What is Organizational Culture: Everything You Need to Know
Organizational culture is a combination of the underlying beliefs, assumptions, values, and ways of interacting that help to produce the social and psychological environment in an organization. 8 min read
What Is Organizational Culture?
Organizational culture is a combination of the underlying beliefs, assumptions, values, and ways of interacting that help to produce the social and psychological environment in an organization. It is an organizational culture that combines the experiences, expectations, philosophy, values that guide behavior, self-image, inner workings, internal and external interactions, and future expectations that define a specific organization.
As organizational cultures continue to change and evolve, people's beliefs and thoughts begin to be shaped by the way they conduct business. Organizational culture can be shown in:
- The way in which the company or organization treats those it employs, those it conducts business with, and how they interact with the wider community
- How much freedom that is present in the organization to create new ideas, promote self-expression, and allow proper decision making
- The flow of power, as well as information, throughout the hierarchy of the company
- How much commitment the employees have to the shared goals of the organization
Culture is a social system of control that is often powered and shaped by incentives. The ultimate role of culture is to promote and reinforce ideas of right and appropriate thinking, and deter or sanction wrong behavior or thinking.
While organizational culture can be its own entity, it is often shaped by or overlaps with the culture of those in the organization, as well as the culture surrounding the organization. This can make maintaining an organizational culture difficult if the culture is immersed in national, local, and regional cultures as well.
It is hard to make assessments of organizational cultures, as these cultures are constantly adapting and evolving to work in the cultures that surround them, as well as the changes in company goals and visions itself.
Characteristics of an Organizational Culture
Company or organizational cultures that put a higher value on innovation are more likely to encourage their employees to be innovative and take risks in regard to their job. Those organizational cultures that put a lower interest in innovation will expect their employees to continue to perform their job the same way as they were trained without looking for ways to improve job performance.
Other types of organizational cultures that exist in many companies include:
- Attention to detail – Organizational cultures that promote attention to detail are often referred to as precision oriented, and involves an organization that will dictate the degree to which all employees are expected to work. Those that do not put a value on attention to detail will not require as many specifics in the work environment.
- Emphasis on outcome – Otherwise known as achievement oriented, this type of organizational culture will focus on the results and not necessarily how the results are achieved. This might include a company that demands sales people to do whatever it may take to close a deal.
- Emphasis on people – This type of organization puts a higher value on how their decisions will affect the people in their organization. It is important to them to treat employees with dignity and respect.
- Teamwork – Otherwise known as collaboration oriented, a teamwork-based organizational culture will place a high value on organized work activities that involve the team. In these types of organizations, employees tend to work well together and get along with their co-workers.
- Aggressiveness – Competition organizational culture focuses on dictating when the members of the organization are expected to act assertive or easygoing when they are competing in the marketplace. In this type of culture, there is a high value on competitiveness and outperforming other competitors.
- Stability – Stability, or rule orientation, involves a company placing a high value on stability, and a rule-oriented and predictable bureaucratic environment. These types of organizations typically provide a consistent output and function best in non-changing conditions.
Principals of Organizational Culture: Work With and Within Your Current Cultural Situations
A deeply embedded culture is hard to replace with simple upgrades, and sometimes even with a complete overhaul. You may be part of an organizational culture that is not truly defined and has formed as a natural evolution of the company and the employees that built it.
Whether you are entering a new organizational culture or trying to adapt to changes in a current one, it is important to be able to identify it and recognize the traits that are consistent within it. You will be able to then discern the focus and value of the company so that it will be easier to decide what traits will work harmoniously, and which ones would be a hindrance.
Many companies try to create an organizational culture by changing the minds of those around them, but sometimes they fail to do so because they only use a top down approach to implement the culture. This involves trying to change the mindsets and behavior of employees, customers, and the community by communicating values in marketing pieces, providing training and development programs, and other forms of messaging telling others how they should think or act. This type of cultural implementation rarely works, because changing a mindset usually involves changing actions, and can become clearer through showing rather than telling.
Cultural changes can be implemented more easily in an organization by using:
- Interpersonal relations
Principals of Organizational Culture: Focus on a Critical Few Behaviors
"The critical few" is a small number of important behaviors that would have great impact if put into practice by a significant number of people. To utilize this, discern a few things people do throughout the company that positively affect business performance. Some examples may include different ways of starting meetings or interacting with customers. Next, translate these behaviors into simple, practical steps that people accomplish every day, then select groups of employees who are more likely to implement the behavior change and promote the ideal.
Principals of Organizational Culture: Deploy Your Authentic Informal Leaders
Leadership is not synonymous with authority as leadership requires a skill set and attitude that is exhibited naturally, even without the title or power. Since authentic informal leaders may not be in a titled position they are often overlooked in companies, but can be an important tool in helping to implement an organizational culture.
You can help identify these natural, informal leaders using:
- Network analysis
- Meeting records
- Email statistics
- Coworker interviews
Once you have identified these leaders you can make them part of a group of powerful allies who can help the implementation of the organizational culture by influencing behavior through "showing by doing."
Not only are these informal leaders capable of helping to promote pride in the company, but they are also often master motivators because they understand what motivates those around them and serve as the catalyst for improvement to occur around them.
There are three primary types of informal leaders to look for:
- Exemplars - Exemplars act as role models and bring behaviors and skills to life while getting others to pay attention to them.
- Networkers – They act as hubs of personal communication within the organization. They know many people with whom they can communicate openly and freely.
- Early adopters – Early adopters like to enthusiastically latch onto and experiment with new technologies, processes, and ways of working.
Principals of an Organizational Culture: Don't Let Your Formal Leaders Off the Hook
While informal leaders can play an important role in shaping an organizational culture it does not mean that you should allow you formal leaders to be completely off the hook. When creating an organizational culture, it is important for all aspects of the culture to be represented by the employees. Staff leaders need to set the example and the standard for employees to follow and emulate.
While many companies try to put the task of developing an organizational culture in the hands of human resources, it is essential that all member of leadership remain involved in the culture implementation and development.
Principals of Organizational Culture: Demonstrate Impact Quickly
A great way to get others on board with the organizational culture that you are trying to emulate and achieve is for others to hear about the initiative and see the impact of the changes quickly. Once initiatives and efforts are announced it is important that they continue to move forward, otherwise people will tend to disengage and become cynical about new proposals or efforts.
A way to show an immediate effect of high-profile projects is to offer a trial run period, which is simply a high-profile demonstration of your projects.
How Organizational Culture Is Created and Communicated
Adaptive cultures rely a lot on the freedom to develop new ideas, participate in decision making, and personal expression. Being adaptive to value changes and being action oriented can help increase the likelihood of overall success.
There are three primary ways in which an organizational culture can be created and communicated:
- Entrepreneurial – Entrepreneurial methods will often motivate employees by promoting risk-taking, innovation, and putting the interest of people first.
- Power cultures – Power culture involves one leader that makes fast decisions that control the whole strategy.
- Role cultures – Role cultures exist where practical structures are created, where individuals understand their jobs, report to superiors, and where efficacy is valued above all.
- Hierarchy cultures – These cultures are comparable to role cultures in that they are highly structured and focus on stability, efficiency, and completing tasks right. A matrix structure is common in this kind of culture as it promotes the importance of small tasks completed by small teams.
- Clan cultures – These types of cultures are extremely family-like and focus on nurturing, mentoring, and performing activities and duties together.
Why and How to Create an Organizational Culture Change
Employees and supervisors may be extremely resistant to change, and may tend to rally against changes to the current company culture. To help make the changes more palatable for employees, trainers, and supervisors, it is important to formulate a clear vision and set strategic goals that outline the future direction of the impending cultural change.
Start with the top and get the commitment from the top-levels of management to implement the changes, and agree to help implement it within the rest of the organization. The best way for these managers to help implement the cultural changes are by using modeling behavior and having upper management and supervisors learn to symbolize the values that are part of the goals for the proposed cultural change.
Next, you will need to identify what current procedures, policies, systems, and rules need to be changed to be brought into alignment with the new values and cultural goals that are desired to be achieved.
During the process, you will need to make sure that all of the newcomers to the organization are properly socialized into the culture, and any deviants who refuse to embrace the changes should be terminated to promote loyalty and create a healthy culture.
You also need to implement training that will help to support the culture changes so that everyone can understand the new systems and processes.
Organizational Subcultures: What Are They?
Company subcultures can be classified into one of three categories, which each exemplify a form of congruence with the dominant culture's values.
- Enhancing subcultures – Members of enhancing subcultures follow prevailing organizational culture values even more willingly than members of the rest of the organization.
- Orthogonal subculture – Members of orthogonal subcultures are those who embrace the dominant culture's values while still holding their own set of values.
- Counterculture subculture – Members of a counterculture are one's who often argue against the essential values of the dominant culture and personally have values that may conflict with those values.
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