What is a system of shared values norms and assumptions that guides organization members attitudes and behaviors?

Posted at March 13, 2019 in Management Corner by Donald Smith, Ed.D

An organization is a machine consisting of two major parts: culture and people. In an organization, tough love is effective for achieving both great work and great relationships. A believability-weighted idea meritocracy is the optimal system for reaching effective decisions. Make our passion and our work one and the same, and do it with people we want to work with and believe in.

Culture is defined as the underlying beliefs, assumptions, values, and ways of interacting, which contribute to an organization’s unique social and psychological environment. Organizational culture includes an organization’s expectations, experiences, and philosophy as well as the values that guide member behavior, and is expressed in member self-image, inner workings, interactions with the outside world, and future expectations.

Organizational culture is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid. Organizational culture also includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits. Simply stated, organizational culture is “the way things are done around here” (Deal & Kennedy, 2000).

Organizational leaders are vital to the creation and communication of their workplace culture. However, the relationship between leadership and culture is not one-sided. While leaders are the principal architects of culture, an established culture influences what kind of leadership is possible (Schein, 2010).

Leaders must appreciate their role in maintaining or evolving an organization’s culture. A deeply embedded and established culture illustrates how employees should behave, which can help them achieve their goals. This behavioral framework, in turn, ensures higher job satisfaction when employees feel their leader is helping them accomplish their goals. From this perspective, organizational culture, leadership, and job satisfaction are all inextricably linked.

Globalization and Culture

The process of globalization is impacting cultures around the world. Globalization is a term that has been used since the 1980s to describe the increasing interdependence and interaction between people, cultures, and the economies of different nations. It has resulted in widespread cultural, social, economic, technological, and political changes.

Global culture refers to the collection of customs, attitudes, values, and beliefs that characterize one group of people; distinguish a group from other groups; and the material products a group creates. Global culture is passed on from one generation to another through immaterial culture, which includes values, norms, language, rituals, and symbols, as well as material culture, which includes objects, art, and institutions.

Enlightened cultures throughout history have:

Advanced human rights
Applied principles of justice and dignity
Secured the basis of rights for women and children
Established modern educational systems
Formed the practice of current medical practices
Instituted the principles of modern charity
Built the foundation of today’s scientific community
Shaped the arts

Forces that combine to create a global culture encompass the increasingly global economy with global markets, the global environment, global politics, ease of global travel, the rise of multinational corporations, the growth of global mass media, and the spread of information technologies.

Global culture refers to a common culture shared by people worldwide. Like national cultures, global culture is characterized by shared values, norms, language, and material objects. It may co-exist with or replace national cultures. Critics of global culture find fault with its homogeneous nature, and fear the creation of a global mass culture. Critics consider global culture to be interchangeable with North American, Western, mass, or commercial culture. Supporters celebrate the increased understanding and tolerance that can be produced by shared values, media, material objects, and a shared language. Understanding the characteristics, causes, and issues associated with global culture is vital for all those interested in the study of cultural change.

We can truly say that our cultural nationality restrains our cultural rationality. This is confirmed as we look at the national paradigms:

In the U.S., the cultural focus is on the market
In France, on power
In Germany, on order
In Poland and Russia, on efficiency
In the Netherlands on consensus
In Scandinavia on equality
In Great Britain on systems
In China, on family
In Japan, on Japan.

The Future of Culture

Finally, evolution is unavoidable. Evolution does not look ahead. Evolution is path dependent. Evolution uses many replicators. Evolution evolves.
It is not realistic to expect that all world citizens should become alike. Nor is it desirable nor necessary that they should do so. People will differ, but we all have to learn to co-exist without wanting others to become like us.

Any other road is a dead end.

Part 1 of “Culture: Not Something We Are, But Something We Do” explored how culture impacts the individual and society as well as the 10 Cs of culture.

Vice President Emeritus for Learning Technologies Donald Smith, Ed.D, CPT, headed ME&A programs in learning, leadership, and performance enhancement. He stayed with the firm in his retirement, bringing more than 65 years of experience as a coach, designer, facilitator, evaluator, manager, educator, and organizational change architect in more than 50 countries.

After reading this chapter, you should be able to do the following:

Describe organizational culture and why it is important for an organization. Understand the dimensions that make up a company’s culture. Understand factors that create culture. Understand how to change culture. Understand how organizational culture and ethics relate.
Understand cross-cultural differences in organizational culture.

Just like individuals, you can think of organizations as having their own personalities, more typically known as organizational cultures. The opening case illustrates that Nordstrom is a retailer with the foremost value of making customers happy. At Nordstrom, when a customer is unhappy, employees are expected to identify what would make the person satisfied, and then act on it, without necessarily checking with a superior or consulting a lengthy policy book. If they do not, they receive peer pressure and may be made to feel that they let the company down. In other words, this organization seems to have successfully created a service culture. Understanding how culture is created, communicated, and changed will help you be more effective in your organizational life. But first, let’s define organizational culture.

Define organizational culture.
Understand why organizational culture is important.
Understand the different levels of organizational culture.

Organizational culture refers to a system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behavior (Chatman & Eunyoung, 2003; Kerr & Slocum, 2005). These values have a strong influence on employee behavior as well as organizational performance. In fact, the term organizational culture was made popular in the 1980s when Peters and Waterman’s best-selling book In Search of Excellence made the argument that company success could be attributed to an organizational culture that was decisive, customer-oriented, empowering, and people-oriented. Since then, organizational culture has become the subject of numerous research studies, books, and articles. Organizational culture is still a relatively new concept. In contrast to a topic such as leadership, which has a history spanning several centuries, organizational culture is a young but fast-growing area within management.

Culture is largely invisible to individuals just as the sea is invisible to the fish swimming in it. Even though it affects all employee behaviors, thinking, and behavioral patterns, individuals tend to become more aware of their organization’s culture when they have the opportunity to compare it to other organizations. It is related to the second of the three facets that compose the P-O-L-C function of organizing. The organizing function involves creating and implementing organizational design decisions. The culture of the organization is closely linked to organizational design. For instance, a culture that empowers employees to make decisions could prove extremely resistant to a centralized organizational design, hampering the manager’s ability to enact such a design. However, a culture that supports the organizational structure (and vice versa) can be very powerful.

An organization’s culture may be one of its strongest assets or its biggest liability. In fact, it has been argued that organizations that have a rare and hard-to-imitate culture enjoy a competitive advantage (Barney, 1986). In a survey conducted by the management consulting firm Bain & Company in 2007, worldwide business leaders identified corporate culture to be as important as corporate strategy for business success. 1 This comes as no surprise to leaders of successful businesses, who are quick to attribute their company’s success to their organization’s culture.

Culture, or shared values within the organization, may be related to increased performance. Researchers found a relationship between organizational cultures and company performance, with respect to success indicators such as revenues, sales volume, market share, and stock prices (Kotter & Heskett, 1992; Marcoulides & heck, 1993). At the same time, it is important to have a culture that fits with the demands of the company’s environment. To the extent that shared values are proper for the company in question, company performance may benefit from culture (Arogyaswamy & Byles, 1987). For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer because of its culture. In other words, just as having the “right” culture may be a competitive advantage for an organization, having the “wrong” culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.

In addition to having implications for organizational performance, organizational culture is an effective control mechanism dictating employee behavior. Culture is a more powerful way of controlling and managing employee behaviors than organizational rules and regulations. For example, when a company is trying to improve the quality of its customer service, rules may not be helpful, particularly when the problems customers present are unique. Instead, creating a culture of customer service may achieve better results by encouraging employees to think like customers, knowing that the company priorities in this case are clear: Keeping the customer happy is preferable to other concerns, such as saving the cost of a refund. Therefore, the ability to understand and influence organizational culture is an important item for managers to have in their tool kit when they are carrying out their controlling P-O-L-C function as well as their organizing function.

Figure 8.5 Three Levels of Organizational Culture

Organizational culture consists of some aspects that are relatively more visible, as well as aspects that may lie below one’s conscious awareness. Organizational culture can be thought of as consisting of three interrelated levels (Schein, 1992).

At the deepest level, below our awareness, lie basic assumptions. These assumptions are taken for granted and reflect beliefs about human nature and reality. At the second level, values exist. Values are shared principles, standards, and goals. Finally, at the surface, we have artifacts, or visible, tangible aspects of organizational culture. For example, in an organization, a basic assumption employees and managers share might be that happy employees benefit their organizations. This might be translated into values such as egalitarianism, high-quality relationships, and having fun. The artifacts reflecting such values might be an executive “open door” policy, an office layout that includes open spaces and gathering areas equipped with pool tables, and frequent company picnics.

Understanding the organization’s culture may start from observing its artifacts: its physical environment, employee interactions, company policies, reward systems, and other observable characteristics. When you are interviewing for a position, observing the physical environment, how people dress, where they relax, and how they talk to others is definitely a good start to understanding the company’s culture. However, simply looking at these tangible aspects is unlikely to give a full picture of the organization, since an important chunk of what makes up culture exists below one’s degree of awareness. The values and, deeper, the assumptions that shape the organization’s culture can be uncovered by observing how employees interact and the choices they make, as well as by inquiring about their beliefs and perceptions regarding what is right and appropriate behavior.

Organizational culture is a system of shared assumptions, values, and beliefs that helps individuals understand which behaviors are and are not appropriate within an organization. Cultures can be a source of competitive advantage for organizations. Strong organizational cultures can be an organizing as well as a controlling mechanism for organizations. And finally, organizational culture consists of three levels: assumptions that are below the surface, values, and artifacts.

1Why culture can mean life or death for your organization. (September, 2007). HR Focus, 84, 9.

References

Arogyaswamy, B., & Byles, C. H. (1987). Organizational culture: Internal and external fits. Journal of Management, 13, 647–658.

Barney, J. B. (1986). Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review, 11, 656–665.

Chatman, J. A., & Eunyoung Cha, S. (2003). Leading by leveraging culture. California Management Review, 45, 19–34.

Kotter, J. P., & Heskett, J. L. (1992). Corporate Culture and Performance. New York: Free Press.

Marcoulides, G. A., & Heck, R. H. (1993, May). Organizational culture and performance: Proposing and testing a model. Organizational Science, 4, 209–225.

Schein, E. H. (1992). Organizational culture and leadership. San Francisco: Jossey-Bass.

Slocum, J. W. (2005). Managing corporate culture through reward systems. Academy of Management Executive, 19, 130–138.