Organizational culture

Organizational culture refers to the formal environment and norms that characterize a specific organization, as well as the informal behavioral and social phenomena that occur among individuals in an organization. The study of organizational culture usually includes exploring intangible characteristics, such as shared understandings, beliefs, and values, and the many ways in which culture influences human behavior. More tangible characteristics such as codified norms—for example, in the form of employee handbooks and company hierarchy—are also elements of an organizational culture. Theories of organizational culture seek to understand and define these elements to gain a better understanding of the internal culture of organizations and the performance of their members. A solid understanding of the phenomenon of organizational culture helps organizations strengthen the work environment within and outside of the company.

Brief History

The idea that organizations may have specific cultures is not new. Around the world, the spread of civilizations required the development of management and organization. Ancient cultures developed systems of organization and transmitted them to others. The most influential theories of modern organizational culture, however, were developed from more recent historical events.

The Industrial Revolution led to the creation of large factories, steamships, and railroads in the late eighteenth and early nineteenth centuries. These created an array of new management problems, such as the logistics of transporting and managing vast numbers of people, products, and equipment. Among new organizational models arose the system of scientific management, also known as Taylorism, created by Frederic W. Taylor. Taylor’s system was based on the interchangeable parts of industrial machinery and viewed an organization’s members as an engineer views passive and exchangeable machine parts. (Taylor’s system did suggest that human fatigue, the need for breaks, and worker safety be taken into consideration.) In this system, tasks were divided minutely and efficiently among workers, increasing productivity and reducing human idiosyncrasy and error. This led to the creation of new organizational fields such as quality control, industrial engineering, and human resources. Other scholars, such as Emile Durkheim and Max Weber, produced an important body of work that looked at the ways organizations formalized and managed their practices and workers.

In time, the drive for rationality, codified rules, and bureaucracy often superseded openness to human variability. This, in turn, created widespread dissatisfaction among workers who felt dehumanized. Although the model of scientific management has since been greatly reformed and its tenets modified, its basic characteristics remain popular today. Concerns about job tedium and workers’ feelings of depression, however, led labor activists to demand reform and researchers to investigate the discrepancy between how workers were expected to perform and how they actually behaved. This led to the psychology-based human relations movement, which fostered a greater focus on groups and well-being rather than solely on individual performance and productivity, and gave way to a more trusting and humanitarian environment.

Topic Today

It is difficult to develop theories of organizational culture because many organizational cultures are unique. From the American models of Fordism and post-Fordism to the Japanese model of Kaizen, organizational cultures are created within the organization and, in turn, are also influenced by members of the organization in which it grows. Social, geographic, and historical elements also determine how organizational cultures evolve. For example, during the Industrial Age in the nineteenth century, a great many firms were manufacturing companies. Organizational culture has changed greatly since then as more firms have focused on thriving in a postmodern environment of vast, rapidly circulating information.

Experts widely consider that organizational culture is the most important determinant of behavior in organizations. It is also understood as one of the factors that can be managed in order to improve performance and efficiency. When problems arise in an organization, managers often look to the culture as the possible source for both conflict and solutions. Some approaches look to the culture as a cohesive unit built around common values and ethics. These aspects, supporters argue, offer a sense of uniformity that makes for a strong cultural model. Other theoretical models hold that there is significantly more correlation among an organization’s practices than in the individual attitudes or beliefs of its members. People in an organization often recruit like-minded people, and an organization therefore tends to have a cohesive culture. The culture may change, if perhaps merely incrementally, only when older managers are replaced with new ones.

Yet other models look at organizational culture as a set of constantly shifting subcultures and coalitions and suggest that the permeability of subcultures is the point from which an organization’s culture should be studied. This view also considers diversity a better platform for productive performance. However, focusing solely on subcultures, critics argue, is problematic: Because every culture is unique, theoretical generalizations are difficult to make.

Whichever model is used, there is an understanding that organizational culture is complex. Researchers must analyze the individuals in the organization, as well as their behavior, actions, rituals, and stories. There are also other elements that affect the cultural dynamics of an organization. These include structure, marketing, finance, consumers, the varied interests of different departments, and many more.

In the twenty-first century, one notable trend has been for organizations to embrace diversity and a degree of continuous change in their organizational culture. Many managers increasingly understand that it is possible to manage cultural change as a flexible and continuous process, rather than merely as damage control when problems arise. Many organizational culture theories function on the premise that, because an organization must constantly develop and adapt, long-term stability is unlikely. Another difficulty in creating generalized theories of organizational culture and fostering a shared understanding of the topic is the significant differences between organizations in the private and public sectors, as well as between the for-profit and nonprofit sectors. Economic, legal, and political barriers increasingly overlap in today’s environment, and cultural diversity emerges as a core challenge to organizational success. In today’s world, then, it is important for organizational managers, scholars, and experts to understand the cultural underpinnings of organizational culture and its dynamics.

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