Organizational Culture

Introduction

Organizational culture has become a bit of a buzzword in workplace wellness and human capital management circles. It is frequently talked about due to its claimed impact on a variety of significant organizational outcomes, ranging from employee wellness to talent attraction to productivity. The concept also comes up as a factor that companies must consider when determining how to answer several common organizational questions (e.g., whether to implement a vaccine mandate, what kind of workplace flexibility policy to put in place, how to cultivate a more diverse workforce, etc.).

By and large, the high value that has been assigned to organizational culture is warranted. It is an undeniably crucial determiner of an organization’s success and plays an important role in many of the strategic decisions organizations frequently make. As a result, employers would do well to familiarize themselves with the components of organizational culture, understand why culture is important, and become active and strategic in their own cultures. This article serves as a resource for business leaders to empower themselves with the knowledge and skills needed to optimize their organizational culture for business success.

What Is Organizational Culture?

Organizations have a “vibe” to them. For instance, some feel cooperative and friendly while others have a heavy atmosphere of competitiveness. These climates, or more accurately, the thing that creates and sustain them, is organizational culture. As Cheri Ostroff, a Professor of Management and Organizational Culture Theorist put it, “climate develops from the deeper core of culture.” To help employers make the most of their organizational cultures and adapt them when advantageous, it is important to first understand what constitutes culture.

Fundamental Components Of Organizational Culture

Fundamentals Of Orgnaizational Culture_1

Depending on who you ask, the definition of organizational culture will vary. This examination of organizational culture follows several leading scholars who take a holistic approach to defining it. These researchers theorize that many of the elements that other thinkers have singled out as being the lone fundamental ingredient of organizational culture are but one of many components that have a direct and immediate effect on the attributes and strength of a given culture. In particular, this analysis assumes that organizational culture is composed of or directly impacted by organizational:

Norms and values: Organizational norms are rules for what is appropriate, allowed, required, or forbidden for organizational members. Most commonly, these norms are directed at behaviors. However, they can also be aimed at beliefs and even values (e.g., some organizations have norms that require members to value diversity, innovation, or competitiveness).

Values are a subset of organizational norms. In general, an organization’s values are the things it deems to be appropriate objects of positive evaluative feelings or emotions (e.g., joy, admiration, pride, gratitude, etc.). For instance, if an organization contains norms that encourage employees to feel proud of their collaborative tendencies, then that organization values collaboration, at least to some degree.

Beliefs and stances: Some beliefs are so central to an organization’s mission or entrenched in the minds of its members that they become part of that organization’s culture (e.g., the culture of any climate-change organization will almost certainly include beliefs about the reality of climate change and the necessary means of preventing further environmental damage).

Behavioral dispositions: An organization’s culture is heavily impacted by and made most readily apparent through the behavior of its employees. For instance, if an organization’s employees tend to work together, this makes the culture more cooperative and sends a strong signal to other employees that cooperation is common and expected, thereby encouraging other workers to behave in a similar manner. Thus, behavioral dispositions are one of the more potent elements of organizational culture.

Cultural Traits And Strength

The above-mentioned components determine an organization’s cultural traits or attributes (i.e., whether that organization is competitive, innovative, social justice-oriented, caring, aggressive, etc.) as well as its cultural strength (i.e., the degree to which the culture has become embedded in the minds and behaviors of its organizational members).

The traits of an organization’s culture are established by the content of the organization’s norms, values, beliefs, and stances. In practice, this means that if an organization values competitiveness or has norms that require or encourage competitive behavior, then that organization has a competitive culture, at least to some extent.

In her 2016 norm-centric analysis of organizational culture, Jennifer Chatman argues that in order to fully understand the relationship between norms and culture, both the intensity of norms (i.e., the degree to which they are enforced) along with the degree to which they are agreed upon must be considered in addition to the norm content. She states:

"To make progress we argue that future research should focus on conceptualizing and assessing organizational culture as the norms that characterize a group or organization that if widely shared and strongly held, act as a social control system to shape members’ attitudes and behaviors. We further argue that to accomplish this, researchers need to recognize that norms can be parsed into three distinct dimensions: (1) the content or what is deemed important (e.g., teamwork, accountability, innovation), (2) the consensus or how widely shared norms are held across people, and (3) the intensity of feelings about the importance of the norm (e.g., are people willing to sanction others)."

This analysis incorporates and expands on Chatman’s suggestion. More specifically, norm intensity and consensus are thought of as determining the strength of an organization’s culture. The same goes for an organization’s values, beliefs, and stances. The more widely held and intense the value or belief is, the more it becomes a strong or prominent component of an organization’s culture.

Organizational Culture

Traits Of Organizational Cultures

Based on the basic elements that an organization’s culture is composed of (i.e., which norms, beliefs, values, and behavioral dispositions it has), it acquires particular traits or attributes. These traits are typically manifestations of an organization’s approach or response to common organizational questions (e.g., how much autonomy should be given to employees, how should individual performance be evaluated, to what degree should organizational decisions be limited by ethical considerations, etc.).

Each cultural trait or style comes with a unique cluster of benefits for employees and the organizations they work for. While the precise impact of any given cultural trait on any particular group of employees or organization will depend on a number of factors (e.g., industry an organization operates in, personalities of employees, etc.), each trait is generally associated with distinctive benefits. Because of this, employers should take time to learn about the variety of traits that cultures can acquire along with the advantages of each so that they can make more informed and effective decisions.

Below are descriptions of the most prominent traits that companies gain when addressing broad organizational questions along with the benefits that are associated with each of the attributes.

CONFORMATIVE

“If it ain’t broke, don’t fix it.”

An organization’s culture is conformative to the extent that its members are expected to defer to team leaders and rely on the procedures and tools they are given to complete their tasks. Conformative cultures emphasize doing the most with what they have. They look to leave well enough alone, stick to the status-quo, and take to heart the proverb, “if it ain’t broke, don’t fix it!”

Popular Benefits

Clear organizational structure
Predictable workload capacity and productivity
Safety and stability
Steadfast mindset

INNOVATIVE

“When the winds of change blow, some people build walls and others build windmills.”

Highly innovative cultures are constantly seeking to improve existing products and create new ones. Innovative cultures have a high-risk tolerance and encourage creative problem-solving. They reward innovation, are not prone to penalize failed attempts, and create unique antidotes to organizational problems.

Popular Benefits

Agility and adaptability
Novel solutions
Employee commitment and investment
Growth mindset

COOPERATIVE

“If we don't all row, the boat won't go.”

Cooperative cultures emphasize friendly, supportive, trusting, and collaborative relationships where individuals work together to share their ideas and problem solve in order to meet organizational goals.

Popular Benefits

Cohesive and resilient teams
Efficient communication
Empathetic and supportive relationships
Tolerant and accepting attitudes

COMPETITIVE

“Competition is the whetstone of talent.”

Cultures are competitive to the extent that members are expected to outperform colleagues, work against others, and operate in a “win-lose” framework.

Popular Benefits

Driven workforce
Peak performance
Personal accountability
Successful goal setting and execution

OUTCOME-ORIENTED

“All’s well that ends well.”

Cultures that are heavily outcome-oriented rely primarily on results or outcomes when evaluating the success of employees and determining who is to be rewarded, promoted, penalized, demoted, or terminated.

Popular Benefits

Concrete goals
Decisiveness
Directed focus and attention
Personal accountability

EFFORT-/REASONING-ORIENTED

“It’s the thought that counts.”

In effort-oriented cultures, the degree to which employees try to achieve the desired outcomes along with whether their actions are well-supported by the information available to them when they complete their tasks is used as the primary measure of success. In these cultures, a decision that leads to bad results may still be highly praised, so long as it made good use of what was known at the time.

Popular Benefits

Analytical problem solving
Novel solutions
Data-driven results
Detailed thought and attention

Customer-Centric

“The customer is always right.”

Organizations are customer-centric to the extent that they prioritize customer satisfaction and allow the company’s evolution to be guided by the wants, needs, and demands of the customers.

Popular Benefits

Customer loyalty
Employees become customer champions
Enhanced customer value
Reduced churn

Employee-Centric

“Customers will never love a company until the employees love it first.”

Employee-centric organizations are highly attentive to what their employees gain from their work. To this end, these companies work to improve employee well-being and happiness and provide opportunities for self-actualization, which enables workers to fulfill their talents and potential.

Popular Benefits

Company advocacy
Employee commitment and investment
Employee wellness
Talent attraction

Purpose-/Mission-Driven

“Practice what you preach.”

An organization’s culture is purpose-driven to the extent its leaders and employees think beyond the bottom line and bear in mind what the company stands for or what it aims to achieve when completing, evaluating, and assessing the significance of their work. These companies seek to connect their work with something bigger, whether that be an internal organizational objective or an attempt to change the world.

Popular Benefits

Intrinsic and sustainable motivation
Passion and pride
Reputation and public image
Socially responsible and ethical practices

Profit-Driven

“Money talks.”

Highly profit-driven companies rely heavily on monetary outcomes when determining the direction their organizations should take going forward. Profit-driven companies may make use of ethical or mission-related considerations but only when they believe that doing so will be profitable.

Popular Benefits

Concrete goals
Directed focus and attention
Opportunistic mindset
Pragmatic decision making

Being Active And Strategic In Organizational Culture

At this juncture, team leaders may be convinced of the value and importance of organizational culture but skeptical of their ability to utilize their knowledge to improve it for their companies. By following the six steps described below, organizations can maximize the benefits of their newly acquired insights by being active and strategic in their organization’s cultures.

Step 1: Measure It

Whether an organization is trying to strengthen or change its organizational culture, it must first learn about its current state. Measuring something as abstract as organizational culture may seem daunting, if not downright impossible. However, there are a number of concrete steps that can be taken to simplify the process.

1. Chose a cultural assessment tool: Several cultural assessment tools have been developed by researchers and organizations looking to learn about organizational culture. One of the more tried and tested instruments is the Organizational Culture Profile (OCP). A view of the full OCP, as it is often given to participants in experiments, can be seen here. Below is a modified version of this tool designed to incorporate the insights and frameworks developed throughout this post.

OCP Table copy

Go through the list above and decide which descriptions accurately represent your company. Then, write down the cultural traits that those descriptions are indicative of. The more times you write down a particular trait, the more prominent it is in your organization's culture.

2. Survey a wide range of employees: Employees in different positions will have different perspectives on their organization’s culture. For instance, team leaders may feel that the culture is characterized by a focus on employees, while team members might feel the opposite is true. As a result, a survey must be inclusive to be accurate, meaning that employers must survey members from every part of their organizations and make sure the sample is reflective of the population as a whole.

3. Conduct employee focus groups: While surveys are useful, they have their limitations. Focus groups provide employees with a chance to voice opinions about their organization’s culture that are not adequately captured in surveys that include a limited list of characteristics. Additionally, focus groups may encourage more candid and authentic responses.

Step 2: Evaluate It

Once you have a clear idea of your organization’s culture, you can decide whether to strengthen or to change it. When making this decision, team leaders can start by thinking carefully about the unique benefits associated with each of the cultural attributes above. In doing so, they should consider the working styles and personalities present within their ranks along with the industry dynamics within which their companies operate.

Leaders at this stage might also benefit from a company-wide discussion on their organization’s current and intended cultures. Employees want a say in the organizational culture they will inhabit. Moreover, they may have valuable insights that cannot be obtained from a team leader’s perspective. As a result, an inclusive dialogue on your company’s culture is likely to result in a stronger adoption of its values, beliefs, norms, and behavioral dispositions.

Step 3: Make It Explicit

In many cases, the values, norms, beliefs, and behavioral dispositions that make up an organization’s culture are left unspoken and even undecided. Make sure that your organization’s current or intended culture is clear both to yourself and your employees. This is especially important during employee onboarding when newcomers have adopted norms and beliefs that may be incompatible with the company’s culture.

Step 4: Explain Its Value

Rules are easier to adopt when you understand why they are being implemented. When employees understand why their organization’s values and beliefs are what they are, they may be more inclined to internalize them.

Step 5: Practice What You Preach

Employees are far less likely to accept and abide by an organization’s norms, values, beliefs, and behavioral dispositions if their leaders make exceptions for themselves. As a result, leaders should embody their organization’s culture to the best of their abilities.

Practicing what you preach with respect to your organization’s culture doesn’t end with cultural embodiment. Since effective leaders must extoll the values of the culture they are encouraging employees to support, they need to create an environment that facilitates the adoption of their organization's desired traits. This can be done through organizational nudges, policies, management structures, and physical environmental changes.

Step 6: Hire For Culture

Rather than persuading current employees to adapt their norms and values to suit the culture of their organizations, it can be easier and less time consuming to hire individuals with the “right” cultural traits from the get-go. Try out the following strategies designed to give culture its proper place in hiring practices.

1. Look for cultural complements: For some time, the perceived wisdom has been that companies should hire candidates with a strong cultural fit. This means the prospective employees have traits that match up with or resemble those of the employees already working for the company. However, while some degree of shared expertise, or knowledge, is important, an unwavering requirement for complete conformity can hold companies back. If a business only looks for more of what it already has, it can’t grow and gain new areas of strength. As a result, organizations should recruit individuals who, in addition to valuing an organization’s standards and culture, bring something different that positively contributes to it.

2. Conduct a cultural complement interview: Below are some examples of the kinds of questions that are likely to bring out the candidates culturally relevant beliefs, values, norms, and behavioral dispositions.

How do you measure success as work? (Can be used to assess a candidate’s preferred method of task-evaluation)
Describe a time when you helped a coworker or direct report with a work problem? (Can be used to assess a candidate’s attitudes toward cooperation)
What attracted you to the role? (Can be used to assess the degree to which the job or organization’s purpose motivated them to apply)
Tell me about a time you had to change your mind or way of doing things in order to improve. (Can be used to assess a candidate’s response to criticism and attitudes towards innovation)

3. Wait to describe your company’s culture: If you describe your culture up front, candidates may modify the way they describe their culturally relevant traits to seem like a good cultural fit. To avoid this, listen to what applicants have to say about their beliefs, values, and experiences prior to discussing your organization’s culture. With this tactic, you are far more likely to receive candid, sincere, and authentic responses.

4. Get multiple perspectives: When assessing the degree to which a candidate complements an organization’s culture, it is nearly impossible to prevent one’s own values, norms, and beliefs from getting involved and biasing the evaluation. To combat this, cultural assessments should include a motley crew of evaluators with different backgrounds and perspectives. Employers can be far more confident that personal bias is not an issue when diverse evaluators agree about whether a candidate would add or detract from an organization’s culture.

Putting It All Together

Organizational culture is a holistic phenomenon formed by an organization’s norms, values, beliefs, stances, and behavioral dispositions. Organizational culture is associated with several significant outcomes, ranging from improvements in employee well-being to increases in an organization’s bottom line. Cultures can take on a variety of traits, each of which comes with a unique set of advantages. In turn, these advantages impact how an organization should respond to a wide range of critical decisions (e.g., whether to implement a vaccine mandate, what kind of workplace flexibility policies to put in place, how to cultivate a more diverse workforce, etc.). This explains why optimal business decisions for employers may differ; the right solution must incorporate organizational culture, which varies from group to group.

Finally, organizational culture is not a static, self-contained phenomenon over which organizational leaders have no power. Instead, cultures are living, breathing entities that are responsive to a variety of easily implementable strategies. These tactics allow employers to form and maintain the kinds of cultures they feel will optimize their workforces.

Being a great place to work is the difference between being a good company and a great company. Choose to be a great company.

Organizational Culture As A Strategy

Introduction

What Is Organizational Culture?

Fundamental Components Of Organizational Culture

Cultural Traits And Strength

Traits Of Organizational Cultures

CONFORMATIVE

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INNOVATIVE

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COOPERATIVE

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COMPETITIVE

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OUTCOME-ORIENTED

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EFFORT-/REASONING-ORIENTED

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Customer-Centric

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Employee-Centric

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Purpose-/Mission-Driven

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Profit-Driven

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Being Active And Strategic In Organizational Culture

Step 1: Measure It

Step 2: Evaluate It

Step 3: Make It Explicit

Step 4: Explain Its Value

Step 5: Practice What You Preach

Step 6: Hire For Culture

Putting It All Together