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DEVELOPMENT OF ORGANIZATIONAL CULTURE

Just as there are many different definitions of corporate culture, the research literature offers different processes that organizations have used in the development of culture. For instance, Wilkins and Ouchi argued that four factors (goal congruence, shared social knowledge, collective member interaction, absence of institutional alternatives) influenced the development of clan cultures and contributed to the formation of a common "social understanding" within an organization that would be passed along to future employees. Conversely, an organization with high employee turnover or that lacked stable membership or a shared corporate history, may be unable to sustain a social understanding over time. Other scholars have identified internal factors that contribute to the development of culture. O'Reilly described the development as a process with four mechanisms that ultimately lead to employee commitment and an organizational cul-ture.18 First, an organization that asks for and requires participation from its employees will involve them and make them feel valued. Additionally, management must take symbolic actions to support the development of a strong organizational culture. Such "clear, visible actions" include, for example, modeling the values that are important (e.g., integrity, transparency, respect for others), and in turn spread and reinforce the cultural values within the organization. Third, information shared within the organization (as well as outside the organization), whether it is from employees or from management, needs to be consistent, thereby reducing the potential for contradiction or ambiguity. Finally, a comprehensive reward system needs to focus on the right mix of money, recognition, and approval to keep employees motivated.

Wilkins and Ouchi and O'Reilly presented two examples of the ways in which scholars view the development and implementation of culture. Whereas Wilkins and Ouchi described more basic influences based mostly on their definition of the "clan culture," O'Reilly focused in more depth on internal factors such as management and communication, rewards, and employee beliefs and attitudes. Other scholars have also identified a firm's history and heritage as important19 and have pointed out that a shared mindset is crucial in developing the organizational culture.20 Additionally, management practices can have an important influence on culture development and sustainability. Although management's beliefs, values, and propositions are essential,21 these need to be consistent and encourage leadership at all levels of the organization.22 Only if employees are empowered will organizational norms and values be shared within the organization, and in communication with people outside the organization. The empowerment of employees is particularly important since management needs to ensure that they are not the only ones spreading and reinforcing the organizational culture but that employees also exhibit and convey the "shared set of practices and beliefs."23 Human resource practices thus also need to support the spread of culture within an organization.24 During the hiring process, for example, the opportunity exists not only for applicants to learn about the hiring organization's culture and to decide whether it is consistent with their values and needs but for the interviewer to make the same assessment of the candidate. By exhibiting and spreading the culture at different organizational levels, a shared mindset grows, which further cements culture development. Management must, however, demonstrate a capacity for change within the organization to leave room for modification of the culture and to ensure it is aligned with the business mission and strategy.

 
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