A critical approach towards an integrative dynamic framework for understanding and managing organizational culture change
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Week 3: The Role of Culture in Organizational Life
Learning Objectives:
1.1 Organizational culture and management strategies
Many authors tried to identify the relationship between organizational culture and
management. Although it is frequently considered that organizational culture represents the
ideals, values and visions of the senior management team of an organization, this does not
imply that culture and management strategy are identical concepts within an organization
(Alvesson & Berg, 1992). The definition provided in the previous reading implies that the
determinant driver of organizational culture lies with the values of the most influential groups
of employees. For this reason, it is plausible to assume that management ideology and its
potential impact on the expression of values is but one of the several expressions of
organizational culture. However, the question that arises at this point is to what extent
management controls culture or is adapted to it. In other words, is there definitive evidence
about the causal relationship between organizational culture and management?
Kilmann (1985) approached this question by focusing on what makes culture good, bad
or dysfunctional. He explained that, regardless of the definition of culture, social norms are the
most critical dimension of culture because those are responsible for organizational success.
Stated differently, he believed that social norms within the organization are responsible for
quality, efficiency, product reliability, customer service satisfaction, hard work, loyalty and
innovation. In this context, he asserted that senior managerial strategies are capable of shaping
• Understand the relationship between organizational culture and management
strategies
• Understand the relationship between culture and organizational performance
• Understand the meaning of organizational culture management
• Understand the perspective of culture as constraint (the emancipatory approach)
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the set of social norms within an organization, which, in turn, may influence the behaviour of
the individuals who work for the organization.
Despite several disagreements with Kilmann’s approach – particularly with regard to the
assumption that social norms shape behaviour – there has been consensus on the possible
indirect impact of certain social norms directed by senior managers on organizational culture.
Therefore, following Kilmann’s argument, we may infer that management strategies are, in
fact, capable of shaping organizational culture – at least indirectly.
A second approach to the linkage between organizational culture and management was
offered by Pfeffer (1981). Pfeffer distinguishes between internal management control and
external or environmental control, such as the market forces. Similarly, he differentiated the
substantive outcomes of an organization, such as actions, measurable profits, salaries, budget
planning, etc. from the symbolic outcomes, such as attitudes, sentiments, values, norms,
perceptions or beliefs. In this context, Pfeffer asserts that management strategies may
significantly influence substantive outcomes, but they are much weaker in terms of influencing
symbolic outcomes. In other words, managerial decision-making and management style may
dramatically change tangible end-point outcomes, such as sales volume or profits, but they are
not equally capable of changing the employees’ system of beliefs or values. According to this
approach, external constraints and not managerial decisions may be responsible for the change
of symbolic outcomes. Some examples may be the degree of competition in securing a good
job, the level of unemployment, economic growth, etc. In fact, Pfeffer believes that if
managerial decisions aim to alter employees’ values or beliefs, they will be destined to fail
because the employees may perceive such strategies as a means of obscured oppression and
indirect control, serving corporate performance rather than inspiring the sense of commitment
and rapport. Therefore, Pfeffer believed that management is not as strong as Kilmann
suggested, in terms of shaping organizational culture.
Α third approach to the relationship between management and organizational culture is
provided by Schein - one of the most important authors in the field (Schein, 1985). Schein
argues that the departure point must be organizational culture and not management. He asserts
that culture, as a product of a shared system of values and beliefs, arises from a particular
group within an organization, and for this reason, it is extremely difficult to alter. Managers
should not focus on trying to change organizational culture, but rather on how to use it in order
to enhance substantive outcomes, such as profits, cost minimisation, etc. Stated differently,
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Schein saw managerial decisions to be guided by culture and not the other way around. His
argument is that culture is very powerful on its own right and managers must try to perceive it
as an externally-defined diagnostic instrument, adapt to its requirements and utilise its main
principles in order to enhance operational integration, cooperation and coordination. In this
regard, culture is considered to be the strongest force according to which managers must adapt
to it in order to achieve organizational objectives.
Although the above commentary provided three different research perspectives offered
by three eminent authors in the field, we may conclude that there is no definitive evidence to
indicate whether management influences organizational culture or the other way around. Given
the second and third approaches, one could simply state that culture is a powerful concept,
abstract yet influential, and for this reason, any managerial strategies must always take it
seriously into account.
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1.2 Organizational culture and performance
The impact of culture on organizational performance is unclear in the literature.
Although there is a lot of writing about this topic, only few empirical studies exist to enable us
to identify definitive valid evidence. For this reason, we will simply present the prevailing
perspectives on this topic.
The first perspective considers organizational culture to be extremely influential in
performance only if the employees of an organization consider organizational goals and long-
term business strategies to be reliable. Covey (1991) discussed the role of trustworthiness and
trust within an organization as the most important cultural means for influencing performance.
According to Covey, trustworthiness is a result of character and competence, whereas trust is
the actual act of believing in someone and having confidence in them. Following this
definition, organizational trustworthiness is both integrity and competence, as perceived by the
employees of an organization. If the organization manages to convince its employees about its
work ethos and principles, concrete beliefs about organizational trustworthiness and trust
would follow. In other words, if managers invest in cultivating a principle-centred
management style, they may be capable of directly influencing organizational values, and
hence, organizational culture. This, in turn, would inspire a sense of commitment and
motivation to all individuals of the organization leading to enhanced collective performance
(Brown, 1995). Finally, stronger performance would ensure managers that the principle-
centred approach to their management strategies was correct and they would want to sustain it.
The linkage between organizational values and performance through principle-centred
management is shown in Figure 3.1.
Figure 3.1 The impact of Organizational Culture on Performance
Principle-
centred
management
Organizational values
(work, ethos, integrity,
competence, etc.)
Organizational
culture
Performance Commitment, Motivation
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However, there are authors who found that the reverse relationship exists, i.e. good
performance drives organizational culture (Calori & Sarnin, 1991). The evidence suggested
that very good performance and organizational success create a strong and homogeneous
culture associated with the best “way of doing things”. In other words, if an organization
achieves the predicted set of objectives, it will be difficult for its employees to question its
work ethos, operational practices and managerial strategy. Therefore, a set of values will arise
reflecting successful performance, and, although such values may not necessarily be entirely
understood, they will be fully accepted. In this way, performance determines orientations,
principles, beliefs and values, and, hence, culture, which in turn further enhances performance.
This is due to the fact that employees perceive this type of culture to be directly associated
with prior performance and they are motivated to achieve tangible outcomes themselves.
This perspective towards the relationship between organizational culture and
performance was criticised as exertion of indirect managerial control (Wilkins & Ouchi, 1983).
However, both of the above perspectives were repeatedly empirically validated by other
authors in the field.
At this point, it is important to remind the reader that culture is an abstract concept, also.
This means that it involves dimensions and aspects which might not have been captured in our
operational definition. In other words, empirical studies may not necessarily cover everything
about the relationship between organizational culture and performance. Therefore, if we are
not able to observe certain aspects of culture, we should not expect to have a definitive
conclusion about its causal relationship with performance.
Perhaps for this reason, other perspectives towards organizational culture and
performance appeared to more practical, i.e. with apparent links to practical organizational
decision-making. For example, Wilkins & Ouchi (1983) considered organizational culture to
be a contingency tool and a regulatory mechanism. The authors suggested that certain
management strategies and styles may facilitate culture formation, which could be
intentionally used as a means of enhancing performance and efficiency. They believe that, in
complex organizational settings, where bureaucracy and market appear to be inadequate
control mechanisms, organizational culture may be utilised as a means of decision-making in
order to cultivate a sense of ‘belonging’ and strengthen motivation. Indeed, if senior managers
refer to the shared values and perceptions of the employees and the organization, as a whole,
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employees with a strong emotional awareness towards their values would appear to be adamant
about the importance of remaining committed to the organizational objectives.
Along the same lines, Brown (1995) argued that the key to good performance is an
organizational culture which is, by its very nature, adaptive. In other words, if culture is
capable of changing according to organizational goals, practical decision-making strategies,
risk-taking decisions, expansion strategies, etc., then it is the only type of culture that can
become a long-term driver of performance. Brown did warn about the fact that certain
organizations may not necessarily be responsive to change because they may consider it to be
identical to instability, low cost-efficiency, risky substantive outcomes and a loss of sense of
direction. Indeed, as we will see in the next readings organizational change is not always
desirable, particularly for small scale organizations with very purpose-specific operations and a
clientele with very specific characteristics and consumption goals.
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1.3 Organizational culture management
In the previous sections of this reading, the lack of empirical evidence that would allow a
definitive causal relationship between organizational culture and management or performance
revealed, once again, the complex nature of organisational culture.
Many authors found that the key ingredient of the success of the most influential
companies in the world is their organizational culture (O’ Reilly et al., 1994; Cameron &
Quinn, 2006). These companies invested in the fact that, although management strategy,
market presence and technology are important factors to success, organizational culture is what
reduces collective uncertainties and creates social order, collective identity and continuity.
Indeed, many authors recognized the powerful impact of organizational culture on the long-
term effectiveness of organizations (Cameron & Ettington, 1988; Denison, 1990). For
example, Kotter & Heskett (1992) interviewed 75 financial analysts, whose job was to identify
the most influential factors of long-term financial success of many industries and corporations.
All acknowledged culture as a critical factor for financial success and only one analyst
mentioned that organizational culture had little or no impact on firm performance.
Furthermore, the impact of organizational culture on individuals is well-documented in
the literature (Ostroff & Kozlowski, 1992). As stated in the previous reading, the formation of
culture, based on the ‘competing values framework’, suggested that only when individual
values match the shared values of representative groups of employees, are we able to
characterise the emerging culture. In other words, senior managers must recognise that
organizational culture is intimately tied to the values of individual employees. Therefore, they
cannot be indifferent about any psychological aspects associated with the formulation of an
individual value system and long-held beliefs or perceptions.
The above information indicates the importance of managing organizational culture in
modern organizations. Given the fact that culture emerges as the result of an active, yet not
always apparent, negotiation between employees, it is reasonable to expect that it will not be
an unchanged entity. Therefore, senior managers must be able to employ effective ways of
diagnosing cultural inconsistencies with developing organizational goals in order to be able to
effectively manage either the potential upcoming change or the preservation of the well-
established type of organizational culture. For this reason, they must be receptive to align
managerial behaviour, at any point in time, with the existing or new cultural conditions, be
ready to employ effective, coherent and cohesive leadership strategies, diagnose and
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implement staff training and development needs timely, impose more suitable communication
mechanisms if needed, identify new ways of communicating and articulating issues and
problems to the employees, etc. In other words, appropriate short-term management strategies
could sustain the existing culture or adapt to the changes imposed by the new prevailing
culture, so that the prevailing organizational culture is solidified and well-established in the
long-term. Figure 3.2 summarises the importance of short-term management strategies in
solidifying long-term organizational culture.
Figure 3.2 The importance of managing organizational culture
However, there is another perspective associated with the management of organizational
culture, which is often ignored. Many researchers pointed out that modern organizations are
their own culture. In other words, the organization itself is the dominant culture. In this
context, there is no point assuming that managing people’s behaviour or inspiring a sense of
collective identity would lead to a different type of culture. Instead, organizational culture
follows the nature and operational goals of the organization itself and it is, therefore, expected
to be embraced by its employees, regardless of whether or not its associated values adequately
match the system of values of the majority of the individuals who work for the organization.
Instead, the focus is on how to better describe organizational procedures and strategies, so that
employees are more effective in finding ways of ameliorating potential differences with their
own system of values, in order to, ultimately, fully accept the culture that adequately represent
the organization they work for.
Organizational
culture
(long-term)
Observed
inconsistencies
Short-term
Management
strategies for
preserving or
changing
culture
Sustained or changed
organizational culture
(short-term)
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The above two perspectives remind us of the debate presented in the reading of Week 1,
referring to the causal relationship between culture and society. Indeed, if we perceive an
organization to either be its own culture or represent the dominant values of its people, then
senior managers are expected to consider very different factors in each of the two cases, while
trying to manage organizational culture. Despite the fact that the predominant paradigm of
organizational culture, as stated previously, recognizes that society derives culture and not the
other way around, there are some common factors in the two perspectives. Following the same
line of argument, the two perspectives about the organization having or being its own culture
are also characterised by significant common factors. These factors are considered to be
significant because they concern the people of the organization, and, for this reason, they are
mostly psychologically-driven. Therefore, in an attempt to explore ways in which a particular
organization manages culture, we should aim to focus on those common factors.
In the next reading, we will try and to identify which psychologically-driven factors may
be necessary in order to more effectively manage organizational culture. Further details about
the need for organisational culture change within the context of cultural dynamics will be
presented in the same reading. Furthermore, in the reading of Week 5, we will try to
understand how cultural dynamics could be ‘positively-manipulated’ by people-centred
effective leadership with the view to enhance the management of organizational culture and its
potential change.
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1.4 Organizational culture as constraint: An emancipatory approach
The discussion in the previous section implied that organizational culture management
means managing change. However, this is not necessarily the case. We mentioned change as,
perhaps, the most important aspect of organizational culture management nowadays, but there
is another important dimension of this. This is associated with how to maintain the prevailing
culture in such as way so that adjustments may still occur, but without changing the deep fabric
of culture (preservation, maintenance).
Despite the different approaches to culture, most authors agree on the fact that the
attempt to preserve organizational culture may have pervasive effects on substantive
organizational outcomes, such as sales revenues and profits. Although the idea of stable
cultural values may sound attractive to most people, it is also an idea which may prevent them
from exploring alternative ways of perceiving their social reality.
Indeed, since organizational culture constructs the boundaries within which the
employees interact in their everyday life (social integration), then it is reasonable to expect that
it would also limit the processing of information associated with the perception of human
capability (Krefting & Frost, 1985). For example, cultural assumptions about gender,
careerism, affluent consumption, technocracy, equality or professional development generate
some well-defined meanings, which may be seen as the ‘freezing’ of social reality. If people
subordinate themselves to existing norms, values and patterns, they are naturally refrained
from considering alternative ways of perceiving themselves as social beings. Stated differently,
a homogeneous organizational culture may indeed lead to a smooth social integration allowing
for collective performance to thrive, but it may also become the very factor that could prevent
individuals from critically exploring the reasons for believing in this type of culture; reasons
for questioning certain aspects of the existing culture; and even reasons for considering
alternative ways of how to live their organizational or personal life.
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Fugure3.3 summarises the main points of this perspective.
Figure 3.3 Organizational culture as constraint
A very representative example are the cultural perceptions associated with gender.
Broadly shared cultural perceptions usually associate men with high-profile instrumental jobs,
career commitment and professional development and women with low-profile jobs and
supportive, non-demanding roles. Despite the fact that this is a social stereotype, if the gender-
related statistics of an organization somehow preserve it, it is easy to understand why
ambitious women within the same organization might be discouraged from pursuing high-
profile jobs or men within the organization might be enabled to take for granted career
progression. As stated above, culture may indeed prevent employees from exploring their
individual ideas towards their organizational life or exploring alternative avenues of
professional advancement. On the example of gender, certain employees may feel that it is
unfair for gender inequality to continue, but the nature of the organizational culture formation
won’t allow them to do anything about it.
Conventionally, the majority of organizations would present themselves as ‘neutral’ in
terms of gender. However, as Mills (1988) described, it is difficult for this assertion to be
Homogeneous
organizational
culture
Smooth social
integration within the
organization
Enhanced
collective
performance
Barriers to exploring alternative
perceptions of social reality
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sustained. Mills suggested that gender discrimination exists in a number of overt ways, such as
low pay or low authority status, but also in a number of covert ways, such as combining
women with images of domesticity and sexuality. The purpose is to constraint female
opportunity and further cultivate the stereotype that wants women to be less powerful in
market terms than men. Again, this stereotype is cultivated not in any conspicuous or
formalised way. However, it constitutes a common secret that easily infiltrates organizational
culture, which, in turn, establishes and further reproduces it.
Another example in which culture appears as constraint is formal hierarchy. An
organization with a very strong commitment towards hierarchy could enhance performance
because hierarchy rejects substandard performance, while strengthening the opportunities for
result-oriented, efficient performance. However, this may also hinder autonomous thinking,
expressiveness and creativity. Alvesson (2003) provides a very good example about formal
hierarchy and its impact on organizational culture: the case of Pepsi Cola.
According to Alvesson, the former vice president of Pepsi provided a written account
about the company’s exaggerated focus on strict formal hierarchy. He explained that
employees would feel pressurised to do their outmost, working hard while giving little
consideration to other values, such as social rapport and work-life balance. The competition,
both internal and external, was really fierce and that did not allow employees to professionally
develop themselves, reflect on their performance or cooperate in a creative and “less-
intimidating” way with others. Furthermore, loyalty was a key factor. All employees were
expected to be extremely loyal, which means that they were not allowed to question working
habits, the working conditions and environment, remuneration packages or, indeed, the well-
established cultural values of the company.
Alvesson implies that the approach followed at Pepsi organization was best characterised
by an almost totalitarian ideology towards organizational life. This ideology was so harsh that
it often compromised people’s creativity and self-esteem, giving advantage to the most
aggressively-competitive employees, who would not necessarily be the brightest or the most
capable ones. More importantly, this ideology was internalised by the employees as the
prevailing corporate culture for which they could do nothing about, in terms of changing it.
The perception was that they needed to simply tolerate it because it was imposed from the top
management team and it was not up to them to change it. Ultimately, many employees were
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feeling demotivated and, in the medium and longer-term, they were feeling vulnerable and
unable to think critically or reflect on how to develop themselves professionally.
We characterised this approach to organizational culture as “emancipatory”. The reason
was to demonstrate that employee-driven organizational culture does have another dimension
of forward-looking, eye-opening professional development and it is capable of enhancing the
sense of professional ‘fulfilment’. However, this dimension may often be hidden due to the
capacity of manager-driven culture to obscure it. In other words, organizational culture may
provide the mechanism which would allow employees to develop their own autonomous and
independent way of thinking, performing and progressing within the organization.
If we wanted to take this one step further, we could say that this dimension is largely
hidden due to the fact that Western type organizations present cultural values as fully
representative of the system of values representing employees, while, at the same time,
dissociating employees from the emergence of culture itself. In this context, culture is indeed a
constraint as there is an inherent risk of compromising critical and autonomous thinking,
creativity and, even, self-progression. Surely, through shared visions, ideals, values and norms
employees may feel united and collectively conscious. Some sense of direction and order is
necessary, too. But, there is absolutely no need for this to be achieved alongside the risk of
compromising critical operational values, such as work ethos, healthy competition, self-
development, social integration, constructive cooperation and meaningful, person-centred
performance.
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1.5 Concluding remarks
We started this reading with three different perspectives about the relationship between
management and organizational culture, as follows:
(1) Management decisions are capable of influencing organizational culture (Kilmann,
1985).
(2) Management decisions are not capable of influencing organizational culture in a
significant way (Pfeffer, 1981).
(3) Organizational culture is capable of altering management decisions and strategies
and not the other way around (Schein, 1985).
Subsequently, the relationship between organizational culture and performance was
explored. Once again, the causal relationship was unclear as certain authors demonstrated the
impact of organizational culture on performance and other authors showed that the opposite
could also occur. What appeared to be a key factor was the so-called principle-centred
management, i.e. the management style which pays attention to the principles and values
representing the employees of the organization and the organization, as a whole. Indeed,
regardless of the direction of the causal relationship, common values and principles appear to
be instrumental in understanding the relationship between organizational culture and
performance.
Our efforts to better understand the relationship between organizational culture and
management or performance revealed the important role of the key topic of this module, the
organizational culture management. Given that organizational culture is tied to the values of
individual employees, it was reasonable to expect that managing culture would be an
extremely important activity for modern organizations. The most common way of
understanding the management necessity of organizational culture is the potential change of
culture in order to always represent the values of the majority of the employees who work for
the organization. However, the preservation of the existing culture is also another way of
approaching this topic, which does not require change or adaptation, and, yet, it is often
ignored.
The reading closed with an alternative way of exploring the role of culture in
organizational life, i.e. organizational culture as constraint. For the purposes of this module,
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this advanced topic was kept at a very preliminary analysis, but it was used to indicate that a
fully-defined homogeneous culture could, perhaps, strengthen collective performance within
the organization, but this may be achieved at the expense of other critical factors for
professional and personal development of the employees, such as alternative way of
understanding social reality or exploring ways of career progression and everyday living.
In the next reading, we will be introducing the concept of cultural dynamics, which will
enable us to present the inevitability of organizational culture change and adaptation.
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Reading tips:
- In this reading, you are required to study topics, which are presented in the literature
in very different ways. For example, a prominent author found that organizational
culture may influence performance, but some other author found that performance
may, in fact, be responsible for change in organizational culture. Given these
different perspectives, you must be careful about how you choose additional
scientific papers and articles relevant to the topic. I would always choose the most
cited papers in well-known journals and aim to keep a balanced number of readings
for all different perspectives. This would give you a fairly representative idea about
the topic.
- In this reading we presented – for the first time – the key term organizational culture
management. It is important to remind yourselves about the continuity factor stated
before, i.e. the gradual approach followed throughout the module. Therefore, it is
always a good idea to refresh your memory on key topics explored in previous
readings before proceeding to study every next reading (you could do this by
focusing on key definitions/concepts/models or, simply, on the “concluding remarks”
of each reading). For example, before aiming to read the section about
organisational culture management, I consider it a good idea to refresh your memory
on the operational definition of organizational culture, as presented in the reading of
Week 2.
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1.6 References
Alvesson, M. (2003). Understanding organizational culture, 2nd ed. London, United
Kingdom: Sage.
Alvesson, M. & Berg, A. P-O. (1992) Corporate Culture and Organizational Symbolism: An
Overview. De Gruyter Studies in organization.
Brown, A. (1995). Organisational Culture. London: Pitman Publishing. Cited in Senior, B.
1997. Organisational Change. London: Pitman Publishing.
O’Reilly, C. A., Chatman, J., & Caldwell, D. F. (1991). People and organizational culture: a
profile comparison approach to assessing person-organizational fit. Academy of Management
Journal, 34(3), 487–516.
Calori, R. & Sarnin, P. (1991) Corporate Culture and economic performance: A French study.
Organization Studies, 12 (1) (1991), pp. 49-74.
Cameron, K.S. and Ettington, D.R. (1988) The conceptual foundations of organizational
culture. Higher Education: Handbook of Theory and Research, (356-396). New York:
Agathon.
Cameron, K., & Quinn, R. E. (2006). Diagnosing and Changing Organizational Culture. The
Jossey-Bass Business & Management Series. Addison-Wesley, Reading, MA, USA.
Cameron, K. S., & Quinn, R. E. (2011). An Introduction to changing organizational culture:
Based on the competing values framework. Diagnosing and Changing Organizational Culture,
1–12.
Covey S.R. (1991) Principle-centered Leadership. Simon & Schuster, New York, USA.
Denison, D. R. (1990). Corporate Culture and Organizational Effectiveness. New York John
Wiley Sons.
Kilmann, R. H., Saxton, M. J., Serpa, R., and Associates. (1985). Gaining control of the
corporate culture. San Francisco: Jossey-Bass.
Kotter, J. P., & Heskett, J. L. (1992). Corporate culture and performance. Administrative
Science Quarterly, 47(1), 214.
Krefting, L.A. and Frost, P.J. (1985). Untangling webs, surfing waves, and wildcatting: A
multiple metaphor perspective on managing organisational culture. In: Frost, P. J., Moore, L.
F., Louis, M. R., Lundberg, C. C. and Martin, J. (eds) Organizational Culture, Sage, London.
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Mills, A. J. (1988). Organization, Gender and Culture. Gendering and Organizational Analysis.
Organization studies, 9(3), 351-369.
Ostroff, C., & Kozlowski S. W. (1992). Organizational socialization as a learning process: The
role of information acquisition. Personnel Psychology, 45, 849–874.
Pfeffer, J. (1981). Power in organizations. Marshfield, MA: Pitman.
Schein, E. H. (1985). Organizational Culture and Leadership. Jossey-Bass, San Francisco,
USA, 1–464.
Wilkins, A., & Ouchi, W. (1983). Efficient culture: Exploring the relationship between culture
and organizational performance. Administrative Science Quarterly, 28, 468–481.
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