Organizational culture is the set of values that states what an organization stands for, how it operates and what it considers important. Edgar H. Schein defines organizational culture as the pattern of basic assumptions that a given group has invented, discovered and developed while learning to cope with its problems of external adaptation and internal integration.
All the above definitions stress acceptable and unacceptable behavior of its members. For instance, one organization might value solidarity and loyalty to organization more than any other value whereas another organization might stress on good relations with customers. Such values are part of organizational culture in spite of not being formally written like rules and regulations of the organization. They do not usually appear in the organizational training program and in fact, many organizations have difficulty in expressing their cultural values. However, an organization’s values automatically enter every employee’s personal values and actions over a period of time. Organizational culture has a profound influence on individual employees because it is generally an accepted set of values rather than a written set of rules with which employees might not argue.
Culture is the knowledge used by people to interpret experiences, set priorities and guide their behavior. The beliefs and values of employees form the core of organizational culture. Culture is acquired by learning and experience. Culture is shaped by various organizational influences. For example, in some companies, employees are encouraged to take risk, while in others, playing safe is the accepted norm. In some companies, the work environment may be very informal with people operating on a first name basis, while in others, it can be very formal with great importance being attached to seniority, designation, etc. Some cultures lay a premium on getting the work done while others attach equal if not more importance to how the work is done.
Definitions of Organizational Culture
The organizational culture is the general term for organizations of all members of the commonly accepted values, codes of conduct, team spirit, way of thinking, work style, psychological expectations and feelings of belonging sense of community.
About the concept of corporate culture, there are many different understanding and expression:
- The corporate culture is gradually formed in the working groups of the specification.
- The corporate culture is the values espoused as a business major.
- Corporate culture is the purpose of the guide enterprises to develop the policy of employees and customers.
- The corporate culture is sought in the enterprise competition for survival “principle”, the new employees to the enterprise hired must master the “inner rules.
- The corporate culture is a way to convey the feeling or atmosphere within the object layout, as well as corporate members dealing with customers or other external members.
- The corporate culture is the traditional atmosphere of a company culture, it means that the company values, such as aggressive, defensive or flexible – these values constitute of company employees vitality, opinions and behavior norms. Managers personally, these norms and instill in employees from generation to generation.
- The corporate culture is a business formed some kind of cultural stereotypes and historical tradition, a common value criteria, ethics and life information, unified the various internal forces in a common guiding ideology and under the operating philosophy, brought together to a common direction.
- The corporate culture is a mix of economic significance and cultural significance, refers to the formation of values in the corporate world, the code of conduct in the crowd and community cultural influences. It does not refer to the cultivation of knowledge, but rather refers to the attitude of the people of knowledge; than profit, but profit mental; than interpersonal relationships, but interpersonal life skills embodied in human philosophy. The corporate culture is a penetration in the activities of all the things, it virtues.
- The corporate culture is the basic information of the business organization, the basic values and the basic view of the internal and external environment, is a code of conduct to abide by all the members of the enterprise and beliefs, value system and guiding the people engaged in the work of philosophical concepts.
- The corporate culture, production and operation and management activities with the spirit of the enterprise features to create wealth and physical form in certain social and historical conditions. It includes cultural attitudes, values, entrepreneurship, ethics, code of conduct, history, tradition, enterprise system, cultural environment, enterprise products, etc.. Values are the core of the corporate culture.
Importance of Organizational Culture
Culture plays a very significant role in any organization by communicating information about the overall acceptable and unacceptable behavior. Culture communicates whether the organization expects its managers to be aggressive or conservative in decisions-making, generous or moderate in supporting social causes and ruthless or kind in competitive dealings.
Some organizations have clear, strong and well-defined culture whereas: others have ambiguous, weak and poorly defined cultures. Most managers agree that a strong and clear culture is preferable to weak and vague culture because it helps to provide a common frame of reference for managerial decision-making and a wide variety of other organizational activities.
An organizational culture generally lakes shape over time and is often deeply influenced by the values of the organizational founders. As organizational culture evolves, various symbols, stories, heroes, slogans and ceremonies also come into being. These, then, serve to maintain and perpetuate the culture through subsequent generations of employees.
The values of an organization’s culture are strongly influenced by the values of its founder and top managers. People are often attracted to a company because they share its founder’s values, and many organizations select only such people for employment. Hence the cultures of different organizations tend to become more distinct and different over time.
Characteristics of Organization Culture
Organization culture is very important to improve the organization and achieve that goals which organization set for their self. When we talk about the culture than it can be define on the behalf of their characteristics. So some of the characteristics of the organizational culture is following;
- Norms is the backbone of the organization culture. Norms determine by things similar to as amount of work done and level of support between employer and employees of the organization.
- Policy is clear for employee’s behavior which is associated to the output, inter-group teamwork and customer relationship.
- Observe the behavior relate to their work and regularities in it, as show general language and proper actions
- Maintain the Coordination and combination between the organizational units for the reason of development in effectiveness to works, excellence and designing to built-up the products and services
Dimensions of Organizational Culture
Geert Hofstede, the famous Dutch scholar has identified four well-known dimensions of culture: power distance, uncertainty avoidance, individualism and masculinity.
- Power distance: The extent to which employees feel that power is unevenly distributed across various levels of the organization from the top to the bottom. Power distance tends to be less in knowledge intensive industries such as computer software. In such industries, individual expertise is as important as seniority and designation.
- Uncertainty avoidance: The extent to which people feel threatened by uncertainty.
- Individualism: The tendency of people to be self-centered as opposed to collectivism where people care for each other. Individualism is a typical cultural trait found in investment banks. Americans are considered to be more individualistic, compared to the Japanese.
- Masculinity: Refers to a strong emphasis on success, money and material objects as opposed to femininity, which emphasizes caring for others and quality of life.
Changing Organizational Culture
Change is most often needed when the organization has lost its effectiveness and is struggling to either carry out or change its strategic goals. The manager trying to change an organizational culture faces lots of difficulties. Because organizational culture embody the organizational values, which are embedded in organization’s soul that stays stable irrespective of the changes in leadership and environment.
It is, however, possible to change organizational culture, to improve the organization performance. For this managers must change employee’s ideas about what is and what is not appropriate behavior. They must create new role model and new stories to help employees understand the meaning of what is happening around them. One way to brine about such changes is to manage the symbols that are important to the organization. An organization’s suggestion box is a symbol of an organization’s openness to the ideas of the employees. Some organizations try to emphasize the importance of employees ideas by rewarding them for their suggestions. However, if the suggestion box remains just a symbol and organization never translates the suggestions into actions, the box will have little effect on organization morale.
Once successfully made, changes in the organizational culture will be as stable as the old culture was. However, any organization willing to change its culture must realize that such a change is never easy and cannot be brought about simply by ordering employees.
Short Case Study: How Ray Kroc Established McDonald’s Culture
In the fast food industry, quality control and standardization are very important. But as McDonald’s grew, founder Ray Kroc made extensive use of output control and behavior control to standardize both outputs and employee behaviors at the firm’s thousands of franchises. He established a comprehensive system of rules and procedures, and then trained managers in their use. Kroc used the franchising system itself as a form of control because, when the managers are the owners, the agency problems are solved, and they are more motivated to control quality. In addition, McDonald’s values are taught to employees and norms are strictly enforced by supervisors. McDonald’s includes even customers in its culture by offering family-friendly products and services.
Hint: This case study explains how McDonald’s culture is taught to workers and managers, how it was influenced by the founder’s values, and how it has become part of American culture, so that virtually every customer could explain the McDonald’s values.
External Links:
- What Is Organizational Culture? And Why Should We Care? (HBR Blog Network)