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Organizational culture

Organizational culture encompasses values and behaviours that "contribute to the unique social and psychological environment of an organization." According to Needle (2004), organizational culture represents the collective values, beliefs and principles of organizational members and is a product of such factors as history, product, market, technology, strategy, type of employees, management style, and national culture; culture includes the organization's vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits.

Business executive Bernard L. Rosauer (2013) developed what he refers to as an actionable definition of organizational culture: "Organizational culture is an emergence – an extremely complex incalculable state that results from the combination of a few simple ingredients. In "Three Bell Curves: Business Culture Decoded" Rosauer outlines the three manageable ingredients he says guides the culture of any business. Ingredient #1 - Employee (focus on engagement) #2 The Work (focus on eliminating waste increasing value) waste #3 The Customer (focus on likelihood of referral). The purpose of the Three Bell Curves methodology is to bring leadership, their employees, the work and the customer together for focus without distraction, leading to an improvement in culture and brand. Reliance of the research and findings of Sirota Survey Intelligence, who has been gathering employee data worldwide since 1972, the Lean Enterprise Institute, Cambridge, MA, and Fred Reichheld/Bain/Satmetrix research relating to NetPromoterScore.

Ravasi and Schultz (2006) wrote that organizational culture is a set of shared assumptions that guide what happens in organizations by defining appropriate behavior for various situations. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving and, even, 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 very differing cultures as well as subcultures. Although a company may have its "own unique culture", in larger organizations there are sometimes co-existing or conflicting subcultures because each subculture is linked to a different management team.

Organizational culture refers to culture in any type of organization including that of schools, universities, not-for-profit groups, government agencies, or business entities. In business, terms such as corporate culture and company culture are often used to refer to a similar concept. The term corporate culture became widely known in the business world in the late 1980s and early 1990s.Corporate culture was already used by managers, sociologists, and organizational theorists by the beginning of the 80s. The related idea of organizational climate emerged in the 1960s and 70s, and the terms are now somewhat overlapping.

Such comments reveal interpretive meanings held by the speaker as well as the social rules they follow.
Main: Personality psychology, Identity (social science)
See also: Biculturalism
Corporate executives discussing the importance of building a healthy, effective organizational culture
  • Traditionalism: views culture through objective things such as stories, rituals, and symbols
  • Interpretivism: views culture through a network of shared meanings (organization members sharing subjective meanings)
  • Critical-interpretivism: views culture through a network of shared meanings as well as the power struggles created by a similar network of competing meanings
  • Better aligning the company towards achieving its vision, mission, and goals
  • High employee motivation and loyalty
  • Increased team cohesiveness among the company's various departments and divisions
  • Promoting consistency and encouraging coordination and control within the company
  • Shaping employee behavior at work, enabling the organization to be more efficient
  • Acceptance and appreciation for diversity
  • Regard for and fair treatment of each employee as well as respect for each employee's contribution to the company
  • Employee pride and enthusiasm for the organization and the work performed
  • Equal opportunity for each employee to realize their full potential within the company
  • Strong communication with all employees regarding policies and company issues
  • Strong company leaders with a strong sense of direction and purpose
  • Ability to compete in industry innovation and customer service, as well as price
  • Lower than average turnover rates (perpetuated by a healthy culture)
  • Investment in learning, training, and employee knowledge
  • Metaphors such as comparing an organization to a machine or a family reveal employees' shared meanings of experiences at the organization.
  • Stories can provide examples for employees of how to or not to act in certain situations.
  • Rites and ceremonies combine stories, metaphors, and symbols into one. Several different kinds of rites affect organizational culture:
    • Rites of passage: employees move into new roles
    • Rites of degradation: employees have power taken away from them
    • Rites of enhancement: public recognition for an employee's accomplishments
    • Rites of renewal: improve existing social structures
    • Rites of conflict reduction: resolve arguments between certain members or groups
    • Rites of integration: reawaken feelings of membership in the organization
  • Reflexive comments are explanations, justifications, and criticisms of our own actions. This includes:
    • Plans: comments about anticipated actions
    • Commentaries: comments about action in the present
    • Accounts: comments about an action or event that has already occurred
  • Rites of passage: employees move into new roles
  • Rites of degradation: employees have power taken away from them
  • Rites of enhancement: public recognition for an employee's accomplishments
  • Rites of renewal: improve existing social structures
  • Rites of conflict reduction: resolve arguments between certain members or groups
  • Rites of integration: reawaken feelings of membership in the organization
  • Plans: comments about anticipated actions
  • Commentaries: comments about action in the present
  • Accounts: comments about an action or event that has already occurred
  • Fantasy Themes are common creative interpretations of events that reflect beliefs, values, and goals of the organization. They lead to rhetorical visions, or views of the organization and its environment held by organization members.
  • Competitive edge derived from innovation and customer service
  • Consistent, efficient employee performance
  • Team cohesiveness
  • High employee morale
  • Strong company alignment towards goal achievement
  • 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
  • Creating a new culture: recognizing past cultural differences and setting realistic expectations for change
  • Changing the culture: weakening and replacing the old cultures
  • 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
  • Power distance (Mauk Mulder, 1977) – Different societies find different solutions regarding social inequality. Although invisible, inside organizations power inequality of the "boss-subordinate relationships" is functional and according to Hofstede reflects the way inequality is addressed in the society. "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 there is also a degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.
  • Uncertainty avoidance is the way of coping with uncertainty about the future. Society copes with it with technology, law and religion (though different societies have different ways of addressing it), and according to Hofstede organizations deal with it with technology, law and rituals, or in two ways – rational and non-rational, with rituals being the non-rational. Hofstede listed some of the rituals as the memos and reports, some parts of the accounting system, a large part of the planning and control systems, and the nomination of experts.
  • Individualism vs. collectivism – disharmony of interests on personal and collective goals (Parsons and Shils, 1951). Hofstede raises the idea that society's expectations of Individualism/Collectivism will be reflected by the employee inside the organization. Collectivist societies will have more emotional dependence on members in their organizations; when in equilibrium an organization is expected to show responsibility to members. Extreme individualism is seen in the US. In fact, collectivism in the US is seen as "bad". Other cultures and societies than the US will therefore seek to resolve social and organizational problems in ways different from American ways. Hofstede says that a capitalist market economy fosters individualism and competition, and depends on it, but individualism is also related to the development of the middle class. Some people and cultures might have both high individualism and high collectivism. For example, someone who highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-sufficiency.
  • Masculinity vs. femininity – reflects whether a certain society is predominantly male or female in terms of cultural values, gender roles and power relations.
  • Long- Versus Short-Term Orientation which he describes as "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."
  • 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
  • The paradigm: What the organization is about, what it does, its mission, its values.
  • Control systems: The processes in place to monitor what is going on. Role cultures would have vast rule-books. There would be more reliance on individualism in a power culture.
  • Organizational structures: Reporting lines, hierarchies, and the way that work flows through the business.
  • 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 also extend to symbols of power such as parking spaces and executive washrooms.
  • Rituals and routines: Management meetings, board reports and so on may become more habitual than necessary.
  • Stories and myths: build up about people and events, and convey a message about what is valued within the organization.
  • External environment
  • Industry
  • Size and nature of the organization's workforce
  • Technologies the organization uses
  • The organization's history and ownership
  • Clan culture (internal focus and flexible) – A friendly workplace where leaders act like father figures.
  • Adhocracy culture (external focus and flexible) – A dynamic workplace with leaders that stimulate innovation.
  • Market culture (external focus and controlled) – A competitive workplace with leaders like hard drivers
  • Hierarchy culture (internal focus and controlled) – A structured and formalized workplace where leaders act like coordinators.
  • Constructive cultures, in which members are encouraged to interact with people and approach tasks in ways that help them meet their higher-order satisfaction needs.
  • Passive/defensive cultures, in which members believe they must interact with people in ways that will not threaten their own security.
  • Aggressive/defensive cultures, in which members are expected to approach tasks in forceful ways to protect their status and security.
  • Approval
  • Conventional
  • Dependent
  • Avoidance
  • 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
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