This article provides an overview of organisational culture, how it is formed and the practical actions that can be taken to understand and shape it. The prevailing culture of an organisation has a major impact on its ability to react to changes in market forces, develop innovative new services and products or adopt more efficient practices and processes. We have written this paper for managers within a wide range of organisations who are looking for practical advice and information to help them create an environment that will enable them to successfully adopt improvement methodologies such as Lean, Six Sigma and Continuous Improvement.
A Definition of Organisational Culture
An organisation’s culture comprises all of the values, beliefs, assumptions, principles, myths, legends and norms that define how individuals and groups of people think, make decisions and perform. The MIT Professor Edgar Schein, who is credited with inventing the term “Corporate Culture”, wrote in his book Organizational Culture & Leadership (2nd Edition, 1992, Jossey-Bass) that culture was “a basic set of assumptions that defines what we pay attention to, what things mean and how to react emotionally to what is going on.”
Schein went on to state that an organisation’s culture will also define what actions are taken in reaction to various situations. Schein’s definition clearly shows that a manager who wishes to implement radical changes from the ‘norm’ needs to understand, influence and ultimately change the prevailing culture.
Another popular definition of culture is that it simply defines, “The way we do things around here.” This simplistic definition describes the reality of how an organisation’s culture manifests itself in the form of behaviours and the thought patterns of individuals and groups. This collective set of behaviours also affects the strategy, objectives and day to day operation of organisations.
Putting this in simple terms, organisational culture will impact positively or negatively on everything you try to do whether you want it to or not.
The culture of an organisation is learnt over time. It can be taught to new employees through formal training programmes but is more generally absorbed through stories, myths, rituals and shared behaviours within teams. The culture of an organisation is defined by five aspects;
These describe the ways in which individuals assess certain qualities, activities or behaviours as good or bad and are based on how an individual, or a group of individuals, perceive the organisation they work for.
These reflect an individual’s understanding of the way their team and organisation works and the probable consequences of any actions they take. For example, in some organisations people adhere rigidly to rules because that is how they believe you get ahead, or alternatively people resist taking risks because they believe that ‘risk minimisation’ is the way to manage a process. What a person believes directly affects how they behave.
These are the persistent stories or legends that provide clues or signals about the behaviours that are expected of team members. Myths are often based on a mix of truth and fiction and become embellished over time.
These are repetitive significant events that include such things as parties, social events, celebrations and similar activities that are a basic way of perpetuating cultural values. Traditions highlight to groups what is held in high esteem by the organisation.
These are the informal rules that define day to day work of individuals, such as dress code, work habits, work/life balance, communication styles and gossip. Norms are rarely, if ever, written down and are tacitly accepted by people as the ‘way things are’.
Edgar Schein described how the five aspects of culture described above manifest themselves at three levels within an organisation.