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Organizational Culture: Development and Assessing

Definition, Explanation

Every company and every organization develops a specific culture that comprises people’s values, ethics, norms and attitudes. It is in the social life of the employees as well as in the company’s interaction with the outside world out of which the Corporate Identity emerges. Companies increasingly try to advance their organizational cultures by creating collective visions or guiding concepts (Change Management). The managers’ intention behind it is to gain a competitive advantage. A popular example quoted in this context is Toyota.

Also in the recruiting of new staff, and for employee loyalty, organizational culture is an influential factor. In the war of the talents, the spirit is important: People are proud to be a member of the “Siemens family”, or to be working for Daimler. Especially consulting companies advertise with their culture. The “Meckies” (McKinsey) embody a certain type of behaviour that is even implicitly expected by others. Another mode of self-presentation, again, is practised by IT-companies who like to stress their innovative aptness by their workplace-equipment, by non-hierarchical communicating and by acting especially informal. The better the employees can identify with their company’s culture, the more are they motivated and the nicer is the working atmosphere. Organizational culture also expresses itself in error management culture and in the handling of improvement suggestions and staff-sensitive subjects as salary increase or dismissal as well as in people’s way of reacting to objections and critique.

Most of all, the executives in a company are the ones to define visions and to shape the company by their Change Management and communication and by their personal behaviour and their leadership. Clear goals are essential. A challenge of a higher order sort is to change an existing organizational culture. This becomes necessary when companies merge or when a company extends to new areas of the market.

Tips, Checklist

• Organizational culture cannot be enforced, nor can it be learned in education. Its unwritten laws and behaviour can only be learned by daily experience and attentive observation. Besides that, the company’s history plays a role
• Organizational culture is perceived natural and implicit. That is why, especially for insiders, it is hard to identify
• Organizational culture also frames the remits and responsibilities of people and of organizational units. Subcultures as well as unwritten hierarchies and networks evolve
• Cultural change being change of behaviour takes time. The mere passing of a guiding vision or printing of a brochure does not do it. Rather, those are the beginning of the work. People must build and integrate new patterns of thinking and acting
• The best way to effect changes in behaviour are feedback loops with evaluation criteria
• The use and sense of a cultural change must be worked out and communicated most clearly. Without it understood, resistance would arise instantly
• The processes for changing behaviour must be run permanently

Last update: 06/29/2010