Organizational Culture

By Xiaoyu Liu



Organizational Culture

The head of an organization usually tends to think the more advantage they have, the more strength they could obtain. However, it is not always the case, at least in the organizational culture aspect. So learning how to create a first generation organization and maintain its culture strength becomes the essential source of competitive advantage compared to other organizations. 


Organizational Culture

For an organizational culture to exist, there must be a group of employees interacting with each other for accomplishing a defined goal or purpose in a work environment. After the group has had its own history of overcoming difficulties, and experiences the growth of its value, the organizational culture appears. By force of the founder’s personality, he or she could begin to shape the culture of that group. Consequently, the organization will find out their own solutions for how to cope with its external and internal problems. Therefore, Schein (1983) defined organizational culture as:

the pattern of basic assumptions which a given group has invented, discovered, or developed in learning to handle with its problems of external adaptation and internal integration, which have worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems (p. 1).

First Generation Organization

According to the related research, founders often start an organization with the flowing essential steps:

1. Come up with an idea for a new enterprise. The ideas is workable and worth running, but with some risks.
2. Allocate the ideas to some people that may have the ability to run the business or are interested in doing so, and form a founding group.
3.  Begin to create the organization by raising funds, obtaining patents, incorporating and so on.
4. Develop its own history by bringing other businessman into the group according to what the founder or founding group considers necessary. 

Maintain Cultural Strength

According to the quantitative analyses, organizations with strong cultures have higher performance than the organizations that have weak cultures (Sørensen, 2002, p. 70). As one important aspect of organizational structure and strategy in human resources, culture strength, which is defined as "a set of norms and values that are widely shared and strongly held throughout the organization”, enhanced organization performance (Sørensen, 2002, p. 70). 

As stated earlier in the paper, organizations have to be aware of the truth that having strong culture does not always equal success. There are many examples that demonstrate sometimes the greatest strength could be the biggest weakness in an organization. For instance, strong culture creates steadiness within the organization, but it would appear that strong culture also creates difficulties to adapt in new environments. Moreover, an organization stands out among others but it would be difficult to merge with another organization (Colquitt et al., 2009, p. 567). 

Thus, finding a way of maintaining cultural strength that best fits in an organization is important. After the organization is created, the founders keep shaping the culture of the organization and molding employees. This learning and adapting process for employees is defined as socialization, and it helps the organization maintain its strength (Colquitt et al., 2009, p. 569).


Source of Competitive Advantage

Like the paper illustrated previously, organizational culture is defined as “the shared social knowledge within an organization regarding the rules, norms and values that shape the attitudes and behaviors of its employees” (Colquitt et al., 2009, p. 557). Organizations have to compete with one another, because only a few of organizations have absolute advantage over others, such as Apple and Microsoft. So after we know how to maintain the organizational strengths, it will not be hard to have a competitive advantage over other similar organizations. 
There are various specific culture types of organizations, such as customer service, safety, diversity and creativity.  Based on what kind of culture types the organization is, three conditions must be met for a source of sustained superior financial performance (Barney, 1986, p. 657).

• • Valuable
• • Rare
• • Inimitable

First of all, the culture must be valuable. These valuable cultures enable an organization to add financial value to itself. It leads the organization to achieve high sales, low costs, high margins, and low conflicts in order to have positive economic consequences.

Second, the culture must be rare. It should be unbeatable and have unique attributes and characteristics that others do not usually have.

Last but not the least, the culture must be imperfectly imitable. Organizations lose advantages, such as reputation or experience, if they try to imitate cultures. Organizations could not operate without these cultures and engage in activities that change the cultures to include the required characteristics. 



The organizational culture not only labels who its employees, customers, suppliers, or competitors are, but it also describes how an organization will interact with these primary factors. By implication, the concept of organizational culture blurs the borders between organizational culture and the structure and strategy because these characteristics of an organization directly demonstrates the cultural assumptions about what business an organization is in and how it conducts that business (Barney, 1986, p. 657).


Additional activity: by looking at the chart below, one can see which values they prioritize the most and decide whether your organization shares the values (Colquitt et al., 2009, p. 576).

References

Barney, J. B. (1986). Organizational culture: can it be a source of sustained competitive advantage?. Academy of management review, 656-665.

Colquitt, A. J., Lepine, A.,Wesson, J. M.. (2009). Organizational Structure, Organizational Culture.  Location: New York, 554-575.

Schein, E. H. (1983). The role of the founder in creating organizational culture.Organizational dynamics.

Sørensen, J. B. (2002). The strength of corporate culture and the reliability of firm performance. Administrative Science Quarterly, 47(1), 70-91.