The Importance of Organizational
Culture
As organizational culture has become a major focus in the modern business world, different scholars, organizations and individuals have
become more curious in knowing its importance in the real world, especially
about the link, it has organizational functioning. Armstrong (2009) has
stated that organizational culture is a vital element when it comes to a
company’s functioning.
As essential as it is, organizational culture is a complex
concept to study as it links with other organizational elements starting from
structure to employees’ behaviour in which way,
ensures better performance and better outcomes (Baker, 2002).
According to Boyne (2003), organizational culture has a
direct link with service delivery of a company and furthermore, Pollitt and Bouckaert
(2004) have argued that an effective culture which focuses on organizational
processes enhances organizational innovation. Since organizational culture
focuses on values and beliefs, it helps to define the behaviours of an
organization's workforce. Therefore, it makes it easier for leaders to manage
and guide people (O’Donnell and Boyle, 2008).
While shared norms
give an organization's workforce the sense of a shared purpose, it drives
people to work more like a team rather than individuals who have different
personal goals which lead to better outcomes in certain situations (Simosia and
Xenikoub, 2010). Furthermore, it defines the routines and rituals of the organization which the culture is expressed through and at the end of the day
it formalizes the organization and looks more aligned (Hogan and Coote, 2014).
Baker (2002),
states that it is essential to link an organization's strategy with its culture
as it ensures successful implementation of the plans in the long run. According
to the report by Baker (2002), she further states that organizational culture
enhances the value of human capital and act as a major driver for success which
is why organizational culture has become an essential management
competency.
In an article which
was published in “Business Today” magazine in 2015, it was mentioned that the
organizational culture was the major drive for Virgin Group’s success. Richard Branson
has further told the magazine that it was the reason for the company to grow
into a more expanded business over the years. It clearly shows that creating
the right corporate culture leads to success (Business Today, 2015). The following video about Virgin Atlantic portrays, how the values and attitudes (thinking and actions) of the workforce can offer the values to the customers which leads to growth and success of a company.
According to an
article which was published in the Journal of behavioural and applied
management by O'Neill, et al (2001) states that organizational culture works
together with organizational structure to process information and develop roles
within the organization in order to deal with uncertainty effectively.
Furthermore, it states that the corporate culture act as a "social
glue" which gives the workforce a sense of identity which helps to gain
more effort and commitment from the workers that would eventually enhance
organizational capabilities.
As stated by
Janićijević (2013) in Economic Annals, organizational culture gives both
leaders and followers /subordinates a common perspective on the company's
purpose which would lead to a conscious change in their behaviours. It will
directly affect the organization's productivity in terms of goal achievement.
According to a report published by General Electric Capital Corporation (2012), culture can
influence the results of an enterprise both positively and negatively as
organizational strategy and performance are closely related to the corporate
culture. The following illustration is a perfect representation of that
relationship.
Source - General
Electric Capital Corporation (2012)
Corporate culture is considered
to be more than a factor which binds all together, but a backbone behind a
company's brand and its economic performance (General Electric Capital
Corporation, 2012). The above evidence proves that an effective organizational culture
is an important component for any company. Ultimately it influences a decision
making through employee behaviour enhances team spirit and gives a better
understanding of what is expected of an individual within an organization
(McShane, 2000)
Armstrong, M. (2009) Armstrong’s handbook for human resource management. (11th Ed). Kogan Page, The United Kingdom.
Baker, K. (2002). Organizational Culture. [Online] Available at: https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.439.8759&rep=rep1&type=pdf
Boyne, G. (2003), Sources of public service improvement: a critical review and research agenda’. Journal of Public Administration Research and Theory, 13(3), pp.367-394
Business Today. (2015). Creating the right culture is the key to success. February Issue.
General Electric Capital Corporation (2012). Organizational culture: The effect of behaviour on performance. [Online] Available at: https://studylib.net/doc/8782833/organizational-culture--the-effect-of-behavior-on
Hogan, S J., Coote, L V. (2014). Organizational culture, innovation, and performance: A test of Schein's model. Journal of Business Research. 67 pp1609–1621
Janićijević, N. (2013). The mutual impact of organizational culture and structure. Economic Annals, 58(198) pp. 0013-3264
McShane, S L. (2000). Hillton's Transformation. [Online] Available at: www.mhhe.com/mcshane1e
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
O'Neill, J W., Beauvais, L L., Scholl, R W. (2001). The Use of Organizational Culture and Structure to Guide Strategic Behaviour: An Information Processing Perspective. The Journal of Behavioural and Applied Management. 2(2) pp 131
Pollitt, C., Bouckaert, G. (2004) Public Management Reform: A Comparative Analysis, Oxford: Oxford University Press
Simosia, M., Xenikoub,
A. (2010). The role of organizational culture in the relationship between
leadership and organizational commitment: an empirical study in a Greek
organization. The International Journal of Human Resource
Management, 21(10) pp 1598–1616
Agree with you, Organizational culture offers a shared system of meanings which is the basis for communications and mutual understanding. If these tasks are not accomplished satisfactorily, culture significantly reduces the effectiveness productivity of an organization. This is why it is important for human resource specialists to understand the concept of corporate culture and how it affects organizations (Armstrong, 2014).
ReplyDeleteTotally agree with you. Culture is one of the key elements which has been forgotten by many when it comes organizational effectiveness. It actually aids proper implementation of strategy and overall effective outcomes (O’Donnell and Boyle, 2008)
DeleteOrganizational culture is the set of values, beliefs, and norms which may impact the way employees behave, think and feel in the organization (Schein, 2011). Performance is a measure that require productivity, quality, consistency. The organization's performance is the function of the basic returns to the blend of strong culture in the organization's systems which enable it to perform its routines without a doubt (Richard, 2002).
ReplyDeleteIt can also be defined as a system of informal rules which guides people at work and their behaviors (Deal and Kennedy, 1982)
DeleteAgree with you, Organization culture is a complex concept to study as it links with other organizational elements. According to Boyne (2003), organizational culture has a direct link with service delivery of a company. Pollitt and Bouckaert (2004), argued that an effective culture which focuses on organizational processes enhances organizational innovation.
ReplyDeleteCulture can also be explained as behavior and thinking that discovered and created by people itself when facing problems and situations (Schein, 2004)
DeleteEach organization’s culture is unique to them. Take Netflix for example. Netflix CEO Reed Hastings has created a ‘No Rule’ Culture and re-invented the HR concepts at the company. Netflix has no policies for vacation or expenses. They have eliminated formal reviews, encourages employees to be extraordinary candid and share information openly which most companies might consider as confidential (WeAreNetlix, 2020 , McCord, 2014). Though Netflix’s culture is not for everyone, this same culture has been the main contributing factor for Netflix to become so successful today (Putter, 2018).
ReplyDeleteAgree with you. Organization culture influences management decisions. According to Armstrong (2006) has mentioned that every manager has his or her own style but this will be influenced by the organizational culture, which may produce a prevailing management style that represents the behavioral norm for managers that is generally expected and adopted.
ReplyDeleteFurther,the importance of the culture is such that a positive impact on business regardless of organizational context, seems particularly salient in explaining the performance of the organizations(Frazier, 2004).
ReplyDeleteCulture plays a vital role in an organization's success. Therefore, HR leaders and other members of the HR team should foster a high-performance organizational culture.HR leaders are responsible for ensuring that culture management is a core focus of their organization's competitive efforts. For HR leaders to influence culture, they need to work with senior management to identify what the organizational culture should look like. Strategic thinking and planning must extend beyond merely meeting business goals and focus more intently on an organization's most valuable asset—its people.(www.shrm.org)
ReplyDeleteOrganizational culture is very important to create an effective work environment for their employees (Hall 2015). For example, instead of facilitating employees far from the workplace; Facebook culture has adopted to help employees in the immediate neighborhood by offering an additional $10,000 for an employee to live nearby the Palo Alto Department which indirectly increase the productivity of the organization (Hall 2015).
ReplyDeleteHi Shenali, according to Furnham & Gunter (1993), Culture represents the ‘social glue’ and generates a ‘we-feeling’, thus counteracting processes of differentiations that are an unavoidable part of organizational life. Organizational culture offers a shared system of meanings which is the basis for communications and mutual understanding. If these functions are not fulfilled in a satisfactory way, culture may significantly reduce the efficiency of an organization.
ReplyDeleteOrganizational culture is simply defined as the way things are done in the organization (Deal & Kennedy, 2000). Organizational culture is a key factor which determines the success of an organization (Childress, 2013). Every organization has a unique organizational culture which reflects the personality of the organization (Deal & Kennedy, 2000). In business terms, organization culture is often termed as “corporate culture,” “workplace culture,” and “business culture” (Childress, 2013).
ReplyDeleteOrganizations are now faced with increased competition, globalization, mergers, acquisitions, alliances and various work departments. If these are not properly managed, it could lead to the derailment of the company’s efforts at survival. As indicated in a recent international study by (Dixon, 2005) which found out that 30% of mergers and acquisitions fail because of mismanagement of culture (Oteng, E et al. 2014). In the journey toward success, organization’s culture defines its goals, values, standards and the true nature and personality of the organization (Oteng,E et al. 2014).
ReplyDeleteOrganizational cultures that support innovation are also characterized by general education and management levels, socio-economic knowledge, effective communication systems in the organization, ambition and atmosphere of competition, incentive schemes, free exchange of innovation. The thought proposal (thought), the lack of arrogance and selfish attitude, the successful author and those who helped in the process (Wong and Wong, 2016).
ReplyDeleteOrganizational culture can be a reflection of a company's core values, such as how the organization does business, workflow management, team interaction, and customer treatment.
ReplyDeleteA strong corporate culture keeps the core values of your company's day-to-day performance and core values at the forefront of every aspect of the organizational structure. (Moseley,C.2020)
Although all organizations have cultures, some appear to have stronger, more deeply rooted cultures than others. Initially, a strong culture was conceptualized as a coherent set of beliefs, values, assumptions, and practices embraced by most members of the organization. The emphasis was on (1) the degree of consistency of beliefs, values, assumptions, and practice across organizational members; and (2) the pervasiveness (number) of consistent beliefs, values, assumptions, and practices. Many early proponents of organizational culture tended to assume that a strong, pervasive culture was beneficial to all organizations because it fostered motivation, commitment, identity, solidarity, and sameness, which, in turn, facilitated internal integration and coordination. Some, however, noted that a strong culture might be more important for some types of organizations than others. For example, volunteer organizations may need to stress culture more than business organizations. Still others noted potential dysfunctions of a strong culture, to the point of suggesting that a strong culture may not always be desirable. For example, a strong culture and the internalized controls associated with it could result in individuals placing unconstrained demands on themselves, as well as acting as a barrier to adaptation and change. A strong culture could also be a means of manipulation and co-optation (Perrow 1979). It could further contribute to a displacement of goals or subgoal formation, meaning that behavioral norms and ways of doing things become so important that they begin to overshadow the original purpose of the organization (Merton 1957; March and Simon 1958).
ReplyDelete