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The Impact of Culture on an Organization

Culture is a malleable component of an organization that can adapt

and evolve through influences to create value.
LEARNING OBJECTIVE [ edit ]

Identify the central components of an organization or company that result from the influence
cultural dispositions

KEY POINTS [ edit ]

Culture, particularly in large organizations that have a great deal of momentum, can be
difficult to influence or change.
Understanding how to change an organizational culturerequires some insight into what
creates culture in the first place and how altering those components
may impactmeaningful cultural development.
Some examples of organizational facets that influence culture
are mission and vision statements, controlsystems, organizational
structures, power hierarchies, symbols, routines, and internal stories and myths.
When integrating culture change, it is important to update mission and vision statements,
ensure buy-in from uppermanagement, update control systems and power hierarchies, hire
people representative of the desired culture (and remove those who are not), and update the
corporate ethos.

TERMS [ edit ]

paradigm
A system of assumptions, concepts, values, and practices that constitutes a way of viewing
reality.

joint venture
A cooperative partnership between two individuals or businesses in which profits and risks
are shared.

inertia
The property of a body that resists any change to its uniform motion; equivalent to its mass.
Figuratively, in a person, unwillingness to change.

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The Impact of Culture on an Organization

FULL TEXT [edit ]

Culture, particularly in large

organizations that have a great deal of
internal momentum, can be difficult to
influence or change. The size of an
organization and the strength of its
culture are the biggest contributors to
cultural inertia. Big and strong
organizational cultures will have a
powerful tendency to continue moving
in the direction they are already

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moving (momentum). Therefore,

managers must understand not only how to create culture, but also how to change it when
necessary to ensure a positive, efficient andethical culture.

Cultural Factors
Understanding how to change an organizational culture requires some insight into what
creates culture in the first place and how altering those components may impact
meaningful cultural development. Gerry Johnson's cultural web offers great clarity about
how an organizational culture responds to and reflects influencing factors. These include:
The paradigm: The mission statement, vision, ethicsstatement, and other overt
definitions of culture.
Control systems: The processes in place to monitor what is going on, such as an
employee handbook.
Organizational structures: This comes down to the hierarchy, or who reports to whom
and why.
Power structures: Similar to the organizational structure above, this pertains to who
has the power to make decisions.

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The Impact of Culture on an Organization

Symbols: Most organizations have brand images and other symbols which represent
what the culture stands for (logos, etc.).
Rituals and routines: In the business setting this is simply the way in
which group interactions are organized. One example is the weekly staff meeting.
Stories and myths: CEOs and other figureheads often have stories or legends
associated with them; this generates culture through idolatry.
While these are only a few of the elements of culture, they capture a wide variety of
components that managers can use to influence and change the general
culturalpredisposition.

Implementing Culture Change

Cummings and Worley identify a useful way to frame the stages or steps in integrating
broad organizational change through cultural reform in six stages, which correlates well
with the factors identified above. These stages include:
1. Ensure clarity in the strategic vision. This means making sure that the mission
statement, vision statement and overall strategy work together to create one strong
culture statement. The vision in particular must describe the new culture forcefully
and persuasively.
2. Ensure buy-in from the top down. This means communicating (and often
determining) specific aspects of needed culture change at the upper managerial level.
3. Lead by example. Top management needs to exhibit the kinds
of values and behaviors that they want to see in the rest of the company.
4. Identify areas in the organizational structure and control systems which require
updates to conform with the new or adapted culture. This includes altering employee
handbooks, compensation strategies, hierarchy, decision-making authority and other
central components of structure.
5. Follow through on the mandate. Terminating employees who do not conform to the
desired culture is difficult. But it allows you to bring in new talent that aligns better
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The Impact of Culture on an Organization

with your desired culture. Ensuring proper emphasis on the new culture
in trainingmaterials is useful in this process.
6. Finally, ensure that the ethical and legal implications of the adapted culture are
understood, planned for and in line with corporate ethics.
Joint ventures and mergers and acquisitions usually require large cultural changes. When
different cultures come together it is wise to expect some degree of culture-clash and
differences of opinion. Managers, particularly upper management, must be aware of the
implications of cultural change, the facets of organizational culture and the steps involved
in altering it. While this model describes a long process that is generally more applicable to
large cultural overhauls, the general strategy is useful for managers leading meaningful
cultural change at all levels.

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