Every business has its way of doing things, and its way of doing things affects how employees interact with themselves, customers, and other organizations. This intangible attribute is known as organizational culture. They are the values, attributes, and beliefs that guide the employees and management of a company. This article will shed some light on the organizational culture definition, the role of HR in this, and the different types of the corporate culture.
What is Organizational Culture?
The personality of an organization is its culture. Organizational culture is how the values, business practices, and beliefs guide a company’s operation. It’s also crucial when attracting new hires and customers. Moreover, it has an intangible value that gives a business its reputation to internal and external stakeholders.
In modern times, businesses try to adopt a culture that is receptive to employees and society, especially organizations with an enormous presence and customer base.
The Shifting Expectation of the Market
A vital aim for a company is for its culture to align with its objectives and goals. The pandemic caused companies to reconsider their existing culture, and most look to improve it, while others stand firm with their current one.
A survey by LinkedIn shows employees would rather forgo a pay rise and fancy title if it meant working in a terrible environment. A BBC article shows employees would rather quit their jobs than return to the office.
Another survey by Glassdoor shows candidates are choosing companies that align with their beliefs. Since the great resignation, there has been an employee power play in the market. Positioning yourself to get the best talent will mean looking deep within the company culture and asking if it’s the right match for the emerging workforce in the labor market.
The Different Types of Organizational Culture
To review culture, one must understand the different types out there. According to Kim Cameron and Robert Quinn from the University of Michigan, we have four different types of company culture. They are:
Source: WorldOfWork
Clan Culture
A close-knit culture is what the clan culture is about. The businesses that practice this culture are usually small businesses or family-run businesses. The culture is flexible, meaning no rigid hierarchy, as everyone is on equal footing.
This characteristic allows an employee to voice their opinion without fear of repercussion. Management also encourages open and honest feedback from employees. Teamwork is one of their significant assets as they work towards a common goal.
The clan culture also values mentorship as they love to pass their traditions, values, and technique to the next generation.
Advantage
- It Promotes Employee Engagement: The involvement of employees in the everyday running and decision-making of the business makes them feel heard and feel they are contributing directly to the organization.
- It Can Lead to Employee Growth: There is potential to grow in the business as an employee. Since the organization is small, they can rotate employees to learn about the various aspects of the organization.
- It Encourages Loyalty: The respect and support employees feel from the organization can help improve their devotion to the business.
Drawback
- It Leads to a Lack of Clear Leadership: The close-knit culture means a decisive leader isn’t present. This can pose a problem in the long run, where a defined leadership will need to make tough decisions.
- It Can Promote Inappropriate Behavior: The loose rules and procedures can encourage fraudulent behavior, discrimination, or laziness.
Adhocracy Culture
Adhocracy thrives on disrupting the norm. It encourages employees and management to be innovative and creative in creating a product or service. Any employee can come up with new ideas.
The adhocracy type takes a gamble on its innovative and creative spirit to succeed. They also expect a lot from their employees and usually deliver. Good examples are tech start-ups and think of the early days of Facebook, Apple, and Google.
Advantage
- Encourage Innovation: It rewards creativity and confidence. An employee who can show the ability to think out of the box is an asset and one that can help disrupt the status quo. The organization also reaps the reward of this innovative spirit.
- It Encourages Employee Engagement: The close-knit and flexible working environment allows employees to stay engaged with their tasks or brainstorm with others.
Drawback
- Risky: It encourages high risk, and while that can lead to high returns, it may also result in a loss the organization cannot recover from.
- Promotes Individualism: There is a high promotion of individual brilliance in these companies. This action can easily lead to internal competition among staff. Internal competition can be healthy, but taking it too far can lead to stress and burnout.
Market Culture
The market culture is an aggressive type that focuses on results. Organizations with this culture aim to satisfy their customer by being one step ahead of their competition. They strive to be market leaders and are profit-oriented.
Source: researchgate.net
These companies endeavor to stay ahead of the competition and increase profits. Because of this, they also demand a lot from their employees. It supports a stable hierarchy system where roles and duties are clear. An example of a company with this culture is Amazon.
Advantage
- It Focuses on Success: Placing the focus on success allows an employee to work towards meeting the set targets, objectives, and expectations placed on them.
- It Has Huge Financial Incentive: Employees who meet their targets and goals are often handsomely rewarded.
- It encourages Learning and Development: The competitive workplace encourages employees to continue to improve themselves through professional learning and personal development.
Drawback
- It Can Lead to Burnout: Continually competing in a fast-paced environment can wear the employees out. It can lead to burnt-out and disengaged employees, which affects their productivity and the company’s bottom line.
Hierarchy Culture
It’s the traditional corporate culture most organizations use today. Hierarchy is a culture where a structure is key, a system of process and procedure, and one with a defined chain of command. It’s a system where every person knows where they fit in the chain of command, and everyone in this system knows their role and fulfills them.
The keyword in a Hierarchy is stability. Unlike the Clan and Adhocracy culture, there isn’t room for flexibility, which guarantees an efficient, well-coordinated organization.
Advantage
- It has Defined Roles, Responsibilities, and Goals: It prides itself on stability. Stability means clear goals and targets, and it also means certainty since the processes rarely change.
- It Ensures a Secure and Clear Path to Promotion: The working environment offers security for employees who prefer certainty about their jobs. It helps with certainty because of clear direction and objectives, and its procedure-based system allows for matters like qualifications for promotion to be stated clearly.
Drawback
- It can be Costly: The layers of management staff can raise the cost of employment. This high cost can pressure other business costs, including incentives that can go around in the organization.
- Its Stable Nature can lead to a Rigid One: Stability over time becomes rigidity. This causes organizations to respond slowly to change, making them less competitive in the long run. Rigidity doesn’t allow for innovative thinking, and we know how creativity is critical to competition and staying relevant.
A great example was when Blockbuster went out of business in the mid-2000s. Their Rigidness made it hard to adjust to the changing landscape of the early 2000s, causing them to go out of business.
Source: Reuters
The Role of HR in Organizational Culture
HR plays a crucial role in organizational culture. They are custodians of the current culture and the change agent for new ones. This section looks at how HR plays a role in organizational culture.
The Driving Force
For implementing a new culture, no one is as much of a driving force as the HR leader. They sit with the management team to discuss the objectives and goals of the company and how they align with the company’s values and culture. This activity is crucial for the HR personnel because they are directly involved in enforcing the culture in the organization since they are the primary force involved in an employee lifecycle.
They Receive and Provide Feedback
HR acts as the link between employees and management. Organizational culture continually develops because of internal and external reasons. One way of improving the current system is by taking employee feedback, and HR can do this through one-on-one meetings, surveys, anonymous suggestion outlets, etc. The reason is to ensure the culture is enforceable and beneficial for both employees and the organization.
Driving an Inclusive Culture
One responsibility of the HR manager is to drive an inclusive culture. One that encourages diversity, equality, and inclusion is a culture that boosts innovation. HR can enforce this in various ways. They can:
- Make job descriptions more inclusive by paying attention to using pronouns and language.
- Use blind hiring techniques to reduce hiring bias.
- Ensuring to track diversity metrics.
- Championing unconscious bias training.
- Allowing for flexibility at the interview stag
- etc.
These tactics ensure that the culture is progressive and in tune with the times. To attract the best candidates, a system that supports diversity and equality is a must.
Keeping Senior Management and Employee on Their Toes
The HR leader also keeps the management and employees in check. They can do these through the policy they create to support the organizational culture and suitable repercussions for not following due process. They can also have regular meetings with management to give feedback and updates and re-enforce the culture they want to build.
The Recruitment and Onboarding Process
The recruitment process is a candidate’s first taste of organizational culture. HR leaders need to make this process count, as the candidates will also evaluate the company as you assess them. The Onboarding process is the best time to indoctrinate an employee into the organizational values. You can do these by peering them up with a mentor who embraces the values and giving them a quick download of how things are done here.
HR is such a pillar in organizational culture that its role is the centerpiece of working culture. They are the cultural bridge between employees and management, meaning finding the balance that brings about employee satisfaction and achieves management’s strategic goals.
Choosing the right Culture for your Business
Most organizations have a primary culture with elements of other types. A good example is the tech firms of today.
These tech firms are more structured with elements of market and hierarchy culture. But most have a division or department in their organization that runs an adhocracy or clan type of system. They do this to promote the innovative and creative spirit.
If you decide your organization needs a new culture, the following steps will help when implementing one.
- Identify the Organizational Core Values: You can’t change what you don’t understand. Identifying the core values is the foundation on which you will build.
- The Direction of the Company? Are you changing direction? Or Are you growing an existing culture? What steps do you have to take? How will you communicate these steps? Recent companies are seeing their culture evolve or change to accommodate a remote workplace.
- Engage with Employees: Employees are a huge part of this process and so must be part of it. Not listening to your employees may lead to a disengaged, unhappy, less effective workforce. It may be worse, leading to resignation, which we are witnessing today as many are resigning because companies try to enforce office resumption in the workplace.
- Recruiting the Right Minds: In the future, recruiting employees who share the company values and sentiments will solidify this new culture.
- Monitor and be Patient: Monitoring the cultural shift is crucial as it can mean you may need to make some changes. It also means being patient with the process.
Conclusion
Organizational culture constantly evolves, and HR plays a crucial role in ensuring it develops well. Companies will always need a reason to improve their culture, and having an effective HR can make that process easy. But remember that it’s still a team effort, and HR needs to work directly with the upper management.
