Organizational culture

From CEOpedia | Management online

An important factor in shaping the relationship between employees and the employer is the culture of the organization. Organization culture means business personality, its soul, which distinguishes it from other organizations, the usual way of thinking, feeling, and action shared, absorbed and assimilated by the employees.

Culture of the organization on the one hand determines the mutual relations between the employer and the employees, on the other hand allows the identification of employees with the objectives of the organization and their involvement in realization of these.

Corporate culture is largely determined by the needs of its members. Therefore, it is important to identify the needs and aspirations of individual employees in order to integrate them with the objectives of the organization, which is fundamental to the development of the motivation to work.

Classification of workers' needs by M. Armstrong, divided them into two groups: the first group includes the need for professional development, which is a source of personal development, and the second is: fair remuneration, supervision, working conditions and just administrative actions. The author states that meeting the needs of the group does not motivate individuals to achieve greater job satisfaction and better results, but all manager can expect is to prevent dissatisfaction and poor job performance.

Components of organizational culture

Each culture has its own symbols and rules, specific language, value patterns, management styles, behaviour patterns and success definition. These specific characteristics distinguish one organization from another. Generally, organizational culture elements are divided into three types:

  • thought patterns, that simplify group members different situations assessments,
  • behaviour patterns, that provide specific reaction patterns to different situations,
  • symbols, that help unify and strengthen thought patterns and behaviour patterns among group members.

Functions of organizational culture

Culture of the organization is the building blocks of the desired organizational behaviour, plays a large role in the organization and has the following functions:

  • Helps organizations cope with the uncertainty arising from the variability of environment and internal operating conditions,
  • Builds its identity defined as the overall features of the social bond which connects members of the organization and allows to distinguish it from others.
  • Reduces uncertainty, gives a sense of security,
  • Integrates people, giving a sense of belonging,
  • Provide knowledge and information about the world, broadens horizons
  • A method of shaping human behaviour.

Classifications and research on organizational culture

Nowadays organizational cultures take on various aspects of:

  • relationship to nature,
  • time orientation,
  • human nature,
  • relationship to action,
  • responsibility location,
  • social space.

Studies conducted by G. Hofstede in 40 countries and among almost 116 thousands of employees has shown that five dimensions of organizational culture can be introduced:

  • power distance (whether employee pays attention to hierarchy and differences in force levels),
  • individualism vs. collectivism (if in the foreground is an individual or social group),
  • masculinity vs. femininity (whether social interactions are built on competition or protectiveness),
  • uncertainty avoidance (if high or low level of uncertainty avoidance is practised),
  • long - or short-term orientation (whether organization focuses on past and present or future).

See also:

Examples of Organizational culture

  • Customer Focus: At some organizations, customer service is a top priority and is a part of their organizational culture. These companies are customer-centric, which means they prioritize customer satisfaction and view customer feedback as an important source of information. They strive to meet the customer’s needs and preferences and continuously look for ways to improve their services. Examples of this type of organization include Amazon, Apple, and Zappos.
  • Collaboration: Organizations that promote collaboration among employees are often more successful than those that don’t. These organizations value teamwork and foster a spirit of cooperation among their staff. They also encourage employees to share ideas and work together to come up with creative solutions to problems. Examples of this type of organization include Google and Microsoft.
  • Innovation: Organizations that value innovation are constantly looking for ways to improve their products and services. They invest in research and development and encourage employees to come up with creative solutions. Examples of this type of organization include Tesla and Virgin Group.
  • Quality: Organizations that prioritize quality are focused on providing the best possible products and services to their customers. These organizations invest in quality assurance, ensuring that their products meet the highest standards. Examples of this type of organization include Toyota and BMW.

Advantages of Organizational culture

An organizational culture can be beneficial for both the employer and employees in many ways. Here are some of the main advantages:

  • It helps to set the standards and expectations for the organization, providing employees with a sense of purpose and direction.
  • It helps build trust between employees and employers, leading to a more collaborative and productive working environment.
  • It reinforces the values and mission of the organization, creating a sense of common goals and objectives.
  • It can create a sense of belonging and loyalty among employees, leading to increased job satisfaction and improved morale.
  • It can help to attract and retain top talent, as a positive organizational culture can be a major draw for potential hires.
  • It can serve as a competitive advantage, helping the organization to stand out among its competitors.

Limitations of Organizational culture

Organizational culture has some limitations that need to be taken into account when managing it. These limits include:

  • Limited Flexibility: The organization culture can often be inflexible and difficult to change, meaning that any attempts to alter the existing culture can be met with resistance.
  • Lack of Understanding: Employees may not understand the culture or how it affects their work, leading to confusion and a lack of motivation.
  • Unclear Expectations: A lack of clarity around expectations can lead to a lack of direction in terms of how to act, think and feel.
  • Limited Communication: Poor communication between employees and management can lead to misunderstandings and a lack of clear direction.
  • Unhealthy Competition: Competition within the organization can lead to unhealthy rivalries, which can be damaging and demotivating.
  • Unproductive Habits: Unproductive habits such as gossiping, blaming, and avoiding responsibility can be damaging to the organization's culture.
  • Negative Attitudes: Negative attitudes such as cynicism, pessimism, and entitlement can lead to a toxic work environment.

Other approaches related to Organizational culture

An important factor in shaping the relationship between employees and the employer is the culture of the organization. Other approaches related to organizational culture include:

  • Organizational Structure - The structure of an organization defines its hierarchy, how resources are allocated, and how operations are managed. It is important to ensure that the structure is designed in a way that facilitates effective communication and collaboration between employees and the employer.
  • Leadership Style - Leaders play an important role in creating an environment that is conducive to employee satisfaction. By establishing clear goals and objectives, and providing guidance and support, leaders can create an environment in which employees feel valued and respected.
  • Employee Engagement - Engaging employees in meaningful activities and providing them with opportunities for growth and development helps to create a positive and productive work environment.
  • Performance Management - Performance management strategies provide employers with a way to measure employee performance and to identify areas for improvement.
  • Rewards and Recognition - Rewarding employees for their efforts and recognizing their successes can help to motivate employees and foster a positive work culture.

In summary, the culture of an organization plays an important role in establishing and maintaining a productive relationship between employees and the employer. Other approaches such as organizational structure, leadership style, employee engagement, performance management, and rewards and recognition also play a role in shaping the relationship between employees and the employer.

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