Development of effective organizational cultures

As crucial as it is to understand what organizational culture is, it is even more important to know the factors that leaders have to consider when developing or changing the corporate culture. In order to understand how to develop effective cultures, one should know how organizational culture is created. 

Organizational culture is moulded through learnings which the company faces internally and externally (Kiger, 2005). In the long run, businesses tend to develop their value systems as they have experienced success and pass it on to the new workforce on the go (Schein, 2004). Therefore, the founders’ values, preferences, and industry demands are highly affecting the formation of the foundation of the culture.

Virgin Atlantic is one of the most successful companies and the major reason behind their success is their corporate culture. Being the founder of this brand, Richard Branson always focused on treating people well and having a good time working (Branson, 2017). This eventually developed into an organizational climate which attracted happiness, loyalty and trustworthiness among employees and customers as they experience positive results through that work behaviour. As Richard Branson calls this approach “serious fun” approach, it has helped to develop a culture where the employees feel happy and through that they make customers delighted as well (Business Today, 2015). This clearly portrays that the leader’s or the founders' values and priorities help to establish a certain organizational culture in the company. 

Another important factor which helps to create the corporate culture is industry demands. Apart from the leader's influence, certain industries require a common pattern of cultures from companies to stay competitive (Chatman and Jehn, 1994). One of the best examples is software companies which are driven by innovation, creativity and design. All the companies need to adopt innovative and creative thinking to be more competitive and to serve more to the customers (Business Today, 2015).

One of the best examples is that being an experiences software company in the sector, Intuit getting influenced by other companies to effectively change and adjust their organizational culture.  Their major challenge was to incorporate design thinking to the entire organization to keep up with market requirements and also to be different (Smith, 2015).

Once created, these cultures have to be maintained sustaining better performance and should be passed on. Leadership, rewards, policies and procedures support this process in the long run (O’Donnel and Boyle, 2008).

An effective leader can motivate employees to behave in a certain way especially based on the accepted value systems. By rewarding the right behaviour and inspiring through actions can take the organizational culture to a better position (Sarros, et. al., 2002).  Many scholars have argued that. aligned behaviour of the leader with the policies of the company often seen as examples for the subordinates, where it drives the workforce to act in certain ways (Driscoll and McKee, 2007).

Often leaders can appreciate and encourage proper behaviour and thinking through reward systems as well according to Armstrong (2009) which eventually will shape the culture. Because motivation, rewards and performance have a significant relationship with each other (Dessler, 2013). For example, if the company's core values are team orientation, the organization can implement more team-based reward systems to get people to work more as teams.

According to the above explanation, it is clear that culture takes time to develop and it does not happen just through internal factors. It also has a slight impact from the external environment as well. For a company to develop effective cultures, the above factors should be carefully considered.


 

Armstrong, M. (2009) Armstrong’s handbook for human resource management. (11th Ed). Kogan Page, The United Kingdom

Business Today. (2015). Creating the right culture is the key to success. February Issue.

Branson, R. (2017). Adventure, as a culture. [Online]. Available at: https://www.virgin.com/branson-family/richard-branson-blog/adventure-culture

Chatman, J. A., Jehn, K. A. (1994). Assessing the relationship between industry characteristics and organizational culture: How different can you be? Academy of Management Journal, 37, pp 522–553.

Dessler, G. (2013). Human Resources Management. (13th Ed). Pearson Education Inc. Prentice Hall. United States of America.

Driscoll, K., McKee, M. (2007). Restorying a culture of ethical and spiritual values: A role for leader storytelling. Journal of Business Ethics, 73.

Kiger, P. J. (2005). Corporate crunch. Workforce Management, 84, pp 32–38.

O’Donnell, O., Boyle, R. (2008). Understanding and Managing Organisational culture. Institute of Public Administration. [Online] Available at: https://www.ipa.ie/_fileUpload/Documents/CPMR_DP_40_Understanding_Managing_Org_Culture.pdf

Sarros, J. C., Gray, J., Densten, I. L. (2002). Leadership and its impact on organizational culture. International Journal of Business Studies, 10.

Schein, E.H.(2004) Organizational Culture and Leadership, (3rd Ed.), San Francisco: Jossey-Bass. 

Smith, B. (2005). How I did it: Intuit’s CEO on building a design driven company. Business Today Magazine. February Issue.

 

Comments

  1. Asitha RanasingheDecember 6, 2020 at 11:09 PM

    This comment has been removed by the author.

    ReplyDelete
  2. Thanuja GunathilakeDecember 7, 2020 at 12:28 AM

    Management has responsibility to introduce the organizational culture with its norms, values and objectives to employees. Because, as per organizational development is concerned, employees performance consider as a back bone for the industry. (Shahzad,F et al. (2012)

    ReplyDelete
  3. Madhura AnurangaDecember 7, 2020 at 2:00 AM

    Organizational development is depending on analysis and identification of the factors that conclude the effectiveness of the organization. Organizations and managers are willing to get employees commitment, which leads to improve the productivity. Management would like to introduce employee with norm, values and objectives of the organization which is importance to understand the organizational culture (Sondheimer, Cumming and Albano, 1990).

    ReplyDelete
  4. Thusitha PereraDecember 7, 2020 at 7:42 AM

    Snell and Bohlander ( 2007) discussed about cultural audit which refers as the audit of the culture and quality of work life in as organization .The top level managers involve discussion of how the organization 's culture reveals it self to employees and how it can be influenced or improved .

    ReplyDelete
  5. Asanka VithanaDecember 8, 2020 at 9:28 AM

    the issue of organizational culture and organizational effectiveness and developing an approach
    to understanding organizational culture that helped to explain differences in the performance and
    effectiveness of organizations (Sparrow, 2001).

    ReplyDelete
  6. Surendra FernandoDecember 18, 2020 at 8:32 AM

    In Schein’s view, fundamental assumptions constitute the core and most important aspect of organizational culture. Accordingly, he offers the following formal definition of organizational culture: A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems (Schein 1992:12).

    ReplyDelete

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