What is Organisational Culture? Why is It Important?

Extensive research has shown that organizational and team culture significantly influence company project management. Project managers' approaches can vary across different business departments or teams.

Understanding and recognizing the organizational culture is crucial for effective project management. It enables project managers to focus on achieving goals, minimizing conflicts, and adapting to the organisation's specific context. By aligning strategies and leveraging the existing structures, project managers can foster collaboration and create an environment conducive to project success. This awareness also helps identify challenges and implement appropriate interventions to ensure smooth project implementation. Overall, embracing organizational culture enhances project managers' effectiveness and the achievement of project objectives.

What is Organisational Culture?

Organisational culture encompasses a system of assumptions, beliefs, values, and behavioural norms that shape an organisation. It is expressed through symbols and comprises cognitive and symbolic elements.

Cognitive Elements: Values, Beliefs, and Attitudes

The cognitive elements of organisational culture include values, beliefs, and attitudes that influence individuals' perceptions of the world. These elements provide a framework for decision-making and guide actions within the organisation. They shape how employees approach work, interact with others, and make choices aligned with the organisational values.

Symbolic Elements: Tangible and Intangible Representations

The symbolic elements of organisational culture manifest through tangible and intangible representations. Tangible representations include material objects and artefacts that reflect the organisation's values and norms. They can be observed in the physical workspace, office design, and visual elements of the company's branding. Intangible representations, such as rituals, language, and shared experiences, contribute to the symbolic dimension of culture. They shape how employees communicate, collaborate, and establish a sense of identity within the organisation.

Behavioural Manifestations and Hierarchy Culture

Employees' behaviours serve as observable manifestations of organisational culture. How individuals interact, collaborate, and solve problems within the workplace contributes to the cultural fabric. Additionally, the hierarchy culture within the organisation, including power distribution, decision-making processes, and authority structure, significantly influences the overall culture. It shapes the dynamics of relationships, communication patterns, and the perception of authority within the organisation.

Communication and Visual Identity

Communication plays a crucial role in expressing and shaping organisational culture. The choice of language, communication channels, and information-sharing methods contribute to the cultural fabric. Effective communication practices promote transparency, collaboration, and alignment with organisational values. Furthermore, the appearance of the physical workspace, employee attire, and branding elements visually represent the cultural identity, reinforcing the desired values and creating a cohesive organisational image.

In conclusion, organisational culture is a complex construct encompassing cognitive and symbolic elements. It influences individuals' perceptions, behaviours, and decision-making within the organisation. Understanding and managing corporate culture is vital for leaders and stakeholders to foster a positive work environment, align actions with values, and promote overall organisational success.

Why is Organisational Culture Important?

The significance of organisational culture in companies cannot be overstated, as it influences various aspects of an organisation's functioning and success. By understanding its importance, leaders of companies can harness the power of organisational culture to create a positive and productive work environment for employees.

Influence on Strategic Decisions

Organisational culture plays a pivotal role in shaping strategic decisions within an organisation. The shared company values, beliefs, and norms provide a framework that guides decision-making processes, ensuring that strategic choices align with the organisation's core principles and long-term objectives.

Coordination Mechanism

A well-established organisational culture acts as a coordination mechanism, facilitating the alignment and coordination of organisational behaviour. When employees share a common set of certain values and beliefs, it becomes easier to establish a unified approach to work, fostering collaboration and synergy among employees from different teams and departments.

Control Mechanism

Organisational culture serves as a control mechanism that guides and regulates organisational behaviour. Establishing a set of norms and expectations provides employees with clear guidelines on how to conduct themselves, make decisions, and interact with others. This creates a sense of order and consistency, contributing to a harmonious work environment.

Conflict Reduction

One of the key benefits of a strong organisational culture is its ability to minimise conflicts within the organisation. Employees who share common values and norms are more likely to find common ground, resolve conflicts amicably, and maintain positive working relationships. This increases productivity, employee satisfaction, high employee engagement, and overall organisational effectiveness.

Motivator

A well-defined and positive organisational culture can be a powerful motivator for employees. When employees identify with the organisation's values and feel a sense of belonging, they are more likely to be motivated, committed, and engaged. This intrinsic motivation stems from the employee experience, workplace culture and alignment of personal values with the organisation's mission and vision, creating a sense of purpose and fulfilment.

In summary, organisational culture plays a crucial role in influencing strategic business decisions, providing a coordination and control mechanism for employees, reducing conflicts, and motivating employees. By nurturing a strong and positive workplace culture, organisations and companies can create a cohesive, high-performing workforce that drives business success and achieves organisational goals.

Subculture within Organisations

Subcultures are a prevalent and inherent aspect of organisational dynamics arising from the diverse backgrounds, experiences, and cultures of individuals within the company. They manifest the innate human inclination to gravitate towards those who share similar perspectives and values.

The existence of four types of subcultures within an organisation can have both positive and negative implications. Their impact largely hinges upon the extent to which the company's mission, vision, and values are embraced and disseminated. Subcultures can be classified into distinct categories, each with its characteristics:

Supportive Culture

This subculture serves as the bedrock of the organisational culture, aligning employees more closely with the company's values, stances, and behavioural norms. It acts as a driving force behind the cohesion and unity within the organisation.

Orthogonal Subculture

Coexisting alongside the dominant corporate culture, this subculture embraces and acknowledges the values and norms of the overarching organisational and corporate culture while maintaining its distinct set of beliefs and practices. It operates in parallel, lending diversity and alternative perspectives to the broader organisational landscape.

Counter Culture

Countercultures starkly contrast the prevailing values and norms of the organisation. They embody a set of values opposed to mainstream culture, often leading to conflicts and clashes of ideologies. However, countercultures can also serve as catalysts for organisational transformation and change, challenging conventional practices and prompting a critical examination of existing rules and structures.

Based on Position

Subcultures can also emerge based on hierarchical positions within the company. For instance, managers and their respective teams may form distinct subcultures, each with its values, norms, and behavioural patterns. This division can arise due to different responsibilities, perspectives, and power dynamics.

By recognising the existence of subcultures within the organisation, leaders can gain valuable insights into the diverse tapestry of ideas, perspectives and values that shape the overall organisational culture. It enables them to navigate the intricacies of subcultures and their interactions, facilitating better alignment and integration. Through open dialogue and understanding, leaders can foster a sense of cohesion and shared purpose, mitigating conflicts and harnessing the strengths and advantages offered by subcultures.

How to manage Organisational Culture and Subcultures?

To effectively manage organisational culture and subcultures, it is essential to follow a systematic approach that promotes alignment, understanding, and cooperation. The following steps can be taken to navigate and leverage the dynamics of dominant culture and subcultures within an organisation:

Identify Subcultures

The first step is to recognise the presence of clan culture and subcultures within the organisation. Subcultures can emerge based on departmental divisions, compensation structure, the hierarchy culture, geographic locations, or even different professional backgrounds. Identifying these subcultures and understanding their unique characteristics, norms, and behaviours is essential.

Determine Dominant Subculture

Once subcultures have been identified, it is crucial to determine the dominant subculture. This subculture exerts the most influence and has the most significant number of members within the organisation. Assessing the dominant subculture helps understand its impact on the overall organisational dynamics and potential challenges it may pose.

Understand Values and Beliefs

To effectively manage subcultures, leaders need to understand the core values and beliefs embraced by each subculture. This requires engaging with subculture members and conducting surveys, interviews, or focus groups to uncover their perspectives and motivations. By understanding their cultural values, and beliefs, leaders can identify areas of alignment and potential conflict between subcultures.

Align with the Company Culture

It is essential to connect the subcultures with the overarching organisational culture to foster a sense of unity and collaboration. This involves emphasising shared core values that align with the company's vision and mission. By highlighting the common ground, leaders can promote a sense of team cohesion, facilitate effective communication, and reduce conflicts among team members.

By following these steps, organisations can foster a common culture that promotes collaboration and minimises conflicts among team members. When subcultures are aligned with the company's values and beliefs, employees are more likely to work together towards shared goals. This enhances goal achievement, improves the employee experience and, therefore, employee engagement, and contributes to a positive work environment.

Different Types of Organisational Cultures

Understanding the prevailing organisational culture is crucial for leaders to effectively adapt their leadership style and create a cohesive team and productive work environment. According to Schneider, a renowned expert in organisational culture, four core cultures can exist within an organisation, each with its distinct characteristics and implications.

Culture of Power

In a Culture of Power, the organisation operates under a leader-centric approach. Leadership control is exerted through various means, such as resource control or charismatic leadership. The organisation and leader hold significant influence and decision-making authority, which can result in a hierarchical structure. However, it is essential to note that this culture can potentially lead to internal power struggles and risks, notably if the leader lacks competence or fails to manage their position of power effectively.

Culture of Roles

A Culture of Roles strongly emphasises rules, procedures, and logical decision-making processes. In this culture, the organisation prioritises clearly defined positions and roles, and individuals must adhere to their responsibilities. The focus is maintaining order and structure, ensuring tasks are executed according to predetermined guidelines. Individual personalities take a backseat to the established roles within the organisation's culture. This culture can effectively ensure consistency and reliability, but it may limit flexibility and creativity in problem-solving.

Culture of Tasks

In a Culture of Tasks, the primary values revolve around success and accomplishment. This culture highly emphasises competence and achievement, valuing individuals who can deliver tangible results. Power and influence are typically held by the most capable individuals who consistently meet or exceed performance expectations. The organisation sets ambitious goals and prioritises the completion of tasks. This culture can foster a competitive environment and drive performance. Still, it may also create pressure and stress for employees if work-life balance and well-being are not adequately addressed.

Culture of Support

The Culture of Support is the rarest type of organisational culture. It places a strong focus on individual goals and interests. This best corporate culture values personal freedom and autonomy, allowing employees more flexibility in their work. It encourages a supportive and collaborative environment where employees feel empowered to voice their opinions and ideas. However, it is essential to note that this culture can present challenges in achieving organisational objectives if individual goals overshadow collective goals or if there is a lack of alignment between personal and organisational interests.

By understanding the different types of behaviour within organisational cultures, leaders can better navigate and adapt their leadership styles to create a harmonious and productive work environment. It is essential to recognise the existing culture within the organisation and leverage its strengths while addressing any potential risks or drawbacks.

By recognising the central culture, you can adjust what type of leader you need to be. Leadership is one of the most valued project management skills, and the Institute of Project Management has a course designed to help you better yours. The Project Leadership & Management Diploma course focuses on the capabilities and behaviours you need to be a great leader. Click here to learn more.

Sources:

• Project Management Institute (PMI)
• Janićijević, N. (2007). Organizational Culture - The Collective Mind of The Company.