We often hear that organizational culture generates competitive advantages. In effect, organizational culture can give an organization advantages over its competitors, which may translate into returns and strong performance for the company.
Organizational culture is understood as a symbolic system created, learned and transmitted internally within an organization, for the purpose of facing the demands of its environment and pursuing its mission (Pariente, 2001). Organizational culture therefore fulfills two basic functions: the first is integration between the organization’s members and the second is adaptation to the environment through various mechanisms carried out by the members.
Because organizational culture is a symbolic system that sends signals to the organization’s members, it becomes an instrument that regulates employees’ conduct, so they know what to do and what is expected of them. However, organizational culture not only tells employees what to do; the concept is much broader because it encompasses all the values and idiosyncrasies with which the members of an organization act.
The culture may enable an organization to resolve problems and ensure its survival and at the same time help members to feel integrated. This situation is achieved when individuals know what to do, how to conduct themselves, and what is expected of them; in other words, organizational culture sets the rules, or the standards that regulate behavior, that must be followed by the members of the organization.
Learning an organizational culture is not always a conscious act. To better understand what this means, consider how newly-hired employees spend the first few days on the job. They do not know the dress code, the corporate jargon, or its general behavior. They may feel uncomfortable when they show up for work in strict business clothing and find the rest of the office dressed informally. New employees soon discover whether meetings are held to solve problems or simply to create opportunities for proving who knows more-meaning whether discretion and humility are company values, or quite the opposite. All of this is culture, and through it, employees learn, day by day, how to behave.
Organizational culture is better explained using the three-level Schein model:
The first level of the model corresponds to artifacts and creations. This is the most superficial level, where we may observe the manifestations of the culture but not its essence. The second level is formed by values and beliefs, which guide the behavior of the company’s members. The last level corresponds to basic assumptions, which reveal how a group perceives, thinks, feels, and acts. This represents the deepest level of culture.
Artifacts encompass the things we see first, including the colors, furniture, and language. Values determine what is important in the organization, and beliefs define how things work.
A frequent problem for companies is that they may have more than one culture. They may have one culture for employees, another for owners, and another for management. Problems arise when the company has not created a general dominant culture in which everyone interrelates.
Although organizational culture is created both by the managers and employees of an organization, management plays a key role in creating and establishing a solid and positive culture through which the company can adapt to the environment and solve the problems it encounters. For the leaders of the organization, culture is a powerful force that can be managed for the good of the company and its employees (Childress and Senn, 1995).
Management’s perspective on organizational culture usually differs from that of the rest of the employees because the values expressed or expected by management may differ from the values, beliefs, and rules expressed in actual practice and behavior. For a company to function and obtain the results that its management wants, its symbols and values must be consistent with its mission and philosophy, as well as its style of management.
Ahora bien, ¿cuándo se convierte la cultura de la organización en una ventaja competitiva? Cuando los miembros logran sentirse parte de la empresa, por el hecho de compartir los mismos valores y las mismas creencias, lo cual les permite generar estrategias para adaptarse a los desafíos del ambiente y hacer frente a las demandas actuales.
La cultura ayuda a normar los comportamientos de sus miembros, a conocer qué es lo que debe y no debe hacerse, y comprende una serie de reglas no escritas, pero que son conocidas por el personal y que ayuda a que las cosas se desarrollen de una manera adecuada.
Thus, when does an organizational culture become a competitive advantage? When members are able to feel a part of the company by sharing the same values and the same beliefs, which enables them to generate strategies to adapt to the challenges of the environment and confront current demands. Culture helps regulate the behavior of the organization’s members, to know what they should and should not do, and it consists of a series of unwritten rules that are nonetheless known by employees, which help things to develop appropriately.
Lo esencial en la cultura no es ya sólo que sea la guía de comportamiento de las personas en la organización, sino que determine la capacidad de la empresa para adaptarse a las nuevas circunstancias (Elías y Mascaray, 1998) y que los valores culturales ayuden a moldear las orientaciones que la alta dirección trae a sus funciones como líderes organizacionales y tomadores de decisiones estratégicas, a modo de facilitar el logro de resultados a corto y largo plazo.
Organizational culture must also be flexible enough to adapt when the environment changes. Organizations that maintain a rigid structure with a closed culture may encounter conflicts they find hard to resolve, especially in today’s demanding world. The essential thing about culture is not only that it serves as a guide for the behavior of people in the organization, but that it determines the company’s capacity to adapt to new circumstances (Elias and Mascaray, 1998). Cultural values help mold the orientation that members of top management bring to their role as organizational leaders and strategic decision-makers, and thus help the organization to achieve its short and long-term goals.
What is most important is that the organization’s values coincide with those of its employees. Management image is an issue that warrants some attention because it filters down to the employees. As Childress and Sern (1995) point out, effective leaders “cast a shadow” over their organizations. We all know that leaders influence cultural and ethical values by clearly articulating a vision of organizational values that employees can believe in and adopt.
Organizational culture has been compared with an individual’s personality. Just as we have our own beliefs, attitudes, goals and habits that make us unique, over time an organization develops its own characteristic personality.
In the past, some experts have argued that strong cultures could help members to achieve desired organizational objectives, like commitment, cooperation, and consistent decision-making and performance. However, sometimes a strong organizational culture can be both an asset and a weakness. A strong culture may be a weakness when it fails to satisfy the needs of the members or the organization, in the context of the environment where it operates. This can happen when the culture prevents internal integration and does not help the company adapt to its environment. In these cases, the culture may lose its purpose and its reason for being. For this reason, a company must frequently ask itself if its organizational culture is really what it wants, and if not, it should begin managing the change. Remember that change does not take place overnight; it is a long-term process, and it requires a good deal of patience and perseverance.
To conclude, we might say that all organizations have a culture, even when it is not a planned result, because members share values and beliefs. However, a culture should be managed in such a way that it facilitates the creation of competitive advantages. Culture is not written down like a manual of behavior but rather indicates “the way things are done” in a company.
Organizations are formed by individuals that work toward a common purpose and share values and beliefs, and it is this that forms and strengthens a culture. People make up an organization, and its fate depends on them. To the extent that the members share common values and beliefs, the company will be strengthened, and this will be reflected in its results. If you are looking for ways to create competitive advantages, consider your organizational culture because it can both improve a company’s identity, but also have an impact that is measurable even in the form of improved performance.?
References
Childress, John R. y Larry E. Senn (1995), In the eye of the storm, Los Ángeles: The Leadership Press.
Elías, Joan y José Mascaray (1998), Más allá de la comunicación interna, la intracomunicación, Diez estrategias para la implantación de valores y la conquista del comportamiento espontáneo de los empleados, Barcelona: Gestión 2000.
Pariente, José Luis (2001), Teoría de las organizaciones. Un enfoque de metáforas, Ciudad Victoria: Universidad Autónoma de Tamaulipas.
Schein, Edgar (1985), Organizational culture and leadership, San Francisco: Jossey-Bass Publishers.
Organizational Culture: A Competitive Advantage?
We often hear that organizational culture generates competitive advantages. In effect, organizational culture can give an organization advantages over its competitors, which may translate into returns and strong performance for the company.
Organizational culture is understood as a symbolic system created, learned and transmitted internally within an organization, for the purpose of facing the demands of its environment and pursuing its mission (Pariente, 2001). Organizational culture therefore fulfills two basic functions: the first is integration between the organization’s members and the second is adaptation to the environment through various mechanisms carried out by the members.
Because organizational culture is a symbolic system that sends signals to the organization’s members, it becomes an instrument that regulates employees’ conduct, so they know what to do and what is expected of them. However, organizational culture not only tells employees what to do; the concept is much broader because it encompasses all the values and idiosyncrasies with which the members of an organization act.
The culture may enable an organization to resolve problems and ensure its survival and at the same time help members to feel integrated. This situation is achieved when individuals know what to do, how to conduct themselves, and what is expected of them; in other words, organizational culture sets the rules, or the standards that regulate behavior, that must be followed by the members of the organization.
Learning an organizational culture is not always a conscious act. To better understand what this means, consider how newly-hired employees spend the first few days on the job. They do not know the dress code, the corporate jargon, or its general behavior. They may feel uncomfortable when they show up for work in strict business clothing and find the rest of the office dressed informally. New employees soon discover whether meetings are held to solve problems or simply to create opportunities for proving who knows more-meaning whether discretion and humility are company values, or quite the opposite. All of this is culture, and through it, employees learn, day by day, how to behave.
Organizational culture is better explained using the three-level Schein model:
The first level of the model corresponds to artifacts and creations. This is the most superficial level, where we may observe the manifestations of the culture but not its essence. The second level is formed by values and beliefs, which guide the behavior of the company’s members. The last level corresponds to basic assumptions, which reveal how a group perceives, thinks, feels, and acts. This represents the deepest level of culture.
Artifacts encompass the things we see first, including the colors, furniture, and language. Values determine what is important in the organization, and beliefs define how things work.
A frequent problem for companies is that they may have more than one culture. They may have one culture for employees, another for owners, and another for management. Problems arise when the company has not created a general dominant culture in which everyone interrelates.
Although organizational culture is created both by the managers and employees of an organization, management plays a key role in creating and establishing a solid and positive culture through which the company can adapt to the environment and solve the problems it encounters. For the leaders of the organization, culture is a powerful force that can be managed for the good of the company and its employees (Childress and Senn, 1995).
Management’s perspective on organizational culture usually differs from that of the rest of the employees because the values expressed or expected by management may differ from the values, beliefs, and rules expressed in actual practice and behavior. For a company to function and obtain the results that its management wants, its symbols and values must be consistent with its mission and philosophy, as well as its style of management.
Ahora bien, ¿cuándo se convierte la cultura de la organización en una ventaja competitiva? Cuando los miembros logran sentirse parte de la empresa, por el hecho de compartir los mismos valores y las mismas creencias, lo cual les permite generar estrategias para adaptarse a los desafíos del ambiente y hacer frente a las demandas actuales.
La cultura ayuda a normar los comportamientos de sus miembros, a conocer qué es lo que debe y no debe hacerse, y comprende una serie de reglas no escritas, pero que son conocidas por el personal y que ayuda a que las cosas se desarrollen de una manera adecuada.
Thus, when does an organizational culture become a competitive advantage? When members are able to feel a part of the company by sharing the same values and the same beliefs, which enables them to generate strategies to adapt to the challenges of the environment and confront current demands. Culture helps regulate the behavior of the organization’s members, to know what they should and should not do, and it consists of a series of unwritten rules that are nonetheless known by employees, which help things to develop appropriately.
Lo esencial en la cultura no es ya sólo que sea la guía de comportamiento de las personas en la organización, sino que determine la capacidad de la empresa para adaptarse a las nuevas circunstancias (Elías y Mascaray, 1998) y que los valores culturales ayuden a moldear las orientaciones que la alta dirección trae a sus funciones como líderes organizacionales y tomadores de decisiones estratégicas, a modo de facilitar el logro de resultados a corto y largo plazo.
Organizational culture must also be flexible enough to adapt when the environment changes. Organizations that maintain a rigid structure with a closed culture may encounter conflicts they find hard to resolve, especially in today’s demanding world. The essential thing about culture is not only that it serves as a guide for the behavior of people in the organization, but that it determines the company’s capacity to adapt to new circumstances (Elias and Mascaray, 1998). Cultural values help mold the orientation that members of top management bring to their role as organizational leaders and strategic decision-makers, and thus help the organization to achieve its short and long-term goals.
What is most important is that the organization’s values coincide with those of its employees. Management image is an issue that warrants some attention because it filters down to the employees. As Childress and Sern (1995) point out, effective leaders “cast a shadow” over their organizations. We all know that leaders influence cultural and ethical values by clearly articulating a vision of organizational values that employees can believe in and adopt.
Organizational culture has been compared with an individual’s personality. Just as we have our own beliefs, attitudes, goals and habits that make us unique, over time an organization develops its own characteristic personality.
In the past, some experts have argued that strong cultures could help members to achieve desired organizational objectives, like commitment, cooperation, and consistent decision-making and performance. However, sometimes a strong organizational culture can be both an asset and a weakness. A strong culture may be a weakness when it fails to satisfy the needs of the members or the organization, in the context of the environment where it operates. This can happen when the culture prevents internal integration and does not help the company adapt to its environment. In these cases, the culture may lose its purpose and its reason for being. For this reason, a company must frequently ask itself if its organizational culture is really what it wants, and if not, it should begin managing the change. Remember that change does not take place overnight; it is a long-term process, and it requires a good deal of patience and perseverance.
To conclude, we might say that all organizations have a culture, even when it is not a planned result, because members share values and beliefs. However, a culture should be managed in such a way that it facilitates the creation of competitive advantages. Culture is not written down like a manual of behavior but rather indicates “the way things are done” in a company.
Organizations are formed by individuals that work toward a common purpose and share values and beliefs, and it is this that forms and strengthens a culture. People make up an organization, and its fate depends on them. To the extent that the members share common values and beliefs, the company will be strengthened, and this will be reflected in its results. If you are looking for ways to create competitive advantages, consider your organizational culture because it can both improve a company’s identity, but also have an impact that is measurable even in the form of improved performance.?
References