Organizational culture is defined as the underlying beliefs, values and assumptions that drive how people in an organization interact. It sets the context for everything a company does and is an important part of business.
Different types of organizational culture have different strengths and weaknesses. An organization can use various tools to build a high-performance culture. The goal is to create a consistent and reliable environment in which employees can achieve their potential. For example, companies can use onboarding programs, hiring practices, performance management, and recognition programs. Getting feedback is an essential component of building a strong culture. Getting regular feedback is a good way to assess the state of your organization and help identify areas of improvement.
An organization’s mission statement defines its goals and direction. This statement will determine the type of organizational culture the organization should have. A mission statement should also define the company’s relationship with its environment. In other words, the organization’s mission should reflect its relationship with society, including the economy and social norms.
An organization’s relationships with the environment are crucial to defining its constituencies. These include the employees and customers. Developing a strong organizational culture enables an organization to adapt to changes in its environment. It provides consistency and fuels the workforce.
Hierarchical bureaucracies derive power from their authority definitions, procedures, and role descriptions. Employees in these cultures are expected to follow strict rules, which are interpreted by managers. They do not have a large degree of personal autonomy and they have little motivation.
Passive/defensive cultures expect members to avoid interpersonal conflict and to keep others happy. They also experience low levels of motivation, turnover, and unresolved conflict. To resolve this issue, leaders must reemphasize core values and internal processes.
Market cultures are characterized by clear goals, contingent rewards, and a focus on financial effectiveness. Employees in these cultures are motivated by external incentives, such as money, prestige, or status. There are few rules and little bureaucracy. However, members are expected to think and act in ways that are contrary to their beliefs.
Entrepreneurial organizations are those that believe in innovation and seizing market opportunities. Those in these cultures also expect to respond to competitors’ threats.
Clan cultures are those that are most strongly correlated with positive employee attitudes. Members in these cultures also believe in open communication. Their main belief is that the organization’s commitment to its members facilitates employee involvement.
Power cultures are those that radiate control from the center. Members in these cultures have little to no bureaucracy and make decisions quickly. Expert power is rarely used.
Organizational culture can be a powerful factor in the success or failure of an organization. When a business establishes a culture based on a shared set of beliefs, it can create a sense of community and encourage better decision-making. People within an organization begin to identify with it. Ultimately, it becomes a second nature.
One of the most effective ways to build a high-performance culture is to get regular feedback from the workforce. Regular feedback helps to identify communication breakdowns, as well as areas for improvement.