Business

The Culture Equation – Taking the Mystery Out of Organizational Culture

Innovative studies such as the books of Jim Collins, built to last Y Good to excellent and John Kotter’s book, Corporate Culture and Performance have shown that while an organization’s culture powerfully shapes its operating style and can positively (or negatively) affect the performance of work groups and entire organizations culture it has remained too complex and somewhat of a mystery for most organizations. This article identifies the constituents of organizational culture and formulates them into a Cultural Equation(TM) that describes what organizational culture is in simple and concrete terms (see below).

PDI ↔ COI ↔ ROI = Actual results (TM)

Managers can use this simple equation to improve performance at the organizational, work group, and individual employee levels simultaneously. Culture Equation(TM) terms are defined as follows:

  • POI = Pattern of Interaction (Doing, Informal Rules, Actions, Interactions, Group Learning)
  • COI = Context of interaction (for example, formal rules, structures, systems, location)
  • ROI = Repository of Interaction (Unspoken Assumptions, Belief Structure, Meaning, History)
  • Current Results: The Current Results that an organization obtains, not its goals

The key idea is that organizational culture is made up of the four terms of the equation, with each term being a distinct (but interdependent) category of business elements that interact with each other to produce an organization’s financial and nonfinancial results. It is the interaction of the four terms that creates the organizational culture and many managers experience this interaction as the Invisible Bureaucracy(TM) of culture.

An organization’s culture is created, solidified, and reinforced through the powerful integration mechanisms described below. The strength of these entrenchment mechanisms indicates: a) how strong the culture is, b) how explicit (or implicit) the teaching and/or message of the culture is, and c) how intentional (or unintentional) they are. the actions and interactions of the culture are.

  • Primary inclusion mechanisms: Formal and informal rewards are the main integrative mechanisms to reinforce the culture of an organization because they define what actions and interactions Really do, for example, what people should focus their time, energy and resources on. what organization He says reward is COI (formal), but what really rewards is POI (informal), and the informal rewards have the most powerful effect in creating, reinforcing, and maintaining organizational culture. In fact, the larger the gap between POI and COI, the more powerful the keying effect will be.
  • Secondary inclusion mechanisms: These include organizational design (structures and systems), geographic location, physical space, decor, facilities, equipment, policies, procedures, formal statements about core ideology (purpose, core values), and philosophy. These are primarily COI, but what these items “mean” (ROI) within a specific culture, and the actual day-to-day activities (POI) within this context reinforce, solidify, and integrate the term COI into the above cultural equation. (TM).
  • Tertiary inclusion mechanisms: The purpose of culture is to “teach” people how to “see” the world, and the third integrative mechanism is how this is accomplished, for example, through teaching, training, indoctrination, and interpretation about what PDI, IOC and current results. mean within the context of the organization’s culture (that’s not how we do it, or see it, around here). Organizational rituals, ceremonies, traditions, heroes, stories, and key historical events are also tertiary insertion mechanisms. These are primarily ROI, but can also be applied to the other terms in the Cultural Equation(TM). ROI is the hardest mechanism to change directly through teaching, training, indoctrination, and interpretation of events in organizational life because the unspoken beliefs and assumptions that make up ROI emerge naturally (unconsciously) as a consequence of observing the interaction of POIs within the context of COI.
  • Repetition: Over time, the repetitive day-to-day experience of POI, COI, ROI, and current results helps to migrate these cultural elements to autopilot operations and eventually become the reality of the organization, e.g. how is it here.

Most culture theorists focus on one or two of the terms of the Cultural Equation(TM) as the key elements that define what organizational culture is, but few systematically consider the four terms and their interdependence with each other. For example, Edgar Schein focuses primarily on unspoken beliefs and assumptions (ROI) and the context in which they occur (COI); David Hanna focuses primarily on observable work habits and practices to explain how an organization’s culture actually works, e.g. eg, the interaction between POI and COI to produce the actual results of an organization; and John Kotter and James Heskett focus on linking Current Results to the level of flexibility in the POI as found in Theory I: Strong Cultures, Theory II: Strategically Appropriate Cultures, and Theory III: Adaptive Cultures.

The Cultural Equation(TM) can be applied to all organizations, of any size, in any industry, in any country, regardless of their governance structure (for-profit, nonprofit, government), products, and/or or services produced, number of locations and phase of the corporate life cycle. Organizational culture can be analyzed from two very different, but interdependent perspectives, reflecting the Individual-Collective(TM) Paradox, for example, organizations are collective and cultural entities that are led, managed, and changed by one person at a time:

  • Bottom-up analysis
  • top down analysis

HAS top down analysis analyzes culture from the perspective of shared collective patterns of POI, COI, and ROI that powerfully shape the actions and interactions of managers and staff. From this perspective, culture has emergent properties that take the form of patterns, structures, and processes that are not directly reducible to the actions, interactions, and personalities of individual managers and staff members, although managers and key personnel (culture carriers) have a more powerful effect on creation, reinforcement and maintenance of cultural norms.

HAS bottom-up analysis analyzes culture from the perspective of the basic components of culture in groups of 2, 3 and 4, the main themes being: a) the fact that more than 85% of the sources of performance problems and conflict in groups of work come from outside the work group into the organization’s structures, systems, and culture. From this perspective, the actions, interactions, and personalities of individual managers and staff members cannot “add up” to equal collective cultural norms, although managers and key staff (culture carriers) have a more powerful effect in creating , reinforcement and maintenance. the elements of culture.

If a work group or organization is more or less successful in generating revenue and meeting the challenges of the business environment, the pattern represented by the terms in the Cultural Equation(TM) is put on autopilot and becomes, the way it’s done around here. Over time, an organization’s specific Culture Equation(TM) configuration reaches a state of equilibrium and solidifies within the context of a business environment that exerts definable forces on the business. As David Hanna says, All organizations are perfectly designed to get the results they get! For better or worse, the system finds a way to balance its operation to achieve certain results.. When new employees are hired, they are forced to compare their own ways of seeing the world from previous jobs with what happens in this organization and try to make sense of these ways of working. Experienced employees have long internalized the organization’s ways of seeing and working, so they are on autopilot and powerfully shape the decisions they make. Employees who do not (or cannot) internalize the way of seeing and the ways of working of this organization as codified in Culture Equation(TM) typically do not stay with an organization.

Bottom line: Whether a leader is the founder of a new company or a top or middle line manager in a well-established company, one of their most important tasks is to to create, managementand (if necessary) to destroy organizational culture in order to obtain the desired results for the organization or work group. The precise definition of culture presented in Culture Equation(TM) and the built-in mechanisms described above provide leaders and managers with a powerful set of tools for doing so.

Leave a Reply

Your email address will not be published. Required fields are marked *