur F Carmazzi,[6] Each culture affects the effectiveness and level of commitment of the people and within that culture. And that perpetuates the psychology that creates the culture the first place. In order to break the cycle and evolve a culture and the commitment of those in it, leaders need to understand their roll in the psychological dynamics behind the culture and make adjustments that will move it to the next level. Carmazzi has stated 5 levels of Organisational Culture.

The Blame culture This culture cultivates distrust and fear, people blame each other to avoid being reprimanded or put down, this results in no new ideas or personal initiative because people don’t want to risk being wrong.

Multi-directional culture This culture cultivates minimized cross-department communication and cooperation. Loyalty is only to specific groups (departments). Each department becomes a clique and is often critical of other departments which in turn create lots of gossip. The lack of cooperation and “Multi-Direction is manifested in the organizations inefficiency.

Live and let live culture This culture is Complacency, it manifests Mental Stagnation and Low Creativity. People here have little future vision and have given up their passion. There is Average cooperation and communication and things do work, but they do not grow. People have developed their personal relationships and decided who to stay away from, there is not much left to learn.

Brand congruent culture People in this culture believe in the product or service of the organization, they feel good about what their company is trying to achieve and cooperate to achieve it. People here are passionate and seem to have similar goals in the organisation. They use personal resources to actively solve problems and while they don’t always accept the actions of management or others around them, they see their job as important. Most everyone in this culture is operating at the level of Group.

Leadership enriched culture People view the organisation as an extension of themselves, they feel good about what they personally achieve through the organisation and have exceptional Cooperation. Individual goals are aligned with the goals of the organisation and people will do what it takes to make things happen. As a group, the organisation is more like family providing personal fulfillment which often transcends ego so people are consistently brining out the best in each other. In this culture, Leaders do not develop followers, but develop other leaders. Most everyone in this culture operating at the level of Organisation.

Carmazzi's model requires application of his Directive Communication psychology to evolve the culture. While the idea of having a Leadership Enriched organisation is inspirational, it would require substantial Leadership resources to develop. The concept of Evolving the culture assumes that "Every Individual in the organisation wants to do a good job", and the behaviours that result in poor performance are manifestations of psychology the group or organisation has created through policies, leadership and poor communication.

Elements

G. Johnson[7] described a cultural web, identifying a number of elements that can be used to describe or influence Organizational Culture:

The Paradigm: What the organization is about; what it does; its mission; its values.

Control Systems: The processes in place to monitor what is going on. Role cultures would have vast rulebooks. There would be more reliance on individualism in a power culture.

Organizational Structures: Reporting lines, hierarchies, and the way that work flows through the business.

Power Structures: Who makes the decisions, how widely spread is power, and on what is power based?

Symbols: These include organizational logos and designs, but also extend to symbols of power such as parking spaces and executive washrooms.

Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary.

Stories and Myths: build up about people and events, and convey a message about what is valued within the organization.

These elements may overlap. Power structures may depend on control systems, which may exploit the very rituals that generate stories which may not be true.

Organizational culture and change

There are a number of methodologies specifically dedicated to organizational culture change such as Peter Senge’s Fifth Discipline and Arthur F Carmazzi's Directive Communication. These are also a variety of psychological approaches that have been developed into a system for specific outcomes such as the Fifth Discipline’s “learning organization” or Directive Communication’s “corporate culture evolution.” Ideas and strategies, on the other hand, seem to vary according to particular influences that affect culture.

Burman and Evans (2008) argue that it is 'leadership' that affects culture rather than 'management', and describe the difference[8]. When one wants to change an aspect of the culture of an organization one has to keep in consideration that this is a long term project. Corporate culture is something that is very hard to change and employees need time to get used to the new way of organizing. For companies with a very strong and specific culture it will be even harder to change.

Cummings & Worley (2005, p. 491 – 492) give the following six guidelines for cultural change, these changes are in line with the eight distinct stages mentioned by Kotter (1995, p. 2)3:

1. Formulate a clear strategic vision (stage 1,2 & 3 of Kotter, 1995, p. 2)

In order to make a cultural change effective a clear vision of the firm’s new strategy, shared values and behaviours is needed. This vision provides the intention and direction for the culture change (Cummings & Worley, 2005, p.490).

2. Display Top-management commitment (stage 4 of Kotter, 1995, p. 2)

It is very important to keep in mind that culture change must be managed from the top of the organization, as willingness to change of the senior management is an important indicator (Cummings & Worley, 2005, page 490). The top of the organization should be very much in favour of the change in order to actually implement the change in the rest of the organization. De Caluwé & Vermaak (2004, p 9) provide a framework with five different ways of thinking about change.

3. Model culture change at the highest level (stage 5 of Kotter, 1995, p. 2)

In order to show that the management team is in favour of the change, the change has to be notable at first at this level. The behaviour of the management needs to symbolize the kinds of values and behaviours that should be realized in the rest of the company. It is important that the management shows the strengths of the current culture as well, it must be made clear that the current organizational does not need radical changes, but just a few adjustments. (See for more: (Deal & Kennedy, 1982; Sathe, 1983; Schall; 1983; Weick, 1985; DiTomaso, 1987)

4. Modify the organization to support organizational change

The fourth step is to modify the organization to support organizational change.

5. Select and socialize newcomers and terminate deviants (stage 7 & 8 of Kotter, 1995, p. 2)

A way to implement a culture is to connect it to organizational membership, people can be selected and terminate in terms of their fit with the new culture (Cummings & Worley, 2005, p. 491).

6. Develop ethical and legal sensitivity

Changes in culture can lead to tensions between organizational and individual interests, which can result in ethical and legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security (Cummings & Worley, 2005, p. 491).

Entrepreneurial culture

Stephen McGuire[9] defined and validated a model of organizational culture that predicts revenue from new sources. An Entrepreneurial Organizational Culture (EOC) is a system of shared values, beliefs and norms of members of an organization, including valuing creativity and tolerance of creative people, believing that innovating and seizing market opportunities are appropriate behaviors to deal with problems of survival and prosperity, environmental uncertainty, and competitors’ threats, and expecting organizational members to behave accordingly.

Critical views

Writers from Critical management studies have tended to express skepticism about the functionalist and unitarist views of culture put forward by mainstream management thinkers. Whilst not necessarily denying that organizations are cultural phenomena, they would stress the ways in which cultural assumptions can stifle dissent and reproduce management propaganda and ideology. After all, it would be naive to believe that a single culture exists in all organizations, or that cultural engineering will reflect the interests of all stakeholders within an organization. In any case, Parker[10] has suggested that many of the assumptions of those putting forward theories of organizational culture are not new. They reflect a long-standing tension between cultural and structural (or informal and formal) versions of what organizations are. Further, it is perfectly reasonable to suggest that complex organizations might have many cultures, and that such sub-cultures might overlap and contradict each other. The neat typologies of cultural forms found in textbooks rarely acknowledge such complexities, or the various economic contradictions that exist in capitalist organizations.

One of the strongest and widely recognised criticisms of theories that attempt to categorise or 'pigeonhole' organisational culture is that put forward by Linda Smircich. She uses the metaphor of a plant root to represent culture, describing that it drives organisations rather than vice versa. Organisations are the product of organisational culture, we are unaware of how it shapes behaviour and interaction (also recognised through Scheins (2002) underlying assumptions) and so how can we categorise it and define what it is?

Measurement

Despite the evidence suggesting their potential usefulness, organisational climate metrics have not been fully exploited as leading safety, health and environmental performance indicators and as an aid to relative risk ranking. Dodsworth et al.[11] are the first researchers to have successfully used PLS modelling techniques to correlate organizational climate metrics with an organisation’s safety performance. Further information regarding this research can be obtained from the following link Dodsworth's Homepage

In the context of effectiveness, the repertory grid interview can be used to capture a representation of an organisation's culture or corporate culture - the organisation's construct system. The repertory grid interview process provides a structured way of comparing effective and less effective performance and capturing it in the interviewee's words without imposing someone else's model or way of thinking.

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Notes

^ Charles W. L. Hill, and Gareth R. Jones, (2001) Strategic Management. Houghton Mifflin.

^ Hofstede, G. (1980) Culture's Consequences: International Differences in Work Related Values, Beverly Hills, CA, Sage Publications

^ Deal T. E. and Kennedy, A. A. (1982) Corporate Cultures: The Rites and Rituals of Corporate Life, Harmondsworth, Penguin Books.

^ Handy, C.B. (1985) Understanding Organizations, 3rd Edn, Harmondsworth, Penguin Books

^ Schein, E.H. (1985-2005) Organizational Culture and Leadership, 3rd Ed., Jossey-Bass ISBN 0-7879-7597-4

^ carmazzi, A.F. (2007) The Psychology of Creating the Right Corporate Culture, Veritas Publishing

^ Johnson, G. (1988) "Rethinking Incrementalism", Strategic Management Journal Vol 9 pp75-91

^ Burman, R. & Evans, A.J. (2008) Target Zero: A Culture of safety, Defence Aviation Safety Centre Journal 2008, 22-27. http://www.mod.uk/NR/rdonlyres/849892B2-...

^ McGuire, Stephen J.J. (2003). Entrepreneurial Organizational Culture: Construct Definition and Instrument Development and Validation, Ph.D. Dissertation, The George Washington University, Washington, DC.

^ Parker, M. (2000) Organizational Culture and Identity, London: Sage.

^ Dodsworth M. et al (2007) Organizational Climate Metrics As Safety, Health and Environment Performance Indicators And An Aid To Relative Risk Ranking Within Industry. Process Safety and Environmental Protection, Trans IChemE, Vol 85 (B1) 59-69, Part B, January.

References

Black, Richard J. (2003) Organisational Culture: Creating the Influence Needed for Strategic Success, London UK, ISBN 1-58112-211-X

Cummings, Thomas G. & Worley, Christopher G. (2005), Organization Development and Change, 8th Ed., Thomson South-Western, USA, ISBN 0324260601

Kotter, John. 1992 Corporate Culture and Performance, Free Press; (April 7, 1992) ISBN 0-02-918467-3

O'Donovan, Gabrielle (2006). The Corporate Culture Handbook: How to Plan, Implement and Measure a Successful Culture Change Programme, The Liffey Press, ISBN 1-904148-97-2

Phegan, B. (1996-2000) Developing Your Company Culture, A Handbook for Leaders and Managers, Context Press, ISBN 0-9642205-0-4

Stoykov, Lubomir. 1995 Corporate culture and communication, Stopanstvo , Sofia.