Effects of Culture

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EFFECTS OF ORGANIZATIONAL CULTURE

□ What is Organizational Culture?

□ A single definition of organizational culture has proven to be very elusive. No one definition of organizational culture has emerged in the literature. One of the issues involving culture is that is defined both in terms of its causes and effect.

□ Behavioral Control

□ Most systems of social organization attempt to control the variability of member behavior. Whether it is a business organization, a club, community or nation, social systems need to limit certain behaviors and encourage others.

□ At one level organizations setup rules, procedures and standards along with various consequences for compliance and non-compliance. This system of formalization is part of the organization's formal structure. However, we often find a high degree of behavioral regularity (cross individual behavioral consistency) in system without a strong formal system of rules and regulations.

□ Encourages stability

□ Turnover and transitions exists in most all social systems. Despite changes in membership and leadership many organizations maintain certain characteristics, problems are handled essentially the same way, and behavior continues to be directed toward the same mission and goals. An organization's culture is often passed on from "generation" to "generation" creating a relatively high level of stability over time.

□ Provides source of identity

□ Individuals continually search to define their social identities. Sometimes identities are defined by roles or professions and in other cases people define themselves through their organizational membership. When taking on an organization as a source of identity, people are taking on the values and accomplishments of that organization.

□ Barrier to change and improvement

□ The very fact that cultural derived norms, values and mental models are often internalized by members, often makes them resistant to change when they see these changes in conflict with these values.

□ This is especially true when organizational change is implemented through structural change. For example, while a new reward or incentive system is implemented in support of the change in direction or strategy, employee values and other cultural mechanisms supporting the former direction are still deeply imbedded which conflict with the new structure.

□ Barrier to diversity

□ Strong company cultures create uniformity and consistency of behavior among employees. This is known as cross individual behavioral consistency. While this may be desirable in many ways, it works against a company's goals of creating a diverse workplace and utilizing this diversity for competitive advantage in at least two ways. The first is that one of way in which strong cultures are created is through selection of new employees based on person-organization fit, that is applicants are selected who are believed to "fit" into the organization. This practice tends to limit diversity of any kind. A related issues is that when potential employees are choosing employers, they tend to avoid companies with strong cultures not aligned with their values.

□ The second way in which strong cultures acts as a barrier to diversity has to do with the way in which a strong culture acts to homogenize the workforce. One the reasons why companies desire increased diversity is based on the assumption that more diverse decision-making teams will be more creative and make decisions more inline with a diverse marketplace. Any benefits achieved through diversity hiring can be lost as the mechanisms of a strong culture as new employees attempt to fit in with the team.

□ Barrier to cross departmental and cross organizational cooperation

□ While we often use the terms organizational culture or company culture, most large organizations have sub-cultures associated with different geographic...
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