Organizational culture is the set of shared norms, values, and behaviors in organizations that reflect an organization's core values and strategic direction. This concept is also referred to as business culture, corporate culture or company culture. The term corporate culture emerged in the late 1980s and early 1990s. It was initially used by managers, sociologists, and organizational theorists during the 1980s. Organizational culture influences how people interact, how decisions are made (or avoided), 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 the national culture or the broader cultural background of its workforce. A related topic, organizational identity, refers to statements and images that are important to an organization and help to differentiate it 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, Kennedy, and Kotter advanced the idea that cultures are diverse and may encompass subcultures linked to 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 Elliott Jaques introduced the concept 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.
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 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 with 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 (personal) 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.
… excerpt ends here. Continue reading the full article.
