Chapter 8 : Organizational Culture
Organizational culture is a microcosm of culture in general. Similar to the idea of leadership, culture is a somewhat abstract idea that many in academia have defined with different definitions. Culture is what defines the common beliefs, values, behaviors of a group, making the group different from a random crowd or gathering. These ground rules become governing norms. Many times a leader or founder will introduce an organizational culture that can change over time and/or perpetuate after the leader is gone.
This subject is relevant to my aspirations for two reasons. First, as of today this is a subject that I have not paid much attention to; being more of an introvert. I never deeply thought about it until now, but I have had some powerful firsthand experience with this subject. When my former employer was bought by a French company I suddenly had a French manager and French employees working for me. I saw very quickly there were different beliefs, habits, accepted norms, and attitudes about work which have a significant impact on productivity. Second, because I want to be the leader of an organization I must understand how my actions and behaviors could influence organizational culture for the better or worse. Therefore culture is something that must be well understood and controlled in order for an organization to rise above mediocre.
In the book summary “Organizational Culture and Leadership” author Edgar Schein helps us comprehend what “organizational culture” means; how to study it; how it grows and develops how to manage and transmit it; and how and when to change it. This book summary is relevent to my aspirations because it deepens my understanding of why people act the way they do. It can help not only with raising performance, also managing any work conflicts that arise between groups or teams.
When most people think of culture they think of national or religious groups. Organizational culture has these four additional elements:
1. “Structural stability” – Culture is the foundation of group identity. It holds the group together and defines the group even as members come and go. This is why culture change is so difficult.
2. “Depth” – Culture is so deep that group members may be unconscious of it. It is simply the way you do things and needs no explanation.
3. “Breadth” – Culture affects everything about an organization, touching every function and activity.
4. “Patterning or integration” – Culture is what makes the group’s behaviors, values and rituals coherent.
If subcultures within the group clash, the group’s performance may suffer. Yet, in a rapidly changing environment, intercultural conflict can enable the group to adapt and learn. These five shared basic assumptions describe the content or dimensions of a culture:
1. “External Adaptation” Founders and leaders of groups must define the group’s boundaries if the group is to survive and grow.
2. “Internal Integration” People define themselves as a group when they agree on language; membership qualifications; status, power and influence; and the rules that govern peer relationships.
3. “Assumptions about Reality and Truth” Different cultures define reality and truth differently - Especially if the members of the group belong to different national cultures, they may have conflicting ideas about these issues.
4. “Assumptions about the Nature of Time and Space” Some cultures will focus on the past, the task at hand, near term or long term future. In addition, time orientation may be either polychronic or monochronic.
5. "Assumptions about Human Nature, Activity and Relationships” Cultures have three primary orientations toward work:
· Doing orientation assumes nature is controllable and humanity perfectible; e.g. American culture
· Being orientation practices that you must accept rather than attempt to control nature, and that you should focus on the present.
· Being – Becoming orientation emphasizes personal development and self-actualization.
Leaders have a major influence on an organizations culture. Six types of decisions and behaviors that embed and transmit culture:
1. Measurement and control of decisions
2. Response to crises
3. Resource allocation
4. Coaching, teaching and example
5. Reward and status determination
6. Hiring, firing and promotion
Jay Lorsch’s argues in his California Management Review article titled “Managing Culture: The Invisible Barrier to Strategic Change” that strategy is interconnected to corporate culture. Companies cannot make successful strategic shifts, even if their survival depends on it, if the culture and deeply held belief system is not addressed. The article discusses how to adjust a corporate culture. He recognizes that a strong foundational culture is essential in guiding managers in making complex decisions to tectonic shifts are not recommended.
This article is relevant to my aspirations because it links culture, change management and strategic thinking in one dissertation. It also provides guidance on how to discover an organization’s core beliefs which may affect its ability to change. The material outlines the value of completing self-assessments and create awareness of an organization not just an individual.
We all recognize that external and internal forces are consistently putting pressures on business that must be dealt with to achieve its goals. Not understand the role of culture makes strategic change difficult. The beliefs are often invisible and are handed down from mentor to successor and can command emotional commitment to them. The beliefs inhibit strategic change in two ways: they create a strategic myopia and even when the myopia is overcome the response is in terms of the existing culture. Managers think, “This is what worked before”.
The process for strategic change can be enabled by comprehending and acting with culture in mind: Pursuing incremental changes in the belief structure can be all that is needed. Management can alter a lesser belief while leaving core beliefs untouched is more readily accepted by employees. When that does not work the fundamental nature of the belief system must change. There is typically a step process which top managers will need to go through:
· Grow a shared awareness that the changes are indeed necessary for success. Denial can and doubt can take place for months during this phase.
· Recognition is followed by confusion over what to do next because the course of action is alien to former thinking. The solutions could challenge what the firm believed its distinctive competency was. Sometimes a change in leadership is required to move beyond this phase.
· CEOs and their teams must create a strategic vision and explicitly communicate this to all stakeholders – customers, employees, suppliers, etc.
· Experimentation is typically required to test out new and unfamiliar ideas.
Organizations can enhance their ability to change in the future by remaining flexible. Flexibility can be built into organizations a few ways.
· Create a position for a top manager (Vice Chairman) whose job it is to inquire and remain skeptical and challenge the business unit’s assumptions.
· Ensure the organization is taking advantage of outside directors who can bring different perspectives and experiences to the team.
· Bring in new management from outside the company. This new management must be sensitive to the culture and beliefs that they are coming from and what they are getting into.
· Encourage flexibility of thinking at subordinate levels.
David Livermore, author of “Leading with Cultural Intelligence”, introduces the concept of cultural intelligence. While this book mainly discusses national cultures – it is those national cultures that help to shape organizational culture. Although boundaries between countries and cultures blur every day you must be aware of the differences in how business is done in different areas. Being smart across borders allows managers to understand customers, manage diverse teams and recruit top talent by showing respect and adapting their leadership style.
This book abstract is relevant to me because I have worked and currently work in a multicultural environment. I speak with people in other parts of the world 3-4 times per week and manage and coach people who live on 5 continents. Some of the information in the book seems to be common sense, although there is logical flow which helps to make the knowledge more structured and understandable. Based on my self-assesments I will be able to apply this knowledge immediately to engage diverse teams wtih the appropriate enthusiasm.
Everyone can acquire better cross cultural skills in four key areas. First is the “CQ Drive” which is simply building a sincere desire to learn and appreciate other cultures. Many people are uncomfortable in strange environments, especially if they do not speak the local language. Many North Americans do not appreciate the role a dining experience plays in many other parts of the world.
Next is “CQ Knowledge” which is taking the time to become familiar with another’s culture and understanding your own reactions influence you. Human’s do have universal needs and common fears and desires. There are many differences in how a culture is taught to handle money or raise children. Cultural polarities to remain aware of are :
· Economic – Capitalist vs. socialist
• Familial – Kinship vs. nuclear family
• Pedagogic – Formal vs. informal” education
• Governmental – Formal laws vs. informal governance
• Spiritual – Rational vs. mystical religious systems
• Aesthetic – Solid vs. fluid artistic standards
Next is “CQ Strategy” which is applying the cultural knowledge in different environments, linking knowledge to behavior. Cultural values tend to fall into five main categories.
1. Time – The clock runs some cultures where promptness is considered a virtue. However, in other cultures the social situation dictates when events and gatherings begin and end.
2. Context – Cultures can be “low-context” in that the people in charge do not leave much to chance. In “high-context” cultures, people share a history and higher-ups assume that most people know how to behave.
3. Individualism – Some countries, such as Australia, emphasize individualism over everything else. In contrast, collective cultures, such as those in China, emphasize the interests of the group rather than the individual.
4. Power distance – This refers to how much interaction is appropriate between bosses and subordinates.
5. Uncertainty avoidance – This describes people’s feelings toward the unknown and unfamiliar. In a culture where people find ambiguity disconcerting, a more authoritative management style works better.
Finally, “CQ Action” which is putting it all together and adapting your approach. Examples of this would be to get to know your partner in Latin America before starting a negotiation or in China emphasizing the importance of the group over the individuals. In general tips include speaking slowly and clearly without colloquialisms, do not be afraid to repeat your main points, use visual aids when available. Be aware of your nonverbal communication. Many cultures will not expect you to completely change who you are, it is the sincere effort that will be noticed and respected.
Exercizes and practice routines
Exercise #1 : Identify company belief systems.
Objective: Gather the team to answer these questions that can help give explicit identity to a company’s invisible culture.
Take 10 minutes to answer these questions and allow for 10 minutes for group discussion.
· About what financial objectives do we have strong beliefs based on history?
· Are those beliefs related to one another?
· What other goals are important?
· What is the appropriate scope to competitive activity?
· Is there an earlier experience rooting those beliefs?
· Do they reflect an accurate assessment of company’s competence?
· What broad guidelines do we believe should guide managers in competing?
· Are these guidelines still valid in today’s environment?
· What beliefs are held about employees’ contribution to company success?
· What do employees expect in exchange for their effort?
Exercise #2 Global business cultures
Objective: Gain practice researching and anticipating challenges when doing business with other cultures.
If you have access to GlobeSmart – select a country of interest (not your home country) and print out the following tips for the selected country:
· Establishing Credibility
· Presenting Ideas
· Effective Leadership Style
Discuss the differences between your culture and how you would adapt your approach for greater success. (If you do not have GlobeSmart, Brazil is provided for you.)
This subject is relevant to my aspirations for two reasons. First, as of today this is a subject that I have not paid much attention to; being more of an introvert. I never deeply thought about it until now, but I have had some powerful firsthand experience with this subject. When my former employer was bought by a French company I suddenly had a French manager and French employees working for me. I saw very quickly there were different beliefs, habits, accepted norms, and attitudes about work which have a significant impact on productivity. Second, because I want to be the leader of an organization I must understand how my actions and behaviors could influence organizational culture for the better or worse. Therefore culture is something that must be well understood and controlled in order for an organization to rise above mediocre.
In the book summary “Organizational Culture and Leadership” author Edgar Schein helps us comprehend what “organizational culture” means; how to study it; how it grows and develops how to manage and transmit it; and how and when to change it. This book summary is relevent to my aspirations because it deepens my understanding of why people act the way they do. It can help not only with raising performance, also managing any work conflicts that arise between groups or teams.
When most people think of culture they think of national or religious groups. Organizational culture has these four additional elements:
1. “Structural stability” – Culture is the foundation of group identity. It holds the group together and defines the group even as members come and go. This is why culture change is so difficult.
2. “Depth” – Culture is so deep that group members may be unconscious of it. It is simply the way you do things and needs no explanation.
3. “Breadth” – Culture affects everything about an organization, touching every function and activity.
4. “Patterning or integration” – Culture is what makes the group’s behaviors, values and rituals coherent.
If subcultures within the group clash, the group’s performance may suffer. Yet, in a rapidly changing environment, intercultural conflict can enable the group to adapt and learn. These five shared basic assumptions describe the content or dimensions of a culture:
1. “External Adaptation” Founders and leaders of groups must define the group’s boundaries if the group is to survive and grow.
2. “Internal Integration” People define themselves as a group when they agree on language; membership qualifications; status, power and influence; and the rules that govern peer relationships.
3. “Assumptions about Reality and Truth” Different cultures define reality and truth differently - Especially if the members of the group belong to different national cultures, they may have conflicting ideas about these issues.
4. “Assumptions about the Nature of Time and Space” Some cultures will focus on the past, the task at hand, near term or long term future. In addition, time orientation may be either polychronic or monochronic.
5. "Assumptions about Human Nature, Activity and Relationships” Cultures have three primary orientations toward work:
· Doing orientation assumes nature is controllable and humanity perfectible; e.g. American culture
· Being orientation practices that you must accept rather than attempt to control nature, and that you should focus on the present.
· Being – Becoming orientation emphasizes personal development and self-actualization.
Leaders have a major influence on an organizations culture. Six types of decisions and behaviors that embed and transmit culture:
1. Measurement and control of decisions
2. Response to crises
3. Resource allocation
4. Coaching, teaching and example
5. Reward and status determination
6. Hiring, firing and promotion
Jay Lorsch’s argues in his California Management Review article titled “Managing Culture: The Invisible Barrier to Strategic Change” that strategy is interconnected to corporate culture. Companies cannot make successful strategic shifts, even if their survival depends on it, if the culture and deeply held belief system is not addressed. The article discusses how to adjust a corporate culture. He recognizes that a strong foundational culture is essential in guiding managers in making complex decisions to tectonic shifts are not recommended.
This article is relevant to my aspirations because it links culture, change management and strategic thinking in one dissertation. It also provides guidance on how to discover an organization’s core beliefs which may affect its ability to change. The material outlines the value of completing self-assessments and create awareness of an organization not just an individual.
We all recognize that external and internal forces are consistently putting pressures on business that must be dealt with to achieve its goals. Not understand the role of culture makes strategic change difficult. The beliefs are often invisible and are handed down from mentor to successor and can command emotional commitment to them. The beliefs inhibit strategic change in two ways: they create a strategic myopia and even when the myopia is overcome the response is in terms of the existing culture. Managers think, “This is what worked before”.
The process for strategic change can be enabled by comprehending and acting with culture in mind: Pursuing incremental changes in the belief structure can be all that is needed. Management can alter a lesser belief while leaving core beliefs untouched is more readily accepted by employees. When that does not work the fundamental nature of the belief system must change. There is typically a step process which top managers will need to go through:
· Grow a shared awareness that the changes are indeed necessary for success. Denial can and doubt can take place for months during this phase.
· Recognition is followed by confusion over what to do next because the course of action is alien to former thinking. The solutions could challenge what the firm believed its distinctive competency was. Sometimes a change in leadership is required to move beyond this phase.
· CEOs and their teams must create a strategic vision and explicitly communicate this to all stakeholders – customers, employees, suppliers, etc.
· Experimentation is typically required to test out new and unfamiliar ideas.
Organizations can enhance their ability to change in the future by remaining flexible. Flexibility can be built into organizations a few ways.
· Create a position for a top manager (Vice Chairman) whose job it is to inquire and remain skeptical and challenge the business unit’s assumptions.
· Ensure the organization is taking advantage of outside directors who can bring different perspectives and experiences to the team.
· Bring in new management from outside the company. This new management must be sensitive to the culture and beliefs that they are coming from and what they are getting into.
· Encourage flexibility of thinking at subordinate levels.
David Livermore, author of “Leading with Cultural Intelligence”, introduces the concept of cultural intelligence. While this book mainly discusses national cultures – it is those national cultures that help to shape organizational culture. Although boundaries between countries and cultures blur every day you must be aware of the differences in how business is done in different areas. Being smart across borders allows managers to understand customers, manage diverse teams and recruit top talent by showing respect and adapting their leadership style.
This book abstract is relevant to me because I have worked and currently work in a multicultural environment. I speak with people in other parts of the world 3-4 times per week and manage and coach people who live on 5 continents. Some of the information in the book seems to be common sense, although there is logical flow which helps to make the knowledge more structured and understandable. Based on my self-assesments I will be able to apply this knowledge immediately to engage diverse teams wtih the appropriate enthusiasm.
Everyone can acquire better cross cultural skills in four key areas. First is the “CQ Drive” which is simply building a sincere desire to learn and appreciate other cultures. Many people are uncomfortable in strange environments, especially if they do not speak the local language. Many North Americans do not appreciate the role a dining experience plays in many other parts of the world.
Next is “CQ Knowledge” which is taking the time to become familiar with another’s culture and understanding your own reactions influence you. Human’s do have universal needs and common fears and desires. There are many differences in how a culture is taught to handle money or raise children. Cultural polarities to remain aware of are :
· Economic – Capitalist vs. socialist
• Familial – Kinship vs. nuclear family
• Pedagogic – Formal vs. informal” education
• Governmental – Formal laws vs. informal governance
• Spiritual – Rational vs. mystical religious systems
• Aesthetic – Solid vs. fluid artistic standards
Next is “CQ Strategy” which is applying the cultural knowledge in different environments, linking knowledge to behavior. Cultural values tend to fall into five main categories.
1. Time – The clock runs some cultures where promptness is considered a virtue. However, in other cultures the social situation dictates when events and gatherings begin and end.
2. Context – Cultures can be “low-context” in that the people in charge do not leave much to chance. In “high-context” cultures, people share a history and higher-ups assume that most people know how to behave.
3. Individualism – Some countries, such as Australia, emphasize individualism over everything else. In contrast, collective cultures, such as those in China, emphasize the interests of the group rather than the individual.
4. Power distance – This refers to how much interaction is appropriate between bosses and subordinates.
5. Uncertainty avoidance – This describes people’s feelings toward the unknown and unfamiliar. In a culture where people find ambiguity disconcerting, a more authoritative management style works better.
Finally, “CQ Action” which is putting it all together and adapting your approach. Examples of this would be to get to know your partner in Latin America before starting a negotiation or in China emphasizing the importance of the group over the individuals. In general tips include speaking slowly and clearly without colloquialisms, do not be afraid to repeat your main points, use visual aids when available. Be aware of your nonverbal communication. Many cultures will not expect you to completely change who you are, it is the sincere effort that will be noticed and respected.
Exercizes and practice routines
Exercise #1 : Identify company belief systems.
Objective: Gather the team to answer these questions that can help give explicit identity to a company’s invisible culture.
Take 10 minutes to answer these questions and allow for 10 minutes for group discussion.
· About what financial objectives do we have strong beliefs based on history?
· Are those beliefs related to one another?
· What other goals are important?
· What is the appropriate scope to competitive activity?
· Is there an earlier experience rooting those beliefs?
· Do they reflect an accurate assessment of company’s competence?
· What broad guidelines do we believe should guide managers in competing?
· Are these guidelines still valid in today’s environment?
· What beliefs are held about employees’ contribution to company success?
· What do employees expect in exchange for their effort?
Exercise #2 Global business cultures
Objective: Gain practice researching and anticipating challenges when doing business with other cultures.
If you have access to GlobeSmart – select a country of interest (not your home country) and print out the following tips for the selected country:
· Establishing Credibility
· Presenting Ideas
· Effective Leadership Style
Discuss the differences between your culture and how you would adapt your approach for greater success. (If you do not have GlobeSmart, Brazil is provided for you.)
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Schein, Edgar H.” Organizational culture and leadership.” Jossey-Bass, 2004.
Lorsch, Jay W. "Managing culture: the invisible barrier to strategic change." California Management Review 28, no. 2 (1986): 95-109.
Livermore, David. “Leading with cultural intelligence: The new secret to success.” AMACOM Div American Mgmt Assn, 2009.
Lorsch, Jay W. "Managing culture: the invisible barrier to strategic change." California Management Review 28, no. 2 (1986): 95-109.
Livermore, David. “Leading with cultural intelligence: The new secret to success.” AMACOM Div American Mgmt Assn, 2009.