Managing performance through organizational culture
“Organizational culture is the sum of values and rituals which serve as ‘glue’ to integrate the members of the organization.” — Richard Perrin
Organizational culture is a system of shared values, beliefs, customs, written and unwritten rules that are developed over the time, which governs how people behave in an organization and contributes to the social environment in an organization.
An organizational culture involves expectations, experiences, philosophy and values that express the image of the company, both internally and externally, and how it is viewed by colleagues and clients.
Organizational culture refers to the way they conduct business and treat customers and employees, the degree of freedom allowed in decision making, innovation and new idea implementation or the involvement of employees in achieving set objectives.
All these characteristics increase the performance of a company, providing guidelines for customer service, working standards and values. An organizational culture is unique for every company and it changes according to its objectives.
There are 4 different types of culture:
- the power culture (that has a strong entrepreneurial company value)
- the role culture (this type of organizational culture is guided by formal systems)
- the task culture (consists of groups that are focused on getting the job done, like project teams)
- the personal culture (a system of individual interests and development)
There are highly organized companies that follow a culture of extensive control. There are also companies that offer a competitive environment, like the sales department, which follows a competitive culture, focusing on maintaining a strong relationship with external parties.
The organizational strategy in this case is to attain competitive advantages over its competition. The collaborative culture, like the task culture, is where a decentralized workforce works together to find solutions to different situations.
A good organizational culture boosts performance. Now that we know what organizational culture really means, let’s have a look at how to boost performance through organizational culture.
Regardless of the type of company culture, there are some characteristics that apply to all of them: first of all, organizational performance is tightly related to the company’s management style and then to the belief system of the employees, as they are the pillars of the organization and can make ideas happen.
Strong corporate cultures indicate that employees are like-minded and have similar beliefs and ethical values, that are implemented from top management. When beliefs and values align with business corporate objectives, they seem to build trustful teams.
These common values are helpful when avoiding conflicts and focusing on solutions, due to the high level of good communication they yield. What some companies may not understand is that the first attempt to create an organizational culture and its inherent values must come from the top echelon.
Top management visualizes the objectives and in accordance with them, they put the first stone to the corporate culture, the primordial values and afterwards, the best leaders try to implement and align the employees’ mindset to their vision, mission and values.
For instance, if the company is implementing the “quality over quantity” value system, because its executives considered that this value is helping them achieve their set goals and performance levels, then their employees may work accordingly.
Allowing one department to set up their own culture can affect the performance of other departments. This is why top management needs to visualize, align and implement (through inspirational behavior) the values and culture they need for their company.
An organizational culture can have crucial effects on employee performance and motivational levels. Employees work harder to achieve and align to a company’s objectives if they consider themselves part of the organizational culture.
In order to influence the values all the way from the departmental to the individual level, the recruitment department needs to have a set of very well-established standards and a clear vision of what kind of people they need to recruit for their company.
The importance of this process cannot be overstated, as it ensures the employee’s assimilation into the company values and alignment to its culture. For instance, a person focused on quality will not be 100% compatible with a quantitative kind of culture, or a strategic mindset that focuses on research may not be the best person to focus on sales.
Companies should also ensure alignment between their corporate culture and performance management systems. If not, management must re-visualize these, so that employee behavior leads to achieving the set organizational goals.
In conclusion, despite the various types of organizational culture, if we want the organization to achieve performance, we need to take into account the following two main pillars: the company’s management style and the belief system of the employees.
Based on this, top management needs to visualize their objectives for the company and set a system of values, beliefs and culture that has to be implemented through inspiration all the way to the employee level, via alignment.
Tags: Business Strategy, Organizational Culture, Organizational Performance