Business leaders,
HR Professionals and academics, in addition to the tremendous importance these ascribe
to organisational strategy and its implementation, are lately showing a growing
interest in and attention to organisational culture.
Taking into
consideration the final aims and objectives that organisations essentially aim
at achieving, it could be maintained that whilst business strategy is mainly
concerned with the “what” organisations want to attain, organisational culture
is actually much more concerned with the “how” things need to be done.
Whilst strategy is
in fact concerned with the determination and identification of the objectives
employers want to attain, culture is mainly concerned with the behaviour
employers are expected individuals will exhibit and conform to in order to
achieve those objectives and ultimately competitive edge.
Armstrong (2009)
claims that the impact of organisational culture on individual behaviour is so
relevant as to need “to be taken into account as a contingency factor” in every
plan concerned with businesses development and in all of the HR practices
intended to sustain and facilitate that process.
According to some
Authors (Ouchi, 1981; Deal and Kennedy, 1982 and Peters and Waterman, 1982) a
clear, well-designed and strong organisational culture can reveal to be
particularly useful to enable organisations to better integrate individuals
into businesses. In addition to that, Deal and Kennedy (1982), defining
organisational culture as “the way we do things around here”, put even more direct
emphasis on the behavioural side of culture.
Culture is clearly part of the internal
organisational context and, by reason of the powerful impact it has on individuals’
behaviour, it has been lately considered as one of the most important components
of the overall internal environment (Boddy, 2008). Yet, as suggested by Boddy
(2008), it is important to consider that the components forming the internal
environment have a much more considerable impact on influencing individuals
within an organisation than the elements typically characterising the external
environment have.
Boddy (2008) argues
that forces and events unfolding in the external context, with the
opportunities these offer and treats these pose, not necessarily generate immediate
receptive adaptations in an organisation internal context, these are in fact
considered by the Author as a “fourth set of forces” (internal environment –
competitive (micro) environment – general (macro) environment – external environment).
What apparently Boddy (2008) seems to suggest is that external events can
influence an organisation internal context only if and when it is decided by
the stakeholders concerned to put these events in the management agenda.
This does not
clearly mean that organisations need to develop a tendency to stay isolated
from the exogenous environment. In contrast, the link and interaction between
the internal and external environment is constant and steady so that business leaders
have to relentlessly observe what occurs in the external environment in order
to be ready to timely change things within their organisation accordingly
(Boddy, 2008).
The existence of a process
of constant adaptation is identified and widely recognised by some Authors in
terms of organisational strategy where, to the extreme, it can take the form of
emergent strategy (Mintzberg, 1987), that is, a process according to which
business strategy changes at such a speed that it can only be retrospectively understood
and identified. Although on the one hand this view, or rather this extreme, can
be considered questionable, it cannot be denied on the other hand that,
especially in modern times, business strategies are subject to constant and
frequent changes as a matter of course as a consequence of the relevant and recurring
changes occurring in the exogenous environment.
Inasmuch as
business strategy is influenced by the developments occurring in the external
context, it is also obvious that in turn organisational culture cannot stay completely
immune from the changes occurring in the external context. Boddy (2008) claims to
this extent that it actually exists a “constant interaction between an
organisation’s culture and its external environment.”
Having identified the presence of a clear link
between the external context and organisational culture, and more in particular
taking as axiomatic that the latter is influenced by the former, it needs to be
added that it can hardly be considered that business culture might react and adapt
to the external environment changes and developments at the same speed at which
strategy does. To support this concept both organisational culture definitions and
the way it usually develops can definitely help.
Culture definitions
Considering as “values”
what both the employees and the employer believe is important in terms of
behaviour and as “norms” a set of behavioural unwritten rules, organisational
culture can be defined as “the pattern of values, norms, beliefs, attitudes and
assumptions that … shape the way in which people in organisations behave and
things get done” (Armstrong, 2009). As Deal and Kennedy (1982) put it,
corporate culture is basically about a set of informal rules. Furnham and
Gunter (1993) also refer to culture as the commonly held beliefs, attitudes and
values existing within a business.
The way
organisational culture develops
Thinking about the
way corporate culture actually develops, it can definitely be agreed with Boddy
(2008) that when individuals start to interact and work together they
consequently and instinctively start identifying and developing common values.
These shared values basically represent the basis for individuals working
within the same context to further develop common beliefs and behavioural
norms. It is important not to forget that organisational culture is about
unwritten norms, which are actually intended to shape the behaviour of all the
individuals of a group both when interacting the one with the other and when
interacting with people who are part of the exogenous environment. The positive
outcome achieved by means of these behavioural unwritten norms, that is to say
success, will clearly reinforce and strengthen the importance and validity of
the values and beliefs by which these norms are underpinned, contributing to
generate sort of a vicious, or rather, virtuous circle.
As suggested by
Schein (1990), the identification of the values and beliefs which can be put at
the basis of corporate culture could be inspired by “visionary leaders”; individuals
might decide to take as model the way leaders behave in order to identify
common values and beliefs. Additionally, like successes, corporate culture can
be based on “critical incidents” and “important events” from whose outcomes
group can identify undesirable behaviour (Schein, 1990).
The rate at which
corporate culture reacts to external changes
Organisational culture
definitions and most of all the process throughout which organisational culture
develops clearly show that shared values and beliefs, and the norms which these
generate, are the fruit of a rather long process during which these norms are growingly
reinforced and rooted in an organisation. The circumstance that we are looking
at unwritten norms implies that the values and beliefs at the basis of these norms
need to be even more genuinely acknowledged and accepted by all of the
individuals concerned in order to be respected in practice.
It is hence hardly believable
that organisational culture could react to the changes occurring in the
external environment at the same speed as strategy does. Furnham and Gunter
(1993) claim that corporate culture “is not particularly dynamic and
ever-changing” in that they assume that culture is a component of an organisation
endogenous context, which is relatively stable in the short run and which is
much more likely to be influenced by the internal context. Whether it can be
accepted the idea that the internal context can influence more directly and,
most importantly, more quickly an organisation’s culture, the circumstance that
the external environment may impact less frequently organisational culture
remains notwithstanding questionable. The fact that changing corporate culture
is a long and demanding process does not necessarily entails in fact that
external forces are weak, but that it takes much more efforts and resources to
implement cultural changes. After all, it should not be neglected the circumstance
that the internal context is strongly influenced by the external environment
and its developments.
As mentioned
earlier, changing organisational culture definitely represents a very demanding
process; it is widely recognised that one of the most difficult change
processes, arguably the most difficult type of change process, to implement
within an organisation is that concerned with organisational culture. Since
culture has very much to do with “the way we do things around here” the restraining
forces arising during the implementation of this type of change programmes, at
times supported by complacency, are usually numerous and particularly
remarkable in strength. Furhnam and Gunter (1993) clearly support this idea,
they suggest that since establishing and consolidating organisational culture
requires a very long period of time, by the same token it also takes time to change
it. Armstrong (2009) claims that quickly changing a culture developed over a
long period of time and firmly embedded within an organisation could reveal to
be a particularly tricky feat to achieve, if at all. He also adds that the
process could reveal to be easier only in those cases in which some traumatic
events take place.
At Samsung Mr Jong-Yong Yun
(2003), making treasure of the lessons learned from his past experience,
decided to put more emphasis on organisational culture, rather than in business
strategy in order to enable the company to achieve its overall business
objectives and attain competitive edge. To combat complacency and reduce the
impact of the restraining forces eventually arising during change processes he opted
to put at the basis of Samsung’s organisational culture urgency (Instilling a
sense of crisis – Crisis v Urgency in change management (Instilling a sense of crisis – Crisis v Urgency in change management).
The influence exerted
by organisational culture over performance
Shared values,
beliefs and norms at the basis of corporate culture generate a “we-feeling”
which in turn provides a “shared system of meanings” and represents the basis
of the internal communications system and mutual understanding. Whether these
activities are not effectively and properly designed and implemented,
organisational culture may provoke a remarkable negative impact on
organisational performance (Furhnam and Gunter, 1993).
The significance of
the potential negative impact caused by corporate culture on organisational
performance has recently been stressed by many academics and business leaders;
insofar as Boddy (2008) suggests that the recent growing interest in
organisational culture is actually based on this belief.
Although many
Authors, like Schein (2004), consider culture as a tool which can be used by
employers to improve organisational performance, others, to put it mildly,
appear to be rather sceptic.
An investigation
carried out by Kotter and Heskett (1992) over 207 organisations, in the attempt
to gather evidence of the positive effects of strong corporate cultures on organisational
performance, revealed that the role played by culture was in practice much
weaker than expected.
Notwithstanding,
also those who have questioned the existence of a beneficial link between
corporate culture and organizational performance recognise the positive impact
organisational culture might have on the attainment of organizational results.
Parker (2000), who is not an advocate of the idea that a strong organisational
culture may improve performance, admits that a strong corporate culture
contributes to define a “valuable language which can be used to represent
organisation and organising.” Similarly, Thompson and McHugh (2002) recognise
that a corporate culture consistent and resonant with the overall business aims
and objectives is important for any type of organisation. In particular, they
highlight the case of co-operatives where not putting in place the adequate and
necessary mechanism to transmit and sustain the original ideas from founders to
new members can be the cause of organisational degeneration. Watson (1994)
claims that people are basically happy to share values, myths and legends
supporting corporate culture, “because to do so is to find meaning in their
lives.”
Many academics and business leaders consider the
interaction between organisational culture and business performance remarkable
and likely to positively impact business performance; insofar as, as suggested
by Gilmore and Williams (2008), many early HRM models have duly taken this
aspect into consideration.
Peters and Waterman
(1982) and Kanter (1983) are firm supporter of the idea that a strong
organisational culture can secure businesses competitive edge. Deal and Kennedy
(1982) and Peters and Waterman (1982) even maintained that shared values,
beliefs and norms have an as remarkable impact on performance as financial
factors have (Gilmore and Williams, 2008).
Storey (1992) identifies in “managing climate
and culture” a distinctive approach typical of HRM in managing conflict, as
opposed to “reach temporary truces” associated with the personnel and
industrial relation approach. Resorting to organisational culture in order to
manage conflict has not actually been widely considered in more recent years,
probably because taken as axiomatic. At least in theory, inasmuch as corporate culture
is based on shared values and beliefs and the unwritten norms generated by
these underlying, embedded values are genuinely recognised and respected by each
member of the group, individuals should potentially behave in a way which
should not indeed give raise to any conflict.
Mannion et al
(2010), recalling the findings of some previous studies (namely Department of
Health, 2001 and Mannion et al, 2005), claim in a research report prepared for
the NHS, that whether NHS organisations want actually achieve improvements in terms
of quality and performance they “also need to undergo significant cultural
renewal.”
In order organisations
to attain their intended objectives and achieve competitive edge, business
strategy needs to dovetail with organisational culture. Business strategy and
corporate culture also necessary need to be consistent and coherent in order to
provide evidence in practice of the integrity which should habitually characterise
organisational culture.
The role of HR in the whole process is crucially
important during the design, development and implementation phases. HRM
policies, with particular reference to reward and performance management
practices, need to be fully inspired by and supportive of both organisational
strategy, to enable individuals to perform at the desired levels and achieve
their agreed and preset objectives, and corporate culture, to favour and foster
the behaviour by means of which individuals will attain the pre-identified objectives.
Whenever a relevant change
occurs in organisational culture and strategy, HR clearly needs to promptly
support the business updating and changing HRM policies and practices
accordingly.
Longo, R., (2011), Organisational culture v
Business strategy - How v What, HR Professionals, Milan, [online].
