Organizational Character

Organizational character refers to the collective judgments made by stakeholders regarding an organization’s goals, values, and preferences. Stakeholder groups make such judgments based on observations of the organization’s actions to date, as well as expectations of what the organization is likely to do in similar situations in the future, based on past behaviors. In other words, organizational character reflects guiding principles and values, as well as day-to-day operations and the actions of employees on behalf of the organization. This entry examines organizational character from three perspectives: (1) the evolution of the concept itself, (2) the key dimensions that exemplify organizational character, and (3) the impact of organizational character on organizational behavior and performance.

Evolution of the Concept

Character has been seen, traditionally, as a human trait. In fact, by definition, character refers to consistency of individual behavior. Organizations are not human, of course, nor are they individuals, yet organizations are composed of individuals. Thus, character is a concept that helps define both individuals and organizations. Organizational character demonstrates itself through the individuals who manage the enterprise and their collective behavior over time. Consistency in that behavior reflects whatever values underlie and define the organization as a whole. For example, an organization may value efficiency more than customer service. Managers help champion efficiency by pushing employees to be more productive and downplaying the relative importance of ensuring customer satisfaction. In time, organizational character shows itself: Managers and employees will value productivity, and their individual behavior will consistently reflect this priority.

The concept of organizational character crystallized in the latter part of the 21st century, as downsizing became a trend in business. Scholars and professionals alike questioned the character of organizations and whether the increasing number of large-scale layoffs was fair and just or simply the result of organizations trying to thrive in an increasingly competitive and capitalistic economy. To be clear, though, values are not imposed on an organization, nor are they the responsibility of external parties or pressures. The values that constitute organizational character are ones proactively determined by those who lead the organization. If profit is repeatedly valued more than people, then downsizing simply reflects the organizational character and the values championed by that organization’s leaders. Organizational character may be a measure of integrity, but organizational character is also a fundamental force that shapes the very purpose, strategy, and day-to-day operations of an organization.

Just as an individual’s character may be called into question, so too may the character of an organization. In fact, organizational character—or consistency of behavior over time—is increasingly important in this age of digital technology and social media. Technology can quickly bring to light the gaps between what an organization claims that it values and how that organization actually operates. Stakeholder perceptions, or even misperceptions, may quickly lead to highly visible and even inflammatory questions about the authenticity and integrity of an organization and its people. A familiar example might be that of a commercial airline failing to satisfy disgruntled customers who have been inconvenienced by late crew arrival, mechanical problems, lost baggage, or some other unexpected event seemingly within the airline’s control. When an airline says it puts customer satisfaction first but then fails to deliver on that promise, this reflects on organizational character or the lack thereof.

Key Dimensions of Organizational Character

Consistency of behavior over time fundamentally defines organizational character. Consider a local coffeehouse known for exceptional roasting and brewing. Over time, customers come to expect a high-quality product no matter what day or time of day they visit. They introduce friends and loved ones to the same coffeehouse because they know that they, too, will be impressed. This cycle builds on itself over time until, ultimately, the coffeehouse has earned a strong reputation for consistently delivering perhaps the finest coffee in the entire city. In a similar way, organizational character shows itself over time. Does the organization truly believe in innovation? Does the organization champion diversity? Does the organization value environmental stewardship? Answers to these and many other questions about values and priorities come back to the fundamental dimension of behavioral consistency over time.

Likewise, an organization must be able to identify and recognize its own behavior, just as stakeholders do. This sense of self-awareness and emotional intelligence is another important dimension of organizational character. Employees of a nonprofit organization, for example, must first acknowledge the importance of donors and volunteers and behave accordingly, before those donors and volunteers perceive that they are, indeed, valued. To simply say that one values donors and volunteers is a much different reality from actually demonstrating that value through day-to-day actions and recognizing and reinforcing that behavior among individual employees.

At the same time, though, organizations are dynamic bodies, typically comprising multiple departments, units, project teams, work groups, and so on. Organizational character, then, is often subject to at least some degree of variation, depending on the subentities involved from within that organization and the specific stakeholder interactions or incidents in question. Still, though, organizational character is an ingrained consistency of behavior exemplified by most people who work within that organization. Though there may be outliers in behavior, organizational character is reflected by the greater whole, rather than by the few exceptions. This “critical mass” in employee behavior is another dimension that helps define organizational character because there is enough consistency over time for that organization to earn a particular reputation and perhaps to differentiate from other organizations, based on a proven value proposition.

Finally, organizational character can only truly come to life through individual actions. Employee engagement, then, is paramount to organizational character. It’s for this very reason that employee recruitment, training, motivation, supervision, feedback, recognition, and reinforcement are so vital. Employees must believe in, and willingly align with, the organization’s underlying values and have both the support and the autonomy necessary to deliver on those values in their own day-to-day work.

To be certain, organizational character is a complex and multidimensional phenomenon and one that may evolve over time, depending on organizational leadership changes or other influential impacts. Behavioral consistency, emotional intelligence, critical mass, and employee engagement are the main pillars that provide a necessary foundation for organizational character to thrive.

Impact on Organizational Behavior and Performance

Optimally, an enterprise will thoughtfully bring together those people whose values are consistent with the organization’s underlying values. Training programs and other development programs can help affirm and even catalyze the demonstration of desired behaviors by employees. Such programs may involve helping employees identify and understand organizational character from a range of possible types and then engaging employees in discussions of how this particular type of organizational character might influence the enterprise’s growth and development. For example, some experts identify four different value clusters: (1) the achievement type, (2) the safekeeping type, (3) the collaborative type, and (4) the creative type. Working for an organization that is of the safekeeping type would be a fundamentally different experience from working for one that is of the creative type. Clearly identifying, discussing, and embracing the type of organizational character may help drive employee engagement. This becomes particularly important in the day-to-day operations of an organization, when an employee can truly live the values of the enterprise, even when individual leaders are not present or involved in whatever the individual’s tasks might be.

However, organizational behavior may become so ingrained that people cannot think of new and different ways to address challenges. For this reason, many organizations, especially the largest and the most complex enterprises, find change to be difficult and may struggle to keep pace with changing economics, technology, competition, or other factors. Bold action may be necessary. AT&T, for example, long held a reputation for reliable but slow-moving workers, a reflection more of the highly regulated nature of the telecommunications industry itself than perhaps of the individuals in question. Regardless, as the company restructured and reorganized to become more nimble and competitive, company leaders declared, “Ma Bell doesn’t live here anymore.”

Problems in organizational behavior and performance arise when leaders of the enterprise fail to recognize or admit how deeply held certain behaviors are. These convictions, in turn, may hinder employees’ willingness or desire to embrace change and to do what is necessary to remain competitive and perhaps even relevant in the marketplace. An effective leader will identify problems starting to develop from organizational character and will prescribe appropriate remediation measures. When assuming the helm at United Airlines in 1971, for example, Ed Carlson recognized that the company had lost sight of the customer and of its inherent role as a service business. He and his leadership team invested considerable time working with managers and employees on the front line to reduce bureaucracy and revive a strong customer focus.

Ultimately, organizational character ties to organizational behavior and performance because character is the point at which lofty ideals meet mundane actions. Can an organization aspire to and achieve high standards and yet do so through the often routine and sometimes challenging tasks performed day in and day out by employees? Tools such as a performance dashboard or even an organizational character index may help leaders pinpoint and even quantify how well certain organizational values, such as customer satisfaction, are being reflected through employees’ performance. In the end, then, organizational character is as much a hard-nosed operating philosophy as an aspirational vision statement—and perhaps even more so, for it is through behaviors and outcomes that organizational values truly come to life.

Conclusion

In this digital age, organizations—just like individuals—can be called quickly into question for acting inconsistently with stated values. Organizational character reflects behavioral consistency over time and an ongoing commitment by organizational leaders to emotional intelligence and employee engagement. This value-based leadership strategy is likely to play a strong hand in organizational performance, just as it does in organizational behavior.