Organizational Culture and Performance Essay

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The concept of organizational culture has drawn attention to the long-neglected, subjective or soft side of organizational life. However, many aspects of organizational culture have not received much attention. Instead, emphasis has been placed primarily on the cultural and symbolic aspects that are relevant in an instrumental/pragmatic context. The technical cognitive interest prevails. Culture then is treated as an object of management action. In this regard, Ouchi and Wilkins (1985: 462) note that the contemporary student of organizational culture often takes the organization not as a natural solution to deep and universal forces but rather as a rational instrument designed by top management to shape the behavior of the employees in purposive ways. Accordingly, much research on corporate culture and organizational symbolism is dominated by a preoccupation with a limited set of meanings, symbols, values, and ideas presumed to be manageable and directly related to effectiveness and performance.

This is in many ways understandable, but there are two major problems following from this emphasis. One is that many aspects of organizational culture are simply disregarded. It seems strange that the (major part of the) literature should generally disregard such values as bureaucratic-meritocratic hierarchy, unequal distribution of privileges and rewards, a mixture of individualism and conformity, male domination, emphasis on money, economic growth, consumerism, advanced technology, exploitation of nature, and the equation of economic criteria with rationality. Instrumental reason dominates; quantifiable values and the optimization of means for the attainment of pre-given ends define rationality (Horkheimer and Adorno, 1947; Marcuse, 1964). Mainstream organizational culture thinking in organizations but also in academia tend to take this for granted.

The values and ideas to which organizational culture research pays attention are primarily connected with the means and operations employed to achieve pre-defined and unquestioned goals. A second problem is that subordinating organizational culture thinking to narrowly defined instrumental concerns also reduces the potential of culture to aid managerial action. Organizational culture calls for considerations that break with some of the assumptions characterizing technical thinking, i.e. the idea that a particular input leads to a predictable effect. This chapter thus shows some problems associated with the use of the term culture that does not take the idea of culture seriously enough and presses the concept into a limited version of the technical cognitive interest. It argues for a softer version of this interest as well as for thinking following the other two cognitive interests (as sketched in Chapter 1).

A basic problem in much management thinking and writing is an impatience in showing the great potential of organizational culture. Associated with this is a bias for a premature distinction between the good and the bad values and ideas, trivialization of culture, overstressing the role of management and the employment of causal thinking. Premature normativity: the idea of good culture Associated with the technical interest of optimizing means for accomplishment of goals is an underdeveloped capacity to reflect upon normative matters. Viewing cultures as means leads to evaluations of them as more or less good, i.e. as useful, without consideration whether this goodness is the same as usefulness or if usefulness may be very multidimensional.

The more popular literature argues that good or valuable cultures often equated with strong cultures are characterized by norms beneficial to the company, to customers, and to mankind and by good performance in general: Good cultures are characterized by norms and values supportive of excellence, teamwork, profitability, honesty, a customer service orientation, pride in ones work, and commitment to the organization. Most of all, they are supportive of adaptability the capacity to thrive over the long run despite new competition, new regulations, new technological developments, and the strains of growth. (Baker, 1980: 10)

Good cultures are, according to this author, cultures that incorporate all good things in peaceful co-existence. Also many other authors eager to appeal to practitioners focus on highly positive-sounding virtues, attitudes, and behaviour claimed to be useful to the achievement of corporate goals as defined by management (e.g. Deal and Kennedy, 1982; Trice and Beyer, 1985). They are largely instrumental in character, without considering any ambiguity of the virtue of culture or what it supposedly accomplished in terms of goal realization. The assumption that culture can be simply evaluated in terms of right and wrong come through in embarrassing statements such as that the wrong values make the culture a major liability (Wiener, 1988: 536) has already been mentioned. Similarly, Kilmann et al. (1985: 4) argue that a culture has a positive impact on an organization when it points behavior in the right direction¦.

Alternatively, a culture has negative impact when it points behavior in the wrong direction. According to Wilkins and Patterson (1985: 272): The ideal culture ¦ is characterized by a clear assumption of equity ¦ a clear sense of collective competence ¦ and an ability to continually apply the collective competence to new situations as well as to alter it when necessary. Kanter (1983) talks about cultures of pride, which are good, and cultures of inferiority, which any sane person will avoid. This type of functionalist, normative, and instrumentally biased thinking is also found in Scheins (1985) book, in which culture is seen as a pattern of basic assumptions that has proved to be valid for a group coping with problems of external adaptation and internal integration. Basically, culture in this literature is instrumental in relation to the formal goals of an organization and to the management objectives or tasks associated with these goals (i.e. external and internal effectiveness). It is assumed to exist because it works or at least used to work. Of course, changed circumstances can make a culture dysfunctional calling for planned, intentional change but the approach assumes that culture is or can be good for some worthwhile purpose.

As will be shown later good and bad are not, however, self-evident, especially when it comes to complex phenomena such as culture. A bias towards the positive functions of culture and its close relation to issues such as harmony, consensus, clarity, and meaningfulness is also implicit in many of these studies (see Martin and Meyerson, 1988). Symbols and cultural aspects are often seen as functional (or dysfunctional) for the organization in terms of goal attainment, meeting the emotional-expressive needs of members, reducing tension in communication, and so on. Instrumental/functional dimensions are often emphasized, for instance, in studies of rites and ceremonies (e.g. Dandridge, 1986; Trice and Beyer, 1984). The typical research focus is on social integration (Alvesson, 1987). Culture is understood as (usually or potentially) useful and those aspects of culture that are not easily or directly seen as useful remain out of sight, e.g. on gender and ethics.

The most common ideas guiding organizational analysis draw upon such metaphors for culture as tool, social glue, need satisfier, or regulator of social relations. Problems include the premature use of moral judgement, in a way hidden behind technical understanding in which culture is viewed as a tool and presumably as easy to evaluate in terms of its goodness as a hammer. But few issues are simply good or bad, functional or dysfunctional. Some things that may be seen as good may be less positive from another angle. A clear sense of collective competence to connect to the citation above does in itself sound positive and is good for self-esteem and commitment, but a high level of self-confidence may be a mixed blessing as it easily forms a part of, or leads to, fantasies of omnipotence, and may obstruct openness, reflection, willingness to listen to critique and take new external ideas seriously (Brown and Starkey, 2000).

Cultural themes thus call for careful consideration, where normative judgement should be applied with great caution. Normative talk easily prevents more nuanced interpretation. Trivialization of culture As argued above, the consequence of the functionalist/pragmatic approach is that culture tends to be reduced to those limited aspects of this complex phenomenon that are perceived to be directly related to organizational efficiency and competitive advantage (see, e.g. Barney, 1986; Kilmann et al., 1985). This means a rather selected interest in organizational culture. But much worse is a tendency to emphasize mainly the superficial aspects of these selected parts of organizational culture. These superficial aspects have the advantage that they are compatible with technical thinking, presumably accessible to managerial interventions.

Culture may even be equated with certain behavioural norms viewed as an excellent vehicle for helping people understand and manage the cultural aspects of organizational life (Allen, 1985: 334). In marketing, market-oriented culture is frequently defined as the key to strong performances (Harris and Ogbonna, 1999), culture here implying certain behaviours. The problem, of course, is that norms are not the best vehicle for understanding culture. Whereas norms tell people how to behave, culture has a much broader and more complex influence on thinking, feeling, and sense-making (Schneider, 1976). Again, Barney (1986), Pfeffer (1994) and others argue that to serve as a source of sustained competitive advantage culture must be valuable, rare, and imperfectly imitable. If this statement is to make any sense at all, culture must be interpreted as highly normative, accessible to evaluation in terms of frequency (i.e. quantifiable), and capable of being copied at will.

This conception deprives culture of the richness that is normally seen as its strength. At the same time, any culture may be seen as vital for competitive advantage (or as disadvantage), as it is arguably, highly significant and not easy to imitate. As Pfeffer (1994), among others, notes, many of the earlier identified sources of competitive advantage, such as economies of scale, products or process technology, access to financial resources and protected or regulated markets, become of diminishing significance as a consequence of more fragmented markets with an increasing need for flexibility in production, shorter product life cycle, internationalizations and de-regulations. A companys competence and ability to manage people to a considerable degree overlapping organizational culture are not easy to imitate.

Even to describe and analyse culture is difficult, as indicated by all the management texts providing only superficial and trivial descriptions of culture, such as norms about market-oriented behaviour. The trivialization of organizational culture is not, however, solely restricted to writings promising the quick fix. Despite an effort to define organizational culture on a deeper level, emphasizing basic assumptions, Schein (1985) in most of his empirical examples tends to address the more superficial aspects. One example concerns the acquisition of a franchised business: The lack of understanding of the cultural risks of buying a franchised business was brought out even more clearly in another case, where a very stuffy, traditional, moralistic company whose management prided itself on its high ethical standards bought a chain of fast-food restaurants that were locally franchised around the country.

The companys managers discovered, much to their chagrin, that one of the biggest of these restaurants in a nearby state had become the local brothel. The activities of the town were so well integrated around this restaurant that the alternative of closing it down posed the risk of drawing precisely the kind of attention this company wanted at all costs to avoid. The managers asked themselves, after the fact, Should we have known what our acquisition involved on this more subtle level? Should we have understood our own value system better, to ensure compatibility? (Schein, 1985: 345)

Here the problem seems to be lack of knowledge on a very specific point what the company was buying rather than lack of understanding of the companys own value system. Most ordinary, respectable corporations, whatever their organizational culture, would probably wish to avoid becoming owners of brothels. Prostitution is broadly seen as illegitimate, not only by those who Schein views as very stuffy, traditional, moralistic people. Apart from the moral issue, there is of course the risk that bad publicity would follow and harm the company. Managerialization of culture Another aspect of adapting culture to technical concerns, and the reduction of complexity and depth contingent upon such concerns, is the confusion of organizational culture with the firms management ideology. Frequently what is referred to as organizational or corporate culture really stands for the ideals and visions prescribed by top management (Alvesson, 1987; Westley and Jaeger, 1985).

It is sometimes held that the best way to investigate corporate culture is through interviews with top managers, but the outcome of this approach tends to be a description of the espoused ideology of those managers that only skim the culture that surrounds the top executives (Czarniawska-Joerges, 1992: 174). Denison (1984) in a survey claiming to study corporate culture, for example asked one manager per company in a large number of companies to fill in a questionnaire. Organizational culture and managerial ideology are in most cases not the same, partly due to the lack of depth of ideology compared to culture, partly due to variation within organizations and discrepancies between top management and other groups. To differentiate between corporate culture as prescribed and manager-led and organizational culture as real culture and more or less emergent from below is one possibility (Anthony, 1994).

However, management ideology is not necessarily very different from organizational culture there are cases where management ideology powerfully impregnates cultural patterns (Alvesson, 1995; Kunda, 1992). But this needs to be empirically investigated and shown, and cannot be assumed. Management ideology is but one of several expressions of organizational culture. In most discussions of the relationship between culture and performance, authors focus on values espoused by senior managers, to a higher or lower degree shared by larger groups, while the complexity and variety of culture is neglected.1 From a management point of view, the managerialization of organizational culture immediately appears appealing; but arguably deeper, less conscious aspects of cultural patterns than those managers are already aware of and promote are more valuable, at least in the long run, to focus on.

Rather than smoothing over differences and variations in meanings, ideas and values within organizations, highlighting the latter is significant as a basis of informed management thinking and action. Loosening the grip of premature practicality The three weaknesses of much organizational culture thinking reviewed above are related to the wish to make culture appear as of immediate interest to practitioners, and to fit into a predominantly technical cognitive interest in which culture is reduced to a tool. Cultural studies should be permitted to develop unrestricted by, or at least more loosely connected to, concerns for practicality. It is important here is to recognize the contradiction between sophisticated thinking and easily applicable practical concerns:

The more rigorously (anthropologically) the term (culture) is applied, the more the concept of organizational culture gains in theoretical interpretative power and the more it loses in practicality. In the effort to overcome this contradiction the danger is that theoretical rigour will be lost in the interest of practicality. (Westley and Jaeger, 1985: 15)

Even if one wants to contribute to practicality, rather than to anthropology, this still calls for another kind of intellectual approach than most of the authors cited above exemplify. Oversimplification and promises of quick fixes do not necessarily serve narrow pragmatic interests, neither those of managers nor of others. Making things look clear-cut and simple may mislead. Practitioners might benefit much more from the pro-managerial and pragmatic organizational culture literature if it stopped promising recipes for how to manage and control culture and instead discussed other phenomena which managers might, with luck and skill, be able to influence for example, specific cultural manifestations, workplace spirit and behavioural norms. Learning to think culturally about organizational reality might inspire enlightened managerial everyday action rather than unrealistic programmes for culture change or bending patterns of meaning, ideas and values to managerial will.

Before assuming that culture is functional or good for organizational or managerial purposes, it makes sense to distinguish among possible consequences and to recognize that they may conflict. Critical reflection and learning may be a good thing, consensus facilitating control and coordinated action another, and reduction of anxiety a third; but not all these good things may be attainable at the same time and they may contradict each other. Perhaps more important, contradictory interests those of professions, divisions, classes, consumers, environmentalists, the state, owners, top management, etc. may produce different views on what is good, important, and appropriate. Also within complex organizations, corporate goal-attainment may presuppose considerable variation in cultural orientations. Most aspects of culture are difficult to designate as clearly good or bad. To simplify these relationships runs the risk of producing misleading pictures of cultural manifestations.

Instead, the focus must become the tensions between the creative and destructive possibilities of culture formation (Jeffcutt, 1993). Approaches to the culture–performance relationship There are different ideas regarding to what extent organizational culture can be used as a managerial tool. I will point at and discuss three versions of how managers can work with culture. These represent the relative significance of management versus culture: can management control culture or must management adapt to culture? Cultural engineering: corporate culture as managerial design In the most instrumentally oriented of these formulations, culture is conceived as a building block in organizational design a subsystem, well-demarcated from other parts of the organization, which includes norms, values, beliefs, and behavioural styles of employees.

Even though it may be difficult to master, it is in principle no different from other parts of the organization in terms of management and control. The term cultural engineering captures the spirit of this position, which is sometimes called the corporate-culture school (Alvesson and Berg, 1992). Kilmann (1985: 354) recognizes that there is considerable disagreement about what culture is but concludes that it is still important to consider what makes a culture good or bad, adaptive or dysfunctional. He describes culture almost as a physical force: Culture provides meaning, direction, and mobilization it is the social energy that moves the corporation into allocation ¦ the energy that flows from shared commitments among group members (p. 352) and the force controlling behaviour at every level in the organization (p. 358). He believes that every firm has a distinctive culture that can develop and change quickly and must be managed and controlled: If left alone, a culture eventually becomes dysfunctional (p. 354). The underlying metaphor then clearly comes from technical science.

The crucial dimension of culture, according to Kilmann, is norms; it is here that culture is most easily controlled. More precisely, it is the norms that guide the behaviour and attitudes of the people in the company that are of greatest interest and significance, because they have a powerful effect on the requirements for its success quality, efficiency, product reliability, customer service, innovation, hard work, loyalty, etc. This is the core of most (American) texts on corporate culture (e.g. Deal and Kennedy, 1982; Peters and Waterman, 1982; Sathe, 1985; Wiener, 1988). There are many difficulties with this model. Norms refer to a too superficial and behaviour-near aspect to really capture culture, at least as defined in this book. Norms and behaviours are affected by many dimensions other than culture.

Within a culture there are a number of norms related to the enormous variety of different behaviours. The point with culture is that it indicates the meaning dimension, i.e. what is behind and informs norms. A related problem with this behaviour-near view on culture is the tendency to see culture as more or less forcefully affecting behaviour. For example, Sathe (1985: 236) argues that the strength of a culture influences the intensity of behavior, and the strength of a culture is determined by how many important shared assumptions there are, how widely they are shared, and how clearly they are ranked. A strong culture is thus characterized by homogeneity, simplicity, and clearly ordered assumptions.

In a complex culture by definition any culture assumptions will probably be very difficult to identify and rank, and it can even be argued that such a measurement approach distorts the phenomena it is supposed to study. As Fitzgerald (1988: 910) has put it: Values do not exist as isolated, independent, or incremental entities. Beliefs and assumptions, tastes and inclinations, hopes and purposes, values and principles are not modular packages stored on warehouse shelves, waiting for inventory. They have no separate existence, as do spark plugs in an engine; they cannot be examined one at a time and replaced when burned out¦. They have their own inner dynamic: Patriotism, dignity, order, progress, equality, security each implies other values, as well as their opposites. Patriotism implies homeland, duty, and honor, but also takes its strength from its contrast to disloyalty; dignity requires the possibility of humiliation and shame.

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