Organizational culture is quite complex. Every company has its unique personality, just like people do. The unique personality of an organization is referred to as its culture.
In groups of people who work together, organizational culture is an invisible but powerful force that influences the behavior of the members of that group.
There seems to be wide agreement that organizational culture refers to a shared meaning shared by members that distinguish the organization from other organizations.
Organizational culture is a system of shared assumptions, values, and beliefs, which govern how people behave in organizations. 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.
These shared values strongly influence the people in the organization and dictate how they dress, act, and perform their jobs.
Every organization develops and maintains a unique culture, which provides guidelines and boundaries for the behavior of the members of the organization.
Organizational culture/corporate culture includes-
- The ways the organization conducts its business, treats its employees, customers, and the wider community,
- The extent to which freedom is allowed in decision making, developing new ideas, and personal expression,
- How power and information flow through its hierarchy, and
- How committed employees are towards collective objectives.
Many Scholars have given the definition of organizational culture. Some of the popular definitions are given below:
According to Robbie Katanga, “Organizational Culture is how organizations do things.”
According to Alec Haverstick, “In large part, Organizational culture is a product of compensation.”
According to Bruce Perron, “Organizational culture defines a jointly shared description of an organization from within.”
According to Richard Perrin, “Organizational culture is the sum of values and rituals that serve as a glue to integrate the organization’s members.”
According to Alan Adler, “Organizational culture is civilization in the workplace.”
According to Elizabeth Skringar, “Organizational culture is shaped by the main culture of the society we live in, albeit with greater emphasis on particular parts of it.”
According to Abdi Osman Jama, “An organization is a living culture that can adapt to the reality 4s fast as possible.”
Organizational culture 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.
It also extends to production methods, marketing and advertising practices, and new product creation.
Organizational culture is unique for every organization and one of the hardest things to change. Corporate culture reflects the values, beliefs, and attitudes that permeate a business.
Corporate culture is often referred to as “the character of an organization,” representing the collective behavior of people using common corporate vision, goals, shared values, attitudes, habits, working language, systems, and symbols.
Corporate culture is interwoven with processes, technologies, learning, and significant events. It is a total sum of the values, customs, traditions, and meanings that make a company unique.
Characteristics of Organizational Culture
As individuals come into contact with organizations, they come into contact with dress norms, stories people tell about what goes on, the organization’s formal rules and procedures, its formal codes of behavior, rituals, tasks, pay systems, jargon, and jokes only understood by insiders and so on.
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.
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.
Characteristics of organizational culture are;
- Innovation (Risk Orientation).
- Attention to Detail (Precision Orientation).
- Emphasis on Outcome (Achievement Orientation).
- Emphasis on People (Fairness Orientation).
- Teamwork (Collaboration Orientation).
- Aggressiveness (Competitive Orientation).
- Stability (Rule Orientation).
Let’s examine each of these seven characteristics.
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 they have been trained, 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, and 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 emphasize 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 characteristics.
Emphasis on People (Fairness Orientation)
Companies that place a high value on this characteristic of organizational culture place great 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 the 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 easygoing when dealing with companies they compete with within the marketplace.
Companies with an aggressive culture place a high value on competitiveness and outperform the competition at all costs.
Stability (Rule Orientation)
A company whose culture 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.
These are the seven characteristics that are common in the context of organizational culture.
Of course, it is true that the characteristics are not the same in all times and spheres.
Roles of Organizational Culture
Culture plays an important role in organizations. Some organizations that developed a strong corporate culture increased their goodwill and got a good position in the market.
The various roles of organizational culture are given below:
- Culture unites (brings together) employees by providing a sense of identity with the organization.
- An informal control mechanism.
- Facilitation of open communication.
- Culture enables organizations to differentiate themselves from one another.
- Culture often generates commitment, superseding personal interests.
- Culture sets organization norms, rules, and standards. Thereby, culture enables employees to function in an organization, by teaching them how to behave.
- A shared understanding.
- Culture becomes especially important in a program/project-based organization. In such an organization, the hierarchy is flat and decision-making is moved to the project/program purpose units and departments. In this context, culture provides the guiding light towards the achievement of goals and objectives.
- Enhanced mutual trust and cooperation.
- Fewer disagreements and more efficient decision-making processes.
- A strong sense of identification.
- Assisting employees in making sense of their behaviors by providing justification for behaviors.
Types of Organization Culture
The practices, principles, policies, and values of an organization form its culture.
The culture of an organization decides the way employees behave amongst themselves and the people outside the organization.
Let us understand the various types of organizational culture:
- Normative culture,
- Pragmatic culture,
- Academy Culture,
- Baseball Team Culture,
- Club Culture,
- Fortress Culture,
- Tough Guy Culture,
- Bet your Company culture,
- Process Culture,
- Power Culture,
- Role Culture,
- Task Culture,
- Person Culture.
In such a culture, the norms and procedures of the organization are predefined, and the rules and regulations are set as per the existing guidelines.
The employees behave in an ideal way and strictly adhere to the policies of the organization. No employee dares to break the rules and sticks to the already laid policies.
In a pragmatic culture, more emphasis is placed on the clients and the external parties. Customer satisfaction is the main motive of the employees in a pragmatic culture.
Such organizations treat their clients as Gods and do not follow any set rules. Every employee strives hard to satisfy his clients to expect maximum business from their side. ‘
Organizations following academy culture and hire skilled individuals.
The roles and responsibilities are delegated according to the employees’ background, educational qualification, and work experience. Organizations following academy culture are very particular about training the existing employees.
They ensure that various training programs are being conducted at the workplace to hone the employees’ skills.
The management makes sincere efforts to upgrade the knowledge of the employees to improve their professional competence. The employees in an academy culture stick to the organization for a longer duration and also grow within it.
Educational institutions, universities, hospitals, etc., practice such types of culture.
Baseball Team Culture
A baseball team culture considers the employees as the most treasured possession of the organization. The employees are the true assets of the organization who have a major role in its successful functioning.
In such a culture, the individuals always have an upper edge, and they do not bother much about their organization. Advertising agencies, event management companies, financial institutions follow such a culture.
Organizations following a club culture are very particular about the employees they recruit. The individuals are hired as per their specialization, educational qualification, and interests.
Each one does what he is the best. The high potential employees are promoted suitably and appraisals are a regular feature of such a culture.
There are certain organizations where employees are not very sure about their career and longevity. Such organizations follow a fortress culture.
The employees are terminated if the organization is not performing well. Individuals suffer the most when the organization is at a loss. Stockbroking industries follow such a culture.
Tough Guy Culture
In a tough-guy culture, feedbacks are essential. The performance of the employees is reviewed from time to time, and their work is thoroughly monitored.
Team managers are appointed to discuss queries with the team members and guide them whenever required. The employees are under constant watch in such a culture.
Bet your Company Culture
Organizations that follow bet your company culture take decisions that involve a huge amount of risk and the consequences are also unforeseen.
The principles and policies of such an organization are formulated to address sensitive issues, and it takes time to get the results.
As the name suggests, the employees in such a culture adhere to the processes and procedures of the organization.
Feedbacks and performance reviews do not matter much in such organizations. The employees abide by the rules and regulations and work according to the ideologies of the workplace. All government organizations follow such a culture.
Charles Handy, a leading authority on organizational culture, defined four different kinds of culture:
- Power culture
- Role culture
- Task culture
- Person culture
In an organization with a power culture, power is held by just a few individuals whose influence spreads throughout the organization. There are few rules and regulations in a power culture.
What those with power decide is what happens. Employees are generally judged by what they achieve rather than how they do things or how they act.
A consequence of this can be quick decision-making, even if those decisions aren’t in the best long-term interests of the organization. A power culture is usually a strong culture, though it can swiftly turn toxic.
Organizations with a role culture are based on rules. They are highly controlled, with everyone in the organization knowing what their roles and responsibilities are.
Power in a role culture is determined by a person’s position (role) in the organizational structure. Role cultures are built on detailed organizational structures that are typically tall (not flat) with a long chain of command.
A consequence is that decision-making in role cultures can often be painfully-slow and the organization is less likely to take risks.
In short, organizations with role cultures tend to be very bureaucratic.
Task culture forms when teams in an organization are formed to address specific problems or progress projects.
The task is important, so power within the team will often shift depending on the mix of the team members and the status of the problem or project.
Whether the task culture proves effective will largely be determined by the team dynamic. With productive and creative, the right mix of skills, personalities, and leadership, working in teams.
In an organization with personal cultures, individuals very much see themselves as unique and superior to the organization. The organization simply exists in order for people to work.
An organization with a person’s culture is really just a collection of individuals who happen to be working for the same organization.
How Organizational Cultures Start
Some organizational cultures may be the direct, or at least indirect, result of actions taken by the founders.
However, this is not always the case.
Sometimes founders create weak cultures, and if the organization is to Survive, a new top manager must be installed who will show the seeds for the necessary strong culture.
Although organizational cultures can develop in a number of different ways, the process usually involves some version of the following steps:
- A single person (founder) has an idea for a new enterprise.
- The founder brings in one or more other people and creates a core group that shares a common vision with the founder. That is, all in this core group believe that the idea is a good one, is workable, is worth running some risks for, and is worth the investment of time, money, and energy that will be required.
- The founding core group begins to act in concert to create an organization by raising funds, obtaining patents, incorporating, locating space, building, and so on.
- At this point, others are brought into the organization, and a common history begins to be built.
- Most of today’s successful corporate giants in all industries basically followed these steps.
High vs. Low-Context Culture
The concept of high- and low-context culture relates to how an employee’s thoughts, opinions, feelings, and upbringing affect how they act within a given culture.
North America and Western Europe are generally considered to have low-context cultures. Low-context culture means that businesses in these places have direct, individualistic employees who tend to base decisions on facts.
This type of businessperson wants specifies noted in contracts and may have issues with trust.
High-context cultures are the opposite in that trust is the most important part of business dealings. There are areas in the Middle East, Asia, and Africa that can be considered the high context.
Organizations that have high-context cultures are collectivist and focus on interpersonal relationships. Individuals from high-context cultures might be interested in getting to know the person they are conducting business with in order to get a gut feeling on decision making.
They may also be more concerned about business teams and group success rather than individual achievement.
Ways of Managing Organizational Culture
We highlighted in our last post that there are plenty of frameworks for managing strategy, talent, leadership, and performance, but not culture.
Culture has been this elusive, mysterious subject.
Survey action plans, engagement events or programs, and other improvements fall short of building a strong culture foundation the entire organization can understand and manage with clarity and speed.
Most leaders of successful cultures learn from experience and other mentors, peers, or experts, how to piece together their improvement approaches because there isn’t a clear guide to follow.
While some guides exist, they are not broadly known and applied like other improvement disciplines.
Every organization that excels at the building, reinforcing, and leveraging its unique culture in support of delivering sustainable performance has built a strong “culture foundation.”
Steps of managing organizational culture;
- Evaluate your current culture and performance,
- Clarify your initial vision.
- Clarify values and expected behaviors.
- Clarify strategic priorities.
- Engage your team in defining SMART goals.
- Clarify and track key measures,
- Maintain a management system for priorities and goals.
- Manage communication habits and routines.
- Build motivation throughout the process.
Step 1 – Evaluate your current culture and performance.
- Define your 1-3 critical performance priorities – e.g., growth, profitability, customer satisfaction, etc.;
- identify your 3-5 value/behavior strengths and
- identify no more than 1-3 value/behavior weaknesses that are holding back your organization from achieving its full potential with the performance priorities you defined.
Step 2 – Clarify your initial vision.
Define your vision for improving results with only one or two of the performance priorities from step No. 1 and how you will build a culture advantage by leveraging the value/behavior strengths and improving the weaknesses.
Clearly, communicate how you will work together to improve the weak areas since they are holding your organization back from supporting your purpose and stakeholders.
Step 3 – Clarify values and expected behaviors.
Define supporting expected behaviors for the 1-3 weaknesses that you identified in step #1.
These behaviors would be consistently exhibited in your organization if you were “living your values.” People interpret values from their own perspective so define expected behaviors like Zappos, The Container Store, and others.
Step 4 – Clarify strategic priorities.
Define and clearly share the 3-5 actionable strategic priorities that your organization will focus on to support the 1-2 performance priorities included in your initial vision from the Define steps.
If the performance priority is growth, will it be achieved through new products or services, revised sales strategies, growth with current customers, or other strategies.
Employees want and need to understand the big picture.
Step 5 – Engage your team in defining SMART goals.
Engage your organization and utilize extensive feedback and prioritization to define the objectives that support each strategic priority. These goals need to define in a way to support the expected behaviors for the 1-2 weaknesses you identified from the Define steps.
For example, if accountability is a weakness, goals should include more disciplined plans, measures, reviews, recognition, and other approaches to support the behavior you need.
Goals also need translating to all levels in larger organizations so people understand how to work on their goals and measures impacts the broader organization.
Step 6 – Clarify and track key measures.
Identify a small number of overall measures that support one or two top performance priorities from the Define steps. It may help to have one highly visible “unifying metric” even if some employees don’t directly influence it.
Step 7 – Maintain a management system for priorities and goals.
Most organizations have a system to track or monitor the status of priorities and goals. These reviews need adjusting to focus additional time and attention on the top performance priorities and value/behavior shifts identified in the Define steps.
The focus must be on results and supporting the behavior shift through recognition, coaching, removing barriers, etc.
Step 8 – Manage communication habits and routines.
Transparent, genuine, and consistent communication is needed about your performance improvement journey and the role of culture, so all employees feel part of the process.
Regularly scheduled sessions with two-way communication and extensive informal approaches are needed to emphasize expected behaviors and results. Use these sessions to clarify plans, answer questions, expose rumors and reduce drama.
Step 9 – Build motivation throughout the process.
Feedback and recognition are critical to the process.
Share and celebrate progress in a transparent manner as a standard part of regular communication activities. Confront reality when improvements don’t go as planned and re-engage your team to prioritize adjustments.
Guidelines for Changing Culture
Despite the significant barriers and resistance to change, organizational cultures can be managed and changed over time. This attempt to change the culture “can take many different forms.
The organizations and managers in global relations “must learn to communicate across the cultural divide; each must understand that the other perceives and interacts in a fundamentally different way.
Three-fourths of companies believe their alliances failed because of an incompatibility of the country and corporate cultures. Simple guidelines such as the following can be helpful;
- Assess the current culture.
- Set realistic goals that impact the bottom line.
- Recruit outside personnel with industry experience so that they can interact well with the organizational personnel.
- Make changes from the top down so that a consistent message is delivered from all management team members.
- Include employees in the culture change process, especially when making changes in rules and processes.
- Take out all trappings that remind the personnel of the previous culture.
- Expect to have some problems and find people who would rather move than change with the culture and, if possible, take these losses early.
- Move quickly and decisively to build momentum and defuse resistance to the new culture.
- Stay the course by being persistent.
Also, organizations attempting to change their culture must be careful not to abandon their roots and blindly abandon their core but distinctive competencies.
Cultural Variables (Identified by Harris and Moran)
Culture, therefore, is a moral, intellectual, and spiritual discipline for advancement in accordance with the norms and values based on accumulated heritage.
It is a system of learned behavior shared by and transmitted among the members of the group. There are so many cultural variables that Harris and Moran identified.
A kinship system is a system adopted by a given society to guide family relationships.
The formal or informal education of workers in a foreign firm, received from whatever source, greatly affects the expectations placed on those workers in the workplace. ‘
Whatever the economic system, the means of production and distribution (and the resulting effects on individuals and groups) have a powerful influence on such organizational processes as sourcing, distribution, incentives, and repatriation of capital.
The system of government in a society, whether democratic, Communist, or dictatorial, imposes varying constraints on an organization and its freedom to do business. ”
The spiritual beliefs of a society are often so powerful that they transcend other cultural aspects.
Many types of associations arise out of the formal and informal groups that make up a society.
The health care system in a country affects employee productivity, expectations, and attitudes toward physical fitness and its role in the workplace.
Closely related to other cultural factors, recreation includes how people use their leisure time, as well as their attitudes toward leisure and their choice of whom to socialize with.
It is a Collective heritage learned by individuals and parsed from one generation to another.
The individual receives culture as part of the social heritage and may reshape the culture and introduce changes that then become part of the heritage of succeeding generations.
Ways of Creating Customer Responsive Organizational Culture
The reason an organization can deliver good or bad customer service comes down to one thing; what is happening on the inside of that organization.
To sum it up in one word; culture. The culture inside of the organization is impacting customer service.
It’s more than just hiring the right people, and it’s more than customer service training.
At the same time, it’s simple. It’s just setting an example of customer service behavior at the top and pushing its way, through all employees, toward the customer.
Starting at the top means that leadership and management must set the tone.
Then, they must practice what they preach. They must treat employees like they want the customer treated – even better, just, to accentuate the point.
This is where the customer-focused culture begins, and it starts with people who want to do the right thing.
We can layer on customer service training that focuses on creating a fantastic place to work from that point.
Here are the ways that you can create a customer-responsive organizational culture:
- Management must measure service quality and feedback from the customer, a basic part of everyone’s work experience. This information must be available and understood by everyone, no matter what their level. The entire organization must become obsessed with what the customer wants.
- Be very clear about specifying the behavior that employees are expected to deliver, both with external customers and their coworkers.
- Explain why giving excellent customer service is important not only for the company but for the world. What does your company do that makes life easier for everyone? What does your product or service add? Be sure to include this in the reasons for achieving customer service excellence.
- Create ways to communicate excellent examples of customer service both within and outside the company. Institute celebrations, recognition ceremonies, logos, and symbols of the customer service culture and its values. This is where you want the mugs, buttons, and banners. Have a customer service bulletin board to feature special service incidents. Seize every opportunity to publicize the times when employees do it right.
- Indoctrinate and train everyone in the culture as soon as they are hired. It puts all newcomers through a “traditions” course that details the company history with customer relations.
- Encourage a sense of responsibility for group performance. Help employees see how their performance affects others. Emphasize the importance of “internal customer service.”
- Establish policies that are “customer-friendly” and that show concern for your customers. Eliminate all routine and rigid policies and guidelines. ‘
- Remove any employees who do not show the behavior necessary to please customers. Too many companies allow frontline service representatives to remain on the job when they are not suited to a customer service position.
In order for a culture of customer service excellence to grow and thrive, management must have a burning desire for it to be that way and the energy to ensure that this desire spreads throughout the organization and remains there permanently.
How to Keep the Culture Alive in your Organization?
Once a culture is in place, there are practices within the organization that act to maintain it by giving employees a set of similar experiences.
Some important practices which help to sustain the culture strengthening organizational culture are as depicted in the following diagram:
The first such practice is the careful selection of candidates.
Standardized procedures should be used to hire the right people for the right jobs. Trained personnel interview the candidates and attempt to screen out those whose personal styles and values do not fit with the organization’s culture.
By identifying the candidates who can culturally match the organizational culture, selection helps sustain culture to a large extent.
Additionally, the selection process provides the applicants’ information about the organizational culture.
If the applicants perceive a conflict between their values and the organization’s values, they can themselves decide not to join the organization.
The actions of top management also have a major impact on the organization’s culture.
Through what they say, how do they behave, senior executives, establish norms that filter through the organization as to whether risk-taking is desirable, how much freedom managers should give to their subordinates, what is the appropriate dress code, what actions will pay off in terms of pay raise, promotions, and other rewards and the like.
The organization may have done a very good job in recruiting and selecting the employees, but sometimes the employees are still not indoctrinated in the organization’s culture.
Since these persons are not familiar with the organization’s culture, they are most likely to disturb the existing beliefs and customs of the organization.
Therefore, the organization needs to help new employees adapt to its culture. This adaptation process is called ‘Socialization.’