"What is Organizational Culture? Critically analyse the extent to which it is related to organizational processes and outcomes."

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People and Organizations: Assignment

“What is Organizational Culture? Critically analyse the extent to which it is related to organizational processes and outcomes.”

Culture, a concept that has had a long and checkered history, is difficult to define unambiguously. In the past few years, organizational researchers and managers have used it to indicate the climate and practices that organizations develop around the way they handle people (Schein E H, 1992). The culture of an organization may be described as, ‘a general constellation of beliefs, mores, customs, value systems, behavioral norms, and ways of doing business that are unique to each corporation, that set a pattern for corporate activities and actions, and that describe the implicit and emergent patterns of behavior and emotions, characterizing life in the organization.’ (Tunstall, 1983; cited in Brown A, 1998) This definition would help to understand organizational culture and focus attention on the selective phenomena it refers to. In the course of the essay, an endeavor has been made to elucidate some of the different types of cultures in an organization. Moreover, the essay will deal with different aspects of an organization’s culture, which have an impact on organizational processes, effectiveness and outcomes. However, before dealing with the aforementioned aspects, it is essential to understand exactly how culture can bear a relation to organization.

Organizations have the paradoxical quality of being both ‘part of’ and ‘apart from’ societies. They are embedded in a wider social concept, but they are also communities in their own right, with distinctive rules and values. They can thus be thought of as ‘culture producing phenomena.’ (Smircich, 1983, cited in Fincham R and Rhodes P S, 1992) The best way to think about culture is to view it as the accumulated shared learning of a given group, covering behavioral, emotional, and cognitive elements of the group members’ total psychological functioning. However, it has to be kept in mind, that not all cultures suit all purposes or people. Cultures are founded and built over the years by the dominant group in an organization. What suits them and the organization at one stage is not necessarily appropriate forever. A large number of typologies or classifications of types of organizational cultures have developed, providing broad overviews of the sorts of variations that exist between cultures. An appropriate typology to sight would be Harrison and Handy’s typology, which suggests that there are four main types of organizational culture, namely: power, role, task and person. Each of these could be a good and effective culture; but that does not mean that the culture that works in one place, is bound to be successful everywhere. The following paragraphs throw some light on these cultures, and outline some of their advantages and disadvantages.

The power culture is usually found in small entrepreneurial organizations and it depends on a central power source, with rays of power and influence spreading out from that central figure. The internal organization of a power culture is highly dependant on trust, empathy and personal communication for its effectiveness. Characterized by few rules and procedures, little bureaucracy, and power-oriented individuals, these cultures are proud and strong. They have the ability to move quickly, and can react well to threat or danger. However, size can be a problem for power cultures. Often seen as tough and abrasive, they may suffer from low morale and high turnover in middle management positions, if they fail to recruit appropriate personnel. (Handy C B, 1985)

The role culture is often stereotyped as bureaucracy, the organizing principles of which are logic and rationality. The role organization rests its strength, in its ‘pillars’ of functions and specialties, which are controlled and coordinated, by a small group of senior executives. Rules, procedures and job descriptions dominate the internal environment of a role culture; and the efficiency depends on the rationality of the allocation of work and responsibility, rather than on individual personalities. Such a culture is likely to be most successful in stable and predictive environments. The civil service, the oil industry, and retail banking are often cited ...

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The task culture is job or project orientated. This culture focuses on bringing together appropriate resources, and the right people at the right level of the organization to make the project successful. Flexibility, adaptability, individual autonomy and mutual respect based on ability, are the most important organizing principles here. Task culture can be highly successful in those environments, where the market is competitive, product life spans are short, and constant innovation is necessary. Advertising agencies would be a good example to cite for this sort of culture. However, such organizations find it hard to produce economies of scale or great depth of expertise. They heavily rely on the quality of the people involved, are difficult to control, and are inherently unstable by themselves. (Brown A, 1998)

The person culture develops, when a group of people decides that it is in their own best interest, to organize on a collective, rather than an individual basis. Here, the individuals themselves decide on their own work allocation, with rules and coordinative mechanisms having minimal significance. However, the individuals with this orientation are not easy to manage, as there is little influence that can be brought to bear on them. (Handy C B, 1985)

After having studied the four different cultures discussed above, it can be seen that they are significantly related to an organization’s processes and outcomes. Each culture, in itself, is a separate institution, working on principles that are identifiable with it. The set up and functioning of an organization, based on the form of culture adopted, will determine outcomes of the organization. Processes, on the other hand, refer to how the tasks of an organization are carried out. Decision-making, leadership, communication, motivation, and conflict-resolution practices are some examples of processes. In the following paragraphs, it has been endeavored to highlight some avenues where culture plays an indefinite role in influencing an organization’s processes.

Culture plays an important role in fostering social cohesion. It has been described as the ‘cement’ or ‘glue’ that bonds an organization together. According to Schein, 1985, organizational cultures reflect the ultimate problems that every group faces: dealing with its external environment (i.e. developing consensus on its mission, strategy and goals) and managing its internal integration (i.e. communication, interpersonal relationships, etc). Largely because culture promotes consistency of outlook, it also facilitates organizational processes of coordination and control. Furthermore, it also solves the problem of uncertainty and complexity. Through a culture’s myths, metaphors, stories and symbols, an organization is able to construct its own world. This is most usually a world, where complexity is much reduced, uncertainties are neutralized, and the organization is able to exert control over its own activities. Where a complex decision has to be taken, organizational culture may even help by narrowing the range of options to be considered, as some potential courses of action may be ruled out as being culturally incompatible.

Organizational culture can also be an important source of motivation to employees, and thus a significant influence on the efficiency and effectiveness of the organizations. An appropriate and cohesive culture can offer employees a focus of identification and loyalty. It can also foster beliefs and values that encourage employees to think of themselves as high performers, doing worthwhile jobs. It can promulgate stories, rites and ceremonies, which create a feeling of belonging. Furthermore, a strong organizational culture can also be a source of competitive advantage. Since a strong culture promotes consistency, coordination and control, reduces uncertainty and enhances motivation, it facilitates organizational effectiveness, and therefore improves its chances of being successful in the marketplace (Brown A, 1998). For example the success of the US Corporation, Motorola is based on the culture of the company for significant research and development, high quality, and active enthusiasm for customer service. Culture has enhanced the strategy of the company to develop modern products like light weight cellular telephones, wristwatch pagers which have been major technical breakthroughs. (Thierren, 1989; cited in McKenna E, 1994)

The influence that culture has on organizational processes is supported by its influence on organizational outcomes. It has been suggested that there are four different aspects of an organization’s culture, which have an impact on organizational effectiveness and outcomes. These aspects can be discussed in the form of hypotheses, which can be labeled as involvement, consistency, adaptability and mission. (Denison, 1990; cited in Brown A, 1998) The involvement hypothesis states that organizational effectiveness is a function of ‘the level of involvement and participation of an organization’s members’. A high level of involvement and participation create a sense of ownership and responsibility. The result is greater employee commitment to the organization, reducing the needs for formal systems of control, leading to performance enhancement. The consistency hypothesis on the other hand, states that, in consistent cultures, communication is a more reliable process for exchanging information, because there is general agreement on the meaning of words, actions and other symbols. The adaptability hypothesis states that a culture that allows an organization to adapt to changing demands and circumstances, will promote effectiveness. Adaptability allows an organization to recognize and respond to its external environment and internal constituencies. Moreover, in response to either internal or external prompting, it requires the capacity to restructure behaviors and processes, as appropriate. Lastly, the mission hypothesis states that a culture that provides a shared definition of the function and purpose of an organization will be positively associated with effectiveness. A sense of mission not only provides employees with non-economic reasons for investing their efforts in the well being of the organization, but also helps in identifying the direction and end goals, which make it easier to choose appropriate courses of action for the organization.

Another view suggests that high economic performance is correlated with a ‘strategy appropriate’ culture. Those organizations that have cultures that ‘fit’ the environment and the business strategy will perform better in comparison to those whose fit is poor. However, the difficulty arises when the environment changes. Looking at the evidence provided in the study conducted by Kotter and Heskett, 1992, it is seen that the lower performing organizations, had, in the past enjoyed a significantly better culture-environment fit. This fit had worsened as a result of environmental changes, to which the organization had not effectively responded. The conclusion that can be drawn is that, for any organization, a good culture-environment fit will be associated with short-term high performance, but this does not guarantee the success of the organization in the long term. In order for an organization to be continually successful, it must have more than just a strong and appropriate culture, it must be able to continuously adapt to its environment. (Brown A, 1998)

However it is seen that the relationship between an organizational culture and its performance is not always good. Kotter and Heskett (1992), for example, have identified ten large and well known organizations (including Sears, Procter & Gamble and Goodyear) that have exceptionally strong cultures and relatively weak performance over the period 1977-1988, but that weak cultures are not necessarily economically disadvantageous (for example, at McGraw Hill and SmithKline). It has also long been recognized that companies such as Kodak, Polaroid and Xerox, all of which once held seemingly unassailable positions, and were supposed to be bolstered by their strong cultures, have experienced significant performance difficulties in recent years. In these instances, it seems reasonable to assume that a dysfunctional culture has played (and is playing) a role in thwarting organizational achievement. There are cultures which feature beliefs, values and assumptions that promote conflict, undermine coordination and control, increase uncertainty and confusion, diminish employee motivation and reduce competitive advantage. (Brown A, 1998)

In conclusion, it can be said that organizational culture plays a pivotal role in influencing an organization’s processes and outcomes. After having studied the different types of culture, and the various aspects, where culture has an impact on an organization’s effectiveness, processes and outcomes, it can be said that culture is not something an organization ‘has’; it is something an organization ‘is’; and all the features of an organization, including its systems, policies, procedures and processes, are elements of its cultural life. (Pacanowsky and O’Donnell-Trujillo, 1982; cited in Brown A, 1998) Culture is an enormously powerful means of influencing how the world is interpreted, and naturally enough there are dangers too, associated with those cultures that perpetuate dysfunctional beliefs, values, attitudes and assumptions. It definitely has a positive correlation with long-term economic performance, but it is weak. This means that there are instances where culture can also be a liability, because shared beliefs, values and assumptions can interfere with the needs of the business and lead people to think and act in commercially inappropriate ways. However the advantages of a strong culture are explicitly outlined in the aforementioned paragraphs, and the relevance, pertinence and importance of culture in organizational processes and outcomes, by far outweighs its disadvantages.

References:

Books

Handy, Charles B. (1985). Understanding Organizations.

Penguine books. Middle Sex, England.

Fincham, Robin and Rhodes, Peter S. (1992). The Individual, Work and Organization. Weidenfeld and Nicolson, London.

Brown, Andrew D. (1998). Organizational Culture. Prentice Hall – Pearson

Education Limited, Wiltshire.

Schein, Edgar H. (1992). Organizational Culture and Leadership. Jossey- Bass

Publishers, San Francisco.

Longenecker, Justin G. (1969). Principles of Management and Organizational

Behaviour. Charles E Merrill Publishing Co. Columbus, Ohio.

Hellriegel Don, Slocum John W. And Woodman Richard W. (1995)

Organizational Behaviour. West Publishing Company, St. Paul, Minneapolis.

Huczynski, Andrzej and Buchanan, David (2001). Organizational Behaviour: An

Introductory Text. Prentice Hall, Europe.

McKenna, Eugene (1994). Business psychology and organizational behavior: A

Student’s Handbook. Lawrence Erlbaum Associates Limited Publishers, East Sussex.

Mullins, Laurie J (2002). Management and organizational behavior. Prentice hall – Pearson Education Limited, Italy.

Information Available Online

Organizational Culture. Available at, , written by Carter McNamara. Accessed on 08.11.02.
BOLA: Organizational Culture. Available at, , developed and maintained by Chris Jarvis. Accessed on 08.11.02.
Communication Policy and Strategy. Available at, , maintained by David L. Sturges and Michael Minor. Last modified on August 29, 2001. Accessed on 08.11.02.

Secondary References

Denison, D. (1990). Corporate Culture and Organizational Effectiveness, New York: John Wiley.

Kotter, J. P. and Heskett, J. L (1992). Corporate Culture and Performance. New York: The Free Press.

Pacanowsky, M. E. and O’Donnell-Trujillo, N (1982). Communication and Organizational Culture. The Western Jornal of Speech Communication, 46(spring), 115-130.

Smircich, L (1983). Concepts of Culture and Organizational Analysis. Administrative Science Quarterly, 28, 339-58.

Tunstall, W. B. (1983). Cultural Transition at AT&T. Sloan Management Review, 25(1), 15-26

"What is Organizational Culture? Critically analyse the extent to which it is related to organizational processes and outcomes."

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