A critical approach towards an integrative dynamic framework for understanding and managing organizational culture change

Page 1 PSY704: Organizational Culture Management

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

Page 12 PSY704: Organizational Culture Management

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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