Organizational Culture
Clarence C. Walton
A distinctive characteristic of a community having a significant history, organizational culture consists of shared assumptions and fundamental beliefs validated over time as essential to the group’s successful handling of problems relevant to its internal cohesiveness and external adaptations. Taken for granted as the most realistic way to view the organization and its environment, such beliefs and assumptions are automatically transmitted to new employees as guides for their acting, thinking, and feeling toward the entity’s operation.
Situated at the intersection where many disciplines (anthropology, sociology, psychology, philosophy, history, and organizational theory) meet to offer diverse definitions of organizational culture, it is not surprising that the term seems surrounded by ambiguities.
Previously ignored – even considered as irrelevant – organizational culture had clearly come of age when the New York Times (January 7, 1983) described it as the catchphrase ‘‘management consultants are breathing into the ears of American executives.’’ An even surer sign of the term’s acceptance came when companies followed the lead of Ford, Polaroid, TRW, Proc tor and Gamble, and Pacific Telesis in investing millions in efforts to define more precisely their respective cultures. Since culture is the organization’s foundation, architects of change had to understand how much restructuring the foundation could support.
Organizational cultures are developed in various ways: World War II gave a Rosie the Riveter culture to war production facilities; IBM’s outstanding past performances made the Big Blue a model for other cultures; charismatic founders in the mold of Thomas Watson of IBM, General Johnson of Johnson and Johnson, and Harley Proctor of Proctor and Gamble who, convinced that the lives and productivity of their employees were shaped by the workplace, sought to build an environment in which both could thrive. An intriguing historical footnote is the question whether Sears Roebuck surpassed arch rival Montgomery Ward because Sears’s General Robert Wood had more humanistic values than MW’s Sewell Avery. There are, of course, other heroes: Thomas Edison, Charles Steinmetz, and Gerald Swope at General Electric, Knute Rockne at Notre Dame, Theodore Vail and Walter Gifford at American Telephone and Telegraph, and hundreds of others.
On the other hand, hard driving and successful executives like Harold Geneen of Inter national Telephone and Telegraph, and Richard Snyder of the Simon and Schuster publishing house, left their respective companies with badly battered cultures. The hero hellion tale suggests that a culture’s making may be more than the company’s maker. Job security, high wages, aesthetically pleasing workplaces, and onsite health and recreational facilities are among the ways new leaders and employees enrich and redefine the culture. Within organizations are subcultures. The sales division, for example, may have a ‘‘gung ho’’ ideology; research and development, a visionary ‘‘can do’’ outlook; and engineering, a careful, meticulous approach. But all subcultures partake of the essential qualities of the entity’s larger culture that serve as both an integrative and control agent over the various parts.
Distinctions are now in order. Organizational culture is not the same as corporate structure, which may reflect (a) Weberian bureaucratic models that provide impartial treatment of people and standardized procedures, or (b) patrimonial structures that emphasize personalities, an emphasis that often results in politicking, Machiavellian intrigues, and discreet maneuvering to win the boss’s favor.
A more important distinction exists between culture and climate. The organizational climate, often determined by taking the pulse of employees, seeks to answer such questions as these: What are the workers’ expectations of the enterprise? Do they find their expectations being met? Are they proud of being an Organization X’s employee? The climate is more like public opinion – transitory, subject to sudden change, and an uncertain base for judging the company’s underlying character.
Culture’s Importance
That culture plays a significant role in business is illustrated by the way company breakups and corporate mergers are handled. The most dramatic example of breakup came in 1984 in the court ordered division of AT&T. To dismantle efficiently, the company established headquarters in Basking Ridge, New Jersey. On the center’s walls were posted every conceivable item: schedules, charts, alternatives and options, and the like. Missing was the word culture – an omission that added confusion to the dismantling process.
A second example of culture’s importance occurs during mergers or takeovers. Post mortems of failures have tended to focus on such factors as over inflated purchase prices, unrealistic projections for earnings, or potential economies of scale. Ignored was the possibility of a mismatch of corporate cultures. One example occurred in 1984 when General Motors purchased Electronic Data Systems from H. Ross Perot. At the time it was thought that EDS’s hard driving entrepreneurial spirit would be crushed by the bureaucracy of the giant purchaser. In reality, the reverse occurred: loyalty to the boss became the prime requisite for employees.
Ethical Questions
By its very nature, organizational culture raises important moral questions: Are individuals trustworthy or not? More prone to good or to evil? Capable of increasing their understandings of right and wrong? On another level is the question of truth: Is it what most people say truth is? Is it what the boss declares? Is every one’s opinion as good as everyone else’s?
On the institutional plane the question centers around the meaning of the corporate person – a definition used in the American legal system. What does person mean? While many terms have been coined to describe the perspective of the disputants on this issue, one useful distinction is that between (1) the moral person’s view and (2) the structural restraint paradigm. Under the first, all agents are moral agents because they behave intentionally – and organizations act with intent, an intent that may differ from the intention of even certain directors and officers. Corporations are, therefore, full fledged members of the moral community on equal standing with humans. The organization is not simply an agency among agencies; it is the stage on which actors perform. As role holders their actions might be quite different from their personal behavior and beliefs.
Firmly opposed to this position is the structural restraint camp, which insists that individuals, not entities, act. Simply establishing goals implies that other moral considerations are either automatically excluded or considered irrelevant. Persons alone have intellects and free wills and only they can bear moral responsibility for their actions. Hiding under a collective cloak is no excuse for evading individual responsibility.
While scholars debate, managers act. Perhaps leadership’s most important function is to know when and how to create, recreate, and, when necessary, destroy the organization’s culture.
Bibliography
Deal, T. W. and Kennedy, A. A. (1982). Corporate Cultures. Reading, MA: Addison-Wesley.
Frost, P. J. et al. (1985). Organizational Culture. Beverly Hills, CA: Sage.
Hofsteder, G. (1980). Culture’s Consequences. Beverly Hills, CA: Sage.
Ott, J. S. (1989). The Organizational Culture Perspective. Chicago: Dorsey.
Schein, E. H. (1985). Organizational Culture and Leader ship. San Francisco: Jossey-Bass.
Walton, C. (1992). Corporate Encounters. New York: Dryden.