Organizational Culture: How Things Are Done

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There exist successful corporations with very different corporate culture. Their employees enjoy their jobs and generally like the way how things are done at their company. Every organization has a set of values that characterize how people behave and how the organization carries out everyday business. Positive cultural norms strengthen the company while negative cultural norms have the power to take the company down.

A related concept concerning the influence of norms and values on how people work together and how they treat another is called Social Capital. It refers to the quality of interactions among people and whether they share a common perspective. In organizations with a high degree of social capital, relationships are based on trust, mutual understandings, and shared norms and values that enable people (inside and outside the organization) to cooperate and coordinate their activities to achieve organizational goals. It can be seen as goodwill where relationships are based on trust and people cooperate to achieve mutual benefits.

Given its pervasiveness, we need to understand culture better. Culture is the set of values, norms, guiding beliefs and understandings that is shared by members of an organization and is taught to new members. Organizational culture operates on two levels:

1) Visible artifacts and observable behavior: the way people act and dress, the type of control structures, ceremonies shared by employees, stories, slogans, behavior, physical settings. The visible artifacts can be used to interpret culture.

2) Values in the minds of organization members: The underlying values, assumptions and thought processes of an organization operate unconsciously to define the true culture.

Culture provides members with a sense of organizational identity and generates in them a commitment to beliefs and values that are greater than themselves. Culture generally begins with a founder or early leader who articulates and implements ideas and values as a vision, philosophy or business strategy. When these ideas and values lead to success they become institutionalized. Cultures serve two critical functions in organizations:

1) Internal integration: members develop a collective identity and know how to work together effectively. It is culture that guides day-to-day working relationships, determines how people communicate within and organization, what is acceptable and what is not.

2) External adaptation: it deals with how organization deals with outsiders to meet its goal. It can help organization respond rapidly to needs of customers or moves of a competitor.

To identify and interpret culture requires that people make inferences based on observable artifacts. Artifacts can be studied but are hard to decipher accurately, for example – an award ceremony in one company may mean differently than in another company. To understand what is really happening, inside experience is needed. To understand a culture, we can look at some of the important observable aspects of organizational culture: 1) Rites and ceremonies: These are the elaborate, planned activities that make up a special event and are often conducted for the benefit of an audience. They serve as dramatic examples of what a company values. Two commonly used rites are:

a) Rites of passage: Facilitates the transition of employees into new social roles. Example of it can be cadet training programs where the rotating-among-department cadets have a lunch with senior executives. b) Rites of integration: Creates common bond and good feelings among employees. Example – When a Wal-Mart executive visits one of the stores, he or she leads employees in the Wal-Mart Cheer. The cheer strengthens the bond between employees.

2) Stories and Myths: Stories are narratives about company heroes who serve as models or ideals for serving cultural norms and...
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