Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
Organizational Culture
Introduction:
The topic of organizational culture has become an important one in fields that study
the functioning of organizations in some manner. With the growth of business and
management schools a concept of culture that applied to organizations within society
became important to understand particular organizational phenomenon. A general concept
of organizational culture was needed in order to explain both variations in patterns of
organizational behaviour and levels of stability in organizational behaviour (Schein, 1990,
p. 110). While a review of the literature on the topic will indicate that organizational culture
is an intangible concept that is hard to define, it clearly plays a meaningful role in
organizations, and their employees, and can often affect the organization’s success or
failure (Gilsdorf & Wagner-Marsh, 2006, p. 624). Influential books on the subject that
propelled this topic into the limelight include William Ouchi’s (1981) “Theory Z: How
American Business can meet the Japanese Challenge”, in which organizational culture was
seen as a key determinant of organizational effectiveness, and Deal and Kennedy’s (1982)
book entitled, “Corporate Cultures: The Rites and Rituals of Corporate Life”, which made
popular the notion of understanding, establishing, and fostering a positive corporate culture
(Sadri & Lees, 2001, 853).
This essay will provide an overview of some of the difficulties of defining culture
within organizations and some of its purposed positive outcomes. A positive outcome,
often discussed in the literature is that of organizational effectiveness. However, what an
“effective culture” is also presents problems and can be understood in a variety of ways
(Denison & Mishra, 1995, p. 205). This essay will than scan the literature on the topic to
paint a rich portrait of what organizational culture can constitute and settle on a balanced
definition that enables us to discuss what a positive organization can be. Stemming from
discussions of positive culture this paper will next discuss why it is important to understand
an organization’s culture and how we can affect it in a positive way. The literature
recognizes that in positive cultures where the culture is aligned with the values of an
organization’s varied subcultures and personal values of the individuals working there, then
they are often corresponding positive outcomes for the organization (Sadri & Lees, 2001,
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
pp. 854-5). Benefits of a positive culture include the abovementioned effectiveness, but
also competitive advantage, and job satisfaction to name a few. More importantly,
organizational cultures can be changed (Sadri & Lees, 2001, p. 853), and therefore
understanding ones culture, and its strengths and weaknesses, means that a manager is able
to perform diagnoses on his/her organization’s culture and makes changes to enable a more
positive or balanced culture. Lastly, this paper will focus on some practical implications for
professional managers in understanding organizational cultures, namely fostering
appropriate HR management practices that increase employee commitment to an
organization (and thereby motivation for), and that can match individuals to compatible
cultures with the hopes of improving organization effectiveness.
The Rise of Corporate Culture within an Organization:
As Schein notes, to exist an organizational culture depends on a definable
organization. More specifically it depends on the interaction of a number of people working
together towards defined goals in a defined work environment (Schein, 1995, p. 221). As
individuals work together to accomplish goals groups necessarily develop into
organizations (Gilsdorf & Wagner-Marsh, 2006, p. 624). Individuals come from diverse
cultural and ethnic backgrounds, and have a variety of personalities shaped by differing
experiences, and when they are brought together in a work environment these factors
manifest themselves in a variety of ways (Sadri & Lees, 2001, p. 853). As goals become
more specific and longer-term, and the work that they do becomes more specialized,
organizations become more formal and institutionalized (Gilsdorf & Wagner-Marsh, 2006,
p. 624). Over time a dominant set of norms will emerge, guiding the way in which work is
accomplished within the organization (Sadri & Lees, 2001, p. 853). This occurrence gives
rise to the concept of organizational cultural. The founder of an organization has a special
role in the creation of the organization’s culture. In creating an organization and bringing
together people to work on shared objectives, his/her personality is forced upon the
organization, and begins to shape the group’s culture (Schein, 1995, p. 221). However, an
organization only realizes its dominant culture after it has overcome various critical crises
relating to growth and survival (Schein, 1995, pp. 221-2), and has worked out solutions.
When an organization can cope with its external problems of adaptation and internal
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
problems of integration, in a manner with a workable set of relationship rules, than we can
say that a dominant organizational culture has emerged (Schein, 1995, p. 222). Handy in his
work suggests that a variety of factors (history, size of organization, technology of work,
goals and objectives, the environment of the industry, and the people) influence the choice
of a culture and structure for an organization (Handy, 1993, p. 192). For example a large
and centralized founder-dominated organization will develop a particular type of culture,
what Handy describes as a power culture (Handy, 1993, p. 192), but that over time forces of
the environment, changes in size and technology might push it towards another culture.
Therefore Handy suggests that over time dominant cultures can (and should) change, most
starting as power cultures and then with specialization and formalization of activities
change to role cultures in their organizational maturity. Further, with increased demands of
flexibility in order to deal with changes in the external environment that these cultures may
again transform to become task or other cultures (Handy, 1993, p. 201). Sambasivan &
Johari concur that organizational culture is in fact evolutionary, in that under normal
conditions they experience slow change (Sambasivan & Johari, 2003, p. 711). Handy posits
that an organization with a positive culture would be one that exhibits cultural diversity,
and that there should be subcultures that are matched to and based on the type of activity of
departments and units within an organization, (Handy, 1993, p. 201) but that are still
aligned with an overall dominant culture that everyone embraces.
Problems of Definition:
Organizational culture is an intangible concept and therefore there are many ways
that one could define it and presently there is limited consensus regarding a general theory
(Denison & Mishra, 1995, p. 205). Compounding this limited consensus is scepticism,
which exists in discussions regarding culture generally, whether or not organizational
culture can in fact be “measured” to adequately compare one organization to another, at all
(Denison & Mishra, 1995, p. 205). Firstly, it is intangible in that there are many factors that
influence organizational culture and thereby influence its definition. Organizational culture
is influenced by factors such as the industry in which the organization operates, its
geographic location, critical events that have occurred during its history, the
aforementioned personalities of the founder, and the personalities of the employees and
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
patterns of interaction amongst employees within the organization (Sadri & Lees, 2001, p.
854). Another major influence on an organization’s culture is the national culture within
which the organization operates (Gilsdorf & Wagner-Marsh, 2006, p. 624). For example, it
is easy to see how an organization operating in the United States where there is an emphasis
placed on democracy and individualism, would differ from an organization operating in
Asia where there are different values and beliefs that are emphasized. It is also a difficult
concept to define precisely due to the ambiguous nature of the concept as well.
Organizational culture is not simply something that exists as a concrete “cultural
phenomenon” separate from the organization where it is present. To understand
organizational culture in any fashion, one must first specify that a particular group of
people functioning within an organization has had enough stability and common history to
have allowed a culture to form (Schein, 1990, p. 111).
Presently there is little agreement in the literature regarding defining and analyzing
organizational culture as a concept (Schein, 1990, p. 109). Part of the diversity in how the
concept is used and the meaning it takes on stems from the fact that each organizational
culture researcher brings to the table her/her own explicit or implicit paradigms from within
the field the researcher is working that can bias the definitions of key concepts within
organizational culture. These biases further cloud the whole approach researchers take
toward the study of the phenomenon of organizational culture (Schein, 1990, p. 109). Such
diversity exists in the approaches to organizational culture, which influence the way it is
talked about and how people “do” organizational culture, because it like culture, lies at a
crossroads of several socials sciences and can reflect the bias of each of them, for example,
anthropology, sociology, social psychology, and organizational behaviour (Schein, 1990, p.
109). Interestingly, organizational culture as a concept was developed to practically assess
particular organizations and compare facets of cultures that do work to those that do not in
order to analyze strengths and weaknesses of cultures. It is thought that a positive culture
will carry over and affect positive outcomes, namely effectiveness. A note must be made on
this concept of effectiveness. As a concept effectiveness is also problematic as it is
extremely multidimensional (Denison & Mishra, 2001, p. 205). Denison and Mishra in
their discussion of culture and effectiveness insist that effectiveness must be defined by
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
“…a complex of stakeholders, who may hold differing, incompatible, and changing
criteria” (Denison & Mishra, 2001, p. 205), and therefore effectiveness will be a little
different for each organization and is context dependent.
Literature Review: Defining Organizational Culture:
While there are differences in approaches taken toward organizational culture, each
with their own theoretical and methodological biases, and there are a variety of factors that
make up and influence it, nonetheless as a concept it has been a popular subject in the
literature. This is so as organizational culture has been clearly shown to play a meaningful
role in organizations and can hold implications for either their success or failure (Gilsdorf
& Wagner-Marsh, 2006, p. 624). One of the seminal works in the field of organizational
culture, the aforementioned work by Ouchi (1981), was a response to such concerns over
the relationship of culture to success and failure, namely, a response to why Japanese
organizations were performing better than those in North America. Organizational culture
as a concept allows researchers and managers to differentiate between organizations and to
measure or at least discuss these cultures in relation to different levels of effectiveness
(Schein, 1990, p. 110).
A variety of approaches to organizational culture that has been discussed and
defined in the literature will now be explored. Generally, organizational culture can be
thought of as the shared and taken for granted assumptions, values and beliefs that guide
the actions of members of an organization (Gilsdorf & Wagner-Marsh, 2006, p. 624). Some
scholars have discussed organizational culture in terms of the particular characteristics or
dimensions that encompass such culture. For example Chatman and Jehn identified seven
primary characteristics that define organizational culture including: innovation, stability,
people orientation, outcome orientation, easy-goingness, detail orientation, and team
orientation (Helm, 2006, p. 624). Others have offered formal definitions such as Greenberg
and Baron who see culture as the “…cognitive framework consisting of attitudes, values,
behavioural norms, and expectations” (Sadri & Lees, 2001, p. 854), or as Celemente and
Greenspan argue, “...the collective thoughts, habits, attitudes, feelings, and patterns of
behaviour” (Sadri & Lees, 2001, p. 854). Some scholars, like Handy (1993), Deshpande &
Farley (1999), and Sambasivan & Johari (2003) go beyond general definitions to classify
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
organizational cultures into types. Handy contends that there are four types of cultures, the
power culture, the role culture, the task culture and the person culture (Handy, 1993,
pp.183-191). Each culture will look different, hold different values, will require different
people and psychological contracts, have different powers of influence and have different
ways of working (Handy, 1993, pp. 183-191). What is particularly useful about Handy’s
four types of organizational culture in terms of practical implications is that he suggests that
all four of these types can and should exist within one organization. As noted before he
suggests that organizations should have cultural diversity, and not just one dominant
culture, and that it is useful to promote positive cultures that integrate a variety of specific
sub-cultures based on the activity of work (Handy, 1993, p. 204).
Therefore, a useful definition is one that respects cultural diversity but also
recognizes that an organizational culture is also a pattern of behaviour that has been
adopted and accepted as a way of solving problems (Sadri & Lees, 2001, p. 854). For
example when discussing the creation of organizational cultures, Schein notes that while
the founder’s beliefs, values, and thus personality are instrumental in creating culture, that
culture can not be said to exist until it has responded to crises regarding its growth and
survival (Schein, 1995, p. 222). Therefore a workable definition must respect that
organizational culture is created in response to external and internal problems that create a
workable set of relationship rules. Schein therefore sees organizational culture as a,
“…pattern of basic assumptions that a given group has invented, discovered, or developed
in learning to cope with its problems of external adaptation and internal integration…” and
that can be “…taught to new members as the correct was to perceive, think, and feel in
relation to those problems” (Schein, 1995, p. 222). What this implies is that more general
definitions of organizational culture that place too much emphasis on overt behaviour and
visible artifacts or value systems that are articulated in “charters” and mission statements
are not completely valid as they do not provide for the fact that organizational culture is
simultaneously a behavioural, cognitive and emotional process (Schein, 1990, p. 111).
Organizational culture is also the taken for granted and unconscious assumptions that
underlie these behaviours, artifacts, and value systems (Schein, 1995, p. 222). Schein
dictates that a “mature” (or “strong”) culture is one that has a rich history and where one
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
will find assumptions that are “…patterned and interrelated into a ‘cultural paradigm’”
(Schein, 1995, p. 224). Such a cultural paradigm is a sound way in which to think about
organizational culture and basically explains how the organization and its members view
the world (Schein, 1995, p. 224), and explains to outsiders “how we do things around here”
(Sambasivan & Johari, 2003, p. 711). However, as Handy points out such a cultural
paradigm, to be positive, must be adaptable and cultural diverse.
While it is important not to confuse explicit material artifacts as representing the
totality of an organization’s culture, culture can manifest in a variety of ways. For example
an organization will often convey cultural values explicitly through mission statement
(Gilsdorf & Wagner-Marsh, 2006, p. 624), and through other rules such as written policy
statements and less explicitly through unwritten organizational expectations that include
metaphors, images, sayings, etc. (Gilsdorf & Wagner-Marsh, 2006, p. 625). Organizational
culture is often captured by what founders and head executives in a company value which
is expressed through what they say and do, what and who they reward, and how they
motivate their employees and who they hire (Gilsdorf & Wagner-Marsh, 2006, p. 625).
Organizational culture can even hold a physical element in that the way a space is
organized and laid out speaks to the values and assumptions an organization will hold
(Gilsdorf & Wagner-Marsh, 2006, p. 625). In all an organizational culture is composed of a
variety of relatively stable characteristics that are based on deeply held assumptions and
that are reinforced by such practices and structures that have been mentioned (Helm, 2006,
p. 625).
Positive vs. Strong Organizational Culture:
Within the literature on organizational culture one comes across two similar
concepts that upon closer analysis can be seen as being in conflict with each other, those of
a “positive” culture and a “strong culture”. A strong culture are those, regardless of type or
how else they are classified, where the core values of the dominant culture are strongly
believed by the great majority of organizational members (Gilsdorf & Wagner-Marsh,
2006, p. 624). Strong cultures are argued to often increase behaviour consistency and
reduce turnover, however the literature shows that they are often not positive cultures, in
that they are less adaptive to change and may create barriers to cultural diversity and are
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
troublesome in times of mergers (Gilsdorf & Wagner-Marsh, 2006, p. 624). A positive
culture on the other hand is more adaptive to change as it is more excepting of
differentiation within organizations. A positive culture is one that contains a strong values
espoused by leaders, and is supported by organizational values consistent with the purpose
of the company and aligned with the personal values of organizational members. Purposes
and values must be transmitted to every level and every person of the organization and
across functional departments. However the culture has to be adaptable (Sadri & Lees,
2001, p. 854). A positive culture must be able to integrate and interact effectively with its
subcultures, for example Handy’s types of cultures based on functional difference.
Therefore a positive culture is a dominant culture that is strong enough for members of
various subcultures to embrace (Sandri & Lees, 2001, p. 854), and yet it must have values
that are aligned or compatible with each of the subcultures and the personal values of each
individual (Sadri & Lees, 2001, p. 855). That a positive culture is one that is aligned with
the personal values of each employee is especially important because positive cultures can
not have the positive effects it should produce without individual support. For example,
while organizational culture is important in that is has been shown to have multiple positive
benefits to an organization and can affect its success in achieving goals and objectives, this
means nothing unless there is sufficient commitment of people to ensure the successful
implementation of such organizational policies and plans (Sambasivan & Johari, 2003, p.
709).
Why Culture is Important:
Culture and namely, a positive culture(s) are important for a variety of reasons, namely
identifying and understanding efficient management practices that support commitment of
employees, and the positive correlation of organizational culture to effectiveness of the
organization overall. Firstly, as Sadri and Lees noted in their work, a positive culture can
provide benefits to an organization. They discuss that the right organizational culture can
lead to a competitive advantage in that when members identify with the culture, meaning it
is amiable to their personal values, that the work environment is more enjoyable and moral
is increased (Sadri & Lees, 2001, p. 856). This positive work environment leads to
increased teamwork and the sharing of information. The increased interaction, they argue,
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
leads to continued learning and improvement due to the increased information flows (Sadri
& Lees, 2001, p. 856). Deal and Kennedy first explored how organizational cultures guided
employees’ behaviour within an organization (Sambasivan & Johari, 2003, p. 708). This is
important as such behaviour encompasses both job satisfaction and organizational
commitment. Both of these are understood in the literature as being determinants of
organizational performance and effectiveness (Lok, 2004, p. 321). Organizational
commitment in particular is important to the overall effectiveness of an organization, as
research on commitment shows that it has an impact on employee job performance,
turnover, pro-social behaviour, and absenteeism (Sambasivan & Johari, 2003, p. 709).
Further studies have shown that organizational culture can have a significant impact on job
satisfaction and organizational commitment (Lok, 2004, p. 321). While the aforementioned
discussion on effectiveness has illustrated that it must be contextual defined and depends on
a variety of stakeholders within an organization and other factors, the literature has
supported in general, a positive correlation between organizational culture and
effectiveness. Studies by Denison (1990), Van der Post, et al. (1998), Kotter & Heskett
(1992) have all found a positive correlation between organizational culture and
performance of an organization (Sambasivan & Johari, 2003, p. 708). Kotter & Heskett for
example found that organizational culture had a significant impact on a company’s longterm economic performance and that those organizations that emphasized particular
managerial constituencies (customers, stockholders, and employees) and leader at all levels
of the organization performed better than those who did not (Sambasivan & Johari, 2003, p.
711). Therefore organizational culture is an important concept to understand and
problematize as it can have an impact on performance and the success or failure of a
company. This is important as studies have identified that certain types of cultures can
foster success, and the absence of certain cultures, or a domineering overriding culture
without integrated subcultures, can lead an organization to failure. Therefore managers
need to understand culture generally, and their own organization’s culture specifically, to
assess the strengths and weakness in order to change the culture for the better. As
organizational cultures seem to impact employee behaviour, managers may need to shape
and develop cultures that are more conducive to their employee’s values and the
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
organizational setting to illicit commitment to an organization. This conclusion leads us to
the last section on practical implications of the concept of organizational culture for
managers.
Practical Implications for Managers
What practical implications does organizational culture pose for managers within an
organization? Firstly, not all cultures are deemed equal and some cultures have a negative
effect on the performance and effectiveness of an organization and on job satisfaction and
commitment of employees. It has also been illustrated that cultures can be transformed and
changed. Therefore a practical implication for managers, especially when a professional
manager is taking over a company from a first generation founder (Schein, 1995, p. 237), is
to be able to affect positive change to an organization by assessing strengths and
weaknesses, and helping the organization adapt to a more positive culture. Schein agrees to
this sentiment by noting that “…culture must be analyzed and understood, and…the
founders/owners must have sufficient insight into their own culture to make an intelligent
transition process possible” (Schein, 1995, p. 238). To this end managers go about cultural
change by taking a proactive approach to change by modeling the behaviour they want to
encourage, and then reinforce the desired culture. This can be done through such means as
developing a visionary statement or slogan, celebrating employee’s successes or
promotions to reinforce the desired culture, and by recruiting and hiring individuals that are
compatible to the new desired culture (Sadri & Lees, 2001, p. 858).
Secondly, as this essay has shown having a positive organizational culture is not the
sole determinant of success. There has to be strong levels of organizational commitment as
a positive culture means nothing unless there is sufficient commitment of people to ensure
the successful implementation of such organizational policies and plans (Sambasivan &
Johari, 2003, p. 709). Further, in his work Geiger (1998) notes that organizational culture
could enhance the level of organizational commitment and increase organizational success
(Sambasivan & Johari, 2003, p. 709). Organizational commitment refers to the willingness
of employees to give their energy and loyalty to an organization apart from purely
instrumental worth of the relationship (Sambasivan & Johari, 2003, p. 713). It can also be
seen as the belief in the goals and values of the organization and the willingness to exert
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
considerable effort on the behalf of an organization (Sambasivan & Johari, 2003, p. 713). It
has been shown that such commitment is a determinant of organizational performance and
effectiveness. On the other hand this essay has also shown that organizational culture plays
a role in cementing an individual’s commitment to an organization. This has huge
implications for management development, especially in relation to human resource
development and motivating employees (Sambasivan & Johari, 2003, p. 724). For example,
being aware of organizational culture can help managers better focus their efforts by
understanding that particular types of organizational cultures will be best served by
particular types of organizational commitments, and that a certain compatibility between
the two is required to motivate employees (Sambasivan & Johari, 2003, p. 724). For
example a particular type of culture will need to emphasis a particular type of commitment
(i.e. affective commitment), so that employees are sufficiently motivated (Sambasivan &
Johari, 2003, p. 724). As organizational culture is something that is shared, taught and
passed on, it is up to managers ensure proper HR management, particular hiring individuals
who share or hold compatible values with the organization, or match particular types of
individuals with particular types of activities within a department to ensure organizational
commitment. When a manager understands his culture, for example he is the manager of a
department that is classified as a task culture, he will be more equipped to development
appropriate and successful human resource practices. For example in such a task culture,
assuming that individuals have been correctly matched to the culture, a manager will know
that to reward individuals so that they are sufficiently motivated and committed. He will
know that status and position power are not highly valued by task cultures or by the
individuals who are drawn to task cultures, and therefore promotion is not a adequate
method of rewarding such individuals. He will know that such an individual would much
rather feedback on performances (Handy, 1993, p. 236). Generally, an overall implication
for managers regarding organizational culture is that different approaches to the
management of human assets is needed depending on the type of culture he/she is
managing (Handy, 1993, p. 236).
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Jessica Lawson
INF1230- Essay Assignment
Chun Wei Choo
November 21, 2010
References
Barney, J.B. (1986). Organizational culture: Can it be a source of sustained competitive
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Denison, D.R., & Mishra, A.K. (1995). Toward a theory of organizational culture and
effectiveness. Organization Science 6(2), pp. 204-223.
Gilsdorf, J.W., & Wagner-Marsh, F. (2006). “Organizational Culture”. In Helms, M.M.
(ed.), Encyclopedia of Management (pp. 624-626). Detroit: Gale.
Handy, C. (1993). Understanding Organizations. New York: Oxford University Press.
Lok, P. (2004). The effect of organizational culture and leadership style on job satisfaction
and organizational commitment: A cross-national comparison. The Journal of
Management Development 23(4), pp. 321.
Sadri, G., & Lees, B. (2001). Developing corporate culture as a competitive advantage. The
Journal of Management Development 20(10), pp. 853-859.
Sambasivan, Z.A.R., & Johari, J. (2003). The influence of corporate culture and
organizational commitment on performance. The Journal of Management
Development 22(8), pp. 708-725.
Schein, E.H. (1990). Organizational Culture. American Psychologist 45(2), pp. 109-119.
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