Each time you walk into a new office, you will scan the environment, collect data, formulate impressions, and build a narrative.
The first thing you notice is the open space and the short distances between the desks. Next, you see that it’s unusually noisy; people’s voices are loud, and their tones emotionally charged.
Your mind builds a story to make sense of all this data. You see a glimpse of the organisation’s culture.
But what exactly is organizational culture? How does it come about, and how does it impact social groups and their evolution through time?
Researchers became interested in organisational theory as early as the 1940s. They borrowed natural, sociological, and anthropological concepts to explain the behaviour of organisations. Systems thinking, for example, allowed them to model organisations as complex systems.
Concepts explaining the behaviour of organisations as a whole did not explain the different patterns observed within the organisation, nor did they explain the stability or instability of the organisation itself.
One needs concepts that permit one to differentiate between organisations within a society, especially in relation to different levels of effectiveness, and the concept of organisational culture has served this purpose well
The above quote is from a paper published in 1990 by Edgar Schein, one of the leading figures in organisational psychology. It is easy to read, very concise, and highly informative.
In this article, we explain Schein’s views on organisational culture and how it explains the performance and dynamics of an organisation.
2. Table Of Contents
- 1. Overview
- 2. Table Of Contents
- 2. Organisational Culture: Why Bother?
- 3. Organizational Culture
- 4. Dynamics of Organizational Culture
- 5. Understanding Your Organization’s Culture
- 6. Final Words
- 7. Further Reading
- 8. Featured Articles
2. Organisational Culture: Why Bother?
Humans rarely work alone; they almost always group together to form complex systems.
Organisational theory is a branch of social science that studies these systems to understand their behaviour and find ways to influence it for better performance.
As we shall see later, an organisation’s culture is a byproduct of that group coming together and collaborating on various tasks. This manifestation, in turn, affects the future behaviour of the group.
This continuous loop of often self-reinforcing actions of testing, learning, and applying shared ideas makes organisational culture very complex. Therefore, understanding this complexity is fundamental for steering an organisation in the desired direction.
Manager’s speeches often discuss the need to change the culture, foster a culture of so and so, or attach new values to existing cultures.
The intentions are undoubtedly sincere, but their practicality is questionable.
Questioning the validity of the assumptions implicitly made about organisational cultures (for example, that these are easily modifiable through management edicts and the staff’s complete dedication) is justifiable.
The study of organisational culture was partly motivated by the will to understand why Japanese firms outperformed their American counterparts (Schein, 1990). Explanations based on nationalistic ideas could not explain this fact since not all companies in Japan performed in the same manner; this discrepancy warranted further studies.
Is culture influential today and in other fields?
To take a more recent example, the 15th State of Agile Report states that cultural barriers have been identified as one of the top-ranking factors in the slow adoption of Agile among the participants (43%) in that survey.
Deciphering your organisational culture is vital to understanding its drivers, evolution, and performance capabilities.
3. Organizational Culture
3.1 Groups and Organizations
In Schein’s view, organizational cultures do not exist outside of a group that owns them.
In effect, a group that has spent enough time together and accumulated shared experiences and a stable core will develop a unique culture.
Although organizations are vastly more complex and display a broader spectrum of phenomena than small groups, Schein argues that all organizations have started, at some point, as a small group of individuals and continue to exist as a collection of smaller groups with different, and sometimes conflicting subcultures.
Organizational cultural diversity (as in multiple subgroups with different subcultures) can also arise from mergers, acquisitions, geographical expansions, and assimilation of individuals or groups from different ethnographical and cultural backgrounds.
The internal stability of the group directly influences the strength and consistency of the culture. That stability usually comes from the following factors:
- The length of its shared history or how long has the group worked together
- The intensity of the shared experiences as experienced by the individuals in the group
- The learning mechanisms involved. The author lists “positive reinforcement” and “avoidance conditioning.”
- The clarity and consistency of the convictions held by the leaders and founders.
Now that we know where organizational cultures live, and where they derive their strengths, let’s state its definition.
3.2 Organizational Culture Definition
The model put forward by Schein defines organizational culture as follows:
Culture is what a group learns over a period of time as that group solves its problems of survival in an external environment and its problems of internal integration. Such learning is simultaneously a behavioural, cognitive, and an emotional process.
In other words, as the group struggles to maintain its internal cohesion and fend off external threats, a learning process takes place on various levels. These are emotional, cognitive, and behavioural.
The lessons learned from successfully dealing with those internal and external threats will be repeated and reinforced over time and become the foundations of that culture. These lessons are what the author refers to as “assumptions”.
The author states that the cognitive processes that develop within a group will ultimately decide how that group will:
- Perceive reality, the group’s mission, and its ultimate objectives
- Espouse and advocate specific values (although not necessarily apply them)
- Develop a particular attitude towards problems, both internal and external
- Learn how to deal with failures
3.3 Cultural Levels
Now that we have a working definition of organizational culture, let’s look at how it manifests itself in the office environment and the employee’s behaviour.
In analysing the culture of a particular group or organization it is desirable to distinguish three fundamental levels at which culture manifests itself: (a) observable artefacts, (b) values, and (c) basic underlying assumptions.
The below table summarizes the attributes of the three cultural levels proposed by the author.
|Definition||Observable attributes or objects||Espoused values, norms, ideologies, and philosophies||Axioms, hidden laws, rules-of-thumb|
|How to access them||Objects and feelings that one experiences inside the organization||Usually documented in mission statements, charters, etc.||By interviewing motivated employees|
|Attributes||Tangible, observable, measurable||Declared, espoused, conflicting, divorced from reality||Unconscious, hidden, taken-for-granted|
|Deciphering||By observation and looking out for anomalies||By interviewing key people and looking at the important events that shaped the organization’s history||By looking at inconsistencies in the espoused values and past traumatic experiences|
3.3 Purpose of a Developing a Culture
In 1947, Kurt Lewin proposed a theory that attempts to explain the purpose of human systems.
Edgar Schein subsequently refined some of those ideas in his studies and finally came up with the following conclusions that might explain the existential purpose of cultures in human systems.
3.3.1 Anxiety Reduction
The strength and tenacity of culture derive, in part, from this anxiety reduction function.
The ultimate goal of a human system (such as an organisation or a group) is to “maintain a certain level of equilibrium and autonomy vis-à-vis the environment“.
The environment we live in as individuals or groups is complex, dynamic, chaotic, and unpredictable. This hostile environment generates anxiety when we cannot make sense of the events around us.
Human beings tried to bargain with nature (or fate) throughout the ages by employing various methods such as prayers, offerings, and only recently, saving accounts and insurance policies. The supernatural powers receive adorations and offer favours (rain, favourable weather, protection from beasts).
Organisational culture is another defence and coping mechanism that tries to reduce anxiety through shared knowledge and learnings, except it operates on a group rather than an individual level.
Therefore, the strength of organisational culture is proportional to its ability to provide a coherent narrative of the events that happen in our environment.
3.3.2 Provides a Group Identity
The evolution of culture is therefore one of the ways in which a group or organization preserves its integrity and autonomy, differentiates itself from the environment and other groups, and provides itself an identity.
The second conclusion that Kurt Lewin and Edgar Schein arrived at was that culture (and cognitive structures such as beliefs, myths, and general attitude to specific problems) provides an understanding of the world and a common platform for cooperation.
Individuals who share our beliefs are one us while those who don’t threaten our integrity.
People who share common beliefs act in similar ways, and their actions are predictable by other individuals of the same group. This predictability induces trust and allows bonds and relationships to form. People who think alike can work effectively together.
Understanding how the world functions allow humans or groups to make predictions and plan for the future. It also gives meaning to their existence.
What Are Cognitive Structures
From Springer.com: The cognitive structure is a psychological construct that accounts for a form of human knowledge. Schema and mental models are examples of cognitive structures. The cognitive structure provides meaning and organization to experiences and guides both the processing of new information and the retrieval of stored information.
4. Dynamics of Organizational Culture
Organisations are dynamic systems that evolve and change over time. They have a lifecycle that starts with founding, creation, maturity, decline, and fall.
The average lifetime of organisations is about 40 years, although some organizations live much longer (the Catholic Church is 1500 years old).
Edgar Schein lists the necessary ingredients for the creation and development of organizational culture as follows:
Culture can now be defined as (a) a pattern of basic assumptions, (b) invented, discovered, or developed by a given group, (c) as it learns to cope with its problems of external adaptation and internal integration, (d) that has worked well enough to be considered valid and, therefore (e) is to be taught to new members as the (f) correct way to perceive, think, and feel in relation to those problems.
To understand how a culture is created, we need to look at critical incidents in the group’s history to which this culture belongs.
Critical incidents in a group’s history are emotionally charged events where the group has faced and overcome internal or external threats (more about that in the next section).
Emotionally charged events and the group’s subsequent response to those events will have a long-lasting impact on the group’s behaviour. Whatever events occur in the aftermath of such events becomes the norm.
Another way a culture can be created is through dominant figures or opinion leaders.
Members of the group pay close attention to what the leaders do and how they react to certain situations and then try to articulate those observations into a guiding framework. Through experimentation, they would figure out what works and what doesn’t, adding their solutions to the mix.
The group’s shared knowledge and solutions that stood the test of time become its culture.
4.1.2 Internal and External Pressure
We have talked so far about the external and internal pressures that a group faces throughout its history. Now it’s time to have a closer look at what these pressures consist of.
We have talked so far about the external and internal pressures that a group faces throughout its history. Now it’s time to have a closer look at what these pressures are.
The environment’s ever-changing nature constantly presents the group with challenges it needs to overcome if it were to survive. Naturally, multiple solutions to these challenges would present themselves, and the group would need to form a consensus on which solutions to adopt.
Schein refers to these challenges are environmental pressures and splits them into internal and external.
External pressure mainly revolves around finding a consensus on the following topics:
- Purpose, mission, and goals of the organization
- Means and methods to attain these goals
- Success criteria and Key Performance Indicators for measuring the success
- The repair mechanisms for dealing with failures should the goals be missed
The internal pressures also consist of finding consensus, albeit on different topics:
- Basic concepts of time. Cultures organize themselves differently regarding cadence and orientation of time. Organizations can live in the past, present, or future, which will affect their time management processes and long-term planning capabilities.
- Basic concepts of space. Think of rank and status and how that translates into larger offices and private areas.
- Group boundaries and criteria for inclusion. This determines whether someone is “one of us” or an outsider.
- Rewards and punishments. This has a direct relationship with the perceived value of one’s work.
- Allocation of status, power, and authority. This can be seen through the allocation of roles and privileges and trade-offs between efficiency and politics.
- Criteria for love, friendship and intimacy. This is heavily shaped by the culture’s view of the nature of human beings (humans are good vs evil, rational vs emotional, etc.), the nature of truth and intimacy.
- Managing the unmanageable – such as ideology, gender, and religion.
After an initial stage of turmoil, where the group is experimenting with different solutions to internal and external pressures, a state of equilibrium will be reached.
Culture perpetuates and reproduces itself through the socialization of new members entering the group.
After an initial stage of turmoil, where the group is experimenting with different solutions to internal and external pressures, a state of equilibrium will eventually be reached.
The group then maintains the state of equilibrium through active resistance to change. Unfortunately, this resistance happens even if circumstances change to disconfirm their original beliefs.
That is not to say that cultures are fixed and never change; small incremental changes occur when they lose or add members as long as they do not threaten the group’s integrity and image.
As groups welcome incomers, these would need to be acculturated before being admitted to the group. Three outcomes are usually envisaged.
New members are either totally assimilated into the new culture, partially integrated, or wholly reject the assumptions of the group’s culture.
In the latter case, the new member has entirely rejected the group’s culture and usually moves on if circumstances allow. Otherwise, they will attempt to “subvert, sabotage, and ultimately foment revolution” (Schein, 1990).
Deeply held assumptions often start out historically as values but […] gradually come to be taken for granted and then take on the character of assumptions. They are no longer questioned […] Such avoidance behaviour occurs particularly if the learning was based on traumatic experiences […] If one understands culture in this way, it becomes obvious why it is so difficult to change culture.
However, that in itself is not reason enough to abandon a long-standing, cherished legacy and embark on a transformation journey. For that to happen, the organisation’s survival must be at stake. At this critical juncture, one of two things can happen.
In the first scenario, the leadership sees an opportunity to solve the problem without losing its identity or integrity. In contrast, the solution might require a core transformation in the second scenario.
The final stage is straightforward: either the organisation successfully relinquishes some of its culture (perhaps also its identity) and learns new solutions or accepts continuous decline and demise.
5. Understanding Your Organization’s Culture
Understanding your organization’s culture is vital to leveraging its capabilities and remedying its weaknesses.
There are three vital experiences that organizations constantly go through, and these are growth, external pressures, and internal conflicts.
In the following three subsections, we examine the role of organizational culture in the evolution of those events.
5.1 Growing the Business
Growing the business invariably involves assimilating new members into your group or serving new customers.
With every new group member or client, there is the risk of disagreement on issues of a fundamental nature, but there is also an opportunity for efficient collaboration and growth.
Your ability to decipher the root causes at the heart of those differences requires great leadership skills, an appreciation of human nature, and a perfect understanding of the culture’s dynamics.
5.2 Facing New Challenges
The fast-changing pace of some industries, such as high-tech, can be frustrating as you have to constantly keep up with emerging technologies and compete with new adversaries.
In this case, it is vital to identify critical periods of the organization’s lifecycle where change is unavoidable and respond appropriately. For this reason, senior management needs to be prepared mentally and psychologically for a degree of cultural transformation.
5.3 Dealing with Conflict
Conflict arises when members reject the dominant organisational culture. It can also occur when the interests of two parties (individual vs group, or individual vs individual) clash.
Using quick-and-easy solutions can treat the symptoms but will not prevent the issue from reoccurring. The leadership must identify the root cause and attend to it for that to happen.
The way that conflicts are dealt with soon becomes part of the culture and influences the occurrence and treatment of future ones.
6. Final Words
Experiences shape our views of reality, and the mental models that we create from them allow us to interpret future experiences and reevaluate the past.
These models can become obsolete as new experiences that invalidate them are acquired. Recognizing the obsolescence of paradigms we hold requires, in addition to courage, the mental tools that help us forge new ones.
The creation of these mental tools is usually driven by a passion for learning and scientific curiosity, precisely what researchers in social sciences do.
Very complex and sometimes wildly opposing views in psychology, philosophy and cognitive analysis have produced different theories to explain organizational behavioural patterns.
Depending on your views of the nature of knowing and thinking (realism, idealism, relativism) and human systems (systemic or process-oriented), the theories you espouse will vary from one end of the spectrum to the other.
This short article tried to investigate one of those theories, which offers a straightforward and intuitive explanation for organizational behavioural patterns.
We hope it has helped the reader better understand social behaviour in organizations and opened the door for further investigations.
7. Further Reading
- The Toyota Way by Jeffrey K. Liker is a must-read.
- Organizational Culture and Leadership by Edgar Schein is indispensable.
- Six Frames for Thinking About Information by Eduard de Bono.
- Thinking Fast and Slow by Daniel Kahneman is a must-read.