MN7181 - People and Organisations: Principles and Practice in Global Contexts - 9

What is Organizational Culture?

Organizational Culture included 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 be developed overtime and are considered valid. (The Business Dictionary).
As defined by Schwartz and Davis (1981), culture is a pattern of beliefs and expectations shared by the organization's members. These beliefs and expectations produce norms and powerfully shape the behavior of individuals and groups in the organization.

How are Cultures created?

An organization's culture is shaped as the organization faces external and internal challenges and learns how to deal with them. When the organization's way of doing business provides a successful adaptation to environmental challenges and ensure success, those values are retained.

Is Organizational Culture Important?

Yes. Organizational culture is a vital driver for the success or failure of any organization. An aligned culture can drive it to success, and similarly, the wrong culture can suppress its ability to adapt to a dynamic world.
Taking these into consideration, Terrence Deal and Allan Kennedy proposed one of the first models of organizational culture, in their "Corporate Cultures: The Rites and Rituals of Corporate Life" book in 1982.

In their model of culture, Deal and Kennedy suggested that the basic of organizational culture was interlocking set of six cultural elements:

• History – Traditions of the past keep people anchored to the core values that the organization was built on.
• Values and Beliefs – Cultural identity is formed around the shared beliefs of what is really important, and the values that determine what the organization stands for.
• Rituals and Ceremonies – Ceremonies are what employees’ do every day which brings them together.
•  Stories – Stories allow employees’ to learn about what is expected of them and better understand what the business stands for.
•  Heroic Figures – Related to stories are the employees and managers whose status is elevated because they embody organizational values. These heroes serve as role models and their words and actions signal the ideal to aspire to.
•  The Cultural Network – The informal network within an organization is often where the most important information is learned. Informal players include:

1. Story Tellers - who interpret what they see happening and create stories that can be passed on to initiate people to the culture.
2. Gossipers - who put their own spin on current events and feed people a steady diet of interesting information.
3. Whisperers - who have the ear of the powerful people in the organization. They can be used by anyone with a message they want taken to the top but who doesn't want to use formal communication channel.
4. Spies - who provide valuable information to top management, and let them know what really happens on a daily basis.
5. Priests and Priestesses - who are the guardians of cultural values. they know the history of the company inside out, and can be relied on to interpret a current situation using the beliefs, values and past practices of the company.

Deal and Kennedy's Culture Types

Examining these cultural elements across a variety of organizations, Deal and Kennedy identified four distinct types of cultures along with two market place factors that they felt influenced cultural patterns and practices. They were:

• The degree of risk associated with a company’s key activities
• The speed at which companies learn whether their actions and strategies are successful.

Deal and Kennedy present these factors into a 2X2 matrix that identified the four culture types as below:

Image 1: 2x2 Matrix

Tough-Guy, Macho – This culture contains a world of individuals who enjoy risk and who get quick feedback on their decisions. Teamwork is not highly valued in this culture, hence it is difficult for slow bloomers to survive, and as a result the turnover is high, which impedes efforts to build a cohesive culture. Thus, individualism continues to prevail.

Work Hard/Play Hard – This culture is the world of sales. Employees take few risks themselves; however, the feedback on how well they are performing is almost immediate. They maintain high levels of energy. Interestingly, this culture recognizes that one person alone cannot make the company. Teamwork is valued. Competes with each other yet all drive to reach new heights.

Bet-Your-Company – This culture is the one where decisions are at high risk and employees wait years before they know whether their actions actually paid off. Because the need to make the right decision is so great, the cultural elements evolve such that values are long-term focused and there is a collective belief in the need to plan, prepare and perform due diligence at all stages of decision making.

Process – In this culture, feedback is slow and the risks are low. No single transaction has much impact on the organization’s success and it takes years to find out whether a decision was good or bad.

Because of the lack of immediate feedback, employees find it very difficult to measure what they do so they focus on how they do things. Technical excellence is often valued here and employees will pay attention to getting the process and the details right without necessarily measuring the actual outcome.

References:

http://www.businessdictionary.com/definition/organizational-culture.html

London Metropolitan University. (2017-2018). MN7181 Module Guide People & Organizations

https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-v1.1/s19-04-creating-and-maintaining-organ.html

https://www.mindtools.com/pages/article/newSTR_86.htm

http://changingminds.org/explanations/culture/deal_kennedy_culture.htm

Image: mindtools.com