The concept of organizational culture (company culture) appeared in the ’80s in developed industrial countries and is considered a basic prerequisite for effective management of the organization.
Organizational culture comes to the fore in the management of our companies, which are in a dynamic and unpredictable environment. It not only provides high prestige but also helps to increase the quality and efficiency of the activity.
Organizational culture is the set of values, norms, models of subordination, communication, and professional behavior that are able to ensure continuity in the development of organizational culture, stability, innovation, and progress. This culture is all the more effective the more it is saturated with humanity, with a pragmatic spirit, with a willingness to take risks. It contains an effective strategy for solving the problems that arise in the process of work (labor conflicts, technological difficulties, etc.).
Organizational culture should not be perceived as a complete system of rules and norms but as a flexible and plastic conglomeration of values and patterns, which is constantly changing, renewing, and adjusting in the direction of perfection. The reliability of the company culture is manifested in critical situations – recession, growing losses, bankruptcy. In such cases, professional qualities, managerial skills, as well as the unity of the team are of great importance.
It cannot be said that there is a “correct” organizational culture, ie a certain set of characteristics, which if we develop we will get the necessary organizational culture. Where there is a strong culture, there is a growing consistency in the behavior of partners. In this sense, the need for many written rules and procedures disappears. In it, the key values are present in an active way among the majority of employees of the organization.
Organizational culture cannot be described in any rigid and non-dynamic terms and embedded in “rigid” rules and inflexible schemes.
The object of organizational culture is the person, the company staff with their interests, values, attitudes, norms, rituals, and symbols. It covers:
- The beliefs, traditions, customs, and values that distinguish one company from another;
- A set of unwritten laws, rules of conduct that determine the specifics of the spiritual environment;
- Shared many suggestions, beliefs, and values held by team members;
- Guiding principles, concepts, and shared values;
- Strength of adhesion, values, myths, characters, and symbols;
- Traditions and climate;
Entrepreneurs and small business owners often face the need to make many decisions every day related to morality and honor in business. The better the entrepreneur is able to combine economic and public goals in his activity, the more successfully and long-term his company will be established on the market. Reference: “Managing business organizations and adding business value. An Agile Manager’s Guide to the Theory of BVOP.org”, https://www.policymatters.net/managing-business-organizations-and-adding-business-value-an-agile-managers-guide-to-the-theory-of-bvop-org/
The main factors influencing the company’s culture include – the company’s goals, value system, and ideas, rules and standards, informal communication channels, etc. the formation and development of the culture of entrepreneurial activity take place first in a natural way when the company on the basis of studying its past experience and the present maintains those cultural traditions that are most effective in achieving the goals. Secondly, it can be purposefully formed by implementing certain behavioral complexes.
What is a weak organizational culture?
The company’s culture can be considered weak when:
- There is no clear idea of the value system and the means to achieve the goals;
- There are no strategic goals;
- There are no tactical goals – contradictions arise;
- The individual parts of the organization cannot reach an agreement;
- Leaders do nothing to develop common beliefs;
To improve culture, it is necessary to study the mechanism of interaction of its individual elements and their influence on each other.
Many organizations in developed market economies have their own codes of ethics. They proceed from the understanding that high ethical standards ensure the competitiveness of their goods and stable profits. Business ethics defines the basic rules of conduct in business that are acceptable to society as a whole, determine what is acceptable and what is not, what is the right action and what is not, what is moral and what is not. culture and value system, which in turn depend on the material culture of the nation.
Trust in organizational culture
Another key category in organizational culture is trust. It presupposes open and honest relations both between the managers and the representatives of the different companies and within the company itself in the relations and contacts between its individual members. Another key point is caring for people. This is usually an indicator of the company’s prosperity.
The actual human resources strategy can be interpreted on the basis of specific manifestations of attention, support, encouragement, and restorative care. The care of subordinates is an essential feature of professional management, but there is a kind of care that is constant, constructive, purposeful.
Another important part of the essence of the company culture is the clothing and in general the adequate, up-to-date, and functional shaping of the appearance of the employees. Company clothing – materials, construction, colors, is woven into the overall system of signs that help identify the specific culture, the values that integrate a group of people on a professional basis. Austerity and elegance, representation and finesse, self-confidence and restraint are just some of the suggestions that corporate fashion aims to offer.
Values are the basic concepts and beliefs of the organization. Shared values are the core of the business, everything else depends on them. They can be included in the seven “C’s” of business – strategy, structure, systems, capabilities, employees, and style.
Values also represent beliefs in the organization. One of these beliefs is that the majority of company members should be innovators. Innovators must be seen as an asset of the company. Rituals that encourage and reward innovation are particularly important for harmonizing a company’s culture and technological innovation strategy.
Effective management relies on the perfect knowledge of everything that inspires and mobilizes employees and workers – pride, sense of superiority, sense of belonging, specific merits of the organization such as speed of operations, quality of service, technological innovation, reliability, and security in production. products, good image, etc. Values unite the members of the company. They incorporate them into the main goals, objectives, means, symbols, and prestigious signs.
There are claims that the scope of the value content is limited to the conviction of the members of the organization:
- That they are the best;
- That even the smallest detail in their work is important;
- In the meaning of people as individuals;
- That most members of the organization must be innovators;
- In the importance of informal contacts and communications;
- In recognition of the importance of economic growth and profit;
Leading among the moral values in organizational life are such qualities and characteristics as diligence, responsiveness, tolerance, initiative, professional honor and pride, and others.
In general, company values can be divided into conservative and liberal. The criteria for such a distinction are the characteristic features and attitudes of the management, such as the attitude towards the new and the old, willingness to take risks, the specifics of the communications, the degree of trust in the empowerment, etc.
Conservative values adhere to the stereotypical, the known, the verified, the certain. The meaning and benefit of their application are that they are maximally dictated by experience, by many years of practice. The dangers associated with conservative models of organization and management can come from several directions.
One is the dynamics of modern economic, social and cultural life. The other is the incredible change in people’s thinking – in their attitude to work, in the special requirements, they place on management, in the work environment, and more. The third reason is in the suppression of such feelings and actions inherent in the full-fledged person as the spirit of reform, imagination, etc.
Liberal values in the organization reflect the changed attitude of people to work, to their professional realization. Leading criteria are increasingly becoming opportunities for creative expression, moral satisfaction, the ability to say what is thought, not what management wants to hear, and more. The advantages of the new model of corporate governance with dominant liberal values can be summarized into three groups.
The first includes the system of beliefs, attitudes, and expectations towards the work itself. Its enhanced creative nature, new information technologies, and the changed status quo of the worker allow expressing the new attitude to work. The second concerns the dynamics of interpersonal communications in the company environment.
Dominant horizontal over the vertical structure of management, respect, and respect for the opinion of individual employees, high trust is only part of the dimensions of the liberal type of communication between managers and subordinates, as well as between individual subordinates. The third group of advantages is related to individual values and those of them that build mentality, self-confidence, and self-confidence.
Ethical norms and organizational culture
Ethical norms are the result of the collective creativity of people and are related to the historical nature and social conditions of life in a society. They manifest as socio-historical characteristics of behavior, expressing the values of a culture formed as a result of generations. The set of ethical norms in a society provides a “framework” for entrepreneurial behavior.
The role of ethical norms in entrepreneurial behavior has different meanings. They lay the foundations of knowledge, preserved and passed down through the generations, strengthen the faith of entrepreneurs, give the “measure” to look at history. The leading norms that the entrepreneurs from the small businesses use in their daily practice reveal typical internal characteristics of the Bulgarian. Such norms are – to perform his duties, not to steal, not to lie, care for the family, organization of his own life and that of subordinates and others.
Rituals and ceremonies in the company environment bring together the members of a working community, reveal new aspects of the history and present of the organization, involve those present in the basic values and traditions. Sustainability and durability are qualities that are always respected for belonging to rituals and ceremonies. Rituals in the work environment may include – rituals at work, integrating rituals, rituals related to rest and recovery, etc.
Company culture and its interactions can be considered on three levels:
1. At this level are born those basic preconditions which are perceived by the members of the collective and which are naturally invisible;
2. This level covers the value area. These are values that encourage and motivate the actions of team members. This includes the attitude towards the customer and the quality of the production;
3. This includes language, rituals, art, and technology. These are the visible standards of behavior such as furniture, company clothing, and more.
Four main functions of the company culture
There are four main functions of corporate culture:
- transfer of knowledge – through the shared knowledge problems of external and internal nature are solved;
- unification of the company – the values that are the core of culture contribute to a certain harmony and interaction in the decisions of all levels of government;
- through rituals and ceremonies, through the raising of characters, people join the team, become empathetic to the problems, and feel part of this team;
- managing strong emotions – company culture can guide both negative emotions such as anger and aggression, and positive experiences such as faith and enthusiasm;
Each company can build an appropriate culture taking into account its age, geographical location, markets, and even the preferences of managers. When considering the issue of cultural change, the strength of the previous culture is usually highlighted as a major factor. Most authors believe that the stronger the culture, the harder it is to change.
The company’s strategy determines the company’s relationship with the environment. The presence or absence of harmony between strong company culture and a business strategy can mean success or failure in today’s dynamic environment. Company culture can become a powerful force if it is consistent with the company’s strategy.
If the already established culture contradicts the formed strategy, serious problems invariably arise. There are two potential opportunities to combine culture and strategy:
- a strategy requires an adequate response from the culture in solving problems, ie. a direction of culture, which with its behavior to act in the direction of the expressed strategy;
- the strategy should not depend on the habits of thinking and feeling when reacting to problems;
The corporate (organizational) culture is not easy to change
The corporate (organizational) culture can be extremely resistant to change. Company values, in line with the company’s strategy and supported by a large number of people, act as a protective mechanism against the necessary change. For change to be successful, it must be supported and managed by the top of the organization.
It is necessary to have stable leadership that does not tolerate internal power struggles, to enable the development of progressive and distinguished employees. Senior administrative officials must have the ability to promote the new culture through their own actions, to demonstrate loyalty and dedication, to be diligent in imposing new values.
If there is a need to change the culture, the selection and socialization of the newcomers and the removal of the unacceptable ones should be carried out.
In order to increase the culture of entrepreneurship and small business, it is necessary to study the experience in this field of our and foreign companies. The best example can be found in Japanese and American corporate cultures.
National-cultural differences have a great influence on the overall organizational culture in an organization. American employees express dissatisfaction with the fact that their work lacks accuracy and clarity in the tasks set, the correspondence between the position held, responsibility, rights, and remuneration. There is no opportunity for career development within the company itself.
Japanese companies are characterized by devotion and loyalty, which ensures stable employment. The economic interest of employees in permanent employment in the same company is stimulated through the system of pay and growth in the hierarchy. Particular attention is paid to raising the qualification of management staff.
The American understanding of the profession affects the achievements, which must correspond to the title, responsibility, authority, and pay of the employee. They firmly believe that if an employee is charged with being responsible for a problem or task, he or she must have adequate authority to control the performance of the task. The Japanese believe that responsibility should not depend on authority, but on the task at hand.
Organizational culture in the United States
In the United States, such qualities as loyalty, diplomacy, and the ability to cooperate are valued. People who strive to realize their creative and organizational abilities, taking on high responsibilities, are valued. A special role is given to high moral principles. American businessmen have such business qualities as – keep their word, accurately meet deadlines and promises, justify the trust of the partner, know the competitiveness of the product, appreciate high professionalism. Successful and fast-growing companies have high culture and a special style, helping to achieve and maintain market leadership.
Organizational culture in Japan
In Japan, hard work, perseverance in achieving goals, striving for continuous improvement, high-quality work and benefits, cost reduction and more efficient work, flexibility, high innovation, diplomacy, and more are highly valued. The Japanese are supporters of the collective form of labor organization. The basis of the company’s management philosophy is the social responsibility of the manager. Reference: “The Japanese employee management system”, https://bvop.org/learn/japanese-employee-management-system/
Apart from the developed industrial countries, the company culture comes to the fore in the management of our companies. It would be good to use the experience of Japanese and American managers in the field of organizational culture, but we must take into account the specific features of our national culture and corporate environment.
There are several main factors that influence the culture in our companies:
- the need to change human thinking and values to meet the transition to a market economy;
- the routine of creative problem solving;
- the lack of research on organizational culture due to the dominance of the formal organizational system in recent years;
- the specific features of the company culture are manifested, the object of which is the company staff with its characters, rituals, and symbols;
- national peculiarities of the people such as the tendency to conservatism and lack of traditions;
For a successful business, it is necessary to form a strategy for ethical management both in relation to the people in the company and in relation to the companies, institutions, and people from its environment.
The main elements of such a strategy include – a sense of responsibility for compliance with ethical standards in business; the establishment of an appropriate internal organizational structure for the application of ethical norms in business; institutionalization of ethical norms in business, ie. their application both at the company level and within associations, branch unions, etc.
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Managerial decisions related to ethical and moral problems in business are reflected not only in the activities of the company, the market, and the people working there but also in society as a whole.
Successful steps in achieving business goals, the honesty of the entrepreneur, the good image of his company are often the main motive, the reward for his efforts and striving to be useful to himself, to the people working in the company, and to those who which its products or services are intended to be useful in enhancing the welfare of society.