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The role of culture in an organizations overall success

Origins[ edit ] The term of culture in the organizational context was first introduced by Dr. The study is concerned with the description, analysis, and development of the corporate group behaviours.

Elliott Jaques "the culture of the factory is its customary and traditional way of thinking and doing of things, which is shared to a greater or lesser degree by all its members, and which new members must learn, and at least partially accept, in order to be accepted into service in the firm.

It is a matter of being able to care about the same things, and it applies to nations as well as to associations and organizations within nations. Elliott Jaques in his concept of requisite organization established the list of valued entitlements or organizational values that can gain from people their full commitment. Fair and just treatment for everyone, including fair pay based upon equitable pay differentials for level of work and merit recognition related to personal effectiveness appraisal.

Leadership interaction between managers and subordinates, including shared context, personal effectiveness appraisal, feedback and recognition, and coaching. Clear articulation of accountability and authority to engender trust and confidence in all working relationships. Articulation of long-term organizational vision through direct communication from the top. Opportunity for everyone individually or through representatives to participate in policy development.

Work for everyone at a level consistent with their level of potential capability, values and interests. Opportunity for everyone to progress as his or her potential capability matures, within the opportunities the role of culture in an organizations overall success The role of managerial leadership at every organizational level is to make these organizational values operationally real.

Usage[ edit ] Organizational culture refers to culture in any type of organization including that of schools, universities, not-for-profit groups, government agencies, or business entities. In business, terms such as corporate culture and company culture are often used to refer to a similar concept. The term corporate culture became widely known in the business world in the late 1980s and early 1990s.

Culture is basic, with personal experience producing a variety of perspectives. A weak culture is one that employees have difficulty defining, understanding, or explaining. In such environments, strong cultures help firms operate like well-oiled machines, engaging in outstanding execution with only minor adjustments to existing procedures as needed.

Conversely, there is weak culture where there is little alignment with organizational values, and control must be exercised through extensive procedures and bureaucracy. Research shows[ citation needed ] that organizations that foster strong cultures have clear values that give employees a reason to embrace the culture.

A "strong" culture may be especially beneficial to firms operating in the service sector since the role of culture in an organizations overall success of these organizations are responsible for delivering the service and for evaluations important constituents make about firms. Organizations may derive the following benefits from developing strong and productive cultures: Better aligning the company towards achieving its vision, mission, and goals High employee motivation and loyalty Increased team cohesiveness among the company's various departments and divisions Promoting consistency and encouraging coordination and control within the company Shaping employee behavior at work, enabling the organization to be more efficient Where culture is strong, people do things because they believe it is the right thing to do, and there is a risk of another phenomenon, groupthink.

He defined it as "a quick and easy way to refer to a mode of thinking that people engage when they are deeply involved in a cohesive in-groupwhen the members' strivings for unanimity override their motivation to realistically appraise alternatives of action" Irving Janis, 1972, p. This is a state in which even if they have different ideas, they do not challenge organizational thinking, and therefore there is a reduced capacity for innovative thoughts.

This could occur, for example, where there is heavy reliance on a central charismatic figure in the organization, or where there is an evangelical belief in the organization's values, or also in groups where a friendly climate is at the base of their identity avoidance of conflict. In fact, groupthink is very common and happens all the time, in almost every group.

Members that are defiant are often turned down or seen as a negative influence by the rest of the group because they bring conflict. Culture is the organization's immune system. And Why Should We Care? A variety of characteristics describe a healthy culture, including: Acceptance and appreciation for diversity Regard for fair treatment of each employee as well as respect for each employee's contribution to the company Employee pride and enthusiasm for the organization and the work performed Equal opportunity for each employee to realize their full potential within the company Strong communication with all employees regarding policies and company issues Strong company leaders with a strong sense of direction and purpose Ability to compete in industry innovation and customer service, as well as price Lower than average turnover rates perpetuated by a healthy culture Investment in learning, training, and employee knowledge Additionally, performance oriented cultures have been shown to possess statistically the role of culture in an organizations overall success financial growth.

Such cultures possess high employee involvement, strong internal communications and an acceptance and encouragement of a healthy level of risk-taking in order to achieve innovation. Additionally, organizational cultures that explicitly emphasize factors related to the demands placed on them by industry technology and growth will be better performers in their industries.

According to Kotter and Heskett 1992[11] organizations with adaptive cultures perform much better than organizations with unadaptive cultures. An adaptive culture translates into organizational success; it is characterized by managers paying close attention to all of their constituencies, especially customers, initiating change when needed, and taking risks. Healthy companies are able to deal with employees' concerns the role of culture in an organizations overall success the well-being of the organization internally, before the employees would even feel they needed to raise the issues externally.

It is for this reason that whistleblowingparticularly when it results in serious damage to a company's reputation, is considered to be often a sign of a chronically dysfunctional corporate culture. Specifically, some organizations have "functional" cultures while others have "dysfunctional" cultures. A "dysfunctional" culture is one that hampers or negatively affects an organization's performance and success.

Management of culture[ edit ] There are many different types of communication that contribute in creating an organizational culture: Stories can provide examples for employees of how to or not to act in certain situations.

Rites and ceremonies combine stories, metaphors, and symbols into one. Several different kinds of rites affect organizational culture: Fantasy Themes are common creative interpretations of events that reflect beliefs, values, and goals of the organization. They lead to rhetorical visions, or views of the organization and its environment held by organization members. Bullying culture and Workplace bullying Bullying is seen to be prevalent in organizations where employees and managers feel that they have the support, or at least implicitly the blessing, of senior managers to carry on their abusive and bullying behaviour.

Furthermore, new managers will quickly come to view this form of behaviour as acceptable and normal if they see others get away with it and are even rewarded for it. That people may be bullied irrespective of their organisational status or rank, including senior managers, indicates the possibility of a negative ripple effect, where bullying may be cascaded downwards as the targeted supervisors might offload their own aggression on their subordinates.

In such situations, a bullying scenario in the boardroom may actually threaten the productivity of the entire organisation. Culture of fear Ashforth discussed potentially destructive sides of leadership and identified what he referred to as petty tyrantsi. An authoritarian style of leadership may create a climate of fear, where there is little or no room for dialogue and where complaining may be considered futile.

Rayner explained these figures by pointing to the presence of a climate of fear in which employees considered reporting to be unsafe, where bullies had "got away with it" previously despite management knowing of the presence of bullying. They identify five basic stages: This model of organizational culture provides a map and context for leading an organization through the five stages. Geert Hofstede, 1991 Perhaps equally foundational; observing the vast differences in national copyright and taxation, etc.

Field data were collected by interviewing Western expatriates and Chinese professionals working in this context, supplemented by non-participant observation and documentary data. The data were then analyzed objectively to formulate theme-based substantive theories and a formal theory. The major finding of this study is that the human cognition contains three components, or three broad types of "cultural rules of behavior", namely, Values, Expectations, and Ad Hoc Rules, each of which has a mutually conditioning relationship with behavior.

The three cognitive components are different in terms of the scope and duration of their mutual shaping of behavior. Values are universal and enduring rules of behavior; Expectations, on the other hand, are context-specific behavioral rules; while Ad Hoc Rules are improvised rules of behavior that the human mind devises contingent upon a particular occasion.

Furthermore, they need not be consistent, and frequently are not, among themselves. Metaphorically, they can be compared to a multi-carriage train, which allows for the relative lateral movements by individual carriages so as to accommodate bumps and turns in the tracks.

In fact, they provide a "shock-absorber mechanism", so to speak, which enables individuals in SW-ICCM contexts to cope with conflicts in cultural practices and values, and to accommodate and adapt themselves to cultural contexts where people from different national cultural backgrounds work together over extended time.

It also provides a powerful the role of culture in an organizations overall success which explains how interactions by individuals in SW-ICCM contexts give rise to emerging hybrid cultural practices characterized by both stability and change. One major theoretical contribution of this "multi-carriage train" perspective is its allowance for the existence of inconsistencies among the three cognitive components in their mutual conditioning of behavior.

This internal inconsistency view is in stark contrast to the traditional internal consistency assumption explicitly or tacitly held by many culture scholars.

The other major theoretical contribution, which follows logically from the first one, is to view culture as an overarching entity which is made of a multiplicity of Values, Expectations, and Ad Hoc Rules. This notion of one multiplicity culture to an organization leads to the classification of culture along its path of emergence into nascent, adolescent, and mature types, each of which is distinct in terms of the pattern of the three cognitive components and behavior.

Effects[ edit ] Research suggests that numerous outcomes have been associated either directly or indirectly with organizational culture. A healthy and robust organizational culture may provide various benefits, including the following: Competitive edge derived from innovation and customer service The role of culture in an organizations overall success, efficient employee performance High employee morale Strong company alignment towards goal achievement Although little empirical research exists to support the link between organizational culture and organizational performance, there is little doubt among experts that this relationship exists.

Organizational culture can be a factor in the survival or failure of an organization — although this is difficult to prove given that the necessary longitudinal analyses are hardly feasible. A 2003 Harvard Business School study reported that culture has a significant effect on an organization's long-term economic performance. The study examined the management practices at 160 organizations over ten years and found that culture can enhance performance or prove detrimental to performance.

Organizations with strong performance-oriented cultures witnessed far better financial growth. Additionally, a 2002 Corporate Leadership Council study found that cultural traits such as risk taking, internal communications, and flexibility are some of the most important drivers of performance, and may affect individual performance. Furthermore, innovativeness, productivity through people, and the other cultural factors cited by Peters and Waterman 1982 also have positive economic consequences.

Denison, Haaland, and Goelzer 2004 found that culture contributes to the success of the organization, but not all dimensions contribute the same. It was found that the effects of these dimensions differ by global regions, which suggests that organizational culture is affected by national culture.

Additionally, Clarke 2006 found that a safety climate is related to an organization's safety record. Organizational culture is reflected in the way people perform tasks, set objectives, and administer the necessary resources to achieve objectives.

Culture affects the way individuals make decisions, feel, and act in response to the opportunities and threats affecting the organization. Adkins and Caldwell 2004 found that job satisfaction was positively associated with the degree to which employees fit into both the overall culture and subculture in which they worked.

A perceived mismatch of the organization's culture and what employees felt the culture should be is related to a number of negative consequences including lower job satisfaction, higher job strain, general stress, and turnover intent. It has been proposed that organizational culture may affect the level of employee creativity, the strength of employee motivation, and the reporting of unethical behavior, but more research is needed to support these conclusions.

Organizational culture also affects recruitment and retention. Individuals tend to be attracted to and remain engaged in organizations that they perceive to be compatible. Additionally, high turnover may be a mediating factor in the relationship between culture and organizational performance.

Deteriorating company performance and an unhealthy work environment are signs of an overdue cultural assessment.

Organizational culture

Change[ edit ] When an organization does not possess a healthy culture or requires some kind of organizational culture change, the change process can be daunting.

Organizational culture can hinder new change efforts, especially where employees know their expectations and the roles that they are supposed to play in the organization.

This is corroborated by Mar 2016: One major reason why such change is difficult is that organizational cultures, and the organizational structures in which they are embedded, often reflect the "imprint" of earlier periods in a persistent way and exhibit remarkable levels of inertia.

Culture change is affected by a number of elements, including the external environment and industry competitors, change in industry standards, technology changes, the size and nature of the workforce, and the organization's history and management.

There are a number of methodologies specifically dedicated to organizational culture change such as Peter Senge 's Fifth Discipline. There are also a variety of psychological approaches that have been developed into a system for specific outcomes such as the Fifth Discipline's "learning organization" or Directive Communication's "corporate culture evolution.

Burman and Evans 2008 argue that it is ' leadership ' that affects culture rather than ' management ', and describe the difference. When one wants to change an aspect of the culture of an organization one has to keep in consideration that this is a long term project.