Organizational Structure and Values

Abstract

Organizations engage in specific behaviors based on their identity, culture, and values. In fact, organizations have “personalities” that include the values that inform how they act. To different degrees, all members of an organization share and are affected by the organizational culture, which includes values, norms, commitments, and expectations. Some organizational structures provide an easier ground for developing an open and holistic culture than others do. Nevertheless, regardless of structure, organizations that have clear delineations of culture, mission, and values are highly successful not only in productivity and the market but also in higher rates of satisfaction among its workers and customers.

Overview

Organizations form cultural systems that represent their expressive and affective aspects. A culture includes many things, among the most important of which are ideology and values. All members of the organization are individuals with their own personalities, experiences, talents, and skills, and they bring these to the workplace. An individual’s personal values and culture are, in turn, modified by the organizational culture. A complex system develops between the cultural and structural systems of the organization, in which the structure inevitably shapes cultural development; however, it is also inevitable that the people who form the organization will also have an impact on the organizational culture.

Many organizational structures exist. The most common way to analyze them in their social and cultural contexts is to consider the organization’s main components: the people, the structural system, and the culture. The latter is the context that provides norms and motivations for its members, while at the same time, being subject to transformation by its members. The organizational culture, in turn, supports and legitimates the interests, strategies, and processes of the structural system. The culture of an organization comprehends a series of collective symbols, “normalized” knowledge, and formal methods of support and expression; these create among an organization’s members a shared perspective and value system, which regulates individual and group behavior.

Organizational culture is the medium by which members become integrated in the organization. It provides the essential elements for people to develop an organizational identity and identify, as well, with organizational values. When identifying with an organization, people form collective understandings of who they are in the organization. An organizational culture also provides the norms and motivations for action (“this is what we do”) and, ideally, fosters an efficient and harmonious coordination of members; that is, it ensures cohesiveness and unity of vision. An organizational culture guides and regulates daily processes and behavior (“this is how we do it”). These elements are essential and should be clearly established and accepted as legitimate by an organization’s members. Besides specifying the nature and goals of the organization, they stem from the organization’s ideology and values, that is, its core values.

Ideological systems are sets of fundamental ideals, beliefs, and ideas that guide the organization. The implicit beliefs that organization members have about themselves and the world, also become part of the organization’s ideological system, because it influences their relations with others and their understanding of the organization. Organizational ideologies do not occur in a vacuum; they are created and shaped by its leaders. An organization’s commanding principles and ideals are established and fostered by its dominant groups, such as the board of directors; the ideological system influences the character of the organizational culture and is intricately tied to the organization’s structure, functions, and goals or objectives. There are three main aspects to how organizational directives articulate the structure and ideology of an entity: (1) how they conceive the structure, (2) how they view their members or the human talent in relation to the structure, and (3) how they conceive of the functions, risks and goals of the organization.

Another important aspect, besides the ideological system, is the value system. The value system is the system of support that underpins how organization members act, make judgements, and relate to the organization’s interests, people, and objectives. Furthermore, values shape what people see as “common sense” and the norms that regulate their actions. Just as the norms of culture become implicit, so do values. People do not think of abstract concepts such as culture, norms, ideals, and values on a constant basis; yet these act as a software does for a computer, standardizing proceedings, behaviors, and expectations.

Many studies suggest a strong correlation between organizational culture and a company’s indicators of success, as well as between personnel satisfaction and corporate finances. Companies can promote organizational values while also improving their employees’ quality of life and skills through educational, training, and well-being programs. It is also useful to maintain open channels of communication. A worker-centered organization promotes values that lead directly to happier and more fulfilled employees, as well as higher productivity. This can happen in different organizational structures, from the most formal, that is, hierarchic or vertical, all the way to the most horizontal.

Structures establish the patterns of relationships in the organization, through which people must organize to achieve common goals. The organizational structure, then, is crucial to organizational culture, since culture occurs within the structure. It shapes the fundamental values and principles of an organization’s leaders, as well as the procedures and behaviors that managers model for the rest of the organization.

Most scholars who study organizational culture and values do it along specific lines, the most common of which analyzes four main variables:

(1) Leadership—The role played by managers and supervisors in creating and maintaining organizational culture, and in adhering to the organization’s vision, mission, values and goals;

(2) Participation and commitment—Practices and mechanisms established to help members participate in the organization’s processes and achievement of organizational goals

(3) Development and acknowledgement—Practices and behaviors that lead to members’ development, to systems of reward, and the extent to which members participate in and contribute to the identification and development of these practices.

(4) Environment—Concrete actions that foster strengthening and growth of self-esteem, well-being, and identity, and an environment in which members can develop their potential. Participants asked to list the most important factors that increase satisfaction within an organization, identified taking into account the norms, values, traditions, and culture of people from different demographic groups (ethnicities, gender, age, sexuality, etcetera).

Even though companies may have diverse structures, how they fare often depends on their commitments as an organization, that is, the activities it engages in and promotes to improve the management of authority and autonomy within the organization. These include strategies that facilitate collaboration and goal achievement; provide prompt and satisfactory responses to queries, complaints, and initiatives; implement programs that train workers for better performance or personal well-being; develop systems of acknowledgement and rewards for good performance; and establish an environment that decreases workplace stress and anxiety.

All the actions listed above foster an organizational culture that, according to experts, rates high on positive relationships, innovation, and knowledge creation and sharing. Of course, limitations exist to how organizations can implement a culture of openness, and these are easier to implement in smaller and flatter organizations than in traditional hierarchical ones. Nevertheless, an organization that cultivates values of best practices and strives to be people-oriented will have a more committed, skilled, and motivated workforce than organizations which neglect the proper development of organizational culture, and neglects its stated mission, vision, and values.

Applications

Organizational cultures are both internal and external. An organization’s personality—how it acts and the values that guide its behavior—correlate to the extent to which culture and behavior are coherent internally and externally. It is similar to how an individual’s behavior must be coherent with his or her values, internally as well as externally, for the person to be successful and fulfilled as a human being. For this reason, it is crucial for an organization to define clearly its mission, vision, and values, which are the root of its corporate identity. These elements determine an organization’s coherence and authenticity. A clear understanding of these elements, then, is essential for a company to grow and reach its goals and to align its internal culture and values with those it projects to the world outside its confines.

The organization defines “strategic leadership,” based on a fundamental 3-step process, which begins with defining strategic goals. An organization must (1) define its philosophy and mission, (2) establish short- and long-term goals, and (3) identify the actions needed for the organization’s present and the future. Strategic leadership involves formulating strategies and choosing the best for the organization as well as developing the organizational structure appropriate for these goals. This is known as strategic planning. Success depends on the implementation of the designed strategies.

Another important part of the organization’s structure and culture is its mission. The organization’s mission is described in its mission statement: This articulation of purpose is usually established in the organization’s charter and appears on its website, in its employee handbook, and anywhere an organization describes its activities. The organization’s mission is a key item in the creation of an organization’s identity and vision. In fact, the mission must always fit harmoniously with the vision. One of the ways to develop a coherent organization mission is to ask the reason for its existence. Questions such as “What do we offer?”, “Who do we want to attract?”, “Who are our users?”, “What do we want to communicate?”, “What kind of relationship do we want with our members?”, and “What makes us different from our competitors?” are helpful guidelines in determining an organization’s mission.

An organization’s vision is the dream or ideal of the company. The organization’s vision statement is a declaration of its mid- and long-term aspirations, the image of what it wishes for the future. The organization’s vision must serve as the inspiration and roadmap for the organization’s ultimate objective. The vision must align with the mission and, as with the mission statement, a series of questions may help define it: “What are our objectives?”, “What are our key values?”, “Which attitudes ought we to have?”, “What principles are important to our growth?”

An organization’s mission and vision are interrelated with its stated and implicit values. An organization with the right values is successful at attracting and maintaining its members, which leads, in turn to higher productivity, output, and results. An organization must make a firm purpose of never betraying its principles, because the results are always counterproductive, including overall rejection by disappointed users and members.

An organization’s mission, vision, and values should always be clear and explicit to workers. Moreover, an organization’s values must be aligned not only with the mission and vision, but with ethical principles that serve as a compass for the whole organization and are aligned with the moral values of its members or employees.

Most successful companies have a clear sense and statement of the company’s mission, vision, and values, from Non-Government Organizations (NGOs) such as Greenpeace to mass retail companies such as Nike. Greenpeace, for instance, presents mission and vision statements based on personal accountability, nonviolence, political independence, protection of the environment in all its forms, promotion of global peace, and solutions for a green and peaceful future for all. These values are very explicit in the mission statement and the vision that guides them, and their actions—from peaceful protests to environmental education and consciousness—does not deviate from this coherence. As such, Greenpeace is known as one of the most successful of environmental organizations, with great impact on both the public and private sectors.

Nike, on the other hand, is a wildly successful worldwide mass retailer of athletic wear. Its mission statement from the beginning was simple: to be the world’s greatest retailer of athletic shoes. Its mission is based on a stated vision of inspiration and innovation for all athletes, as well as sustainable production. Its goals, ideals, and values are streamlined and clear, and it guides organizational personality and behavior, making it one of the top corporations worldwide. The company also focuses on employee and community well-being through a system of programs that provide benefits for Nike employees worldwide.

Issues

An organization’s structure is, simply put, its set of coordination and classification mechanisms. Structures and management styles vary from one organization to another, yet all must deal with interpersonal issues, which include reactions to change, mutual adjustment between managers and subordinates and, horizontally, between workers or members; as well as some form of supervision, however minimal the latter may be (such as in very flat organizations).

In 1939, organizational expert Elton Mayo observed that an informal structure exists side by side with an organization’s formal structure. The informal structure refers to organizational culture, the non-official relationships based on mutual interaction and adjustment among workers. This includes not only relationships between internal members, but also the organization’s actions and behavior toward third parties, such as users, customers, or vendors. These unofficial elements are not formally stated in organizational structures; instead, they emerge as sets of habits, assumptions, expectations, group behaviors—normed or spontaneous—and all other types of attitudes that occur in the workplace.

Every individual carries his or her own culture with them, wherever they go. In the organization, this culture is distinct from the organizational culture, even if it aligns well with it. Usually, employees adapt to the dominant culture in the workplace and form part of the unified sense of attitudes and behavior, internal as well as with third parties (if she or he must deal with third parties at work).

Some experts contest the idea that an organization’s structure dominates a company culture almost absolutely. They argue, for instance, that the workplace is often a field of subcultures or co-cultures in friction with each other. These are not only brought from the world outside the organization but also include the formation of new subcultures within the organization itself. Added to this, an organization does not exist separate from the society that surrounds it. All of this inevitably leads to a series of constant conflicts, some overt and some understated, that differ in degree and vary across organizations. It is an issue that surges more and more as corporations expand globally and hire thousands of employees worldwide, bringing new challenges and opportunities to the development of organizational structures and values in the twenty-first century.

Terms & Concepts

Best Practices: Organizational standards and processes considered as the most effective and ethical for its field.

Core Values: An individual’s, community’s, or organization’s fundamental code of principles and behavioral standards.

Ethics: The group of norms, mores, and customs that guide the values, beliefs, and behavior of people in a community or group. Although it is commonly used synonymously with “morals,” ethics examines questions of right and wrong based on the potential for consequences, especially harm, whereas morals are usually considered to be based on religious standards.

Mission Statement: A short statement of the objectives and purpose of an organization. It must be aligned with an organization’s vision.

Vision Statement: A statement of an ideal and/or end goal of an organization.

Organization: A group of people and resources organized toward a specific goal. It includes diverse administrative and managerial systems and structures and can be large or small, formal or informal.

Organizational Culture: The norms, values, expectations, and behaviors shared, followed, and promoted by people and groups in an organization.

Organizational Values: The key factor that determines the behavior, expectations, and performance of the people who work in an organization. These values must be shared by all members of the organization in order to be effective.

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Suggested Reading

Bone, K., Jack, G., & Mayson, S. (2018). Negotiating the greedy institution: A typology of the lived experiences of young, precarious academic workers. Labour & Industry, 28(4), 225–243. Retrieved January 1, 2019 from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=134164410&site=ehost-live

Cameron, K. S. (2011). Diagnosing and changing organizational culture. (3rd ed.). San Francisco, CA: Jossey-Bass.

Evdokimova, T. G. (2016). Rural Russia’s values and values orientations. Sociological Research, 55(3), 176–186. Retrieved January 1, 2019 from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=120211613&site=ehost-live

Power, M. (2018). Accounting, boundary-making, and organizational permeability. Research in the Sociology of Organizations, 57, 31–53. Retrieved January 1, 2019 from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=133573210&site=ehost-live