Organizational culture

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Organizational culture refers to culture related to organizations including schools, universities, not-for-profit groups, government agencies, and business entities. Alternative terms include corporate culture and company culture. The term corporate culture emerged in the late 1980s and early 1990s. [1] [2] It was used by managers, sociologists, and organizational theorists in the 1980s. [3] [4]

Contents

Organizational culture influences the ways in which people interact, how decisions are made (or not made), the context within which knowledge is created, the resistance they will have towards certain changes, and ultimately the way they share (or the way they do not share) knowledge.

Definition

Various definitions exist, without consensus. Examples include:

History

Jaques introduced the concept in his 1951 book The Changing Culture of a Factory. [22] The book was a published report of "a case study of developments in the social life of one industrial community between April, 1948 and November 1950". [6] The case involved a publicly-held British company engaged principally in the manufacture, sale, and servicing of metal bearings. The study concerned itself with the description, analysis, and development of corporate group behaviors. [23]

Analysis

Researchers have proposed myriad dimensions individually and in combination as useful for analyzing organizational culture. Examples include external/internal, strong/weak, flexible/rigid, and many others.

Insularity

Culture can be externally focused, aiming to satisfy customers, investors, and partners. Alternatively, they can be internally focused, aiming to satisfy employees, comply with union-imposed rules, or to meet conduct standards around issues such as diversity, equity, and inclusion. [24] Many organizations lie between such extremes, attempting to balance the needs of multiple stakeholders.

Strength

Any type of culture can be strongly or only tacitly supported. A strong culture is characterized by reinforcing tools such as ceremonies and policies to instill and spread it. [25] [ predatory publisher ] The intent is to secure group compliance. [26]

Researchers generally report that organizations having strong cultures are more successful. [27] [28]

Cultural

Organizational culture is used to control, coordinate, and integrate distinct groups across the organization. [29] Differences in national cultures must be addressed. [30] Such differences include organizational structure and manager/employee relationships. [31]

Groupthink

Janis defined groupthink as "a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members' strivings for unanimity override their motivation to realistically appraise alternative courses of action." [32] This is a state in which even if group members have different ideas, they do not challenge the group. Groupthink can lead to lack of creativity and decisions made without critical evaluation. [33] Hogg and separately Deanne et al. stated that groupthink can occur, for example, when group members rely heavily on a charismatic figure or where members evince an "evangelical" [34] [35] belief in the organization's values. Groupthink can also occur in groups characterized by a friendly climate conducive to conflict avoidance.

Five Monkeys Experiment

Since the late 1960s, the so-called 'Five Monkeys Experiment' that serves to exemplify the adverse effects of unquestioned traditions has become part of management lore, often titled "How Company Policy Is Made". [36]

It imagines a situation where five monkeys are in a cage with a banana tied to the ceiling. Whenever a monkey climbs to reach the banana, all five are sprayed with cold water. The group quickly learn to ignore the banana and punish any monkey who attempts to reach for it. If one monkey is removed from the cage and replaced with a newcomer, they too are punished for reaching for the banana. If every monkey is subsequently replaced in this manner, so that none present remember being sprayed with cold water, the group will supposedly continue to punish any attempts to reach the banana. The monkeys are perpetuating a caution that may be redundant "because that's the way it's always been around here". [36]

Rigidity

Kotter and Heskett define an adaptive culture as characterized by managers who pay close attention to their constituencies, especially customers, initiating change when needed, and taking risks. They claim that organizations with adaptive cultures perform better. [11]

Bullying

Bullying manifests in workplaces that allow employees of higher status to harass those of lower status. This generally requires support or at least forbearance from company leaders. [37] Bullying can cascade down the organizational hierarchy as supervisors experiencing bullying display the same behavior to their subordinates. [38]

Indicators

Healthy cultures address members' concerns about the well-being of the organization. Whistleblowing, particularly when it damages a company's reputation, is considered to be a sign of a dysfunctional corporate culture, indicating that internal methods of addressing problems are inadequate. [39]

Role of communication

Promulgating a corporate culture requires effort, typically from leaders, but potentially throughout the organization. Among the many types of communication that affect organizational culture are: [40]

Intended effects

Numerous outcomes have been associated either directly or indirectly with organizational culture.The relationships between organizational culture and various outcomes include organizational performance, employee commitment, and innovation. A healthy and robust organizational culture is thought to offer various benefits, including: [44] [45]

A Harvard Business School study reported that culture has a significant effect on an organization's long-term economic performance. The study examined the management practices at 160 organizations over ten years and found that culture can impact performance. Performance-oriented cultures experienced better financial results. Additionally, a 2002 Corporate Leadership Council study found that cultural traits such as risk taking, internal communications, and flexibility are important drivers of performance. Furthermore, innovativeness, productivity through people, and other cultural factors cited by Peters and Waterman in In Search of Excellence also have positive economic consequences.

Denison, Haaland, and Goelzer reported that culture contributes to the success of the organization, but not all dimensions contribute equally. Effects differed across nations, implying that organizational culture is rooted in national culture. [49]

Culture change

Cultures are not static and can evolve over time, either organically or through intentional change efforts by management. [50] Culture change may be attempted to reduce member turnover, influence behavior, make improvements to the organization, reset objectives, rescale the organization, and/or achieve specific results. [51]

Stages

Organizational cultures have been reported to change in stages. One group proposed five stages: [52]

Obstacles

Existing culture can hinder change efforts, especially where members understand the roles that they are supposed to play. Marquis et al. claimed that 70% of all change efforts fail because of the members. Organizational culture, and the structures in which they are embedded, often exhibit substantial inertia. [53]

Methods

Change methodologies include Peter Senge's concept of a "learning organization" expressed in The Fifth Discipline or Directive Communication's "corporate culture evolution".

Changing culture takes time. Members need time to get used to the new ways. Organizations with a strong and specific culture are harder to change. [54]

Prior to introducing a cultural change, a needs assessment can characterize the existing culture. This involves some mixture of employ surveys, interviews, focus groups, observation, customer surveys, and other internal research. The company must then describe the new, desired culture, and then design a change process.

Cummings and Worley offer six guidelines for cultural change, in line with the eight distinct stages mentioned by Kotter. [55] [56]

Research and models, cultural dimensions

Several methods have been used to classify organizational culture. While there is no single "type" of organizational culture and organizational cultures vary widely across organizations, researchers have developed models to describe different indicators of organizational cultures.

Hofstede's National Culture Dimensions

Hofstede looked for differences between over 160 000 IBM employees in 50 countries and three regions of the world, searching for aspects of culture that influence business behavior. He emphasized awareness of international differences and multiculturalism. Cultural differences reflect differences in thinking and social action, and in "mental programs", a term Hofstede used for predictable behavior. Hofstede related culture to ethnic and regional differences, but also to the influence of organizations, professional, family, social and subcultural groups, national political systems, and legislation. [65]

He suggested that changing "mental programs" involves changing behavior first, which then leads to value change. Though groups such as Jews and Gypsies have maintained their identity through centuries, their values reflect adaptation to the dominant cultural environment.

Hofstede described national and regional cultural groupings that affect the behavior of organizations and identified four dimensions of culture (later five [66] ) in his study of national cultures:

These dimensions help define the effect of national cultures on management, and can be used to adapt to local needs. [70]

Daniel Denison

Denison's model assessed culture along four dimensions. Each divides into three sub-dimensions: [71]

It separately assesses cultures along the dimensions of external/internal focus and flexible/stable evolution.

Deal and Kennedy

Deal and Kennedy characterized four types of organizations. Each focused on how quickly the organization processes along three dimensions:

Organization types

  • Work-hard, play-hard – Feedback: rapid; risk: low. Stress come from work quantity rather than uncertainty. High-speed action leading to high-speed recreation. Examples: Restaurants, software companies. [72] [73]
  • Macho – Feedback: rapid; reward: rapid; risk:high. Stress comes from risk and potential reward loss/gain. Short-term focus. Examples– police, surgeons, sports.
  • Process culture – Feedback: slow; reward: slow; risk: low. Low stress, plodding work, comfort and security. Stress comes from internal politics and bureaucracy. Examples: banks, insurance companies. [5] [72]
  • Bet-the-company culture – Feedback: slow; reward: slow; risk: high. Stress comes from high risk and long payoff intervals. Detailed long-term planning. Examples: aircraft manufacturers, oil companies.

Artifacts, values, and tacit assumptions

Schein claimed that culture is the most difficult organizational attribute to change, outlasting products, services, founders and leadership and all physical attributes. His model considers culture as an observer, characterized in terms of artifacts, values and underlying assumptions. [10]

Schein's model considers attributes that can be experienced by the uninitiated observer – collectively known as artifacts. Included are facilities, offices, furnishings, visible awards and recognition, informal dress codes, member interactions with each other and with outsiders, and company slogans, mission statements and other creeds.

This model can enable understanding seemingly paradoxical behavior. For instance, an organization can profess high aesthetic and moral standards in terms of values, while violating those values should they conflict with tacit assumptions.

External adaptation and internal integration

Schein claimed that the two main reasons why cultures develop in organizations are external adaptation and internal integration. External adaptation helps an organization to flourish by affecting its culture. An appropriate culture holds the potential for generating sustained competitive advantage over external competitors.

Internal integration is an important function for establishing essential social structures and aiding socialization at the workplace. Culture-shaping factors include: [10] [ clarification needed ]

Organizational structure, organizational culture

Organizational structure is linked to organizational culture. Harrison described four types of culture: [74]

Cultural web

Johnson described a cultural web, identifying elements that can be used to describe/influence organizational culture: [76]

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

Schemata

Schemata are knowledge structures derived from experience that simplify behavioral choices by providing a way to think about events. Schemata are created through interaction with others. [77]

Harris described five categories of in-organization schemata necessary for organizational culture:

These schemata represent an individual's knowledge of the organization. Culture results when individual schemata become shared across an organization, primarily through organizational communication, reflecting shared knowledge and meaning.

Reciprocity

Adam Grant, author of Give and Take, highlights norms of reciprocity in analyzing culture. He distinguishes giver, taker and matcher cultures.

In a study of the US intelligence system, giver cultures had the greatest group effectiveness. [78]

Frank claimed that "many organizations are essentially winner-take-all markets, dominated by zero-sum competitions for rewards and promotions". In particular, when leaders implement forced ranking systems to reward individual performance, giver cultures give way to taker or matcher cultures. Awarding the highest-performing individual within each team encourages a taker culture. [78]

Entrepreneurial

McGuire's model predicted revenue from new sources. An entrepreneurial organizational culture is a system of shared values, beliefs and norms, valuing creativity and tolerance, believing that innovating and seizing market opportunities are solutions to problems of survival and prosperity, environmental uncertainty, competition, and expects members to behave accordingly. [79] [80]

Variable, process

Smircich described two approaches to studying organizational culture: as a variable and as a process. [81] The former could be external or internal, encompassing values, norms, rituals, structures, principles, assumptions, and beliefs. [82] National culture influences that variable.

Driskill and Brenton claimed that culture could be understood as shared cognition, systems of shared symbols, and as the expression of unconscious processes. [82]

Organizational communication

The organizational communication perspective views culture as falling into three types:[ citation needed ]

Rosauer observed organizational culture to be emergent – an incalculable state that results from the combination of various ingredients. In "Three Bell Curves: Business Culture Decoded", [83] he outlined three ingredients that he claimed guide business culture:

Improving these areas brings leadership, employees, work and customers together, improving culture and brand. [83]

Other

Other frameworks include:

Instruments

Organizational Cultural Profile

O'Reilly, Chatman and Caldwell developed a model based on the belief that cultures can be distinguished by values. Their Organizational Cultural Profile (OCP) is a self-reporting tool that distinguishes eight categories:

  • Innovation
  • Supportiveness
  • Stability
  • Respect for People
  • Outcome Orientation
  • Attention to Detail
  • Team Orientation
  • Aggressiveness.

The instrument can measure how culture affects performance, as it discerns persons most suited to an organization and such organizations have an effective culture. Takeda claimed that such instruments can measure both person-situation fit and person-culture fit. [90] Such measurements assess the level of  compatibility between employees and companies. Employee values are measured against organizational values to predict employee turnover. [91] [92]

Organizational Culture Assessment Instrument

Cameron and Quinn developed the Organizational Culture Assessment Instrument (OCAI) that distinguishes four culture types, based on the Competing Values Framework. [93]

Competing values can be assessed along dimensions of flexibility/stability and internal/external focus – they reported these to be the most important in influencing organizational success. These dimensions enable a quadrant of four culture types:

  • Clan culture is flexible/internally focused.
  • Adhocracy culture is flexible/externally focused.
  • Market culture is stable/externally focused.
  • Hierarchy culture is stable/internally focused.

Organizational Culture Inventory

Cooke defined culture as behaviors that members believe are required to fit in and meet expectations. The Organizational Culture Inventory measures twelve behavioral norms grouped into three culture types: [94]

  • Constructive cultures – Members are encouraged to interact with people and approach tasks in ways that help them meet their higher-order satisfaction needs.
  • Passive/defensive cultures – Members believe they must interact with people in ways that will not threaten their own security.
  • Aggressive/defensive cultures – Members are expected to approach tasks forcefully to protect their status and security.

COVID-19 impact

The pandemic led many organizations to incorporate limiting spread into their cultures as a collective responsibility. Responses focused on requiring vaccines, hygiene, and masking.

In Asia, mask-wearing was part of several national cultures predating the pandemic. [95] This was driven by experience with prior flus in Asia, such as Spanish flu, Hong Kong flu, Avian flu, and Swine flu, in addition to SARS, as well as various affronts to air quality such as volcanic eruptions. [96]

Somers categorized cultures based on whether the need of the individual or the group was foremost. He used behaviors such as mask-wearing to measure collectivism vs individualism. [97] Cultures otherwise rated "strong" were relatively resistant to change during the pandemic. [98] However, strong cultures that emphasized innovation were more willing to change.

Mandated interventions could be seen by members either as attempts to protect them or to as attempts to exert control despite limited effectiveness, depending on how they were presented. [99]

Digital tools such as videoconferencing, screen-sharing, file sharing, shared document authoring, digital whiteboards, and chat groups became widely accepted, replacing in-person meetings. The reduced amount of face-to-face communications may have impacted organizational cultures. New members, lacking face time with others, experienced difficulty in adapting to their organization's culture. The loss of face-time affected existing employees as well, directly weakening cultures, in addition to the indirect effects that strengthened or weakened cultures as organizations reacted in various ways to the pandemic. Some members felt disengaged and expandable rather than essential, alienated, and exhausted. [100]

Sull and Sull reported that employees rated their leadership higher given honest/open communication, integrity, and transparency more than in preceding years. Also, employers and leaders giving more attention to employees' welfare had a positive impact on cultural adherence. [101] Chambers claimed that this was a short-term response rather than a culture change. [102]

Deloitte argued that employees displayed greater sense of purpose, inspiration, and contribution. Also, leaders became more tolerant of employees' failure because of a significant increase in experimentation and risk-taking. [103]

Daum and Maraist claimed that sense of purpose relates to customers and the society of which employees are part. They compared hospitals and retail shops. The former had a greater sense of purpose during the pandemic, while the latter had less. [104]

Critical views

Criticism of "organizational culture" began in the early 1980s. [4] Most criticism comes from writers in critical management studies who for example express skepticism about functionalist and unitarist views. They stress the ways in which these assumptions can stifle dissent and reproduce propaganda and ideology. They suggest that organizations do not embody a single culture (diversity), and cultural engineering may not reflect the interests of all stakeholders.

Parker suggested that many of the assumptions surrounding organizational culture are not new. They reflect a long-standing tension between cultural and structural (or informal and formal) versions of organizations. Further, it is 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. [105]

Smircich criticized theories that attempt to categorize or 'pigeonhole' organizational culture. [3] [106] She applied the metaphor of a plant root to represent culture, saying that it drives organizations rather than vice versa. Organizations are the product of their organizational culture, which shapes behavior and interaction. While Schein's underlying assumptions are that beliefs, perceptions, thoughts, and feelings are taken for granted and can be observed and considered the ultimate source of values and action. However, such assumptions undermine attempts to categorize and define organizational culture. [107]

In the US, corporate culture can legally be found to be a cause of injuries and a reason for fining companies, such as when the US Department of Labor Mine Safety and Health Administration levied a fine of more than US$10.8 million on Performance Coal Co. following the Upper Big Branch Mine disaster in April 2010. This was the largest fine in the history of this agency. [108]

Subcultures

Groups within the organization may act according to their own subcultures that are not fully aligned with that of the organization as a whole. For example, computer technicians will have expertise, language and behaviors gained independently of the organization, but their presence can influence the culture of the larger organization.

Shadow side

Egan and Tate speak of organizations having a "shadow side", [109] which Egan defined as:

All those things that substantially and consistently affect the productivity and quality of the working life of a business, for better or worse, but which are not found on organisation charts, in company manuals, or in the discussions that take place in formal meetings. [110]

Tate describes the shadow side as the "often disagreeable, messy, crazy and opaque aspects of [an] organisation's personality". [109]

See also

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References

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  2. ↑ Unlike many expressions that emerge in business jargon, the term spread to newspapers and magazines. Few usage experts object to the term. Over 80 percent of usage experts accept the sentence The new management style is a reversal of GE's traditional corporate culture, in which virtually everything the company does is measured in some form and filed away somewhere.", The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company.
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