Organizational culture
Organizational culture encompasses the shared norms, values, and behaviors in organizations reflecting their core values and strategic direction. Alternative terms include business culture, corporate culture and company culture. The term corporate culture emerged in the late 1980s and early 1990s. It was used by managers, sociologists, and organizational theorists in the 1980s.
Organizational culture influences how people interact, how decisions are made, the context within which cultural artifacts are created, employee attachment, the organization's competitive advantage, and the internal alignment of its units. It is distinct from national culture or the broader cultural background of its workforce.
A related topic, organizational identity, refers to statements and images which are important to an organization and helps to differentiate itself from other organizations. An organization may also have its own management philosophy. Organizational identity influences all stakeholders, leaders and employees alike.
Definition
Various definitions exist, without consensus. Lesley Willcoxson and Bruce Millett note that organizational cultures can be described in similar ways to wider forms of culture such as national culture. Some of the definitions offered include:- Writers Terrence E. Deal and Allan A. Kennedy defined organizational culture as "the way things get done around here".
- According to Elliott Jaques, the culture of a 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".
- Edgar Schein defined it 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.
- Ravasi and Schultz characterized it 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.
- Schein, Deal and Kennedy, and Kotter advanced the idea that cultures are diverse and may encompass subcultures linked to an individual management teams.
- Ravasi and Schultz and Allaire and Firsirotu claim that organizational culture represents the collective values, beliefs and principles of organizational members. It is 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 reported that just 22% of U.S. employees feel connected to their organization's culture.
- Geert Hofstede defined organizational culture as "the collective programming of the mind which distinguishes the members of one organization from another".
- McHale defines culture as "how the organization functions and its deeply embedded patterns".
History
Analysis
Researchers have proposed various dimensions individually and in combination as useful for analyzing organizational culture. Examples include external/internal, strong/weak, flexible/rigid, and many others.Insularity
Culture can be externally focused, aiming to satisfy customers, investors, and partners. Alternatively, they can be internally focused, aiming to satisfy employees, comply with union-imposed rules, or to meet conduct standards around issues such as diversity, equity, and inclusion. Many organizations lie between such extremes, attempting to balance the needs of multiple stakeholders.Strength
Any type of culture can be strongly or only tacitly supported. A strong culture is characterized by reinforcing tools such as ceremonies and policies to instill and spread it. The intent is to secure group compliance.Researchers generally report that organizations having strong cultures are more successful.
An employee's perception of the organization's culture can have an impact on the employee's longevity with the organization. When organizations create a positive environment for their employees, they experience professional fulfillment, boosted performance, and a longer stint with the organization.
Risks
Tension arises when cultural and organizational identities do not match well because corporate policies, work practices, and communication styles conflict with local customs, for example in terms of formal vs. informal work environments, direct vs. indirect communication, and individualistic vs. collectivist approaches.Quiet quitting is a principle that could potentially affect organizations with negative culture. It is the idea of doing the bare minimum on a job and setting boundaries in response to poor culture, burnout, lack of recognition, and inadequate work-life balance. This occurs in unhealthy work environments where personal circumstances force employees to stay.
Cultural
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.Groupthink
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. 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.Five Monkeys Experiment
Since the late 1960s, the so-called "Five Monkeys Experiment", which serves to exemplify the adverse effects of unquestioned traditions, has become part of management lore, often titled "How Company Policy Is Made". It imagines a situation where five monkeys are in a cage with a banana tied to the ceiling. Whenever a monkey climbs to reach the banana, all five are sprayed with cold water. The group quickly learn to ignore the banana and punish any monkey who attempts to reach for it. If one monkey is removed from the cage and replaced with a newcomer, they too are punished for reaching for the banana. If every monkey is subsequently replaced in this manner, so that none present remember being sprayed with cold water, the group will supposedly continue to punish any attempts to reach the banana. The monkeys are perpetuating a caution that may be redundant "because that's the way it's always been around here".Rigidity and adaptability
Willcoxson and Millett note that organizational cultures change over time. 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. They claim that organizations with adaptive cultures perform better.Bullying
Bullying manifests in workplaces that allow employees of higher status to harass those of lower status. This generally requires support or at least forbearance from company leaders. Bullying can cascade down the organizational hierarchy as supervisors experiencing bullying display the same behavior to their subordinates.Workplace bullying impacts employees leading to increased stress on the job, decreased productivity and high turnover rates. Employees who are bullied often remain silent because management fails to hold perpetrators accountable.
COVID-19 impact
The pandemic led many organizations to incorporate limiting spread into their cultures as a collective responsibility. Responses focused on requiring vaccines, hygiene, and masking.In Asia, mask-wearing was part of several national cultures predating the pandemic. This was driven by experience with prior flus in Asia, such as Spanish flu, Hong Kong flu, Avian flu, and Swine flu, in addition to SARS, as well as various affronts to air quality such as volcanic eruptions.
Somers categorized cultures based on whether the need of the individual or the group was foremost. He used behaviors such as mask-wearing to measure 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 change.
Mandated interventions could be seen by members either as attempts to protect them or to as attempts to exert control despite 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 organizations reacted in various ways to the pandemic. Some members felt disengaged and expendable rather than essential, alienated, and exhausted.
Sull and Sull reported that employees rated their leadership higher given honest/open 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 adherence. Chambers claimed that this was a short-term response rather than a culture change.
Deloitte 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 experimentation 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.