Culture performs a number of functions within an organization. First, it has a boundary-defining role; that is, it creates distinctions between one organization and others. Second, it conveys a sense of identity for organization members. Third, culture facilitates the generation of commitment to something larger than oneâ€™s individual self-interest. Fourth, it enhances the stability of the social system. Culture is the social glue that helps hold the organization together by providing appropriate standards for what employees should say and do. Finally, culture serves as a senseâ€“making and control mechanism that guides and shapes the attitudes and behavior of employees. It is this last function that is of particular interest to us. As the following quote makes clear, culture defines the rules of the game:
Culture may be definition elusive, intangible, implicit, and taken for granted. But every organization develops a core set of assumptions, understandings, and implicit rules that govern day-to-day behavior in the workplace. Until newcomers learn the rules, they are not accepted as full-fledged members of the organization. Transgressions of the rules on the part of high-level executives or front-line employees result in universal disapproval and powerful penalties. Conformity to the rule becomes the primary basis or reward and upward mobility.
The role of culture in influencing employee behavior appears to be increasingly important in todayâ€™s workplace. As organizations have widened spans of control, flattened structures, introduced teams, reduced formalization, and empowered employees, the shared meaning provided by a strong culture ensures that everyone is pointed in the same direction.
Who receives a job offer to join the organization, who is appraised as a high performer, and who gets the promotion are strongly influenced by the individual organization â€œfitâ€? that is, whether the applicant or employeeâ€™s attitudes and behavior are compatible with the culture. Itâ€™s not a coincidence that employees at Disney theme parks appear to be almost universally attractive clean, and wholesome-looking, with bright smiles. Thatâ€™s the image Disney seeks. The company selects employees who will maintain that image. And once on the job, a strong culture, supported by formal rules and regulations, ensures that Disney theme-park employees will act in a relatively uniform and predictable way.
Culture as a Liability
Many of its functions, as outlined, are valuable for both the organization and the employee. Culture enhances organizational commitment and increases the consistency of employee behavior. These are clearly benefits to an organization. From an employeeâ€™s standpoint, culture is valuable because it reduces ambiguity. It tells employees how things are one and whatâ€™s important. But we shouldnâ€™t ignore the potentially dysfunctional aspects of culture, especially a strong one, on an organizationâ€™s effectiveness.
Barriers to change: Culture is a liability when the shared values are not in agreement with those that will further the organizationâ€™s effectiveness. This is most likely to occur when an organizationâ€™s environment is dynamic. When an environment is undergoing rapid change, an organizationâ€™s entrenched culture may no longer be appropriate. So consistency of behavior is an asset to an organization when it faces a stable environment. It may, however, burden the organization and make it difficult to respond to changes in the environment. This helps to explain the challenges that executives at organizations like Mitsubishi, Eastman Kodak, Xerox, Boeing, US Federal Bureau of Investigation, have had in recent years in adapting to upheavals in their environment. These organizations have strong cultures that worked well for them in the past. But these strong cultures become barriers to change when â€œbusiness as usualâ€? is no longer effective.
Barriers to Acquisitions and Mergers
Historically, the key factors that management looked at in making acquisition or merger decisions were related to financial advantages or product synergy. In recent years, cultural compatibility has become the primary concern. While a favorable financial statement or product line may be the initial attraction of an acquisition candidate, whether the acquisition actually works seems to have more to do with how well the two organizationsâ€™ cultures match up.