The term ‘organizational culture’ refers to a set of behaviors, values, attitudes, and beliefs that contribute to mental and social environment in an organization (Strategic Leadership and Decision-Making, 2000). An organization’s experiences, values, assumptions, and philosophies, are what contribute to its culture. All the aspects of organizational culture are expressed by the employees of an organization through their routine interactions with outsiders, their inner working behaviors, the way they dress and interact with each other, and their future expectations. Organizational culture, also known as corporate culture, is used to express the following features about an organization; flow of power in an organization, how decisions are made, how an organization conducts its business operations, treats its employees, and serves its customer, and the extent of employees’ commitment towards achievement of organizational objectives (Strategic Leadership and Decision-Making, 2000).
Organizational culture is very important because it affects the productivity of the employees, hence the performance of the entire organization. Weak organizational culture may result into high employees’ turnover, poor productivity, lack of customers’ trust, production of poor quality goods and services, and poor employees’ morale. Organizational culture also has direct implication on marketing practices, production methods, and invention and innovation of new products and/or services. Every organization has its own organizational culture. Despite the fact that many large and medium-sized organizations share some common features, culture is the main differentiating factor among these organizations. Once organizational culture is developed, it may become hard for an organization to change it (Strategic Leadership and Decision-Making, 2000).
According to Schein, the importance of culture is to help an organization cope with both its external and internal environments (Strategic Leadership and Decision-Making, 2000). Schein observes that many organizational leaders in modern organizations face challenges when generating organizational achievement through the human resources. These challenges arise due to the inability of organizational leaders to evaluate and understand organizational culture in their organizations (Woodby, 2006). Schein states that, organizational leaders’ success largely depends on their ability to understand the culture of their organizations. In many instances, strategic plans implemented by organizational leaders usually fail, if such plans are not consistent with the culture of the concerned organization. This means that organizational leaders should always try to understand the prevailing culture of a given organization, before they think of implementing any new strategic plans.
According to Heathfield (2010), creation of organizational culture starts during the inception stage of an organization. Therefore, creation of effective organizational culture requires a clear understanding of where the organization want to be in the future (the vision), and what the organization needs in order to achieve its vision (Heathfield, 2010). In addition, as an organization continues to grow, its leaders need to know, which cultural elements support growth in the organization, and which ones prevents organizational growth. The reason as to why organizational leaders, especially the founding leader, should pay attention to culture during the inception stages of an organization is because, it is easier to create organizational culture, than to change it. This is because, for people to learn the new culture, they must first unlearn the old experiences, values, and beliefs. This is a difficult process and it can take a long period before the employees finally adapt to the new culture.
According to Heathfield (2010), success in creation of effective corporate culture can be achieved through executive support, and training of organizational members. Heathfield states that executives must provide support to other organizational members through practicing the desired culture (2010. In development of organization culture, executives must also portray verbal support for the desired culture. This entails constantly talking about the desired culture to the employees during formal and informal interactions. Non-verbal support of the desired culture can also be effective in culture creation. Non-verbal support of the organizational culture may include posting small messages about the desired culture on notice boards and on office walls.
For example, to create a culture of team spirit in their organizations, executives can demonstrate this by spending most of their time interacting with members of different teams in the organization on individual basis. Executives can also demonstrate team spirit by participating in membership of various teams within the organization. In addition, to create a culture of autonomy in decision-making, executives should adapt a culture of implementing their decision without first seeking approval from the organization’s owners or founders. Creating such as culture is very important especially where important and urgent decisions need to be made from time to time.
Culture creation also depends on the level of understanding about the desired culture, among the organizational members. Corporate culture is linked closely with employees’ behaviors. Therefore, all organizational members need to be trained on what is expected of them in terms of behaviors (Heathfield, 2010). Training may involve demonstrating the desired behavior, which can be done through role-play.
Where executive support and training of organizational members may be useful in creating organizational culture, Lieberman (n.d.) observes that success in creation of organizational culture entails defining the desired culture right from the beginning, and integrating it in employees’ recruitment and selection procedures, customer services, treatment of employees, and general business operations. As an organization grows, it is important to incorporate old employees who understand the concepts of organizational culture, with the new employees, so that they can help them understand and implement the existing corporate culture (Lieberman, n.d.). As the new and the old employees interact, the old employees can learn some new culture from the new employees, hence adding value to the existing organizational culture.
A very good illustration of how successful old-new employees’ interaction can be in creating and sustaining organizational culture is the case of Roy Restaurant. The restaurant has 19 properties spread across Hawaii, California, Washington, Colorado, New York, and Tokyo. According to Brian Gavin, the managing partner of the restaurant, whenever they open a new outlet in one of the states, they have the old employees train the new employees. Brian says,
“We have long range retention in our organization because we hire and grow from within. We define our culture as serving creative bold flavors from Asia cooked in a European style. We develop a sense of family, and have what we call Aloha customer service: professional and technically correct, but very friendly. Ever since Roy Yamaguchi opened the first restaurant in Hawaii, we have made a conscious effort to maintain our culture. By growing from within, many employees have gotten to experience working in different positions, and have helped to create the culture at Roy. As they move up and to different properties, they bring those values and ways of working with them. Roy’s has a strong training culture.”
Organizational culture can also be transmitted to new employees through onboarding (Carpenter, Bauer & Erdogan, 2008). Onboarding, also known as organizational socializing process, involves a process through which new employees learn about the values, beliefs, attitudes, behaviors, and skills that are important for effective functioning in a given organization. Onboarding helps new employees to feel confident about their capabilities, as well as feel accepted by the old colleagues in the organization (Carpenter, Bauer & Erdogan, 2008). This facilitates easy and quick understanding of organizational norms, values, and assumptions, which form part of corporate culture. In return, new employees are able to perform effectively, and commit more to the organizational objectives.
It is therefore important for organizational leaders to recognize that creation of corporate culture is an ongoing process. All organizations need to develop ways in which old employees transmit organizational culture to new employees. Failure to do this, an organization may end up with employees who do not understand even a single concept of its culture, after retirement, transfer, change of job, or dismissal of all old employees. As earlier mentioned, organizational culture has a direct implication on production methods, marketing functions, and invention and innovation of new products and services. Therefore, if employees do not understand the culture of their organization, then such an organization is likely to suffer from low production, poor quality of products and services, and/or reduced market.
To ensure success in creating of organizational culture, which lasts through change and growth, Lieberman provides the following steps. The first step in creation of sustainable corporate culture is to define the desired culture, and developing a method of differentiating it from other concepts within the organization (Lieberman, n.d.). Definition of corporate culture entails making the organizational members understand what is expected of them in terms of behaviors and conduct of routine business operations. For example, in a restaurant, employees can be taught how to make autonomous decisions concerning customers’ needs without referring the customers to the supervisors. Such decision may include change or substitution of certain ingredients in menus.
The next step is to develop a strategic plan for implementing the desired culture (Lieberman, n.d.). A strategic plan is a guideline, which explains more about the what, how, when, and where an organization wants to be in the future. A strategic plan for implementing the desired organizational culture may entail explaining the specific behaviors, and attitudes that all organizational members must portray, and how they are supposed to behave during specific situations. The next step involves integration of the desired culture into all management functions, which include marketing, decision-making, hiring, rewarding of employees, compensation, and environment creation (Lieberman, n.d.). Success in creation of sustainable corporate culture also involves influencing employees at all levels to adopt the desired culture, and practice it in and out of the organization. Subsequently, an organization should arrange for seasonal training of new employees, where they are trained about all aspects of the organization’s culture (Lieberman, n.d.). Organizations should also develop systems, which help new employees to learn about the written and unwritten aspects of the organizational culture.
After successfully implementing the desired culture, an organization should develop a system of evaluating the progress of conformity to the desired corporate culture among the organizational members (Lieberman, n.d.). This step is important because it helps to identify those cultural aspects, which do not contribute to the overall achievement of the organization’s goals. It is important to note that evaluation should be done on frequent basis. This is because, it helps to identify the negative cultural aspects as early as possible, before they become a permanent part of the organizational culture, hence making it difficult to change them in the future. Finally, organizations should adopt flexibility, to allow easy integration of change in their corporate culture. Whenever change occurs, organizational leaders should always inform their employees and customers about it, and explain to them how the change may be beneficial to the organization.