Organizational Culture

Culture is a concept that is difficult to define and there is no shortage of definitions and interpretations proposed in literature and research. Corporate or organizational culture is defined as a pattern of shared beliefs, behaviors, values, assumptions, rituals and symbols that uniquely identify an organization, and that produce norms that shape the behaviors of members and groups in an organization. Organizational culture with varying degrees of strength not only provides stability to an organization, but can have an impact on employee behaviors and organizational performance.

A survey of literature and research indicates that organizational culture can be categorized in two broad groups based on the nature and function of culture, the traditional and rationalist perspective. The traditional perspective focuses on the underlying nature of culture, assumptions and beliefs that infiltrate an organization at three fundamental levels. While the first level is manifested through observable artifacts such as structure, dress code, stories, and rituals, the second level reflects the organizational values, norms, and ideologies that represent the nature of the organization. The third level implies the underlying assumptions that are implicit in nature and once understood facilitate uncovering perceptions, feeling, and behaviors that can only be investigated through intense observation and focused questioning.

The rationalist perspective views culture as a mechanism for governing rational behavior, and as a way to solve management problems, based on which an organization’s effectiveness and performance are predicted. Culture is defined based on how an organization sets strategy, develops goals, measures progress, and defines products and markets. While the main assumption of the traditional perspective is that culture is static and resistant to change, the rationalist perspective assumes that culture is malleable and subject to managerial intervention.

In assessing the variables that impact organizational performance, research suggests that culture is one such variable affecting organizational outcomes and overall management behavior. Culture has been linked to other variables such as work attitudes and behaviors, commitment and intention to stay, job satisfaction, strategy and competitive advantage. These studies demonstrate that organizational culture impacts micro variables such as commitment and macro variables such as competitive advantage, which in turn are linked to organizational performance. Thus, research suggests that there is positive relationship between the measures of culture and objectively measured organizational performance.