Organizational Culture and Leadership

Introduction:

Organizational culture and leadership are one of the most important topics for organizational development. The success of every organization depends upon its culture and leaders. In this training, we will discuss about organizational culture, leadership, ways to improve it and much more.

Defining Culture:

Culture is the set of shared beliefs, values and norms by which people live and organizations work. It can be defined as a collective programming of the mind that distinguishes the members of one organization from those of another.

Cultural differences between organizations create an unbridgeable gap among these organizations, affecting their ability to cooperate and compete in the market place (Schein, 2003).

Schein (1991) has defined organizational culture in three categories. They are,

•          Technical culture: It refers to the sets of basic assumptions that managers have about reality and the ways they translate these into practice.
•          Normative culture: It reflects individuals’ sense of obligation based on their beliefs.
•          Reflective culture: It reflects the meaning and ideologies that are made up by individuals in response to their environment.

Eight Distinct Culture Styles:

Edgar Schein (2004) has identified the following eight distinct culture styles:

1.  Authoritative:

It is a culture where managers lead and staff people work through specific orders and procedures. The performance of individuals is judged by their compliance to established rules, policies and practices. Here managers determine what should be done and how it should be done by the employee.

2.  Networked:

It is a culture where managers act as consultants to their co-workers and not as supervisors. Here, leaders determine what needs to be achieved, but not how it should be achieved. People working in that organization are given freedom to find out ways and means for achieving set objectives.

3.  Consensual:

It is a culture where managers are not expected to take individual decisions rather they are expected to reach consensus with their co-workers. Here organizations are based on the principle of equality between managers and subordinates.

4.  Achievement oriented:

Here, leaders operate in an environment that is challenging but results orientated. Leaders and subordinates are expected to achieve results by accepting challenges that come within the purview of their authority. Here, managers as well as employees work hard and accept challenges.

5.  Affiliative:

It is a culture where things happen because people like each other and want to help each other. Here leaders look for opportunities to form social alliances with their subordinates.

6.  Pragmatic:

It is a culture where managers are expected to work in an environment that focuses on getting tasks completed by using whatever means are available. Here, the focus lies on efficiency and economy rather than following formal rules or relationships.

7.    Productive:

This culture operates in an environment where managers and subordinates work towards common goals. Here, everyone is expected to make a contribution, but this contribution takes place within the existing structure of authority.

8.    Procedural:

It is a culture that functions on basis of rules and procedures. Here employees are allowed to take action only after obtaining formal authorization from their authorized person.

What is Organizational Culture?

Organizational culture is a pattern or a shared set of meanings, beliefs and values among the people of an organization. Culture is embedded in an organization through its shared symbols, rituals, stories, values and assumptions/mind-sets.

Organizational culture is a pattern or a shared set of meanings, beliefs and values among the people of an enterprise which becomes visible in their attitudes, behaviour and interactions with each other and outside the organization.

Types of Organizational Culture:

There are three types of organizational culture:

1. Bureaucratic
2. Entrepreneurial
3. Humanistic

There is a tendency among organization to go for bureaucratic culture (less risk taking) as such companies usually perform less risky activities such as building roads, factories etc., whereas humanistic culture is more common among NGOs and students associations.

In bureaucratic organizations, the organization’s primary objective is to survive. These types of companies focus less on their customers and mainly concentrate on internal issues such as rewards, promotions etc., whereas in a humanistic culture, employees enjoy a good work-life balance and have a greater degree of freedom which helps them in better decision-making.

As discussed earlier, entrepreneurial culture is seen among companies which are involved in high risk activities such as software industry etc., entrepreneurship helps companies to be aware of the external environment and encourages employees to take more risks.

Characteristics of Organizational Culture:

Schein (2003) has identified ten characteristics of organizational culture based on his studies with 2800 managers, employees and executives from different countries. They are,

•          Culture is a system of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way you perceive, think and feel in relation to those problems.
•          Culture is pervasive: It affects every aspect of organizational life.
•          Culture has priority: The organization prioritizes its assumptions above facts, figures and logic.
•          Culture is powerful: The shared basic assumptions have a life of their own, independent from the individual’s understanding or awareness of them.
•          Culture is in people: Of the human mind, body and spirit.
•          Culture is conservative: It resists change, especially changes introduced from someone outside the culture.
•          Culture has continuity over time: Organizations are long-lived systems that value their history, identify with it and learn from it.
•          Culture has bounded reality: People in the same culture share perceptions of what is real, what is true and what is important.
•          Culture has creativity: It produces new behavior that overcomes problems.

What is Leadership culture?

Porter (2001) defines leadership culture as the manner in which leaders act, behave and interact with followers. It refers to how leaders treat employees and is developed over time (Humphrey & Nahrgang 2011).

•          Entirely shaped by System 1:

This suggests that there is no System 2 thinking involved when dealing with leadership culture. It is a shared understanding between leaders and followers that governs the behavior of both groups.

•          Entirely shaped by System 2:

With this system, leaders have a goal in mind to achieve from their actions and thoughts. When formulating elements of culture, they only do so consciously with a pre-determined agenda.

•          A combination of both:

This is the most common leadership culture that exists. Leaders first operate using System 1, then rationalize their actions by going over them in a more conscious manner to achieve a desirable end result. This would be considered as situational leadership theory which is discussed later on in this course.

Culture provides employees with a sense of security and understanding in the organizations that they work for. It helps them to function more efficiently by providing them with a set of norms and values (Humphrey & Nahrgang 2011).

What are Ways to Improve Organizational Culture?

Leadership:

Leaders have a great impact on organizational culture. Over the years, it has been observed that when leaders are enthusiastic about their work then they can easily motivate employees to be committed towards organization’s objectives.

Recruitment:

Organizations should do proper recruitment of employees who can fit in their organizational culture and share similar values which will help them in strengthening the organization’s shared beliefs and assumptions.

Employee engagement:

Employee should be given proper training which will encourage them to become more aware about the organizational culture and help them in adapting accordingly. Employees should also be encouraged to share their thoughts/views about organization’s culture, leadership etc., this can strengthen their commitment towards objectives of the organization.

Rewards and recognition:

Rewards and recognition play a major role in improving organizational culture, they help employees to increase their collaboration with each other and also acknowledge them for their efforts.

Invest in Your Culture to Optimize Performance.

Every business is driven by its staff; it is the people that make all the difference. The inherent traits and characteristics of your employees largely contribute to how they perform and their level of commitment.

As a result, it is critical for business leaders to understand what motivates their teams and how this can be maintained over time in order to ensure future success. Similarly, HR managers should be able to identify ‘talent’ and how it can be maximized. Understanding what drives an employee’s performance is the key to talent management.

A culture is a way of life passed down from individual to individual creating a common behavioral pattern that exists within a group or organization. The culture of an organization is created by its leader and can be seen through the behaviors of its managers, which is then reflected through each employee’s actions. When an organization creates a healthy culture that employees identify with, this can improve overall performance levels as well as staff retention rates.

In addition to determining what motivates your teams and how this may change over time, it is important to recognize that the expectations and perceptions of every employee differ. Therefore, it is essential to understand what motivates each individual and how this information can be used to establish a positive work environment in which all staff members feel valued.

Gaining an understanding of your workforce’s values and attitudes can help you determine what strategies to implement in order for your business to succeed. Motivation, attitude and general outlook are all factors that cause people to perform well or struggle in their roles. By using the above methods, psychologists have found many ways to measure these key variables which can be used as a basis for talent management.

The psychology of work is an important concept that provides much insight into how an individual performs in their chosen position. By understanding how to motivate employees, HR personnel are better able to implement the correct retention strategies which will ensure ‘talent’ is retained within your organization.