Organizational Culture

Although there is no universally accepted definition of organizational culture, researchers generally agree that organizational culture refers to the shared meaning, interpretations, and understanding of various organizational events among organizational members. Organizational culture serves as a guide to members to behave in ways shown to be effective over time; adds a sense of predictability and order to uncertainties in the environment; and provides a general understanding of how, when, and why members behave in certain ways.

Researchers generally agree that organizational culture is best represented as different layers along a continuum of accessibility. Denise Rousseau’s description of culture suggests that the most observable layer of organizational culture is the material artifacts, such as organizational logos and office layout, found in the organization. The next layer is the behavioral patterns in which members engage. These are the routinized activities that members perform, which build coordination among members. The third layer is formed by the behavioral norms that provide predictability among members and identify acceptable and unacceptable behavior. The fourth, and less readily accessible, layer is made up of the values and beliefs of the organizational members. These values and beliefs represent preferences for various outcomes or behaviors and are generally conscious or espoused by organizational members. The deepest, and therefore least accessible, layer of culture is the basic, fundamental assumptions shared by organizational members. These assumptions exist outside of conscious awareness and as such, members are typically unaware of their content or influence.

Edgar Schein’s (1992) highly influential definition of culture focused primarily on the deeper levels of culture, in that he defined organizational culture as a pattern of basic, largely unconscious assumptions that organizational members share. These basic assumptions are learned over time as those behaviors effective at solving organizational issues with adapting to the external environment or with resolving internal conflicts that have come to be internalized as the right way to do things here. Because these behaviors were effective in the past, new organizational members are socialized to these behavioral responses as the correct way to perceive, think, and feel in regard to external and internal issues. Ben Schneider’s (1990) arguments about attraction, selection, and attrition leading to a homogeneous workforce suggest that because similar types of people enter the organization in the first place, it is often relatively easy for organization members to internalize the basic assumptions that form the organization’s culture.

According to Schein’s (1992) definition, organizational culture exists primarily at the level of these basic assumptions. Meanwhile, not included in his definition of organizational culture are artifacts, the visible structures, norms, and processes of an organization; and espoused values, the cognitively available and articulated strategies, goals, and philosophies of an organization. Instead, they are considered manifestations of the true, deeper culture. Other culture researchers (like Rousseau, described previously) view all these layers as various aspects of organizational culture.

Measurement of Organizational Culture

Generally speaking, there are two distinct ways to measure organizational culture, each with advantages and disadvantages. One approach is more anthropological in nature and emphasizes the investigators’ immersion into the organizational culture. When embedded in the organization, the investigator can better interpret the basic assumptions made by the organizational members. The second approach uses more quantitative methods to assess organizational culture. Through surveys of organizational members, investigators can quantify an organization’s culture, which provides a means to compare organizations or branches of an organization on predetermined cultural factors.

The more qualitative approach to the assessment of organizational culture is advocated strongly by Schein, and by the organizational anthropological community. Schein (1992) argues that the more efficient and accurate way to truly understand an organization’s culture is to plunge into the organization. This vantage point provides an opportunity, with the help of motivated insiders, to better decipher the organizational members’ basic assumptions and truly understand the culture. Specific methods used thus far in the literature include ethnographic techniques such as observation; interviews; structured focus groups; and large group meetings with organizational members designed to examine artifacts, espoused values, and basic assumptions. Schein even goes so far as to argue that a quantitative assessment of organizational culture is unethical, in that it fails to describe the unique ways in which various beliefs and assumptions are manifested in a given organization.

The qualitative assessment of culture depends on an iterative clinical approach, or a continual revising of cultural assessment as new information is made available. With this method, the investigator enters the organization and directly experiences the organizational culture. This entails both active and systematic observation as well as passively encountering situations that are different from what the investigator expected and attempting to understand these observations and encounters. An important step in this approach is to find a motivated insider that can help decipher the investigator’s observations and interpretations. This motivated insider has to have the mental capacity to think analytically to be helpful in this important process, as well as have a vested interest in understanding the cultural issue that has initiated the organizational culture study.

With the help of the motivated insider, the investigator attempts to identify the underlying shared assumptions and continually recalibrates these assumptions to further understand the true organizational culture. The end product in a qualitative investigation of culture is a formal description of the organization’s culture. This description is in no way static; but it is a perpetual work in progress, because organizational culture is dynamic and new information may reveal more basic assumptions or revisions to the prior basic assumptions.

The ability to converse with insiders of the organization is essential to fully understand the culture for two reasons. First, the investigator can easily misinterpret events and observations and needs the insider to help correct these misinterpretations. Second, the insider is usually unaware of the basic assumptions in the organization, because these assumptions have dropped from conscious awareness and are taken for granted. It is the goal of the investigator to help bring these basic assumptions to a conscious level.

These qualitative methods, although thorough and comprehensive, have many disadvantages. In some situations, it is not financially feasible to conduct one or two large group meetings at numerous organizations in many different countries. The time burden of this endeavor would cause too much time to pass for an equal comparison across organizations or countries. Further, the results of this type of research do not allow for necessary comparisons, because statistical analysis of qualitative data would be difficult, if not impossible.

Using Rousseau’s five-level typology of culture as a framework, quantitative measures of culture vary from the more behavioral level to values and beliefs. Because quantitative measures of culture are limited to the more observable and measurable aspects of organizational culture, these self-report measures are necessarily limited to the shallower levels of the typology. However, it has been argued that when the organizational culture is strong, the material artifacts, behavioral patterns and norms, espoused values, and basic assumptions may all be in alignment. When this is the case, a quantitative measure of culture may effectively tap the deeper levels of organizational culture.

The quantitative approach to assessing organizational culture is through self-report surveys. A number of survey measures have been created and are classified by Neal Ashkanasy as either typing or profile surveys. Typing surveys classify organizations into mutually exclusive taxonomies or types. Once an organization is classified into a particular type, a description of behaviors and values typical of the type is provided. Through these types, organizations can be compared and organizational culture change can be monitored over time. Profile surveys assess an organization on predetermined cultural dimensions. High or low scores on the various dimensions of norms, behaviors, values, and beliefs provide a profile of the culture of an organization. These profiles can also be compared with those of other organizations, and changes can be tracked over time.

Assessing organizational culture using a quantitative measure provides a standardized means of understanding an organization’s culture. This standardization of measurement is more conducive to comparing cultures of different organizations as well as different branches of the same organization. The ability to use statistical techniques is also a benefit of standardized, quantitative measures of organizational culture. Another advantage is that organizational members may be more likely to take part in later organizational change efforts because they were included in the cultural assessment. This commitment to the process could prove valuable later on.

There are a number of disadvantages to using the quantitative approach to cultural assessment. Self-report measures of organizational culture assume the respondent is aware of and can report the various aspects of an organization’s culture. This approach assumes everyone surveyed is motivated and mentally capable of reporting on the behaviors, values, and beliefs of the organization as a whole. Further, quantitative measures are incapable of assessing all dimensions of culture identified to date. Using quantitative measures alone could miss those dimensions that are idiosyncratic, yet vitally important, to the functioning of a specific organization.

Quantitative measures are useful in assessing the more shallow layers of culture and may approach the deeper levels when the culture is strong. Although using qualitative measures may aid in the understanding of basic assumptions, quantitative measures provide information that is replicable and generalizable and that can reap the many benefits of statistical analysis. Because of the various advantages and disadvantages presented here, whether to use quantitative and qualitative measures should be considered carefully. A multimethod approach is recommended whenever feasible to avoid missing any vital level of information about organizational culture. In general, quantitative measures can be an efficient and valid measure of the more shallow levels of culture, and the use of qualitative measures can be considered for deeper layers of culture such as basic assumptions.

Role of Leadership in Organizational Culture

The general assumption that is inherent in much organizational research on the relationship between leadership and culture is that leaders create cultures. This seems intuitive, in that organizational founders are seen as the people who create the initial culture of the organization, and in many organizations the founder’s impact continues to be felt for years or decades after the founder has left the organization, or died. Schein (1992) in particular emphasizes the importance of the founder in shaping the organization’s culture. Early research (e.g., Kurt Lewin, Ronald Lippitt, and Ralph White’s 1939 study) and writing (e.g., Douglas McGregor’s classic, The Human Side of Enterprise) in this area focused largely on how managerial beliefs about employees affect the behavior of those employees. Research has demonstrated that the personality traits of the CEO may be related to certain aspects of the organization’s structure; and recently, Tomas Giberson and colleagues have shown congruence between CEO personality and values and the personalities and values of subordinates within the organization. Clearly, leadership plays a role in the creation of organizational culture.

However, other perspectives emphasize the role that culture plays in allowing (or preventing) people from emerging as leaders. For example, Robert Lord and colleagues focus on an information-processing approach to culture and suggest that the shared values and shared ways of conceptualizing and solving problems within an organization lead to evaluations of organizational members as being good or bad leaders, when a more accurate appraisal might be that a person is consistent with the type of person who has been successful as a leader in the past here. They thus argue that leadership itself may simply be an artifact of culture. The punctuated equilibrium model leads to similar conclusions: During times of calm, the people who rise to leadership positions tend to be those who do things in the same ways as the people who came before. They are likely to share the same values and perspectives, and it is only during times of crisis— when the shared values of an organization may be threatened or crumbling—that people with different leadership styles may come to be seen as leaders.

In short, leaders create cultures, and cultures yield leaders. The dynamics of this reciprocal process vary from organization to organization, from industry to industry, and from society to society. To believe the causal arrow points in only one direction, however, is to be too simplistic in our conceptualization of organizational functioning.

Role of Societal Culture in Organizational Culture

Although it seems intuitively obvious that the culture of the society in which an organization emerges would affect the culture of the organization itself, until recently there has been little data available with which to assess this question. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) project’s analyses on this question have provided evidence suggesting that there is in fact some degree of congruence between aspects of a societal culture and of the culture of the average organization within that society. Speculating about the mechanisms by which this impact occurs, GLOBE researchers propose several possible avenues, including normative isomorphic pressures (e.g., organizations that structure themselves in certain ways and value certain things are seen as good within a given societal context) and cultural immersion (e.g., when an organization’s founders have lived in an uncertainty-avoiding society, they are likely to have internalized that value, and would thus be more likely to create organizations that manifest uncertainty avoidance).

What remains unknown to date is whether the organizations in a society that are most effective are those that most closely represent the dominant values of the society, or those that diverge from those values in some distinct way. Additionally, the role of the industry here is unknown. For example, it seems plausible that in a conservative, risk-averse society, a bank with a culture of risk aversion could be seen as trustworthy and good, whereas a pharmaceutical or high-tech firm with a strong risk aversion could be seen as less appropriate. Research on these issues will be critical for better understanding the origins and effects of organizational culture in different societies and industries.

Organizational Culture versus Organizational Climate

Although the climate and culture constructs are clearly related, they have evolved in different ways and have come to be seen as representing different aspects of organizational functioning. Arnon Reichers and Schneider, in Schneider’s Organizational Climate and Culture (1990), provide an extensive description of the historical evolution of the two constructs, showing how the current conceptualization of organizational climate has followed almost a direct linear path from the early work of Kurt Lewin, with his focus on the practicality of good theory, whereas the organizational culture construct has evolved more from a history rooted in anthropology. Reichers and Schneider point out the research emphasis on climate as a predictor of organizational effectiveness in some domain (which links cleanly to Lewinian practical theory), and the emphasis in culture research on descriptive, rather than prescriptive, approaches to organizational culture assessment (which links cleanly to a more anthropological, value-neutral, descriptive approach); but clearly there has been increased emphasis in recent years on the value of certain types of organizational cultures over others.

In the Handbook of Organizational Culture and Climate (Ashkanasy, Wilderom, & Peterson, 2000), both Schneider and Schein weigh in with their perspectives on climate and culture. Schneider argues that climate is the shared perception of the setting in which people work, the way things are around here, and that culture is the attributions made about why the setting is the way it is. Schein emphasizes the importance of attending to an organization’s culture both as something that is a static property and as something that is a natural, constant process of building collective meaning. Both authors note the overlap between climate and culture, emphasize the separateness of the two constructs, and emphasize the value for researchers and practitioners of attending to both.

Conclusion

Several recent books, both popular and academic, have focused on the importance of organizational culture. For example, the best-selling books Good to Great (Jim Collins, 2001) and Built to Last: Successful Habits of Visionary Companies (Collins and Jerry Porras, 1994) both focus on aspects of organizational culture that help explain why certain organizations over time excel within their industry and relative to their competitors. Others have noted the importance of culture match in mergers and acquisitions and joint ventures (e.g., Yaakov Weber’s work) and about the difficult but critical issue of organizational culture change when faced with an organizational crisis. Clearly, culture matters— it matters for the organization in its quest for effectiveness, and it matters for shareholders who want to see resources put to good use and not diverted by people problems, and it matters for employees who live within a system of shared values that affects their day-to-day functioning. We hope that consideration of the issues described in this entry illustrate both the utility and the complexity of organizational culture.

References:

  1. Ashkanasy, N. M., Wilderom, C. P. M., & Peterson, M. F. (Eds.). (2000). Handbook of organizational culture and climate. Thousand Oaks, CA: Sage.
  2. Deal, T. E., & Kennedy, A. A. (1982). Corporate cultures: The rites and rituals of corporate life. Reading, MA: Addison-Wesley.
  3. Denison, D. R. (1990). Corporate culture and organizational effectiveness. Ann Arbor, MI: Aviat.
  4. Schein, E. (1992). Organizational culture and leadership (2nd ed.). San Francisco: Jossey-Bass.
  5. Schneider, B. (Ed.). (1990). Organizational climate and culture. San Francisco: Jossey-Bass.
  6. Trice, H. M., & Beyer, J. M. (1993). The cultures of work organizations. Englewood Cliffs, NJ: Prentice Hall.

See also: