Organizational Culture

Organizational culture arises out of organizing activity as people create patterns of behavior, language, ritual, and tradition and share expectations about how they will work together to sustain those patterns. This entry covers three perspectives on organizational culture: (1) integration, (2) differentiation, and (3) fragmentation; then, it offers a dynamic model that examines how cultural processes stabilize or change a culture. All three perspectives assume that top managers desire to harness organizational culture as a way of shaping orga nizational reputation, thereby producing corporate culture—their desired version, not the organizational culture itself.

Integration Perspectives

Edgar Schein (1985), an early theorist of organizational culture, defined the phenomenon as

the pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to these problems. (p. 6)

According to Schein, organizational cultures are constituted by a set of basic assumptions and beliefs that manifest in values and artifacts. Lying beneath ordinary awareness, basic assumptions and beliefs penetrate every part of one’s cultural life and color all forms of human experience, leading the members of a culture to perceive, think, and feel in ways unique to the organization in question. Because assumptions are taken for granted, it can be extremely difficult for members to articulate them. Because they lie closer to the metaphorical surface of a culture, values have been the focus of most efforts to describe and manage organizational cultures.

Values—social principles, goals, and standards having intrinsic worth for members of the culture—define what members care about most, as revealed by their priorities. Because they also guide members in assessments of right and wrong, a culture’s values are equated with its morality or ethical code. Values, in turn, encourage activities that produce cultural artifacts. Schein theorized that organizational cultures only change when new values are introduced by the decree or example of top management. But Schein also noted that only when the new values are absorbed into unconscious assumptions will the culture actually change, giving employees a controlling role as well. Members of the culture must personally experience the benefits of the proposed new values and change their behavior accordingly for cultural change to take hold.

Artifacts are manifestations or expressions of the same cultural core that produces and maintains values and norms; however, their greater distance from core assumptions can make it difficult to interpret artifacts unambiguously. Cultural artifacts include corporate architecture, styles of dress, jargon, stories, myths, humor, ceremonies, and traditions, and the collective power of these to communicate symbolic meaning is what makes artifacts important. By noticing how organizational members make and use meaning in ways that produce artifacts and imbue them with meaning, we learn to interpret a culture and to communicate effectively with members. The symbolic role played by artifacts inspired a range of studies focused on organizational symbolism that is closely related to organizational culture studies.

Differentiation and Fragmentation Perspectives

Joanne Martin, who was critical of Schein’s approach, offered two alternatives to his view of organizational culture as an integrated whole (Martin called this the integration perspective). One of the alternatives suggests that organizational cultures are formed from sets of differentiated subcultures (differentiation perspective); the other is that they are the product of the fragmented and constantly shifting relationships members form with one another and their organization (fragmentation perspective). According to Martin, the perspective on culture adopted by a researcher or manager drives that person’s theorizing and/or management practices. In the case of wanting to change a culture, for example, an integrationist will attempt to create a controlling set of unifying assumptions and values, whereas a differentiationist would rather manage conflict between subcultures to produce change. Meanwhile, postmodernists question the motives of anyone who seeks to manage or change an organizational culture and all those who theorize culture.

A Dynamic Model of Culture

A different perspective on organizational culture assumes that culture is dynamic and looks not at what constitutes culture (its elements) but how cultural processes stabilize or change a culture. Mary Jo Hatch, for example, built a dynamic model of organizational culture on Schein’s theory by focusing attention not just on the elements of culture (assumptions, values, artifacts, symbols) but also on four processes by which these elements are related: (1) manifestation, (2) realization, (3) symbolization, and (4) interpretation. Her theory of cultural dynamics claims that meaning embedded in cultural assumptions (1) manifests as values that guide activity, which (2) realizes material artifacts, some of which are transformed into symbols via (3) symbolization that, in the context of (4) interpretation, (re)constitutes meaning, thereby (re)producing the culture in which that meaning is embedded. Taken together, these four processes—manifestation, realization, symbolization, and interpretation—not only describe the dynamics within which members forge and maintain their cultures but also show how they respond to and change them. Accordingly, changing an organizational culture requires sensitivity to and engagement with the processes that produce a culture’s dynamism.

While integration, differentiation, fragmentation, and dynamic approaches to organizational culture define organizational culture each in their own way, they all share the assumption that organizational leaders want to control culture in order to harness it to their strategy and/or to build a strong and lasting corporate reputation. With regard to change, most would agree that top managers produce a subculture within any organization that, for better or worse, tries to dominate how members think and feel about the organization and act within it.

An important distinction some fail to grasp is that when top managers put forward their desired version of an organizational culture, they produce not organizational culture so much as corporate culture. Organizational culture is the product of all members of an organization, including top managers and, with increased stakeholder engagement, external stakeholders. It is a collective dynamic phenomenon that is distributed in the thoughts, feelings, and actions of all those who engage with the organization.