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ORGANISATIONAL CULTURE: DEFINITIONS AND TRENDS

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ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

Introduction

Organization culture is the characteristic and the tangible personality originated inside every organization.
Even If we are not familiar with companies like Starbucks, Google or WWF. Their names represent the taste
of their workplaces, the attitude, the unwritten protocol of interactions and the company values.

While some might think of organisational culture as the result of the organization's people and processes,
something that cannot be controlled or quantified, the truth is, organisational culture is unexpectedly tangible.
It can be deliberately designed and leveraged. It affects morale and employee engagement. It governs
revenue rates and influences company performance and it affects profitability.

Organizational culture differentiates the extraordinarily successful companies from all the rest. It can be a
powerful, competitive advantage. The organizations’ culture is always distinct, but the big winners,
consistently, it is the organizations that make culture a priority.

This article will discuss some of the general cultural definitions and will go on following some specific
cultural definitions for organizations. Looking at the question how the organisation culture affects the
innovation strategy of the organizations.

The article will also depict the influence of the trends and developments on the organisation structure.
And the relationship between the organizations’ structure and culture.

The article will also give examples of current trends and developments and different methods that are
currently used to help organizations create the required change in their culture or structure.

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ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

Organization culture defined

Culture definition varied through the years. For example, more than four decades ago, Herskowits
conceived a wider definition of culture by suggesting that culture was a »human-made part of the
environment« (Herskowits, 1955). Trying to interpret his definition, we may talk about »objective culture«
(e.g., tables, computers, trains) and »subjective culture« (e.g., norms, roles, values). (Treven, Mulej, & Lynn,
2008)

In a recent article in Harvard Business Review, the writers said that, Organizational culture is the collective
effect of the common beliefs, behaviours, and values of the people within a company. Those norms within
any organization regulate how employees perform and serve customers, how they co-operate with each
other, whether they feel motivated to meet goals, and if they are sincerely into the company's overall
mission. How are employees getting their work done? Independently or collaboratively? Do employees
feel inspired, committed, and engaged, or annoyed, overworked, and underappreciated? (Groysberg, Lee,
Price & Cheng, 2018)

When we talk about organizational culture, we are talking about the employee experience, the internal
view. What do the employees think? What is it like, to work here? How can the leadership keep them
engaged, loyal, and devoted? Organizational culture, the employee experience, is a steady setting for
every organization’s daily operations. It does not matter if the organizations develop a high-quality
product or plan a killer kick-off meeting, if there is an underlying attitude of unpleasantness, resentment,
or boredom, the long-term outlook for the organisation will not be good. Organization culture is the filter
through which everything else happens. Meanwhile creating a positive employee experience is a universal
goal, but there is more than one way to get there. And the lines between functions and duties are often
blurred. (Brown, Melian, Solow, Chheng & Parker, 2015)

We could define culture through four filters. The first being every culture is unique, and there is no
single right answer. Even if different organizations have the same goal of creating happy employees, how
they get there can be quite different.

Second, cultures give us a clear guideline for finding potential employees who will be a good fit. When
companies hire people, who are more likely to thrive in those environments, they significantly increase
their odds of success.

Third, cultures are fluid like and growing organic. They need to be grown and nurtured like any
relationship. Sometimes cultures evolve as external factors alter, or as the company simply grows and
expands. If the mission changes, the culture might need to adjust to the mission too. Other times
companies fight to keep their cultures from evolving away from their core values. The point is,
organizations need to watch their cultures and control when and if they change, rather than leaving that
to chance.

Fourth, some organizations can raise their internal cultures to become part of their external identity
and set themselves apart. When we think about companies like Facebook, Coolblue or Whole Foods, we
see that those brands are a straight reflection of the energy and spirit found inside the company. Their
internal cultures distinguish them and power their financial success.

These four qualities help us round out the definition of organizational culture. It reflects the employee
experience, and it often determines whether companies win or lose. (Weiner, 2018)

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ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

Why organizational culture matters

From a landmark research study about corporate culture and performance. Scientists looked at
operational data from 207 large US companies in 22 industries across 11 years and compared the results
of companies that dynamically led their cultures versus those that did not. Companies that managed
culture well enlarged their stock prices by 901% versus 74% for those that did not. Culture-focused
companies increased their income over the 11-year period by 682% versus 166%. Net revenue also saw a
growth of 756% for companies that managed culture well versus 1% for companies that did not. That
makes a powerful statement. Investing in your organizational culture can have an undeniable effect on
productivity. (Cui & Hu, 2012)

Companies that reach position between their culture and innovation strategy do better financially than
those that do not. Jaruzelski, Loehr, and Holman categorized a sample of 1,000 world-wide innovating
companies based on the degree of alignment between their culture and their innovation strategy.
Companies with a high degree of alignment, when compared with those with a low degree of alignment,
saw their enterprise value grow 12 per cent faster per annum over five years and their gross profit grow 7
per cent faster per annum. That significant difference was related directly to a company’s ability to fund
innovation projects. (Grant & Shamonda, 2013)

Trends & Developments and Culture Change examples

As organizations grow and adapt to innovative technologies and practices, happened by the
globalization of businesses increase. The current developments require from organizations to not only to
react to the trends but also be proactive and start internally. There is a trend towards increased complexity
in organizational structures and inter-departmental interactions. The introduction of cross-functional
teams is another contributing factor. This has been the case for years, which needs new skills to adapt. As
noted by the Society for Human Resource Management (SHRM); “there is a growing need for
Organization Development professionals skilled in organizational design and change management
required to effectively implement enhanced organizational structures.” (DeRosa, 2017)

The way high-performing organizations run today is radically different from how they operated 10 years
ago. Yet many other organizations continue to run according to industrial-age models that are 100 years
old or more, weighed down by legacy practices, systems, and behaviours that must be confronted and
discarded before true change can take hold. The structure of the legacy organization, which is for example
composed of over 2,200 employees under a traditional command-and-control model, is not right for
coping with latest developments and trends.

The organization should set up a flexible organizational and governance structure centred around the
Agile method: a network of teams grouped by product functionality, technical domains, and operational
readiness, reporting to program leaders with the authority to approve final decisions. These organization
should both hire new talent and assign the current employees to the change program, empowering them
to make decisions in the best interest of the change program with little or no influence from the legacy
organization.

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ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

Most essentially, the organization had to


restructure itself to enable greater
teamwork, communication, employee
empowerment, and information flow.
To make further progress, organizations
focus on building a new leadership mind-
set, that rewards innovation,
experimentation, learning, and customer-
centric design thinking.

In short, if what a company needs to


know and do is constantly changing, then
the organization’s structure must change
as well. only 14 percent of executives
believe that the traditional organizational
model—with hierarchical job levels based
on expertise in a specific area—makes
their organization highly effective.
Instead, leading companies are pushing
toward a more flexible, team-centric model. (Bersin, McDowell, Rahnema & Van Durme, 2018)

For example, Philips Lighting conducted a series of workshops around the world to help their company
identify its traditional current and future values to build alignment around a new, more innovative culture.
The company created a common manifesto around four new cultural values (Pioneering, Caring, Fast, and
External Focus) to help the company empower teams, rapidly innovate, and move into lighting services
and a new market for Internet-based lamination.

For instance, a large telecommunications company in Asia has embraced real-time dashboards that
measure customer acquisition, customer satisfaction, hiring, employee satisfaction, and financial
profitability across all 1,000 of its small business teams. This infrastructure, built on top of its SAP
backbone, gives the entire company transparency, accountability, and the ability to adapt quickly.

In the past five years, the gig economy has become a major trend changing the global workforce, and
has created a new kind of diversity, with full-time permanent employees working side-by-side with
freelancers. Platform-based talent markets might supply a solid structure to help supplement and even
replace traditional hierarchies. They could also greatly alter how matrix organizations work.

Workforce platforms are therefore likely to supply extensive stability in unpredictable environments. As
the old view of hard and dotted lines begins to fade, companies might choose to group employees by
their strongest activities and skills. Agile companies tend to have more fluid structures, in which day-to-
day work is organized in smaller teams that often cut across business lines and market segments. From
this functional home, they could be “rented,” via a talent market, by business-line and project leaders. The
result would be at once more stable, since employees would be associated with familiar homes, yet more
dynamic, as platform-based talent markets would help companies to reallocate their labour resources
quickly when priorities and directions shift. (De Smet, Lund & Schaninger, 2016)

As a result, and cause of the undeniable demographic’s math: As national populations age, challenges
related to engaging and managing the older workforce will increase. Corporations that ignore or resist
them may not only suffer reputational damage and liabilities, but also risk falling behind those
organizations that succeed in turning long life into a competitive advantage. Based on these findings and

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ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

our anecdotal observations, we believe there may be a significant hidden problem of age bias in the
workforce today. Left unaddressed, perceptions that a company’s culture and employment practices suffer
from age bias could damage its brand and social capital.
(Deloitte Insights, 2018)

Millennials meet Generation Z in the workplace. Both


generations will continue to put pressures on companies
to transform the office, reward employees, embrace
flexibility, and align the companies interests with a
cause. ("Managing Gen Y and Z | Randstad USA", 2017)

With the increase of millennials being in the workforce.


There are range of programs aimed at not only
protecting employee health, but actively boosting
performance as well as social and emotional well-being.
These now include innovative programs and tools for
financial wellness, mental health, healthy diet and
exercise, mindfulness, sleep, and stress management, as
well as changes to culture and leadership behaviours to
support these efforts. (Deloitte Insights, 2018) ("Managing Gen Y and Z | Randstad USA", 2017)

Increased Reliance on Smartphone Apps for Managing the Organization Smartphones and other mobile
devices have become increasingly ubiquitous over the last few years. The prevalence of smartphone and
tablets have led to the explosive development of apps for not only individual entertainment, but for
businesses as well. Teamwork and productivity applications abound on app-enabled devices—giving
organizations options for managing activities. However, organizational development experts can also use
these mobile apps to help implement and guide change in their organizations. For example, team
collaboration apps can be useful for communicating and enacting both organization-wide and subsystem
changes quickly. Also, these apps can be used to collect data on overall progress towards change goals—
such as incremental improvements in productivity or the percentage of employees who have completed a
specific online training course.
The coming
digitization of the
workforce—and the
powerful economics of
automation—will need
a sweeping rethink of
organizational
structures, influence,
and control. The current
premium on speed will
continue, to be sure,
even as a new
organizational
challenge arises: the
disruption of the way
people works. (De Smet,
Lund & Schaninger,
2016)

(Deloitte Insights, 2018)

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ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

Neuromanagement uses neuroscience to continuously ignite organizational practices for high


performance and engagement. Leaders need to create the circumstances in which individuals want to
spend their effort, energy, and creativity to move the organization toward its objectives, creating the
opportunity to express one’s intrinsic motivation and achieve high performance (Norton, Mochon, & Ariely,
2011)

Neuroscience studies are interested in, for instance, better understanding the neural mechanisms that
influence ethical decision-making in relation to a range of relevant issues, such as trust, altruism, fairness,
revenge, social punishment, social norm conformity, social learning, and competition (Rilling and Sanfey
2011).

Emotions and emotional moments


of moderate intensity are a kind of
lifeblood of organizations and their
employees. As the graph shows.
While slightly positive emotions—
section of the curve that is marked
with 1—have an incredibly positive
impact on creativity and
performance, an excess of them
causes impulsiveness and
thoughtless behaviours. Then, we
(Reisyan, 2016)
are inclined to do or say things that we often later regret.
All by ourselves—we do not need any external help or push to gain such insights. It happens because we
calm down and gain back our ability to make full use of those structures of our brains that allow us to
perform our most advanced thinking and to access our most advanced knowledge to reflect what
happened as sophisticated as we can.

Back in 2004, Zak's lab was the leading to discover that


the brain chemical "oxytocin facilitated trust, generosity,
connection to others." Zak's team discovered that trust is
a significant part that really makes work exciting,
productive, and innovative. As it turns out, trust is a
chemical. Neuromanagement worked with organizations
to implement management policies, procedures, and
systems that enhance trust. Zak's lab data shows that trust
substantially boosts an organization’s performance,
employee engagement, retention, and well-being.

Organizations that sustain a prominent level of trust have


substantially greater engagement by colleagues, an effect
that has been measured multiple ways. This shows that
organizational trust should be considered a valuable asset
that can be measured and managed to sustain a
competitive advantage over rivals. Leadership practices
and organizational policies, systems, and processes affect
interpersonal interactions that either facilitate or inhibit
(Zak, 2018)
2016) Oxytocin release. Neuroscience now provides insights
about specific practices and behaviours that can directly improve organizational performance by nurturing
a culture of trust.

M MORCOS 580438 6
ORGANISATIONAL CULTURE: DEFINITION AND TRENDS

Conclusion

The definition for culture changed significantly over the years from being a description of collective
behaviours and norms within an organisation, that could not be influenced. The definition evolved to the
understanding that an organisational culture is unexpectedly tangible and can be deliberately designed
and leveraged as an employee experience.

Culture-focused organisations increased their income as research showed over an 11-year period, by
682% versus 166% for organisations who did not focus on their culture. Organisations culture requires
focus and attentions from leadership and should be consciously embedded in the organisational structure.

Some organisations started this change earlier than others and they reap the benefits of being successfully
adaptable to the rapid changes of the world and its trends, creating continuous value for their customers,
their employees, and their organisation. They continuously attracted, develop, and retain loyal employees
that fit their culture and strengthen their workforce.

With the recent technology to support the organisation culture also new data is created. Data is playing a
big part in understanding the current issues and opportunities related to the organisation culture and
structure. Neuroscience combined with this new type of data and this data analysis in addition to the rise
of artificial intelligence and further digitalizing of the organisations, we ask ourselves the question: “How
will organisations’ cultures look like in the future?”

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