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What Is Organizational Culture?

management, business, corporate culture, organization, organizational culture, norms, values, corporate climate

During the past 40 years McDonald's has risen from modest beginnings to occupy a global position in the fast-food business. Not the least of the reasons for this dramatic growth—and the accompanying profitability—has been the development and nurturance of a clear corporate creed, embodied in such diverse ways as tales of company humor and successes that nearly every McDonald's employee is told about, Krocisms that teach the company's philosophy, a company museum, and of course, Hamburger University, where new employees learn—and are awarded for learning—the core values and beliefs of the company. In sum, McDonald's has developed a strong corporate culture and a program for socializing employees to embrace that culture. The objective of all this effort is to ensure employee commitment and effective performance.

Organizational culture was one of the hot research topics in organizational science in the 1980s. It was a popular topic for business writers, who landed four books about it on the New York Times best-seller list. The subject also captured scholarly interest. In 1983 two scholarly journals (Organizational Dynamics and Administrative Science Quarterly) each devoted an entire issue to organizational culture. This interest derived in part from the changing competitive scene and the growth in market share enjoyed by foreign businesses, especially Japanese firms. How, observers wondered, might the company loyalty shown by Japanese workers contribute to their firms' success? What had the firm done to promote that commitment? In fact, one study showed that Japanese workers had stronger social bonds, which are related to commitment and the acceptance of similar norms.

As we will see, despite this intense interest, organizational culture is not yet a clearly defined area of study. Rather, it is an omnibus concept with numerous definitions reflecting many schools of thought. This variety of approaches has not helped either researchers or managers to understand exactly what constitutes culture in organizations. Culture is variously seen as a component of, equal to, or a determinant of organizational climate, a popular area of study until culture took its place in the late 1970s. Another difficulty is that culture and socialization are often discussed interchangeably. Another point of confusion involves the need to distinguish between organizational culture and national culture.

Although culture is just one of the many constructs managers must manage in organizations (along with structure, power, leadership, and so on), it has not been well differentiated from these other aspects of management. Neither culture nor socialization has been clearly linked through research to such outcome variables as turnover and commitment. Because these outcomes are important to managers and researchers alike, culture and socialization may wane as subjects of study unless such relationships can be shown.
Published: 2007-04-21
Author: Martin Hahn

About the author or the publisher
Martin Hahn PhD has received his education and degrees in Europe in organizational/industrial sociology. He grew up in South-East Asia and moved to Europe to get his tertiary education and gain experience in the fields of scientific research, radio journalism, and management consulting.

After living in Europe for 12 years, he moved to South-East again and has worked for the last 12 years as a management consultant, university lecturer, corporate trainer, and international school administrator

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