Organizational Culture
A culture can be strong (think of Disney) or weak. A strong culture is not necessarily an asset to the organization. An organization's culture will start with the founder's values and preferences and respond to industry demands. However, the culture is shaped over time as it deals with external and internal challenges. Additionally, the culture is shared with new employees. Companies can use a formal orientation program and mentoring to instill the organizational culture during the onboarding process. We can learn about an organization's culture by looking at its mission statement, rituals, rules and policies, physical layout, and stories. Read this text to consider organizational culture in more depth and provides some different perspectives to help us understand corporate culture, including how it forms.
Understanding Organizational Culture
Why Does Organizational Culture Matter?
An organization's culture may be one of its strongest assets, as well as
its biggest liability. In fact, it has been argued that organizations
that have a rare and hard-to-imitate organizational culture benefit from
it as a competitive advantage. In a survey conducted by the management
consulting firm Bain & Company in 2007, worldwide business leaders
identified corporate culture as important as corporate strategy for
business success. This comes as no surprise to many leaders of
successful businesses, who are quick to attribute their company's
success to their organization's culture.
Culture, or shared values within the organization, may be related to increased performance. Researchers found a relationship between organizational cultures and company performance, with respect to success indicators such as revenues, sales volume, market share, and stock prices. At the same time, it is important to have a culture that fits with the demands of the company's environment. To the extent shared values are proper for the company in question, company performance may benefit from culture. For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer as a result of its culture. In other words, just as having the "right" culture may be a competitive advantage for an organization, having the "wrong" culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.
In addition to having implications for organizational performance, organizational culture is an effective control mechanism for dictating employee behavior. Culture is in fact a more powerful way of controlling and managing employee behaviors than organizational rules and regulations. When problems are unique, rules tend to be less helpful. Instead, creating a culture of customer service achieves the same result by encouraging employees to think like customers, knowing that the company priorities in this case are clear: Keeping the customer happy is preferable to other concerns such as saving the cost of a refund.
Culture, or shared values within the organization, may be related to increased performance. Researchers found a relationship between organizational cultures and company performance, with respect to success indicators such as revenues, sales volume, market share, and stock prices. At the same time, it is important to have a culture that fits with the demands of the company's environment. To the extent shared values are proper for the company in question, company performance may benefit from culture. For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer as a result of its culture. In other words, just as having the "right" culture may be a competitive advantage for an organization, having the "wrong" culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.
In addition to having implications for organizational performance, organizational culture is an effective control mechanism for dictating employee behavior. Culture is in fact a more powerful way of controlling and managing employee behaviors than organizational rules and regulations. When problems are unique, rules tend to be less helpful. Instead, creating a culture of customer service achieves the same result by encouraging employees to think like customers, knowing that the company priorities in this case are clear: Keeping the customer happy is preferable to other concerns such as saving the cost of a refund.