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Organizational Culture

What is Organizational Culture?
An Organizational Culture, or corporate culture, refers to the culture in an organization, including the culture of schools, non-profit organizations, universities, or government agencies.

What is Organizational Culture?
An Organizational Culture, or corporate culture, refers to the culture in an organization, including the culture of schools, non-profit organizations, universities, or government agencies.

The term corporate culture became known in the business world in the early 1980s. The idea arose earlier, in the 1960s and 1970s. Organizational culture is influenced by many factors, including:

  • History
  • Vision
  • Symbols
  • Values & Norms
  • Strategy
  • Type of employees
  • Product
  • Market
  • Management style
  • Assumptions
  • Location
  • Beliefs
  • Habits
  • Language
  • And more

Organizational culture definition

An organizational culture is defined by Edgar Schein as a number of characteristics, including a set of basic assumptions that employees acquire as they learn to deal with internal and external problems.

Schults and Ravasi, both professors at a business university, also define organizational culture as a set of assumptions. They went on to state that these assumptions influence the behavior of new hires. As a result, they learn to perceive, think and feel in a certain way. So organizational culture has a strong influence on the way people and groups interact with each other. In addition, organizational culture has a strong influence on the extent to which employees identify with a company.

Edgar Schein, Deal & Kennedy and John Kotter introduced the idea that organizations often consist of different cultures and subcultures.

Although a company also has its own ‘feel’, several cultures also exist side by side, especially in larger organizations. In this way it is also possible that conflicting subcultures arise. This makes managing the organizational culture a complex activity.

Types of organizational culture

A distinction is generally made between four types of corporate cultures. The Competing Values Framework, developed by Robert Quinn and Kim Cameron, classifies four organizational cultures:

Competing Values Framework

Clan culture

Clan culture mainly occurs in traditional organizations and less so in digital organizations. This is because traditional organizations are more often owned by families.

There is then a focus on nurturing employees through interpersonal connections and mentoring programs. This is done to enhance the sense of a family.

Hierarchical culture

Hierarchical culture is also common in traditional organizations. These are highly structured companies with virtually all power and decision-making at the top of the company.

The opposite is a so-called ‘flat’ culture, in which employees at all levels are equal to each other and in which everyone can address and question each other.

The consequence of a hierarchical culture is that only the top floor can make decisions. Employees then quickly feel undervalued and it affects the agility of an organization in a negative way. Nevertheless, the standardized way of working is ideal and very efficient for some organizations.

Market culture

The market culture is reflected in organizations that have a digital core task and that want to scale up. The market culture is highly performance- and result-oriented.

Internal competition is stimulated and winners are rewarded. In this culture, everyone is expected to function at their best. The people who score consistently enjoy significant (financial) benefits.

Adhocracy culture

The adhocracy culture is focused on innovation. Risks are taken in this culture. It is a slightly less structured culture than the types described above, but employees are encouraged to work together and participate in joint innovative projects.

In these kinds of organizations, it is always uncertain where the next groundbreaking idea will come from.

Corporate culture examples described by Handy

In addition, the Handy Model of Organizational Culture also describes four types of organizational cultures. These are briefly explained below.

Person culture

In the person culture, employees feel that they are more important than the organization they work for.

In these kinds of corporate cultures, the importance of the organization as a whole recedes into the background. Every organization suffers from this.

Employees only come to the office for pay and never really get involved with what the organization stands for. Rarely are employees loyal to management in a person culture and almost never do they decide in favor of company results.

Task culture

The task culture is at odds with the person culture. In organizations with a task culture, teams are formed to achieve objectives and solve critical problems.

Individuals with common interests and different specializations come together to set up a multifunctional team. Usually such a team consists of four to six people.

Each team member makes an equal contribution and carries out his or her tasks with the utmost precision and in the most innovative way possible.

Role culture

The role culture is a culture in which all functions and responsibilities are assigned to the person who is most suitable for this. This includes specializations, general knowledge, educational qualifications and interests.

This helps to get the most out of the employee. In a role culture, employees partly determine what they do on a daily basis and are happy to take on a challenge. Power in such a culture comes with great responsibility.

Power culture

Similar to the clan culture, as described by Robert Quinn and Kim Cameron, the power culture is a culture in which only a few people have all the power.

Power often remains in the hands of the same group of people (clan culture). This group often enjoys special privileges and is seen as the most important people of the organization. They delegate responsibilities and tasks to employees who carry them out without hesitation. Employees do not have the freedom or space to share their own opinion or idea. This often leads to great unrest and dissatisfaction.

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Organizational culture theory

Since the 1960s, much research has been done into organizational culture and the ways in which it can be optimized for optimal results.

No specific “best” type of culture has been identified. National culture also plays a major role in local organizational cultures.

This is apparent from Geert Hofstede’s research: the cultural dimension model. Fons Trompenaars also developed seven dimensions of culture.

The above studies have proven to be of great value in developing theories and methods for doing business internationally while respecting the local culture. An example of this is the Patterns of Cross Cultural Business Behavior.

The Denison Culture Survey helps managers identify the type of organizational culture in their organization and generate appropriate advice that steers the organization in the right direction.

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