Case Study: Organizational Culture in Montenegrin Companies

Definition, content and importance of organizational culture

Organizational culture is difficult to define precisely, i.e. there is no single definition of organizational culture. It can be said that some of definitions are more recognized and some less, but neither of them is generally accepted. The organizational culture includes the "system of assumptions, beliefs, values and norms of behavior that members of one company have developed and adopted through common experience, which are manifested through symbols that guide their thinking and behavior". From the above stated definition three important components necessary for better understanding of organizational culture arise. First, organizational culture consists of collective cognitive structures such as assumptions, values, norms and attitudes, but also of symbols which materialize and manifest its cognitive content. Second, organizational culture is the result of organization members' common experience in solving problems they face with in dealing with external adaptation and internal integration of the collective. Third, collective cognitive structures that make organizational culture represent a framework and become a guide for members of the company in interpretation of reality and the world around them. Culture helps members of the company in determining the meaning of concepts, things and events within the company and outside of it and act in accordance with them.

For better understanding of organizational culture definition it is necessary to know its characteristics. Organizational culture is a social phenomenon since it is expressed at the level of a certain social group in the process of social interaction. Building organizational culture represents a long-term process, because it is changed hard and slowly. One part of its content is of subconscious character which makes this process more difficult. Further, culture as a combination of single experiences of members of an organization makes an organization different from others. Since it determines the meaning of events and things by its meanings, organizational culture provides a sense of certainty and order in them.

Organizational culture has its cognitive and symbolic component. Cognitive component comprises elements of interpretive schemes of managers and employees that are imposed by the company and through which it affects not only the way they behave, but also the way they understand the world around them. Cognitive components of organizational culture are: assumptions, values, norms and attitudes.

Basic assumptions explain the world as it is to the members of the company. Basic assumptions arise when solutions to problems the members of the company are facing with and which proved to be successful, gradually become the rules of how to behave in certain situations. Out of these problems solutions that proved to be successful, explanations of how the reality in which these problems arise works, are gradually developing. Those explanations are the basic assumptions as the deepest element of organizational culture.

Values are defined as "stable belief" that a particular behavior is more desirable than the opposite behavior. Values are defined as durable, extremely positive attitude to underestimated objects that we access as important. Values guide employees' behavior and influence the formation of their attitudes.

Norms are often included into the content of organizational culture, but always within the value. On the one hand, norms are largely overlapping the values they arise from and the practice of behavior they determine, on the other. That is the reason why norms represent connection between values and behaviors. Norms are rules of behavior, often informal, deriving from values and represent guidelines for everyday behavior of company's members.

Attitudes are based on and derived from values. However, attitudes generate behavior in a slightly different way from the norms. In contrast to the norms that represent certain rules that lead behavior of employees in the company, the attitudes represent beliefs about the object of behavior that will produce certain behavior towards the object. "The attitudes include basic ideals and principles of business conduct".

Cognitive content of organizational culture is made of invisible culture elements. Symbolic components of organizational culture manifest cognitive elements of organizational culture and include everything that can be seen, heard and felt in the company.

The importance of organizational culture arises from the fact that it largely determines the meaning attributed to events and occurrences, both within the organization and outside of it, by members of an organization. So it is a system of assumptions, values, norms and attitudes that are shared by all members of the organization, employees and managers of the company, which essentially determines their thinking, behavior and influences their decisions and actions. Therefore, all decisions, both of managers and employees in an organization, are to a large extent determined by culture. In that sense, organizational culture affects not only strategic decisions of top management but also operational, i.e. everyday decisions within the organization.