Organizational Culture

The definition of culture varies with an estimate of 164 individual definitions of organizational culture. One potential catalyst for the number of definitions comes down to the application of theory to the abstract concept of culture within an organization. The more theorist and different organizational fields of study you have the more individual definitions are spawned. Though there may be many definitions of culture one point is understood, the strength of a company is directly related to how culture is rooted in its strategies and way of doing business. Culture acting as a corner stone allows the company to take risks being more innovative as the company expands and succeeds. Culture defines the company becoming a brand from which both employees and customers will flock to. This paper will discuss organizational culture. More specifically, this paper will open by looking at what organizational culture is before covering the history of culture, cultural functions and four types. This will be followed by discussing some of the common theories and models of culture before turning to discuss the importance of leadership within organizational culture. This paper will conclude by addressing elements of organizational culture and how to manage organizational culture. Three high performance organizations will be examined to compare high to low performance companies.
What is Organizational Culture?
Organizational Culture is a term that is often used in workplace discussions with organizations and/or companies having very distinct or nonexistent cultures, but what is organizational culture? If organizational culture is to be managed it helps first to be able to define it, for definitions of culture influence approaches to managing culture. Defining organizational culture, however; is difficult because there are so many variables that shape the definition of culture. Edgar Schein defines organizational culture as “a pattern of basic assumptions that the group learned as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems.” (Schien, 2010). To put it simply, organizational culture is everything that enables the organization to exist, it includes: organization values, visions, norms, working language, systems, symbols, beliefs and habits which govern the behavior of people as members of an organization. The following table, is a timeline of earlier definitions of organizations culture, it displays how the definition has changed over the years, but has really remained the same.
Historical Perspective for Organizational Culture
The concept of organizational culture, often referred to corporate culture, has an interesting history in organization research. The idea of organizational culture originated in the 1940s with the early human relations view of organizations. Human relations theorists viewed the informal, nonmaterial, interpersonal, and moral bases of cooperation and commitment as perhaps more important than the formal, material, and instrumental controls stressed by the rational system theorists. The human relations perspective drew its inspiration from even earlier anthropological and sociological work on culture associated with groups and societies (Geertz 1973; Mead 1934; Durkheim 1964; Weber 1947, 1958).
While a handful of scholars had earlier applied the term to the values, beliefs, and sentiments to a single organization (Pettigrew, 1979), what gave the topic real momentum was the number of practitioner oriented books appearing in the late 70’s to early 80’s when organizational culture became really popular. Many of these books were the discovery of culture and had an infatuation with Japanese styles of management and organization. In the late 70’s, Japan’s growing global competitiveness was sparking admiration and alarm among business researchers, journalists, and practitioners, yet the organization of the Japanese firm seemed to have the Western culture beat when it can came to economic and administrative modernity, rationality, and efficiency.
The term corporate culture has always been linked to the idea of non-diversified men in suits conducting the business of the company while the rest of the company’s workforce did the work. In more recent years, the more traditional idea of corporate culture has changed due to the startup movement. The startup movement is when smaller companies (startups) created from nothing with leaders of diverse backgrounds have gotten the public to change the way they view corporate culture and the business world. A study by Business Women Rising found that Fortune 500 companies with a large number of female senior leaders had 53 percent higher returns on equity, 42 percent higher return on sales and 66 percent higher return on invested capital. Fortune 500 companies with the strongest record of promoting women earned between 18 and 69 percent higher profits than companies with weak records in this area (www.businesswomenrising.com, 2012).
In today’s world, the boardrooms have been replaced with a less formal setting and the non-diversified men in suits have changed into a much more diverse group of successful corporate leaders.