Organizational Culture

What is Organizational Culture

Business Dictionary defines Organizational Culture as "The values and behaviors that contribute to the unique social and psychological environment of an organization." Organizational culture includes an organization's expectations, experiences, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid. Also called corporate culture, it's shown in
(1) the ways the organization conducts its business, treats its employees, customers, and the wider community,
(2) the extent to which freedom is allowed in decision-making, developing new ideas, and personal expression,
(3) how power and information flow through its hierarchy, and
(4) how committed employees are towards collective objectives.
It affects the organization's productivity and performance and provides guidelines on customer care and service, product quality and safety, attendance and punctuality, and concern for the environment.

Organizational culture refers to the personality of an organization: if the structure of the organization is the body: the bone structure, the feeding structure of blood vessels, and the communication channels of the nervous system, then the personality or soul is the way people deal with one another, the values and beliefs that exist within the organization. Culture is defined as the collective mindset or 'the software of the mind'. Because it is often difficult to describe what the personality is, the following method can be used to understand the deeper cultural aspects of an organization. The organization's culture can be described in terms of Hofstede's 'onion':

• the exterior layers consist of symbols (the building, the way employees are dressed, the 'language' they speak, the cars they drive, collective behavior, etc.)
• one layer deeper one can notice the 'heroes' or the 'anti-heroes' in the organization (the leader or founder who is 'worshiped' or who is being used as an example, thereby telling a lot about how to behave here in order to be accepted)
• one layer deeper one can find the rituals (eating together or not, greeting each other, how meetings are organized, celebrations of birthdays, etc.)

Through all these 'layers' one can see glimpses of the heart of the onion: the real values of the organization: the inner nucleus of the onion, the values of the organization: what is really valued or devalued. Be aware of the distinction between espoused and integrated values. Espoused values are the values people say are important to the organization. But most of the time such espoused values delineate the future perspective of the organization, not the actual moving values. Integrated values are the values that actually appear to be important; the heart of the culture. Sometimes there is a gap between the espoused and the integrated values. This can be a real problem, especially when dealing with gender: lip service and no real intention to integrate gender policies.

Evolution of Organizational Culture

Although organizational culture evolution began in the early 1980s, its roots can be traced back to the 1940s when human relations became important for business survival and success. Consequently, organizational culture became a business phenomenon after the release of four seminal books in the early 1980s, which stimulated further study and analysis among researchers. The concept of organizational culture created considerable literature and has become an integral part of organizational effectiveness. Because of a large wave of research on the concept of organizational culture, defining the term has become complex. In and amongst the literature, there is no single definition. For instance, Deal and Kennedy (1982) suggested that organizational culture is indicative of an organization’s values, whereas Sathe (1985) claims that it is the organization’s operating philosophy, and Pettigrew (1979) claims it to be the organization’s generally accepted system of meaning. According to Sathe (1985) and Louis (1985), organizational culture is best understood when there is a cognitive focus with related meanings and understanding that culture is shared, distinctive and unique. Bidney (1968) describes organizational culture as idealistic and realistic.

Comprehensively, Schein (1992) defined 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 therefore to be taught to new members as the correct way to perceive, think and feel in relation to those problems."

Deshpande and Webster (1989) described their organization differently: "We define organizational culture as the pattern of shared value and beliefs that help individuals understand organizational functioning and thus provide them with norms for behaviors in the organization."

Turner and Trompenaars (1993) proposed five cultural dimensions:

• Universalism/Particularism
• Collectivism/individualism
• Neutral/effective relationships
• Diffuse/specific relationships
• Achievement/Assumption

Characteristics of Organizational Culture

Organizational culture is composed of seven characteristics that range in priority from high to low. Every organization has a distinct value for each of these characteristics, which, when combined, defines the organization's unique culture. Members of organizations make judgments on the value their organization places on these characteristics and then adjust their behavior to match this perceived set of values. The seven characteristics of organizational culture are:

• Innovation (Risk Orientation) - Companies with cultures that place a high value on innovation encourage their employees to take risks and innovate in the performance of their jobs. Companies with cultures that place a low value on innovation expect their employees to do their jobs the same way that they have been trained to do them, without looking for ways to improve their performance.
• Attention to Detail (Precision Orientation) - This characteristic of organizational culture dictates the degree to which employees are expected to be accurate in their work. A culture that places a high value on attention to detail expects its employees to perform their work with precision. A culture that places a low value on this characteristic does not.
• Emphasis on Outcome (Achievement Orientation) - Companies that focus on results, but not on how the results are achieved, place a high emphasis on this value of organizational culture. A company that instructs its sales force to do whatever it takes to get sales orders has a culture that places a high-value emphasis on outcome characteristics.
• Emphasis on People (Fairness Orientation) - Companies that place a high value on this characteristic of organizational culture place a great deal of importance on how their decisions will affect the people in their organizations. For these companies, it is important to treat their employees with respect and dignity.
• Teamwork (Collaboration Orientation) - Companies that organize work activities around teams instead of individuals place a high value on this characteristic of organizational culture. People who work for these types of companies tend to have a positive relationships with their coworkers and managers.
• Aggressiveness (Competitive Orientation) - This characteristic of organizational culture dictates whether group members are expected to be assertive or easygoing when dealing with companies they compete with within the marketplace. Companies with an aggressive culture place a high value on competitiveness and outperforming the competition at all costs.
• Stability (Rule Orientation) A company that places a high value on stability is rule-oriented, predictable, and bureaucratic in nature. These types of companies typically provide consistent and predictable levels of output and operate best in non-changing market conditions

Types of Organizational Culture (Figure 1.)

According to Robert E. Quinn and Kim S. Cameron at the University of Michigan at Ann Arbor, there are four types of organizational culture: Clan, Adhocracy, Market, and Hierarchy.

• Clan-oriented cultures are family-like, with a focus on mentoring, nurturing, and “doing things together.”
• Adhocracy-oriented cultures are dynamic and entrepreneurial, with a focus on risk-taking, innovation, and “doing things first.”
• Market-oriented cultures are results-oriented, with a focus on competition, achievement, and “getting the job done.”
• Hierarchy-oriented cultures are structured and controlled, with a focus on efficiency, stability, and “doing things right.”

Figure 1. source: ArtsFwd

Edgar Schein model of Organization Culture (Figure 2.)

According to Edgar Schein - Organizations do not adopt a culture in a single day, instead, it is formed in due course of time as the employees go through various changes, adapt to the external environment, and solve problems. They gain from their past experiences and start practicing them every day thus forming the culture of the workplace. The new employees also strive hard to adjust to the new culture and enjoy a stress-free life. Schein believed that there are three levels in an organization's culture.

Figure 2. source: Sourav Dhar

1. Artifacts: The first level is the characteristics of the organization which can be easily viewed, heard, and felt by individuals collectively known as artifacts. The dress code of the employees, office furniture, facilities, behavior of the employees, mission, and vision of the organization all come under artifacts and go a long way in deciding the culture of the workplace. See the two examples below
   • Organization A
     • No one in organization A is allowed to dress up casually.
     • Employees respect their superiors and avoid unnecessary disputes.
     • The individuals are very particular about the deadlines and ensure the tasks are accomplished within the stipulated time frame.
   • Organization B
     • The employees can wear whatever they feel like.
     • Individuals in organization B are least bothered about work and spend their maximum time loitering and gossiping around.
     • The employees use derogatory remarks at the workplace and pull each other into controversies.
       In the above case, employees in organization A wear dresses that exude professionalism and strictly follow the policies of the organization. On the other hand, employees in organization B have a laid-back attitude and do not take their work seriously. Organization A follows a strict professional culture whereas Organization B follows a weak culture where the employees do not accept things willingly.
2. Values: The next level according to Schein which constitutes the organization's culture is the values of the employees. The values of the individuals working in the organization play an important role in deciding the organization's culture. The thought process and attitudes of employees have a deep impact on the culture of any particular organization. What do people actually think matters a lot for the organization? The mindset of the individual associated with any particular organization influences the culture of the workplace.
3. Assumed Values: The third level is the assumed values of the employees which can’t be measured but do make a difference to the culture of the organization. There are certain beliefs and facts which stay hidden but do affect the culture of the organization. The inner aspects of human nature come under the third level of organizational culture. Organizations, where female workers dominate their male counterparts, do not believe in late sittings as females are not very comfortable with such kind of culture. Male employees on the other hand would be more aggressive and would not have any problems with late sittings. The organizations follow certain practices which are not discussed often but are understood on their own. Such rules form the third level of the organization's culture.

Hofstede Culture Model

Geert Hofstede, social psychologist and foremost authority on global and organizational cultures, defines six dimensions:

• Means- vs. goal-oriented: A means-oriented culture places importance on how work gets done. The focus is on the way people do work and an emphasis on avoiding risk. On the opposite end of the spectrum, a goal-oriented culture identifies with what work gets done. There is a strong focus on achieving an end result. Of the six dimensions, this dimension correlates most strongly with organizational effectiveness; organizations with goal-oriented cultures are more effective than those with means-oriented cultures.
• Internally vs. externally driven: Employees within an internally-driven culture see themselves as experts; they feel they know what is best for the client and customer and act accordingly. As Steve Jobs put it, “A lot of times, people don’t know what they want until you show it to them.” On the other side, employees working in an externally-driven culture are very customer-oriented and will do whatever the customer wants. Their mantra might be, “the customer is always right” and their favorite metric is customer satisfaction.
• Easygoing vs. strict work discipline: Work discipline refers to the amount of structure and control. In an easygoing culture, the approach to work is informal, loose, and unpredictable, and these characteristics facilitate a high level of innovation. But you better like surprises and be willing to improvise and adapt! In a strict culture, there is a fair amount of planning, which leads to efficiency and productivity. People take punctuality seriously and delegate work with detailed instructions.
• Local vs. professional: In local organizational culture, employees identify with their boss and their teammates. This type of environment risks having a low level of diversity, since there are social pressures to act, look, and talk in a certain way. However, these defined norms allow for a great amount of predictability. In a company with a professional culture, employees identify with their profession or the content of the work
• Open vs. closed system: In an open system, newcomers are welcomed easily. People are inclusive and take the approach that anyone will fit in well with the organization. A closed system is more exclusive, where newcomers have to prove themselves. Open cultures have managers and leaders who are approachable, and thus tend to see higher employee satisfaction.
• Employee- vs. work-centered: In a culture with an employee-centered management philosophy, leaders take responsibility for the happiness, well-being, and satisfaction of their employees. This is true even if it is at the expense of productivity. In a work-centered culture, a focus on high-task performance can come at the expense of employees. In this environment, there is a low level of empathy for personal problems.

See Also

• Chaordic Organization

Further Reading

• What Is Organizational Culture? And Why Should We Care?
• 10 Principles of Organizational Culture
• The Key to Changing Organizational Culture
• Don’t Let Your Company Culture Just Happen