Organisational Culture

What is Organisational Culture?

Organizational culture refers to a system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behavior. These values have a strong influence on employee behavior as well as organizational performance. In fact, the term organizational culture was made popular in the 1980s when Peters and Waterman’s best-selling book In Search of Excellence made the argument that company success could be attributed to an organizational culture that was decisive, customer-oriented, empowering, and people-oriented. Since then, organizational culture has become the subject of numerous research studies, books, and articles. Organizational culture is still a relatively new concept. In contrast to a topic such as leadership, which has a history spanning several centuries, organizational culture is a young but fast-growing area within management.

Why Organisational Culture?

An organization’s culture may be one of its strongest assets or its biggest liability. In fact, it has been argued that organizations that have a rare and hard-to-imitate culture enjoy a competitive advantage.  In a survey conducted by the management consulting firm Bain & Company in 2007, worldwide business leaders identified corporate culture to be as important as corporate strategy for business success. This comes as no surprise to 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.

In addition to having implications for organizational performance, organizational culture is an effective control mechanism dictating employee behavior. Culture is a more powerful way of controlling and managing employee behaviors than organizational rules and regulations. For example, when a company is trying to improve the quality of its customer service, rules may not be helpful, particularly when the problems customers present are unique.

Video 1:What is organisational Culture

Model Describing How Cultures Are Created and Maintained?

Figure 1: Model describing how cultures are created and maintained.

Where do cultures come from? Understanding this question is important in understanding how they can be changed. An organization’s culture is shaped as the organization faces external and internal challenges and learns how to deal with them. When the organization’s way of doing business provides a successful adaptation to environmental challenges and ensures success, those values are retained. These values and ways of doing business are taught to new members as the way to do business (Schein, 1992).The factors that are most important in the creation of an organization’s culture include founders’ values, preferences, and industry demands.

As a company matures, its cultural values are refined and strengthened. The early values of a company’s culture exert influence over its future values. It is possible to think of organizational culture as an organism that protects itself from external forces. Organizational culture determines what types of people are hired by an organization and what types of people are left out. Moreover, once new employees are hired, the company assimilates new employees and teaches them the way things are done in the organization. We call these processes attraction-selection-attrition and on boarding processes. We will also examine the role of leaders and reward systems in shaping and maintaining an organization’s culture.

References

• Creating and Maintaining Organisational culture, Available at: http://open.lib.umn.edu/principlesmanagement/chapter/8-5-creating-and-maintaining-organizational-culture-2/ (Accessed: 2nd October 2018).
• OrganisationalCulture, Available at: https://pdfs.semanticscholar.org/d79e/e2d5d0095c1b650e670a15dda35dfb6f996e.pdf(Accessed: 2nd October 2018).
• Figure 1:Model described how cultures are created and maintained[online]avaolable at:http://open.lib.umn.edu/principlesmanagement/chapter/8-5-creating-and-maintaining-organizational-culture-2/[Accessed on : 2nd October 2018]
• Video 1:What is organizational culture?[Online] available at: https://www.youtube.com/watch?v=Rd0kf3wd120/ [Accessed on: 2nd October 2018].