Organisational CultureOn July 16, 2019 in peopleware • 3 minutes read
Table of Contents
Culture is defined as commonly held ideas, beliefs and practices within a collective, and it’s one of the most critical and dynamic elements of organisational design.
Having a strong culture ensures that employees within a certain organization have a sense of unity and something in common. This makes company culture a major influencer on an employee’s decision to choose one organization over another.
More specifically, culture is the personality or character of an organization; this character is created by everything an organization has learned in its history, while dealing with external challenges and internally how we relate to each other.
Shaping and Reinforcing Culture
A company culture shapes its personality, and it realizes in the form of set of rules and regulations as well in employees’ behavior and way of work.
Culture is highly impacted by the values defined by the company, but it’s not just about what the firm says it “values”, but also about by what management focuses on, which in turn defines what’s expected of its employees.
Management can shape and reinforce culture by defining:
- Decision making practices that shape managerial attention;
- Organizational reaction in time of crisis;
- Evaluation criteria and practices for allocating rewards;
- Hiring, promotion, and management development practices.
Culture as a Competitive Advantage
An innovative, flexible and positive culture can be a competitive advantage to a company by creating operational efficiency, the ability to react quickly to market changes or opportunities, and becoming a desirable workplace for high quality resources.
Value based strategy creation
By keeping a company’s culture and values at the forefront, management can define more meaningful strategies that amplify its strengths and mitigate its weaknesses, in turn making execution more likely to succeed.
The steps for a value driven strategy are:
- Develop fundamental value and beliefs;
- Design management and hiring practices that reflect these values;
- Cultivate core competencies that reflect these values;
- Build strategy with values and competencies;
- Sustain culture by leadership.
By fostering an innovative culture, company can become more resilience to external disruptive events, by reinventing itself in the face of adversities, and to make the creation of breakthroughs achievements more likely.
The key attributes to this type of culture include creating a sense of community, trust and fearlessness. Executing in an innovative culture requires management to amplify the capability of the organisation in:
- Creative abrasion: creating ideas through debate;
- Creative agility: testing and experimenting through quick action and adjustments;
- Creative resolution: making integrative decisions that combine diverse ideas.
Relationship between Culture and HR
HR is fundamental for supporting the reinforcement of the desired culture, with practices like:
- Performance evaluation
- Job design
- Job assignment
- Fringe benefits
Company <> Employee Relationship
In shaping the relationship of employees with a company, two human resource philosophies that are implemented in organizations, with profoundly different effects.
The goal of both philosophies is to:
- Retain talented employees;
- Meet the future staffing needs;
- To build employee appreciation and commitment;
- To prevent burnout;
- To identify better performance criteria;
- To enhance employee contribution and productivity.
Picking the right one can be tricky, as each has its pros and cons.
High Commitment Work Force
For most of the 20th century, the main HR philosophy was about stability, with employees committed to the company and with secure jobs, with high loyalty and low turnover.
This philosophy has 5 pillars:
- Hire for Flexibility
- Selective in recruitment
- Promotion from within
- Long-term Commitment
- Investing in people
- Training and skill development
- Employment security
- Information sharing
- Transparency in financial information
- Transparency in operational information
- Team based work Design
- Participation and empowerment
- Cross-utilisation and cross-training
- Rewards and recognition
- High wages
- Incentive pay
- Employee ownership
High Flexibility Work Force
Nowadays, rapid and unpredictable changes are common, and a more successful philosophy might be in favor of adaptability and creativity.
In this approach, the company boundaries are less defined, as our values expand beyond our organisation by maintaining a rich employee alumni network: it’s the company’s reputation leads top professionals to wanting to be part of the organization when opportunities arise.
The pillars of this philosophy are:
- Flexible time, space, and division of labor:
- Staggered start and end time
- Compressed workweek
- Part-time employment
- Expanded leave options
- Working from home
- Flexible skills, assignments, and rewards:
- Multitasking and job enrichment
- Cross-training and multi-skilling
- Job rotation
- Redefinition of jobs into task clusters
- Pay-for knowledge, skills, contribution
- Flexible life-long careers:
- Non-linear view of careers and advancement
- Periods of greater and lesser focus on work, e.g. sabbaticals
- Flexible size and type of workforce:
- Temporary workers, consultants
- Opportunities to develop occupation-specific rather than firm-specific skills
- Flexible boundaries of the firm:
- Outsourcing to other firms for a variety of inputs and services
Other Peopleware Pages
- August 26, 2019: Business Strategy
- June 22, 2019: Highly Effective Managers
- June 10, 2019: Organisational Design
- January 06, 2019: Performance Management
- January 06, 2019: Decision Making
- October 11, 2018: Psychological Safety
- October 10, 2018: Radical Candor