Why Organizational Culture

1365 Words6 Pages
1. Introduction:
Each individual has his/her character, by which his/her type or feature is defined. Similarly, each nation, race has its personality, known as its culture. Corporations, being a kind of organization, also have their own personalities, and are more typically known as organizational cultures. Understanding how culture is created, communicated, and changed in an organization is important for people in the organization and will help one be more effective in his/her organizational life.

2. What Is Organizational Culture & Why It Matters
First of all, we need a definition for organization culture: Organizational culture refers to a system of shared assumptions, values, and beliefs that show employees what is appropriate and inappropriate
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In a survey conducted by the management consulting firm Bain & Company in 2007, worldwide business leaders identified corporate culture as important as corporate strategy for business success (HR Focus, Sep, 2007). In addition, culture, or shared values within the organization, may be related to increased performance. Researchers found a relationship between organizational cultures and company performance, with respect to success indicators such as revenues, sales volume, market share, and stock prices (Kotter, 2008). At the same time, it is important to have a culture that fits with the demands of the company’s environment (Arogyaswamy & Byles, 1987). For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer as a result of its culture. In other words, just as having the “right” culture may be a competitive advantage for an organization, having the “wrong” culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.
In
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When an individual established his own business as an entrepreneurs, the way he chose to do business determines the organization’s rules, the structure set-up in the company, and the people he hired for company. For example, Microsoft’s aggressive nature is often traced back to Bill Gates and his competitiveness. According to one anecdote, his competitive nature even extends to his personal life such that one of his pastimes is to compete with his wife in solving identical jigsaw puzzles to see who can finish faster (Schlender, 1998). Similarly, Joseph Pratt, a history and management professor, notes, “There definitely is an Exxon way. This is John D. Rockefeller’s company, this is Standard Oil of New Jersey, this is the one that is most closely shaped by Rockefeller’s traditions. Their values are very clear. They are deeply embedded. They have roots in 100 years of corporate history.” (Mouawad,
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