Organizational culture

"Business culture" redirects here. For other uses, see Culture.

Organizational culture refers to culture related to organizations including schools, universities, not-for-profit groups, government agencies, or business entities. Alternative terms include corporate culture and company culture. The term corporate culture emergedin the late 1980s and early 1990s. Corporate culture was already used by managers, sociologists, and organizational theorists in the 1980s. The related idea of organizational climate emerged in the 1960s and 70s, and the terms somewhat overlap.

Organizational culture influences the way people interact, the context within which knowledge is created, the resistance they will have towards certain changes, and ultimately the way they share (or the way they do not share) knowledge.

Definition

Culture is the organization's immune system. – Michael Watkins

What Is Organizational Culture? And Why Should We Care? – Harvard Business Review

Historically investigators differed regarding the definition of organizational culture. Edgar Schein, a leading researcher in this field, defined "organizational culture" as including a shared "pattern of basic assumptions" that group members acquired over time as they learn to cope with internal and external organizationally relevant problems.

Elliott Jaques introduced the concept of culture in the organizational context in his 1951 book The Changing Culture of a Factory. The book was a published report of "a case study of developments in the social life of one industrial community between April, 1948 and November 1950". The "case" involved a publicly-held British company engaged principally in the manufacture, sale, and servicing of metal bearings. The study concerned itself with the description, analysis, and development of corporate group behaviors. According to Jaques, "the culture of the factory is its customary and traditional way of thinking and doing of things, which is shared to a greater or lesser degree by all its members, and which new members must learn, and at least partially accept, in order to be accepted into service in the firm".

Ravasi and Schultz (2006) characterized organizational culture as a set of shared assumptions that guide behaviors. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, thinking, and feeling. Thus organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. In addition, organizational culture may affect how much employees identify with an organization.

Schein (1992), Deal and Kennedy (2000), and Kotter (1992) advanced the idea that organizations often have differing cultures as well as subcultures. Although a company may have a "unique culture", in larger organizations co-existing or conflicting subcultures may exist because each subculture is linked to a different management team. Flamholtz and Randle (2011) suggest that one can view organizational culture as "corporate personality". They define it as it consisting of the values, beliefs, and norms which influence the behavior of people as members of an organization.

Ravasi and Schultz (2006) and Allaire and Firsirotu (1984) claim that organizational culture represents the collective values, beliefs and principles of organizational members. It may be influenced by factors such as history, type of product, market, technology, strategy, type of employees, management style, and national culture. Culture includes the organization's vision, values, norms, systems, symbols, language, assumptions, environment, location, beliefs and habits. Gallup finds that just 22% of U.S. employees feel connected to their organization's culture.

Sagiv (2011) and Dwyer (1997) noted that it is a matter of caring about the same things, and it applies to nations as well as to groups within nations.

Elaborating on the work in The Changing Culture of a Factory, Jaques said "Here is a list of valued entitlements that can reach the hearts of people, and gain from them their full commitment. Together they make up an organizational credo." This concept of requisite organization established a list of organizational values that can gain commitment Together they make an organizational culture or credo:

These general values are reflected in a specific valuing of:

• Work for everyone at a level consistent with their level of capability, values and interests
• Opportunity for everyone to progress as his or her potential capability matures, within the opportunities available in the organization
• Fair and just treatment for everyone, including pay and merit recognition related to personal effectiveness
• Leadership interaction between managers and subordinates, including context, personal effectiveness appraisal, feedback and recognition, and coaching
• Clear articulation of accountability and authority to engender trust and confidence in working relationships
• Articulation of long-term organizational vision through direct communication from the top
• Opportunity for everyone individually or through representatives to participate in policy development

The role of leadership at every level is the means of making these values real.

New members of an organization integrate via organizational assimilation.

Oleksandr Babych defined corporate culture as a background activity that can strengthen organizational effectiveness. depending on the controllability of the values of the organization. This background includes a set of collective basic beliefs of the participants of the organization.

Organizational culture and climate may be erroneously used interchangeably. Organizational culture has been described as an organization's ideals, vision, and mission, whereas climate is better defined as employees' shared meaning related to the company's policies and procedures and reward/consequence systems. Many factors, ranging from depictions of relative strength to political and national issues, can contribute to the type or types of culture that can be observed in organizations and institutions of all sizes. Below are examples of organizational culture types.

Janis defined groupthink as "a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members' strivings for unanimity override their motivation to realistically appraise alternative courses of action." This is a state in which even if group members have different ideas, they do not challenge the group. As a result, innovative thinking is stifled. Groupthink can lead to lack of creativity and decisions made without critical evaluation. Hogg and separately Deanne et al. stated that groupthink can occur, for example, when group members rely heavily on a charismatic figure or where members evince an "evangelical" belief in the organization's values. Groupthink can also occur in groups characterized by a friendly climate conducive to conflict avoidance.

Hofstede defined organizational culture as "the collective programming of the mind which distinguishes the members of one organization from another."

Deal and Kennedy defined organizational culture as the way things get done around here.

Typology

Strong or weak

One scheme divides cultures into strong and weak. A strong culture is characterized by reinforcing tools such as ceremonies and policies to instill and spread it. It emphasizes employees and employee performance, as well as group conformity. It focuses on high-performance and applies constructive pressure. Such actions positively influence behavior.

Flamholtz and Randle state that: "A strong culture is one that people clearly understand and can articulate. A weak culture is one that employees have difficulty defining, understanding, or explaining." Weak culture creates little alignment, so that control must be exercised through explicit procedures and bureaucracy.

Researchers generally report that organizations having strong cultures are more successful.

Claimed benefits from strong cultures:

• Better align the company with its vision, mission, and goals
• Higher employee motivation and loyalty
• Increased team cohesiveness
• Increased consistency, coordination and control
• Improved employee behavior, increasing efficiency

Performance-oriented

Performance oriented cultures achieve statistically better financial results. Such cultures feature high employee involvement, strong internal communications and an acceptance and encouragement of a healthy level of risk-taking.

Adaptive

Kotter and Heskett define an adaptive culture as characterized by managers who pay close attention to their constituencies, especially customers, initiating change when needed, and taking risks. Organizations with adaptive cultures perform better than organizations with unadaptive cultures.

Healthy

Healthy companies deal with employees' concerns about the well-being of the organization internally. Whistleblowing, particularly when it damages a company's reputation, is considered to be a sign of a dysfunctional corporate culture.

Bullying

Main articles: Bullying culture and Workplace bullying

A bullying culture exists when higher status individuals bully those of lower status is accepted. This generally requires the support or at least forbearance of company leaders.

Bullying has been seen to cascade down the organizational hierarchy as bullied supervisors might in turn bully their subordinates.

National

Organizational culture is used to control, coordinate, and integrate distinct groups across the organization. Differences in national cultures must be addressed. Such differences include organizational structure and manager/employee relationships.

Communication

Among the many types of communication that support organizational culture are:

• Metaphors such as comparing an organization to a machine or a family.
• Stories
• Rites and ceremonies:
  • Rites of passage: employees move into new roles
  • Rites of humiliation: employees have power taken away from them
  • Rites of enhancement: recognition for accomplishments
  • Rites of renewal: strengthen existing social structures
  • Rites of conflict reduction: resolve arguments
  • Rites of integration: strengthen ties across individuals and groups
• Reflexive comments, explanations, justifications, and criticisms of actions:
  • Plans: comments about anticipated actions
  • Commentaries: comments about action in the present
  • Accounts: comments about an action or event that has already occurred

Effects

Research suggests that numerous outcomes have been associated either directly or indirectly with organizational culture. A healthy and robust organizational culture offers various benefits, including:

• Competitive edge derived from innovation and customer service
• Consistent, efficient employee performance
• Team cohesiveness
• High employee morale
• Strong company alignment towards goal achievement
• Information security-compliant culture and employee compliance

A 2003 Harvard Business School study reported that culture has a significant effect on an organization's long-term economic performance. The study examined the management practices at 160 organizations over ten years and found that culture can enhance or damage performance. Performance-oriented cultures experienced better financial results. Additionally, a 2002 Corporate Leadership Council study found that cultural traits such as risk taking, internal communications, and flexibility are important drivers of performance. Furthermore, innovativeness, productivity through people, and other cultural factors cited by Peters and Waterman (1982) also have positive economic consequences.

Denison, Haaland, and Goelzer (2004) found that culture contributes to the success of the organization, but not all dimensions contribute the same. It was found that the effects of these dimensions differ by global regions, which suggests that organizational culture is affected by national culture. Additionally, Clarke (2006) found that a safety climate is related to an organization's safety record.

Organizational culture is reflected in the way people perform tasks, set objectives, and administer the necessary resources to achieve objectives. Culture affects the way individuals make decisions, feel, and act in response to the opportunities and threats affecting the organization.

Adkins and Caldwell (2004) found that job satisfaction was positively associated with the degree to which employees fit into both the overall culture and subculture in which they worked. A perceived mismatch of the organization's culture and what employees felt the culture must be is related to a number of negative consequences including lower job satisfaction, higher job strain, general stress, and turnover intent.

It has been proposed that organizational culture may affect the level of employee creativity, the strength of employee motivation, and the reporting of unethical behavior, but more research is needed to support these conclusions.

Organizational culture also affects recruitment and retention. Individuals tend to be attracted to and remain engaged in organizations that they perceive to be compatible. Additionally, high turnover may be a mediating factor in the relationship between culture and organizational performance. Deteriorating company performance and an unhealthy work environment are signs of an overdue cultural assessment.

Moreover, organizational culture also has an effect on knowledge sharing. Succeeding in knowledge transfer is highly dependent on an organizational culture that fosters, adopts and utilizes knowledge-transfer processes.Also, studies in transportation organizations (e. g. bus organizations) showed that organizational culture has an effect on road traffic crashes.

Change

Rationale

Culture change may be necessary to reduce employee turnover, influence employee behavior, make improvements to the company, reset company objectives, rescale the organization, and/or achieve specific results.

Stages

Organizational cultures have been reported to change in stages. One group proposed five stages:

• Life sucks (a subsystem severed from other functional systems like tribes, gangs and prison—2 percent of population);
• My life sucks (I am stuck in the Dumb Motor Vehicle line and can't believe I have to spend my time in this lost triangle of ineffectiveness—25 percent of population);
• I'm great (and you're not, I am detached from you and will dominate you—48 percent of population);
• We are great, but other groups suck (unification around more than individual competence—22 percent of population) and
• Life is great (3 percent of population).

Obstacles

Existing organizational culture can hinder change efforts, especially where employees know the roles that they are supposed to play. Mar claimed that 70% of all change efforts fail because of the employees. Organizational culture, and the structures in which they are embedded, often exhibit remarkable inertia.

Methods

Change methodologies include Peter Senge's The Fifth Discipline concept of a "learning organization" or Directive Communication's "corporate culture evolution".

Burman and Evans claim that 'leadership' drives culture rather than 'management'. Changing an aspect of culture takes time. Members need time to get used to the new ways. Organizations with a strong and specific culture are harder to change.

Prior to a cultural change initiative, a needs assessment canidentify and understand the existing culture. This involves some mixture of employ surveys, interviews, focus groups, observation, customer surveys, and other internal research. The company must then assess and clearly identify the new, desired culture, and then design a change process.

Cummings and Worley offer six guidelines for cultural change, in line with the eight distinct stages mentioned by Kotter.

1. Formulate a strategic vision (stage 1, 2, and 3). A clear vision of the firm's new strategy, shared values and behaviors provides the intention and direction for the culture change.
2. Display top-management commitment (stage 4). It is very important to keep in mind that culture change must be managed from the top of the organization, as willingness to change of the senior management is an important indicator. The top of the organization must be very much in favor of the change in order to actually implement the change in the rest of the organization. De Caluwé & Vermaak (2004, p 9) provide a framework with five different ways of thinking about change.
3. Model culture change at the highest level (stage 5). In order to show that management wants the change, the change has to be notable at this level. Management behavior needs to express the values and behaviors to be realized. It is important that management acknowledges the strengths of the current culture; it must be made clear that the culture needs adjustments rather than radical changes. This process may include creating committees, employee task forces, or value managers. Change agents are key communicators of the new culture. They must embody courage, flexibility, interpersonal skills, organization knowledge, and patience. These individuals must be catalysts, not dictators.
4. The fourth step is to modify the organization to support change. This includes identifying systems, policies, procedures and rules that need to change to align with the desired culture. This may include changes to accountability systems, compensation, benefits/reward structures, and recruitment and retention programs.
5. Select and socialize newcomers and expel deviants. A way to implement a culture is to connect it to organizational membership, people can be selected and terminated in terms of their fit with the new culture. Encouraging employee motivation and loyalty to the company is key and creates a healthy culture. Change managers must be able to connect the desired behavior and organizational success. Training must be provided to employees.
6. Develop ethical and legal sensitivity. Changes in culture can lead to tensions between organizational and individual interests, which can create legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security. It is also beneficial to include an evaluation process to monitor the changeprogress and identify areas that need further development. This step also surfaces obstacles and resistant employees, and acknowledges and rewards improvement, which encourages change. It may be necessary to incorporate new change managers. Outside consultants may be useful. People often resist change, leaving it to management to convince people that gains will outweigh losses. Besides institutionalization, deification is another process that tends to occur in strong cultures. The organization may come to be regarded as a source of pride, and even unique. The organization's members develop a strong bond that transcends material returns, and begin to identify with it. The organization turns into a sort of clan.

Mergers and cultural leadership

Organizational culture is one of the biggest obstacles to merging organizations. Each organization has its own culture that typically clash. Failed mergers may found over issues such as identity, communication problems, human resources, ego clashes, and inter-group conflicts, which all fall under the category of "cultural differences".

Leadership is one way to combat such difficulties. Leaders must help facilitate the change from the two old cultures into the one new culture. This is done through innovation followed by maintenance.

• Cultural innovation includes:
  • Creating a new culture: recognizing past cultural differences and setting realistic expectations for change
  • Changing the culture: weakening and replacing the old cultures
• Cultural maintenance includes:
  • Integrating the new culture: reconciling the differences between the old cultures and the new one
  • Embodying the new culture: Establishing, affirming, and keeping the new culture

Subcultures

Groups within the organization may have their own subcultures. Harrison's four-culture typology, adapted by Handy, states that unlike organizational culture, corporate culture can be 'imported'. For example, computer technicians will have expertise, language and behaviors gained independently of the organization, but their presence can influence the culture of the organization as a whole.

Shadow side

Egan and Tate speak of organizations having a "shadow side", which Egan defined as:

All those things that substantially and consistently affect the productivity and quality of the working life of a business, for better or worse, but which are not found on organisation charts, in company manuals, or in the discussions that take place in formal meetings.

Tate describes the shadow side as the "often disagreeable, messy, crazy and opaque aspects of [an] organisation's personality".

Legal liability

In the US, corporate culture can legally be found to be a cause of injuries and a reason for fining companies, such as when the US Department of Labor Mine Safety and Health Administration levied a fine of more than US$ 10.8 million on Performance Coal Co. following the Upper Big Branch Mine disaster in April 2010. This was the largest fine in the history of this U.S. government agency.

Research and models

Several methods have been used to classify organizational culture. While there is no single "type" of organizational culture and organizational cultures vary widely across organizations, researchers have developed models to describe different indicators of organizational cultures. Some are described below:

Cultural dimensions

Main article: Hofstede's cultural dimensions theory

Hofstede looked for differences between over 160 000 IBM employees in 50 countries and three regions of the world, in an attempt to find aspects of culture that influence business behavior. He emphasized the awareness of international differences and multiculturalism. Cultural differences reflect differences in thinking and social action, and in "mental programs", a term Hofstede uses for predictable behavior. Hofstede relates culture to ethnic and regional differences, but also to the influence of organizations, professional, family, social and subcultural groups, national political systems, and legislation.

Hofstede suggests that changing "mental programs" involves changing behavior first, which then leads to value change. Though certain groups like Jews and Gypsies have maintained their identity through centuries, their values show adaptation to the dominant cultural environment.

Hofstede demonstrated that there are national and regional cultural groupings that affect the behavior of organizations and identified four dimensions of culture (later five) in his study of national cultures:

• Power distance – Societies adopt different approaches to social inequality. Although invisible, inside organizations power inequality of the "boss-subordinate relationships" is functional. "According to Mulder's Power Distance Reduction theory subordinates will try to reduce the power distance between themselves and their bosses and bosses will try to maintain or enlarge it", but societies expect differences in power levels to exist.
• Uncertainty avoidance is a way of coping with uncertainty about the future. Society copes using technology, law and religion/ritual, along either a rational (technology, law) or non-rational (religion/ritual). Hofstede cites rituals including memos and reports, some parts of accounting systems, parts of planning and control systems, and the invocation of experts.
• Individualism vs. collectivism – disharmony of personal and collective interests. Hofstede raises the idea that society's expectations of Individualism/Collectivism are reflected by employees inside the organization. Collectivist societies have more emotional dependence on members in their organizations; when in equilibrium an organization is expected to show responsibility to members. Individualist societies more often expect self-reliance. Some cultures have features of both.

• Masculinity vs. femininity – reflects whether a certain society emphasizes stereotypical male or female cultural values, gender roles and power relations.
• Long- versus shortt-term orientation – "The long-term orientation dimension can be interpreted as dealing with society's search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute Truth. They are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results. In societies with a long-term orientation, people believe that truth depends very much on situation, context and time. They show an ability to adapt traditions to changed conditions, a strong propensity to save and invest, thriftiness, and perseverance in achieving results."

These dimensions characterize the effect of national cultures on management, and can be used to adapt policies to local needs. In a follow-up study, Soeters and Schreuder used Hofstede's dimensions to study the interaction between national and organizational cultures in accounting firms.

Organizational Cultural Profile

O'Reilly, Chatman and Caldwell developed a model based on the belief that cultures can be distinguished by values. Their Organizational Cultural Profile (OCP) is a self-reporting tool that distinguishes eight categories:

• Innovation
• Supportiveness
• Stability
• Respect for People
• Outcome Orientation
• Attention to Detail
• Team Orientation
• Aggressiveness.

The model can measure how culture affects performance, as it discerns persons most suited to an organization and as such organizations can be termed as having an effective culture. Takeda explained that such model can measure both person-situation fit and person-culture fit. Such measurements assess the level of  compatibility between employees and companies (culture). Employee values are measured against organizational values to predict employee turnover.

Daniel Denison

Daniel Denison's model attempted to assess organizational culture by four dimensions. Each divides into three sub-dimensions:

• Mission – Strategic Direction and Intent, Goals and Objectives and Vision
• Adaptability – Creating Change, Customer Focus and Organizational Learning
• Involvement – Empowerment, Team Orientation and Capability Development
• Consistency – Core Values, Agreement, Coordination/Integration

It separately assesses cultures along the dimensions of external/internal focus and flexible/stable evolution. It has been typically used to diagnose cultural problems in organizations.

Deal and Kennedy

Deal and Kennedy hypothesized four different types of organizations. They each focus on how quickly the organization processes feedback, member rewards, and risk management:

• Work-hard, play-hard – Feedback: rapid; risk:low. Stress come from work quantity rather than uncertainty. High-speed action leading to high-speed recreation. Examples: Restaurants, software companies.
• Macho – Feedback: rapid; reward: rapid; risk:risk. Stress comes from risk and potential reward loss/gain. Short-term focus. Examples– police, surgeons, sports.
• Process culture – Feedback:slow; reward:slow; risk:low. Low stress, plodding work, comfort and security. Stress comes from internal politics and bureaucracy. Examples: banks, insurance companies.
• Bet-the-company culture – Feedback:slow; reward:slow; risk:high. Stress comes from high risk and long payoff intervals. Detailed long-term planning. Examples: aircraft manufacturers, oil companies.

Artifacts, values, and tacit assumptions

Schein claimed that culture is the most difficult organizational attribute to change, outlasting products, services, founders and leadership and all physical attributes. His model considers culture as an observer, characterized in terms of artifacts, values and underlying assumptions.

Schein's model considers attributes that can be experienced by the uninitiated observer – collectively known as artifacts. Included are facilities, offices, furnishings, visible awards and recognition, informal dress codes, member interactions with each other and with outsiders, and company slogans, mission statements and other creeds.

• Artifacts are physical elements that convey cultural meaning. Denison describes artifacts as the tangible aspects of culture shared by members of an organization. Verbal, behavioral and physical artifacts are the surface manifestations of organizational culture. Technology and art exhibited by members of an organization are examples of physical artifacts. Rituals (myths, stories, and sagas) are artifacts that convey organizational history and influence member understanding of values and beliefs.

• Values direct individual behavior such as loyalty and customer orientation. Acceptance of stated values underlies impressions about trustworthiness and supportiveness, while also informing member behavior. This can be studied by member interviews and surveys.

• Tacit assumptions are elements of culture that are not explicitly identified by members. Some assumptions may be taboo to discuss. Members may not even have conscious knowledge of them. Nevertheless, they can influence member behavior. Interviews and surveys do not reveal them—much more in-depth assessment is required. Many assessments do not dig that deep.

This model can enable understanding seemingly paradoxical behavior. For instance, an organization can profess highly aesthetic and moral standards in terms of values, while violating those values should they conflict with tacit assumptions. Notably, change agents who do not consider all three typically fail. Mere understanding may be insufficient to enable cultural change because the dynamics of interpersonal relationships (often under threatening conditions) are added to the dynamics of organizational culture while attempts are made to institute desired change.

External adaptation and internal integration

Schein claimed that the two main reasons why cultures develop in organizations are external adaptation and internal integration. External adaptation helps an organization to flourish by affecting its culture. An appropriate culture holds the potential for generating sustained competitive advantage over external competitors.

Internal integration is an important function for establishing essential social structures and aiding socialization at the workplace. Culture-shaping factors include:

• External environment
• Industry
• Size and nature of the organization's workforce
• Technologies the organization uses
• The organization's history and ownership

Organizational structure, organizational culture

Organizational structure is linked to organizational culture. The four types of culture are:

1. Power culture – concentrates power among a small group or a central figure and its control is radiating from its center like a web. Power cultures need only a few rules and little bureaucracy but swift in decisions can ensue.
2. Role culture – authorities are delegated as such within a highly defined structure. These organizations form hierarchical bureaucracies, where power derives from the personal position and rarely from an expert power. Control is made by procedures (which are highly valued), strict roles descriptions and authority definitions. These organizations have consistent systems and are very predictable. This culture is often represented by a "Roman Building" having pillars. These pillars represent the functional departments.
3. Task culture – teams are formed to solve particular problems. Power is derived from the team with the expertise to execute against a task. This culture uses a small team approach, where people are highly skilled and specialized in their own area of expertise. Additionally, these cultures often feature the multiple reporting lines seen in a matrix structure.
4. Person culture: formed where all individuals believe themselves superior to the organization. It can become difficult for such organizations to continue to operate, since the concept of an organization suggests that a group of like-minded individuals pursue organizational goals. However some professional partnerships operate well as person cultures, because each partner brings a particular expertise and clientele to the firm.

Cultural web

Johnson described a cultural web, identifying elements that can be used to describe/influence organizational culture:

• The paradigm – What the organization is about, what it does, its mission, its values.
• Control systems – Processes that monitor activity. Role cultures have vast rule-books. Power cultures rely on individualism.
• Organizational structure – Reporting lines, hierarchies, and the way that work flows through the organization.
• Power structures – Who makes the decisions, how widely spread is power, and on what is power based?
• Symbols – These include organizational logos and designs, but include symbols such as parking spaces and executive washroom keys.
• Rituals and routines – Management meetings, board reports and so on
• Stories and myths – about people and events, and convey values

These elements may overlap. Power structures may depend on control systems, which may exploit rituals that generate stories that may or may not be true.

Schemata

Schemata are knowledge structures derived from experience that simplify behavioral choices by providing a way to think events. Schemata are created through interaction with others.

Harris describes five categories of in-organization schemata necessary for organizational culture:

• Self-in-organization schema – individual self-concept relating to the organization, including personality, roles, and behavior
• Individual-in-organization schema – memories, impressions, and expectations of other individuals
• Organization schema – a subset of individual schema: generalized perspective on others
• Object/concept-in-organization schema – organizational aspects
• Event-in-organization schema – knowledge of social events

These schemata represent an individual's knowledge of the organization. Culture results when individual schemata become shared across an organization, primarily through organizational communication, reflecting shared knowledge and meaning.

Organizational Culture Assessment Instrument

Cameron and Quinn studied organizational effectiveness. They developed the Organizational Culture Assessment Instrument (OCAI) that distinguishes four culture types, based on the Competing Values Framework.

Competing values produce polarities such as flexibility vs. stability and internal vs. external focus – they reported them to be most important in organizational success. The polarities construct a quadrant with four types of culture:

Clans

Clan culture are internally focused and flexible. They produce a friendly workplace where leaders act paternally. Clan cultures are most strongly associated with positive employee attitudes and product and service quality. A core belief in clan cultures is that the organization's trust in and commitment to employees facilitates open communication and employee involvement.

Adhocracy

Adhocracy culture is externally focused and flexible. It offers a dynamic workplace with leaders who stimulate innovation.

Market

Market culture is externally focused and controlled. It produces a competitive workplace with hard driving leaders. Market cultures are strongly related to innovation and financial effectiveness. The primary belief underlying market cultures is that clear goals and contingent rewards motivate employees to perform.

Hierarchy

Hierarchy culture is internally focused and controlled. It offers a structured workplace where leaders act as coordinators.

Organizational Culture Inventory

Cooke defines culture as behaviors that members believe are required to fit in and meet expectations within their organization. The Organizational Culture Inventory measures twelve behavioral norms that are grouped into three general types of cultures:

• Constructive cultures – Members are encouraged to interact with people and approach tasks in ways that help them meet their higher-order satisfaction needs.
• Passive/defensive cultures – Members believe they must interact with people in ways that will not threaten their own security.
• Aggressive/defensive cultures – Members are expected to approach tasks forcefully to protect their status and security.

Constructive cultures

In constructive cultures, people are encouraged work as teams, rather than as individuals. In positions where people perform a complex task, rather than a simple one, this culture is efficient.

• Achievement – completing a task successfully, typically by effort, courage, or skill. Reflects the need for quality results on challenging projects. It requires the belief that outcomes are linked to effort rather than chance and the practice of personally setting challenging goals. This style involves planning, exploring alternatives before acting, and learning from mistakes.
• Self-actualizing – realization or fulfillment of talents and intentions. Reflects the need for personal growth, self-fulfillment and realization of potential. People with this style demonstrate a strong desire to learn and experience, pursue creative yet realistic thinking and reflect a balanced concern for people and tasks.
• Humanistic-encouraging – help others to grow and develop. Reflects interest in the growth and development of others, positive regard for and sensitivity to their needs. People with this style devote energy to coaching and counselling others, are thoughtful and considerate and provide people with support and encouragement.
• Affiliative – treat people as more valuable than things. Reflects interest in developing and sustaining relationships. People with this style share thoughts and feelings, are friendly and cooperative and engage others.

Organizations with constructive cultures encourage members achieve their potential, enhancing motivation, satisfaction, teamwork, service quality, and sales growth. Constructive norms are evident in environments where quality is valued over quantity, creativity over conformity, cooperation leads to better results than competition, and effectiveness is judged at the system level rather than the individual level. Such cultural norms are consistent with empowerment, total quality management, transformational leadership, continuous improvement, re-engineering, and learning organizations.

Passive/defensive cultures

In Passive/Defensive cultures, norms reflect expectations for members to interact with people in ways that will not threaten their own security.

The Passive/Defensive cultural norms are:

• Seeking approval
• Behaving according to Convention
• Dependency on systems/others
• Avoidance of conflict/risk

Members feel pressured to behave in ways that may not match their beliefs about how to be effective. People are expected to please others (particularly superiors) and avoid interpersonal conflict. Rules, procedures, and orders outweigh personal beliefs, ideas, and judgment. Unresolved conflict and turnover are prevalent, and organizational members report less motivation and satisfaction.

Aggressive/defensive cultures

In aggressive/defensive cultures more emphasis is placed on tasks than people. People focus on individual needs at the expense of the group. The aggressive/defensive style creates stress, and people using make decisions based on status as opposed to expertise.

• Oppositional – Presumes a need for security that involves behaving critically and cynically about irrelevant or trivial flaws. People are more likely to question others' work. However, asking tough questions can lead to a better product.
• Power – Presumes a need for prestige and influence. People may equate their self-worth and controlling others and to dictate to others rather than guiding them.
• Competitive – Presumes a need to protect one's status. People protect their own status by comparing themselves to other individuals and outperforming them. Those who use this style are seekers of appraisal and recognition from others.
• Perfectionistic – Presumes a need to attain flawless results. People equate their self-worth with high achievement, focusing on details while putting demands on themselves and others.

Organizations with such cultures encourage/require members to appear competent, controlled, and superior. Members who seek assistance, admit shortcomings, or concede their position are viewed as incompetent or weak. These organizations emphasize finding errors, weeding out "mistakes" and encouraging internal rather than external competition.

Reciprocity

Adam Grant, author of Give and Take, highlights norms of reciprocity in analyzing culture. He distinguishes giver, taker and matcher cultures.

• Givers – employees operate by "helping others, sharing knowledge, offering mentoring, and making connections without expecting anything in return"
• Takers – "get as much as possible from others while contributing less in return" and winners are those who take the most and are able to build their power even at the expense of others.
• Matchers – match giving with taking, and trade favours mostly in closed loops.

In a study on the US intelligence system, giver cultures had the greatest group effectiveness.

Frank claimed that "many organizations are essentially winner-take-all markets, dominated by zero-sum competitions for rewards and promotions". In particular, when leaders implement forced ranking systems to reward individual performance, giver cultures give way to taker or matcher cultures. Awarding the highest-performing individual within each team encourages a taker culture.

Entrepreneurial

McGuire's model predicts revenue from new sources. An Entrepreneurial Organizational Culture is a system of shared values, beliefs and norms, valuing creativity and tolerance, believing that innovating and seizing market opportunities are solutions to problems of survival and prosperity, environmental uncertainty, competition, and expects members to behave accordingly.

• People and empowerment focused
• Value creation through innovation and change
• Attention to the basics
• Hands-on management
• Doing the right thing
• Freedom to grow and to fail
• Commitment and personal responsibility
• Emphasis on the future

Financial impact

Flamholtz identified and validated a model of organizational culture components that drive financial results. The model defines five dimensions:

• treatment of customers
• treatment of people
• performance standards and accountability
• innovation and change
• process orientation.

Flamholtz reported on the impact of organizational culture on financial performance. Flamholtz claimed that organizational culture is an asset in the conventional accounting sense. Flamholtz and Randle reported on the evolution of organizational culture at different growth stages.

Variable, process

Smircich described two approaches to studying organizational culture: as a variable and as a process. The former could be external or internal, encompassing values, norms, rituals, structures, principles, assumptions, and beliefs. National culture influences that variable.

Driskill and Brenton (2019) stated that culture could be understood as a shared cognition, systems of shared symbols, and as the expression of unconscious processes.

Organizational culture can potentially be manipulated and altered.

Organizational communication

The organizational communication perspective views culture as falling into three types:

• Traditional – views culture through stories, rituals, and symbols
• Interpretive – views culture through a network of shared meanings (members sharing subjective meanings)
• Critical-interpretive – views culture through a network of shared meanings as well as through power struggles created by competing meanings.

Rosauer observed organizational culture to be emergent – an incalculable state that results from the combination of various ingredients. In "Three Bell Curves: Business Culture Decoded", he outlined three ingredients that he claimed guide business culture:

• employee (focus on engagement)
• work (focus on eliminating waste increasing value)
• customer (focus on likelihood of referral)

Improving these areas brings leadership, employees, work and customers together, improving culture and brand.

Net Promoter Score

Sirota Survey Intelligence, which has been gathering employee data worldwide since 1972, the Lean Enterprise Institute, and Fred Reichheld/Bain/Satmetrix conduct research relating to Net Promoter Score (NPS). NPS is "a widely used market research metric that typically takes the form of a single survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague." Colvin claimed that the popularity of this model is due to its simple and transparent approach.

Other

Other frameworks include:

• Kets de Vries and Miller (1984): Paranoid, Avoidant, Charismatic, Bureaucratic, and Schizoid.
• Mitroff and Kilmann (1975): Sensation thinking, Sensation feeling, Intuitive thinking, and Intuitive feeling.
• Sethia and Von Gilnow in 1985: Caring, Apathetic, Integrative, and Exacting.
• Deal and Kennedy (1982): organizational environment, core beliefs, heroes of the culture, folklore, myths, rites, rituals of culture, and the cultural network.
• Ouchi and Jaeger (1978): type A (allows some decision making), J (tribal control), and Z (tribal decision making).

COVID-19 impact

The pandemic led many organizations to treat limiting spread as a collective responsibility. Responses focused on requiring vaccines, hygiene, and masking.

Mask-wearing predated the pandemic in Asia. This was driven by the spread of different types of flu in Asia, such asSpanish flu, Hong Kong flu, Avian flu, and Swine flu, in addition to SARS and various affronts to air quality such as volcanic eruptions.

Somers categorized cultures based on whether the need of the individual or the group is favored. He used measures such as mask-wearing to assess collectivism vs individualism. Cultures otherwise rated "strong" were relatively resistant to change during the pandemic. However, strong cultures that emphasized innovation were more willing to accept change.

Mandated interventions could be seen by members either as attempts to protect them or to as attempts to exert control over members even when the interventions were of limited effectiveness, depending on how they were presented.

Digital tools such as videoconferencing, screen-sharing, file sharing, shared document authoring, digital whiteboards, and chat groups became widely accepted, replacing in-person meetings. The reduced amount of face-to-face communications may have impacted organizational cultures. New members, lacking face time with others, experienced difficulty in adapting to their organization's culture. The loss of face-time affected existing employees as well, directly weakening cultures, in addition to the indirect effects that strengthened or weakened cultures as organization reacted in various ways to the pandemic. Some members felt disengaged, expandable rather than essential, alienated, and exhausted.

Sull and Sull reported that employees rated their leadership higher given honest communication, integrity, and transparency more than in preceding years. Also, employers and leaders giving more attention to employees' welfare had a positive impact on cultural values. Chambers claimed that this was a short-term response rather than a culture change.

Deloitte (2020) argued that employees displayed greater sense of purpose, inspiration, and contribution. Also, leaders became more tolerant of employees' failure because of a significant increase in experimenting and risk-taking.

Daum and Maraist claimed that sense of purpose relates to customers and the society of which employees are part. They compared hospitals and retail shops. The former had a greater sense of purpose during the pandemic, while the latter had less.

Critical views

Criticism of the usage of "organizational culture" by managers began in the early 1980s. Most criticism comes from writers in critical management studies who for example express skepticism about functionalist and unitarist views. They stress the ways in which these assumptions can stifle dissent towards management and reproduce propaganda and ideology. They suggest that organizations do not embody a single culture, and cultural engineering may not reflect the interests of all stakeholders.

Parker suggested that many of the assumptions of those putting forward theories of organizational culture are not new. They reflect a long-standing tension between cultural and structural (or informal and formal) versions of what organizations are. Further, it is reasonable to suggest that complex organizations might have many cultures, and that such sub-cultures might overlap and contradict each other. The neat typologies of cultural forms found in textbooks rarely acknowledge such complexities, or the various economic contradictions that exist in capitalist organizations.

Smircich criticizes theories that attempt to categorize or 'pigeonhole' organizational culture. She applied the metaphor of a plant root to represent culture, saying that it drives organizations rather than vice versa. Organizations are the product of their organizational culture; it shapes behavior and interaction. While Schein's underlying assumptions are that beliefs, perceptions, thoughts, and feelings are taken for granted and can be observed and considered the ultimate source of values and action. However, such assumptions undermine attempts to categorize and define organizational culture.

See also

• Assessment culture
• Cultural capital
• Cultural identity
• Diversity
• Fail fast (business)
• Inclusive business
• Inclusiveness
• Kick the cat
• Kiss up kick down
• Lifestyle (sociology)
• Machiavellianism in the workplace
• Multiculturalism
• Narcissism in the workplace
• Organizational behavior
• Organizational learning
• Organizational psychology
• Organizational studies
• Overwork
• Power (social and political)
• Psychological capital
• Psychopathy in the workplace
• Realistic job preview
• Silicon Valley culture
• Three circles model
• Tick-box culture
• Working class culture
• Workplace diversity
• Presenteeism
• Occupational safety and health

Notes

• Adkins, B.; Caldwell, D. (2004). "Firm or subgroup culture: Where does fitting in matter most?". Journal of Organizational Behavior. 25 (8): 969–978. doi:10.1002/job.291.
• Burman, R. and Evans, A.J. (2008) "Target Zero: A Culture of safety", Defence Aviation Safety Centre Journal, pp. 22–27.
• Chatman, J. A.; Jehn, K. A. (1994). "Assessing the relationship between industry characterestics and organizational culture: How different can you be?"". Academy of Management Journal. 37 (3): 522–553. CiteSeerX 10.1.1.466.3338. doi:10.2307/256699. JSTOR 256699.
• Cummings, Thomas G. & Worley, Christopher G. (2004), Organization Development and Change, 8th Ed., South-Western College Pub.
• Denison, Daniel R. (1990) Corporate culture and organizational effectiveness, Wiley.
• Denison, Daniel R., Haaland, S. and Goelzer, P. (2004) "Corporate Culture and Organizational Effectiveness: Is Asia Different from the Rest of the World?" Organizational Dynamics, pp. 98–1 09
• Janis, Irving L. (1972). Victims of groupthink; a psychological study of foreign-policy decisions and fiascoes. Boston: Houghton, Mifflin. ISBN 978-0-395-14002-4.
• Flamholtz, Eric (2001). "Corporate Culture and the Bottom Line". European Management Journal. 19 (3): 268–275. doi:10.1016/s0263-2373(01)00023-8.
• Flamholtz, Eric (2002). "La Cultura empresarial y La cuenta des resultos". Harvard Deusto Business Review. 2002: 62–69.
• Flamholtz, E.G.; Narasimhan-Kannan, Rangapriya (2005). "Differential Impact of Culture upon Financial Performance: An Empirical investigation". European Management Journal. 23 (1): 50–64. doi:10.1016/j.emj.2004.12.009.
• Flamholtz, Eric. "Conceptualizing and Measuring Human Capital of the Third Kind: Corporate Culture". Journal of Human Resource Costing & Accounting. 9 (2): 78–93. doi:10.1108/14013380510645360.
• Flamholtz, Eric G and Randle, Yvonne (2011), "Corporate Culture: The Ultimate Strategic Advantage," Stanford University Press, Stanford California, pp. 5–6 and 26–27.
• Flamholtz, Eric and Randle Yvonne,(2014). "Implications of organizational Life Cycles for Corporate Culture and Climate," Chapter 13 in B. Schneider and K. Barbera, The oxford Handbook of organizational Climate and Culture, Oxford Library of psychology, Oxford university press, 2014, pp. 235–265.
• Handy, Charles B. (1976). Understanding Organizations. Oxford University Press. ISBN 978-0-19-508732-1.
• Harris, Stanley G (1994). "Organizational Culture and Individual Sensemaking: A Schema-Based Perspective". Organization Science. 5 (3): 309–321. doi:10.1287/orsc.5.3.309.
• Harrison, Roger (1972) Understanding your organisation's character, Harvard Business Review
• Hofstede, Geert (1984). Culture's Consequences: International Differences in Work-Related Values. SAGE. ISBN 978-0-8039-1306-6.
• Hofstede, Geert; Hofstede, Gert Jan (2004-10-03). Cultures and Organizations: Software for the Mind. McGraw Hill Professional. ISBN 978-0-07-150568-0.* Johnson, Gerry (1988). "Rethinking Incrementalism". Strategic Management Journal. 9: 75–91. doi:10.1002/smj.4250090107.
• McGuire, Stephen J.J. (2003). "Entrepreneurial Organizational Culture: Construct Definition and Instrument Development and Validation, Ph.D. Dissertation", The George Washington University, Washington, DC.
• Mulder, Mauk (1977) The daily power game, Martinus Nijhoff Socìal Sciences Division
• O'Rielly, Chatman; Caldwell (1991). "People and organizational culture: A profile comparison approach to assessing person-organization fit". Academy of Management Journal. 34 (3): 487–516. doi:10.2307/256404. JSTOR 256404.
• Parker, M. (2000) Organizational Culture and Identity, London: Sage.
• Parsons, Talcott; Shils, Edward (1964-12-01). Toward a General Theory of Action: Theoretical Foundations for the Social Sciences. Transaction Publishers. ISBN 978-0-7658-0718-2.* Peters and Waterman (1982). In Search of Excellence. Harper & Row (New York).
• Stoykov, Lubomir (1995). Фирмената култура и комуникация (in Bulgarian) (Company culture and communication), Stopanstvo, Sofia.
• Zhang, Xibao (2009). Values, Expectations, Ad Hoc Rules, and Culture Emergence in International Cross Cultural Management Contexts. New York: Nova Science Publishers.

Further reading

• Barney, J. B. (1986). "Organizational Culture: Can It Be a Source of Sustained Competitive Advantage?"". Academy of Management Review. 11 (3): 656–665. doi:10.5465/amr.1986.4306261.
• Black, Richard J. (2003) Organizational Culture: Creating the Influence Needed for Strategic Success, London UK, ISBN 1-58112-211-X
• Bligh, Michelle C (2006). "Surviving Post-merger 'Culture Clash': Can Cultural Leadership Lessen the Casualties?". Leadership. 2 (4): 395–426. doi:10.1177/1742715006068937. S2CID 146156535.
• Boddy, C. R. (2011) Corporate Psychopaths: Organizational Destroyers, Palgrave Macmillan
• Hartnell, C. A.; Ou, A. Y.; Kinicki, A. (2011). "Organizational Culture and Organizational Effectiveness: A Meta-Analytic Investigation of the Competing Values Framework's Theoretical Suppositions". Journal of Applied Psychology. 96 (4): 677–694. doi:10.1037/a0021987. PMID 21244127.
• Jex, Steven M. Jex & Britt, Thomas W. (2008) Organizational Psychology, A Scientist-Practitioner Approach, John Wiley & Sons, ISBN 978-0-470-10976-2.
• Kleinbaum, Rob and Aviva (2013). Creating a Culture of Profitability, Probabilistic Publishing, ISBN 978-0-9647938-9-7.
• Markus, Hazel (1977). "Self-schemata and processing information about the self". Journal of Personality and Social Psychology. 35 (2): 63–78. doi:10.1037/0022-3514.35.2.63.
• Mills, Albert J (1988). "Organization, Gender and Culture". Organization Studies. 9 (3): 351–369. doi:10.1177/017084068800900304. S2CID 144595059.
• O'Donovan, Gabrielle (2006). The Corporate Culture Handbook: How to Plan, Implement and Measure a Successful Culture Change Programme, The Liffey Press, ISBN 1-904148-97-2
• Papa, Michael J., et al. (2008). Organizational Communication Perspectives and Trends (4th Ed.). Sage Publications.
• Phegan, B. (1996–2000) Developing Your Company Culture, A Handbook for Leaders and Managers, Context Press, ISBN 0-9642205-0-4
• Sopow, E. (2007). Corporate personality disorder. Lincoln Neb.: iUniverse.
• Luthans, F. & Doh Jonathan, P. (2015). "International Management, Culture, Strategy and Behavior" (9th ed.). Mc Graw Hill

External links

• Organizational Culture and Institutional Transformation (pdf) – From the Education Resources Information Center Clearinghouse on Higher Education Washington, DC; Corporate executives discuss the importance of building a healthy, effective organizational culture

• Organizational Culture, Joel Peterson (Chairman of JetBlue Corporation and managing partner of Trammell Crow Company), Stanford Graduate School of Business
• Organizational Culture Trumps Strategy, Mindy Grossman (CEO of the Home Shopping Network [HSN]), Stanford Graduate School of Business
• Organizational Culture, Isadore Sharp (founder and chairman of Four Seasons Hotels and Resorts), Stanford Graduate School of Business
• Organizational Debt is like Technical debt – but worse, Steve Blank (entrepreneur, investor and Stanford University professor)