Management Series: What is Organizational Culture?

 ORGANIZATIONAL CULTURE

This topic examines organizational culture: the effects culture has on members within the organization; how members learn the culture; and how it can be changed.

Learning Outcomes:

1. Describe the common characteristics of organizational culture.
2. Compare the functional and dysfunctional effects of organizational culture on people and the organization.
3. Identify the factors that create and sustain an organization’s culture.
4. Demonstrate how culture is transmitted to employees.

Introduction

In organisations, there are deep-set beliefs about the way in which work should be organised, the way in which authority should be exercised, people rewarded and punished, etc. Culture embraces the influences that affect society's basic values, beliefs, perceptions and behaviour. They are the characteristics of a particular society or sub-group within it. It is, however, a difficult concept to describe since it is often not remarked on or recognised by those most affected by it. Consider for a moment the following questions in relation to any two organisations with which you are familiar:

• How formal is it?  Do work hours matter or dress?
  
• Are there rules and procedures, or only results?
  
• Who is allowed to sign letters?
  
• Do committees or individuals control?
  
• Who do you have to go through to see the boss?
  

It is likely that the answers to these questions will be different for each organisation. These types of issues are encompassed in the structure and culture of the organisation. These both have a very strong influence on the way staff behave and on the way in which they are managed.

The culture of an organisation refers to the deep-seated values underpinning the organisation. It is manifested through a number of features (as discussed below) and it is increasingly being recognised that the culture is fundamental to the success or failure of organisations in meeting their goals.

 

Organizational culture is an important concept in studying how organizations behave.  Culture has a significant impact on how individuals interpret the impact of their behaviour and make decisions about their actions. Culture is defined as a common perception held by the members of the organization or a sense of shared meaning. it is an intangible mixture of rules, relationships, values, customs, values and attitudes which, taken together, describe the distinctive "feel" of the organisation. It is within this culture that individuals work and from which they learn the norms and values to which they are expected to subscribe.

Organizational culture is a shared medium that consists of a set of the following key characteristics of the organization's values:

1. The organisation's goals – particularly its mission statement – and the extent to which they are clear, communicated to and embraced by all levels of the organisation.
2. The dominant behaviour patterns apply to the interaction within the organisation and between the organisation and its stakeholders (its existing and potential customers, investors, owners, etc.) – in respect of both what has been expected and whether actual behaviour lives up to these expectations.
   
3. The distribution of authority and decision-making through the organisation – is basically along a continuum from being concentrated at the top to being spread downwards to teams working close to customers by the empowerment of employees.
4. The structure of the organisation is closely related to the distribution of authority and may be easier to identify through the use of organisation charts, etc.
5. The nature of leadership refers to the way in which power and authority are exercised, again along a continuum from authoritarian to democratic.
6. The values of the organisation in terms of its responsiveness to the needs and aspirations of its own staff and to those of its stakeholders.
   
7. The entrepreneurial spirit of the organisation is revealed by the degree of enterprise, innovation, competitiveness, flexibility and drive for excellence in the organisation.
   
8. Its receptiveness to embracing change, arising from changes in its environment –, particularly whether it is proactive (anticipating and planning for a change) or reactive (coping with change as and when it arises).

 

Do Organizations Have Uniform Cultures? 

There are several different groupings that most cultures fit into.  These groups describe the organization in an effort to help increase the understanding of how an organization works.  There are different aspects of culture that need to be defined to help lay a foundation for understanding what culture is.

1. The dominant culture is the core values that are shared by the majority of employees in the organization.

2. Subcultures are when there are a variety of different cultures within the organization. These subcultures typically are divided by the department and/or geographical separation.

Core values are the primary values that most people in the organization accept. These definitions are key components of a culture and will help you further understand organizational culture.

Culture’s Functions. 

Overall, culture benefits organizations by increasing organizational commitment and the consistency of employee behaviour. It also aids employees by reducing ambiguity. Some of the things that cultures do are defining the boundary between one organization and others.  They also convey a sense of identity for the members of the organization.  If the cultures are strong they can facilitate a continuous commitment to something larger than self-interest over an extended period of time.  Cultures also help people know what to expect in the organization and can thereby enhance the stability of the social system.  Through doing this it can also serve as a sense-making and control mechanism for fitting employees into the organization.

There are five basic functions of culture that help achieve these benefits:

1. Defines Boundaries.  Culture creates distinctions between one organization and another.

2. Identity.  Culture conveys a sense of identity to its members.

3. Commitment.  Culture generates commitment to something that is larger than one's own self-interest.

4. Social Stability.  Culture is the social glue that helps hold the organization together by providing appropriate standards for socially acceptable employee behaviour.

5. Control Mechanism.  Culture serves as a sense-making and control mechanism that guides and shapes the attitudes and behaviour of employees.

ONLINE DISCUSSION   You have joined a new organization as an HR manager. The company is known for its strong organizational culture, which is characterized by a flat hierarchy, open communication, and a focus on employee well-being. However, you notice that there is resistance to change when it comes to adopting new technology and processes. Drawing from your understanding of organizational culture, explain the concept of a strong organizational culture and how it can both benefit and hinder an organization. Discuss why employees might resist change in a culture-oriented organization and propose strategies for effectively managing change while preserving the positive aspects of the existing culture. <REFLECT NOW>

 

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TUTORIAL ACTIVITY: POSITIVE CULTURE  (Hints: This activity will prepare you for your individual assignment) Using your favourite search engine or online journal portal, search for the terms “creating ethical organizations” or “positive organizational culture.”  Find 2-3 articles related to the topic of your choice and write up a brief synopsis that explains how managers can create such an organization. (include your citation using the appropriate referencing format). >>>Post Your Synopsis Here<<<

GUIDELINES: POSITIVE AND ETHICAL CULTURE

CREATING A POSITIVE ORGANIZATIONAL CULTURE 

A positive organizational culture is one that emphasizes building on employee strengths, rewards more than it punishes, and emphasizes individual vitality and growth.

 

A lot of OB, and of management practice, considers how to fix employee problems. Although a positive organizational culture does not ignore problems, it does emphasize showing workers how they can capitalize on their strengths. One employee may be strong in ideation (the ability to find connections between seemingly disparate phenomena) and learn to use that strength more often and effectively, whereas another may discover and develop the skill of consistency (the ability to set clear rules and adhere to them).

 

Although most organizations are sufficiently focused on extrinsic rewards such as pay and promotions, they often forget about the power of smaller (and cheaper) rewards such as praise. Part of creating a positive organizational culture is “catching employees doing something right.” Another part is articulating praise. Many managers withhold praise either because they’re afraid employees will coast or because they think praise is not valued. Because employees generally don’t ask for praise, managers usually don’t realize the costs of failing to do it. Failing to praise can become a silent killer, like escalating blood pressure.

A positive organizational culture emphasizes not only organizational effectiveness but also individuals’ growth. No organization will get the best from employees who see themselves as mere tools or parts of the organization. A positive culture recognizes the difference between a job and a career and supports not only what the employee does to contribute to organizational effectiveness but also what the organization can do to make the employee more effective (personally and professionally).

CREATING AN ETHICAL ORGANIZATIONAL CULTURE.

The organizational culture most likely to shape high ethical standards among its members is one that’s high in risk tolerance, low to moderate in aggressiveness, and focused on means as well as outcomes. This type of culture also takes a long-term perspective and balances the rights of multiple stakeholders, including the communities in which the business operates, its employees, and its stockholders.

 

Managers are supported for taking risks and innovating, discouraged from engaging in unbridled competition and guided to pay attention not just to what goals are achieved but also to how. If the culture is strong and supports high ethical standards, it should have a very powerful and positive influence on employee behaviour.

Principles for managers that encourage the development of an ethical culture include:

1. Be a Visible Role Model. When senior management is seen as taking the ethical highroad, it provides a positive behavioural guideline for all employees.

2. Communicate Ethical Expectations. The creation and use of an organizational code of ethics help reduce ethical ambiguities and enforce the organization's primary values.

3. Provide Ethical Training. Training acts to reinforce the organization’s standards of conduct, clarify ethical practices, and address possible ethical dilemmas.

4. Visibly Reward Ethical Acts and Punish Unethical Ones. Performance appraisals must include the means taken to achieve goals as well as the ends themselves. Review the means taken to achieve goals as well as the ends themselves. Visibly reward those who act ethically. Just as important, unethical acts should be conspicuously punished.

5. Provide Protective Mechanisms.  Organizations must create formal mechanisms that allow employees to discuss ethical dilemmas or report unethical behaviour without fear of reprimand (such as ethical counsellors, ombudsmen, or ethical officers) to facilitate the change to an ethical culture.

 SUMMARY

• Culture is recognised as a key success (or failure) factor in the achievement of the organisational mission and goals. Whether an organisational is perceived as being characterised by conflict or co-operation will reflect its climate.
  
• Culture tends to be an intangible that is not formally written down or even acknowledged. Climate is also intangible but may be experienced in the degree to which the organisation is seen as friendly or formal.
  
• Culture is a mixture of rules, accepted modes of conduct, values, customs and relationships that together provide a unique and distinctive "feel" for an organisation. Climate is important in terms of achieving goals or accepting necessary change.
• New recruits will be socialised by learning the norms and values to which they are expected to adhere. Organisational climate will also be conditioned by the degree of concern for the welfare of employees.