Why is Organizational Culture so Important?

This webinar on ‘Why is Organizational Culture So Important?’ focuses on the following:

1. Understanding what is Organizational Culture?
2. Dimensions of Organizational Culture
3. Strong vs Weak Cultures
4. How Employees learn Culture
5. Types of Organizational Cultures
6. Functions of Organizational Culture
7. How Important is Organizational Culture to employees?
8. Sustaining & perpetuating Organizational Culture
9. Changing Organizational Culture

What is Organizational Culture? 

Simply stated, organizational behavior stands for the shared values, principle, traditions and ways of doing things that influence the way members in an organization act. It is all about the set of important assumptions, often unstated, that members of an organization share in common. It speaks about the personality of a company and the style in which it does things.

Important elements of the definition may be stated thus:

• Shared values and practices
• Perceived meaning
• It’s the way we do things around here
• Cultural products
• Descriptive
• Organization culture is different from organizational climate
• Culture has an important role in organizations

Dimensions of Organizational Culture

Research suggests that the following dimensions of organizational culture separate companies from one another:

• The routine ways of communicating, such as organizational rituals and ceremonies and language commonly used
• The norms shared by individuals and teams throughout the organization; like ‘do not do too much; do not do too little’
• The dominant values held by the organization such as high product quality, low absenteeism, high efficiency etc.
• The philosophy that guides management’s policies and decision-making
• The rules of the game for getting along in the organization; or the ropes that a new recruit must learn in order to be accepted as a full-fledged member of the group
• The feeling or climate conveyed in an organization by the physical layout and the way in which managers and employees interact with customers, suppliers and other outsiders

(J. Martin, Culture in Organizations, New York, Oxford University Press, 1996)

Strong VS weak cultures

There are broadly two types of organizational cultures:

How employees learn culture

Culture is passed on to employees in numerous ways. The most significant ones may be listed thus:

• Rites: Relatively elaborate, dramatic planned sets of activities that consolidate various forms of cultural expressions into one event carried out through social interactions, usually for the benefit of the audience
• Ceremonial: A system of several rites connected with a single occasion or event
• Ritual: A standardized detailed set of techniques and behaviors that manage anxieties but seldom produce intended technical consequences of practical importance
• Myth: A dramatic narrative of imagined events usually used to explain origins or transformations of something
• Saga: A historical narrative describing the unique accomplishments of a group and its leaders, usually in heroic terms
• Legend: A handed down narrative of some wonderful event that is based on history but has been embellished with fictional details
• Story: A narrative based on rare events, sometimes a combination of truth and fiction
• Symbol: Any object and event, quality or relation that serves as a vehicle for conveying meaning usually by representing another thing
• Language: A particular form or manner in which members of a group use sounds and written signs to convey meanings to each other
• Values: Life directing attitudes that serve as behavioural guidelines
• Metaphors: Shorthand of words used to capture a vision or to reinforce old and new values
• Belief: An understanding of a particular phenomenon
• Heroes/Heroines: Individuals whom the organisation has legitimized to model behaviour for others

(Source: H.W. Trice and J.M. Beyer, “Studying Organizational Culture through Rites and Ceremonials,” Academy of Management Review 9 October, 1984)

Types of Organizational Cultures

Each organization’s culture is unique. However, there exist four general types of organizational cultures that are useful for comparing organizations:

Functions of Organizational Culture

Following are important functions of organizational culture:

How important is Organizational Culture to employees?

The pie chart below aptly describes the value of organizational culture in job seekers today:

Sustaining & perpetuating Organizational Culture

Before sustaining and perpetuating culture, it has to be created within the organization. One prominent way to do this is through Socialization. Socialization is a process through which a new recruit begins to understand and accept the values, norms and beliefs held by others in the organization. The HR department representatives help new recruits to “internalize the way things are done in the organization”.

Socialization, in fact, is a three-step process

1. Pre-arrival stage
2. Encounter stage
3. Metamorphosis stage

Once established, company culture may be perpetuated:

• By screening and selecting new employees that mesh well with the culture
• By systematic indoctrination of new hires in the culture’s fundamentals
• By the efforts of senior management to reiterate core values in daily conversations and pronouncements
• By the telling and retelling of company legends and stories
• By regular ceremonies honoring members who display desired cultural behaviours, and
• By visibly rewarding those who display cultural norms and penalizing those who don’t.

(J.P. Kotter and J.L. Heskett, Corporate Culture and Performance, New York, Free Press, 1992)

Changing Organizational Culture

Organizational Culture, as stated previously, is generally stable. However, it is not immutable. Culture is something which evolves over a period of time—in response to changes in environment, particularly changes in composition of workforce, changes in top management, changes brought about by mergers and acquisitions, deliberate attempts to change the structure of an organization, changes brought about by a crisis etc.

In any case, there is growing evidence suggesting likely change in organizational culture due to the occurrence of any of the following:

• A dramatic crisis
• Leadership changes hands
• Young and small organizations
• Mergers and acquisitions
• Weak culture
• Responding to the revolution brought about by the Internet

(Kilmann, et al and P.J.Frost, et al)

Questions asked during the webinar

Q1. Are there any measurement scales for organizational culture?

Culture is more of a soft factor and cannot be measured directly, but certain things within culture can be measured for e.g. the measurement of innovation and entrepreneurship within the organisation affecting culture

Q2. What should be done when culture is imposed?

Culture is an underlying factor in an organization and cannot be done away with. It will be imposed to some extent when someone moves in a new organization, as its motive is to create shared value and purpose.

Q3. Is culture qualitative?

Yes, culture is definitely qualitative than quantitative as it is related to human behavior and interaction. It can make us feel various emotions.

Q4. Does culture improve/disturb productivity?

It depends on the type of culture and environment prevailing in the environment along with several other factors. For e.g. certain organizations promote a centralized culture where everything is interconnected and hierarchical rather than more autonomous which can have a different impact on different individuals.

Q5. Any guidelines to design a culture? How does organizational strategy define culture?

Again it depends on what type of culture you wish to establish, on what the organization wants as well as what the employees want. There is a strong relationship between strategy and culture – culture can have a big impact on decision-making.

You can view the webinar PPT below:

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