Definition: What is organisational culture?
Organisational culture is the shared values, norms, behaviours and unwritten rules that shape how people act and cooperate in an organisation. The concept is derived from anthropology, which studies the conditions and determining factors for structure, order and hierarchies in different societies. The concept of culture is then transferred to organisations in order to understand, explain and, to some extent, control the experience and actions of individuals.
The concept of organisational culture is derived from anthropology, which studies the conditions and determining factors for structure, order and hierarchies in different societies. The concept of culture is then transferred to organisations in order to understand, explain and to some extent control the experience and actions of individuals.
Definition: What is organisational culture?
The word culture comes from the Latin word cultura and can be translated as cultivation. If we link it to corporate culture, we can ask;
What is cultivated and growing in your organisational culture?
- Want to perform and change to meet market needs today and in the future?
- Want to do what we've always done?
- With us, it is the manager who solves and takes responsibility for all problems?
- With us, everyone in the team shows strong responsibility and co-leads together?
A brief explanation of culture in general is ”The mental programming that distinguishes members of one group from another” (HofstedeTo understand organisational culture, it is important to see how culture affects performance and business. Only then can we value it and create a culture plan and cultural strategy that better leads the company to the vision. And it is only then that we make culture strategically important, something we can understand and change.
Four areas that shape organisational culture - the Denison model
The Denison model, developed by Professor Daniel Denison at IMD Business School, identifies four cultural dimensions that influence organisational performance.
- Mission statement - Direction, purpose and objectives. Do we know where we are going?
- Stability, clarity - Values, systems, structures and processes. Does our system deliver value?
- Involvement - Commitment, ownership and responsibility. Are our people engaged and connected?
- Adaptability - Patterns, trends and markets. Are we listening to the market?
The deeper layers of organisational culture - what really drives behaviour
These areas correspond to what the researcher Edgar Schein calls the ”invisible layers” of organisational culture, the deeper assumptions and values that guide behaviour.
In addition to these four areas, we also need to go deeper, to the core of the company's culture. For example;
- Who founded the company and its legacy
- What behaviours give hero status
- Our rituals and the experience of them
- Which values are alive and well
These are some of the many examples of areas to look at that lead to the beliefs and assumptions that live in the organisation. Of course, organisational culture is also influenced by the national culture and the culture of a specific industry (Manfred Kets de Vries).
Language - the clearest imprint of organisational culture
"A company that has an explicit cultural strategy also knows what feeling, what experience it wants to give to customers, employees, job seekers and all other stakeholders."
Our language has always been an important factor in how culture is passed on or developed, verbally and in writing. The stories that exist in a company say a lot about the culture. What is talked about in the corridors and how we talk or don't talk to each other in a meeting. Being curious and listening to how we talk and about what can be a good first step to start understanding or getting a feel for the company culture.
Why organisational culture is crucial for performance
"Organisations are created because people want to achieve different goals or have different needs that require cooperation to achieve. We are pack animals and are made for contact."
From a systems theory perspective, an organisation is seen as a dynamic system of interrelated components that constantly strive to maintain balance within the system and with the environment. The organisation can be seen as an organism that must constantly evolve and adapt to its surroundings in order not to be destroyed. From this perspective, the organisation is an open system that is constantly influenced by its environment (input), manages and filters these influences within the organisation (throughput), and then delivers something back to the environment (output). (Katz and Kahn) This output (e.g. to a customer) then provides opportunities for feedback that helps the organisation to change so that future output is in line with the customer's wishes. As long as the organisation can manage this process and continually satisfy the environment by adapting to it, the organisation will be vital and functional (Burke). Humans create organisations because they help us achieve our goals. Our survival has always depended on our ability to work and perform together.
In summary, organisational culture is crucial to the existence, performance and growth of an organisation. The complexity of culture does not mean that it cannot be measured and analysed. Developing a healthier and more attractive culture is a long-term endeavour that needs to be owned by senior management and involve all employees.
The difference between organisational culture and corporate culture
The terms organisational culture and corporate culture are often used interchangeably, but there is a nuance difference. Organisational culture is a broader academic term that encompasses all types of organisations - including government agencies, non-profit organisations and businesses. Corporate culture is specifically linked to the business context. At YesP, we work with both concepts in our work with corporate culture at our clients.