We know that very individual has what psychologists have termed personality, a set of relatively permanent and stable traits. When we describe someone as warm, innovative, relaxed, or conservative, we are describing personality traits. An organization too has a personality which we call the organization’s culture.
Organization culture: A system of shared meaning within an organization that determines to a large degree how employees act.
What do we specifically mean by the term organization culture? We refer to a system of shared meaning. Just as tribal cultures have totems and taboos that dictate how each member should act toward fellow members and outsiders, organizations have cultures that govern how their members should behave. In every organization stories, rituals, material symbols and language evolve over time. These shared values determine in large degree what employees see and how they respond to their world.
How can Cultures be assessed?
Although we currently have no definitive method for measuring an organization’s culture, preliminary research suggests that cultures can be analyzed by rating an organization on 10 characteristics. We list characteristics in Exhibit below: they are relatively stable and permanent over time. Just as an individual’s personality is stable and permanent – if you were outgoing last month, you’re likely to be outgoing next month – so, too, is an organization’s culture.
10 Characteristics of Organization Culture
1) Member identify: The degree to which employees identify with the organization as a whole rather than with their type of job or field of field professional expertise.
2) Group emphasis: The degree to which work activities are organized around groups rather than individuals.
3) People focus: The degree to which management decisions take into consideration the effect of outcomes on people within the organization
4) Unit integration: The degree to which units the organizations are encouraged to operate in a coordinated or interdependent manner.
5) Control: The degree to which rules, regulations, and direct supervisors are used to oversees and control employee behaviors.
6) Risk tolerance: The degree to which employees are encouraged to be aggressive, innovative and risk seeking.
7) Reward criteria: The degree to which rewards such as salary increases and promotions are allocated on employee performance criteria in contrast to seniority, favoritism, or other nonperformance factors.
8) Conflict tolerance: The degree to which employees are encouraged to air conflicts and criticism openly.
9) Means end orientation: The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes.
10) Open systems focus: The degree to which the organization monitors and responds to changes in the external environment.
Where does an organization’s culture come from?
An organization’s culture usually reflects the vision or mission of the organization’s founders. Because the founders had the original idea, they also have biases on how to carry out the idea. They are unconstrained by previous customs or ideologies. The founders establish the early culture by projecting an image of what the organization should be. The small size of most new organization also helps the founders impose their vision on all organization members. An organization’s culture that results from the interaction between (1) the founders’ biases and assumptions and (2) what the first employees learn subsequently from their own experiences. For example, the founder of IBM, Thomas Watson established a culture based on pursuing excellence providing the best customer service, and respect for employees. Ironically some 75 years later in an effort to revitalize the ailing IBM, CEO Louis Gerstner enhanced that culture with his strong customer oriented sensibility recognizing the urgency the market place imposes on having customers expectations met. Closer home, what makes the customer service at Jet airways so unique is the organization’s culture. At Jet, that means outstanding service and customer friendly policies. And at Infosys, managers constantly reinforce the company’s people culture by implementing certain practices such as creating a world class working environmental and facilities to keep employees happy.
How does Culture Influence Structure?
An organization’s culture may have an effect on its structure, depending on how strong, or weak, the culture is. For instance, in organizations that have strong culture, the organization’s culture can substitute for the rules and regulations that formally guide employees. In essence, strong cultures can create predictability, orderliness, and consistency without the need for written documentation. Therefore the stricter an organization’s culture the less managers need to be concerned with developing formal rules and regulations. Instead those guides will be internalized in employees when they accept the organization’s culture. If on the other hand, an organization’s culture is weak if no dominant shared values are present – its effect on structure is less clear.