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 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 mind-set 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 he times 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.

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 their 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 on the emphasis on outcome characteristic.
• 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 relationship with their coworkers and managers.
• Aggressiveness (Competitive Orientation) - This characteristic of organizational culture dictates whether group members are expected to be assertive or easy going when dealing with companies they compete with in 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 are 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 condition

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 it everyday 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 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 work place 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 the things willingly.

• 2. Values

The next level according to Schein which constitute the organization culture is the values of the employees. The values of the individuals working in the organization play an important role in deciding the organization culture. The thought process and attitude of employees have deep impact on the culture of any particular organization. What 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 organization 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 understood on their own. Such rules form the third level of the organization 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 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, 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 a 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? Harvard Business Review
• 10 Principles of Organizational Culture strategy+business
• The Key to Changing Organizational Culture Forbes
• Don’t Let Your Company Culture Just Happen hrb.org