The Diagnosing Organizational Culture Management Essay

For a long time, managers are becoming more and more aware of the concept of organizational culture and are examining it. Several studies have been conducted in this regard explaining different types of cultures and the ways that an organizational culture can affect an organization itself and its impact on other employee-related variables such as satisfaction, commitment, cohesion and performance etc. One such study in that continuum “Organizational Culture and job satisfaction” was conducted by Daulatram B Lund Professor of marketing, University of Nevada, USA, in 2003. In that study he used Cameron and freeman’s (1991) model of organizational culture which identifies four types of organizational cultures. Professor B. Lund spotted out the effect of each culture type on satisfaction of employees.

This empirical investigation examines the impact of organizational culture types on job satisfaction in a survey of marketing professionals in a cross-section of firms in the USA. Cameron and Freeman’s (1991) model of organizational cultures comprising of clan, adhocracy, hierarchy, and market was utilized as the conceptual framework for analysis. The results indicate that job satisfaction levels varied across corporate cultural typology. Within the study conceptual framework, job satisfaction invoked an alignment of cultures on the vertical axis that represents a continuum of organic processes (with an emphasis on flexibility and spontaneity) to mechanistic processes (which emphasize control, stability, and order). Job satisfaction was positively related to clan and adhocracy cultures, and negatively related to market and hierarchy cultures.

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We are using the same study as a benchmark and replicating the same research project in context of Pakistan (specifically Lahore). We used same Cameron and Freeman’s model of organizational culture. The four types of cultures identified by that model are Clan culture, Hierarchy culture, Adhocracy culture and Market culture. Every culture has its own unique attributes and characteristics which are explained later in this project. And how the level of contentment of employees varies in each type of culture is also the part of this study.

Figure I.I Overview of the Relationship

Overview of the Relationship

Market Culture

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Hierarchy Culture

Adhocracy Culture

Clan Culture

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Job Satisfaction

1.2 Background

1.2.1 Organizational Culture

The Concept of the organizational culture gained recognition in the early 1980s when prominent business periodicals featured articles on Corporate Culture and Organization (Lewis, 1996: Sheridan, 1992. Peters and Waterman (1985) article, in the search of the Excellence was the one of driving force behind the proliferation of this concept. Organizational Culture is extremely broad and inclusive in scope. It comprises a complex, interrelated, comprehensive and ambiguous set of factors (Quinn & Cameron 1999).

According to Schein 1999, culture is the property of a group that is formed when the group develops enough common experience. He stated that culture is very important phenomenon because it is an unconscious set of forces, Determining both individual and collective behaviors, Values, thought patterns, and way of perceiving.

At the organizational level, Schein (1999) stated that organizational culture is very critical because cultural elements determine strategy, goals, and modes of operating. He postulated that for organizations to become more efficient and effective, the role that culture plays in organizational life must be fully understood because decisions made without awareness of the operative cultural forces may have anticipated and undesirable consequences.

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Hatch and Schultz (1997) promulgated that organizational culture develops at all hierarchical levels, is founded on a broad-based history, and involves all organizational members. They perceived organizational culture as a symbolic context within which interpretation of organizational identity is formed and intentions to influence organizational image are formulated. The culture, they stated, should be considered in explanation of the development and maintenance of organizational identity.

Actually Organizational Culture one of the few areas, in fact, in which organizational scholars led practicing managers in identifying a crucial factor affecting organizational performance. In most instances, practice has led research, and scholars have focused mainly on documenting, explaining, and building models of organizational phenomena that were already being tried by management (e.g., TQM, downsizing, reengineering, and information technology). Organizational culture, however, has been an area in which conceptual work and scholarship have provided guidance for managers as they have searched for ways to improve their organizations’ effectiveness.

The reason organizational culture was ignored as an important factor in accounting for organizational performance is that it refers to the taken-for-granted values, underlying assumptions, expectations, and definitions present in an organization. It represents “how things are around here.” It reflects the prevailing ideology that people carry inside their heads. It conveys a sense of identity to employees, provides unwritten and, often, unspoken guidelines for how to get along in the organization, and enhances the stability of the social system that they experience. Unfortunately, people are unaware of their culture until it is challenged, until they experience a new culture, or until it is made overt and explicit through, for example, a framework or model. This is why culture was ignored for so long by managers and scholars. It is simply undetectable most of the time.

1.2.2 Job Satisfaction

Job satisfaction has received significant attention in the studies of work place. This is due to general recognition that this variable can be major determinant of organizational performance and effectiveness. Some studies have reported strong correlations of the job satisfaction and organizational commitment (Behnkoff 1997). When the employees are dissatisfied at work, they less committed and will look for other opportunities to quit. If the opportunities are unavailable, they may emotionally or mentally withdraw from the organization. Thus the job satisfaction and organizational commitment are important attitudes in assessing employees’ intentions to quit and overall contribution to the organization. Here Organizational commitment can be considered as a part or consequence of job satisfaction because it is ultimately the organizational commitment which will affect the performance of an organization.

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The concept of job satisfaction, in relation with other organization variables, has been studied many times such as task demands (Dodd and Ganster 1996, Zaffare 1994, Ting 1997 and Blau 1999), job satisfaction and leader member exchange (Podsakaff et al, 1996 , Sparks and Schenk, 2001) , job satisfaction and social structure (Sargent and Terry 2000) ,task demand, social structure and job satisfaction (Seers and Graen 1984, De Jonge 2001) ,job satisfaction and commitment (Lincoln and Kalleberg (1990) , Vandenberg and Lance (1992) , Farkas and Tetric (1989) and Currivan (1999) job satisfaction and demographic characteristics such as age, gender, tenure, and education (Clark, 1993; Clark and Oswald, 1995; Hickson and Oshagbemi, 1999; Oshagbemi, 1998, 2000)

These studies show that a lot of work has been done on determining the relationship between job satisfaction and different variables but few efforts are made on determining the relationship of job satisfaction with organizational culture. Out of these few Odom et al. (1990) examined the relationships between organizational culture and three elements of employee behavior, namely, commitment, work-group cohesion and job satisfaction. They concluded that the bureaucratic culture was not the culture most conductive to the creation of employee commitment, job satisfaction and work cohesion. Nystrom (1993) found that employees in strong culture tend to express great organizational commitment as well as higher job satisfaction. He investigated health care organizations.

One of the actual investigations concerning the relationship of job satisfaction and organization culture has been done by Daulatram B. Lund who conducted a research on marketing professionals in cross section of firms in the USA. He used Cameron and Freeman’s (1991) model of organizational culture, comprising of clan, adhocracy, hierarchy, and market, as the conceptual framework for analysis.

1.3 Definitions

1.3.1 Organizational Culture

Although over 150 definitions of culture have been identified (Kroeber & Kluckhohn, 1952), the two main disciplinary foundations of organizational culture are sociological (e.g., organizations have cultures) and anthropological (e.g., organizations are cultures). Within each of these disciplines, two different approaches to culture were developed: a functional approach (e.g., culture emerges from collective behavior) and a semiotic approach (e.g., culture resides in individual interpretations and cognitions). The primary distinctions are differences between culture as an attribute possessed by organizations versus culture as a metaphor for describing what organizations are. The former approach assumes that researchers and managers can identify differences among organizational cultures, can change cultures, and can empirically measure cultures. The latter perspective assumes that nothing exists in organizations except culture, and one encounters culture anytime one rubs up against any organizational phenomena. Culture is a potential predictor of other organizational outcomes (e.g., effectiveness) in the former perspective, whereas in the latter perspective it is a concept to be explained independent of any other phenomenon.

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Most discussions of organizational culture (Cameron & Ettington, 1988; O’Reilly & Chatman, 1996; Schein, 1996) agree with the idea that culture is a socially constructed attribute of organizations which serves as the “social glue” binding an organization together. A majority of writers have come to an agreement that it refers to the taken-for-granted values, underlying assumptions, expectations, and definitions present which characterize organizations and their members (that is, they have adopted the functional, sociological perspective). Culture represents “how things are around here” or prevailing ideology that people carry inside their heads. Culture affects the way organization members think, feel, and behave.

Importantly, the concept of organizational culture is distinct from the concept of organizational climate. Climate refers to more temporary attitudes, feelings, and perceptions of individuals (Schneider, 1990). Culture is an enduring, slow to change, core characteristic of organizations; climate, because it is based on attitudes, can change quickly and dramatically. Culture refers to implicit, often indiscernible aspects of organizations; climate refers to more overt, observable attributes of organizations. Culture includes core values and consensual interpretations about how things are; climate includes individualistic perspectives that are modified frequently as situations change and new information is encountered. The approach to change in this article focuses squarely on cultural attributes rather than climate attributes. It considers the “links among cognitions, human interactions, and tangible symbols or artifacts typifying an organization” (Detert, Schroeder, & Mauriel, 2000:853), or, in other words, “the way things are” in the organization rather than people’s transitory attitudes about them.

Organizational culture is defined by Brent Ruben and Lea Stewart (1998) as the sum of an organization’s symbols, events, traditions, standardized verbal and nonverbal behavior patterns, folk tales, rules, and rituals that give the organization its character or personality. Ruben and Stewart note that organizational cultures are central aspects of organizations and serve important communication functions for the people who create and participate in them.

1.3.2 Job Satisfaction

Job satisfaction can be defined in many ways as there is no universal definition of the concept of job satisfaction (Mumford, 1991), it can be considered as a multi-dimensional concept that includes a set of favorable or unfavorable feelings by which employees perceive their job (Davis and Newstro, 1999). Churchill (1974) defines job satisfaction according to all the characteristics of the job itself and of the work environment in which employees may find rewards, fulfillment and satisfaction, or conversely, sentiments of frustration and/or dissatisfaction. Price and Muller (1986) identify job satisfaction by the degree to which individuals like their job. Job satisfaction has been defined as a positive emotional state resulting from the pleasure a worker derives from the job (Locke, 1976; Spector, 1997) and as the affective and cognitive attitudes held by an employee about various aspects of their work (Kalleberg, 1977; Mercer, 1997; Wright and Cropanzan, 1997; Wong, 1998. In general, overall job satisfaction has been defined as “a function of the perceived relationship between that one wants from one’s job and what one perceive it as offering”(Locke, 1969).

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1.4 Background of Problem

The concept of culture is half a century old. Culture has always been a cornerstone variable in the study of International Business Subjects. Organizational culture refers to a system of’ shared meaning held by members that distinguishes the organization from other organizations. This system of shared meaning is, on closer examination, a set of key characteristics that the organization values. An organization’s culture can be understood as the sum total of the assumptions, beliefs, and values that its members’ share and is expressed through “what is done, how it is done, and who is doing it.” Organizational culture is the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.

All organizations have cultures just like all people have a personality. A culture is a persistent way, patterned way of thinking about the tasks of human relationships within an organization.

On the other hand job satisfaction is a multi-dimensional concept that includes a set of favorable or unfavorable feelings by which employees perceive their job. Job satisfaction can be identified by the degree to which individuals like their job. Job satisfaction has been defined as a positive emotional state resulting from the pleasure a worker derives from the job (Locke, 1976; Spector, 1997) and as the affective and cognitive attitudes held by an employee about various aspects of their work (Kalleberg, 1977; Mercer, 1997; Wright and Cropanzan, 1997; Wong, 1998. In general, overall job satisfaction has been defined as “a function of the perceived relationship between that one wants from one’s job and what one perceive it as offering”(Locke, 1969).

There has been a long debate amongst researchers regarding the relationship between organizational culture and job satisfaction. Many researchers have found supporting evidence about the relationship between these two.

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By reviewing many articles that a lot of work has been done on determining the relationship between job satisfaction and different variables but few efforts are made on determining the relationship of job satisfaction with organizational culture. Out of these few Odom et al. (1990) examined the relationships between organizational culture and three elements of employee behavior, namely, commitment, work-group cohesion and job satisfaction. They concluded that the bureaucratic culture was not the culture most conductive to the creation of employee commitment, job satisfaction and work cohesion. Nystrom (1993) found that employees in strong culture tend to express great organizational commitment as well as higher job satisfaction. He investigated health care organizations.

One of the actual investigations concerning the relationship of job satisfaction and organization culture has been done by Daulatram B. Lund, who conducted a research on marketing professionals in cross section of firms in the USA. He used Cameron and Freeman’s (1991) model of organizational culture, comprising of clan, adhocracy, hierarchy, and market, as the conceptual framework for analysis.

On the basis of this study we are examining the impact of organizational culture on job satisfaction in Pakistan. For this purpose we have selected different organizations, service and manufacturing in Pakistan in order to examine the impact of different types of cultures in job satisfaction.

1.5 Problem Statement

Our research is about the influence of the organizational culture on job satisfaction. In this study we will identify the type of organizational culture in which employees have higher level of job satisfaction. Basically there are four types organizational culture- Clan Culture, Market Culture, Adhocracy Culture, Hierarchy Culture. We combined these cultures into two groups on the basis of some common dimensions. These groups are named as Organic Culture (clan and adhocracy) and Mechanistic Culture (hierarchy and market). For the purpose of research we have developed two hypotheses which are as follows,

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1.5.1 Hypothesis

H0: Employees in organic culture (clan & adhocracy) have high level of job satisfaction than in mechanistic culture (hierarchy & market).

H1: Employees in the mechanistic culture (hierarchy & market) have high level of job satisfaction than in organic culture (clan & adhocracy).

CHAPTER 2

Literature Review

A number of articles from electronic journals and public journals have been studied regarding the concerned topics. Some related books have also been consulted. Literature has been reviewed in terms of both researchers and theorist’s point of view and the valuable findings are as follow:

2.1 Organizational Culture

All organizations have cultures just like all people have a personality. A culture is a persistent way, patterned way of thinking about the tasks of human relationships within an organization. In anthropology, culture is the foundational term through which the orderliness and patterning of much of our life experience can be explained (Benedict, 1934) so; culture is the inquiry into the phenomenon of social order. Culture gives an organization distinctive way of seeing and responding to the world. It expresses the values or social ideals and the beliefs that organization members come to share (Louis, 1980; Siehl and Martin 1981). The values or patterns of beliefs are manifested by symbolic devices such as myths (Rowland, 1982), rituals (Deal and Kennedy, 1982), stories (Mitroff and Kilmann, 1976), legends (Wilkin and Martin 1980) and specialized language (Andrew and Hirsch, 1983).

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Edger Schein defines organizational culture as the “residue of success” within an organization. According to Schein, culture is the most difficult organizational attribute to change. He describes three cognitive levels of organizational culture. The culture of a group can be defined as: A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. (Schein: 1985). Gareth Morgan describes culture as “an active living phenomenon through which people jointly creates and recreates the worlds in which they live.”

2.1.1 Levels of Culture

There are many kinds or levels of culture that affect individual and organizational behavior. At the broadest level, a global culture, such as a world religion’s culture or the culture of the Eastern hemisphere would be the highest level. At a less general level are national cultures (e.g., Pakistani culture) or subgroup cultures such as gender-based cultures (i.e., distinctive ways in which men and women view the world), ethnic group cultures (e.g., differences between punjabi and pathan), occupational cultures (e.g., police culture), or socioeconomic group culture (e.g., rich versus poor). Each of these cultures is generally reflected by unique language, symbols, and ethnocentric feelings. Still less broad is the culture of a single organization, which is the level at which this study is aimed. An organization’s culture is reflected by what is valued, the dominant managerial and leadership styles, the language and symbols, the procedures and routines, and the definitions of success that make an organization unique. This level of culture analysis in relation with the job satisfaction is of primary interest in this study. However these were different cultures which affect the organizational behavior and performance, further the organizational culture is divided into three levels by Schein (1999).

According to Schein (1999), culture exists at several levels in an organization, which go from very visible to very tacit and invisible. Three levels for culture are outlined here

1. Artifacts – The first level is the most manifest level and the easiest to observe. Artifacts are what you can see, hear and feel in organization environment. It consists of the physical and social organization, which includes the architecture, technology, office layout, manner of dress and how each person visibly interacts with each other and with organizational outsiders, and even company slogans, mission statements and other operational creeds.

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2. Espoused Values – The second level explains the behavior pattern in the first level. Constituents of this level provide the underlying meanings and interrelations by which the patterns of behaviors and artifacts may be deciphered. At this level, local and personal values are widely expressed within the organization. Organizational behavior at this level usually can be studied by interviewing the organization’s membership and using questionnaires to gather attitudes about organizational membership.

3. Shared Tacit Assumptions – The third level is an unconscious level of culture at which the underlying values have, over a period of time, been transformed and are taken for granted as an organizationally acceptable way of perceiving the world. The underlying basic assumptions, which first started as espoused values are also the most difficult to relearn and change. These are the elements of culture that are unseen and not cognitively identified in everyday interactions between organizational members.

Figure 2.1 4 Levels of Culture and their Interaction (Schein, 1999)

These were different level of culture at organizational level however inside an organization, subunits such as functional departments, product groups, or even teams may also reflect their own unique cultures. Difficulties in coordinating and integrating processes or organizational activities, for example, are often a result of culture clashes among different subunits. For example, it is common in many organizations to hear of conflicts between marketing and manufacturing, or to hear of disparaging comments about the fuzzy-headed HR department, or to hear put-downs of the white-coats in R&D. One reason is that each different unit often has developed its own perspective, its own set of values, and its own culture. As at macro level all units of the organization have to coordinate and work together such cultural differences influence the job satisfaction of individuals. It is easy to see how these cultural differences can fragment an organization and make high levels of effectiveness impossible to achieve. Emphasizing subunit cultural differences, in other words, can foster increase in job dissatisfaction, alienation and conflict.

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On the other hand, it is important to keep in mind that each subunit in an organization also contains common elements typical of the entire organization. Similar to a hologram in which each unique element in the image contains the characteristics of the entire image in addition to its own identifying characteristics, subunit cultures also contain core elements of the entire organization’s culture in addition to their own unique elements. There is always underlying glue that binds the organization together. In assessing an overall organization’s culture, therefore, one can focus on the entire organization as the unit of analysis, or it is possible to assess different subunit cultures, identify the common dominant attributes of the subunit cultures, and aggregate them. This combination can provide an approximation of the overall organization’s culture.

2.2 Diagnosing Organizational Culture

According to Cummings and Worley (1997), researchers and practitioners have developed a number of useful approaches for diagnosing organizational culture. They described three different perspectives: the behavioral approach, the Competing Values approach, and the deep assumption approach. Each diagnostic perspective, even though different, is yet complementary arid focuses on particular aspects of organizational culture.

2.2.1 Behavioral Approach

According to Cummings and Worley (1997), the behavioral approach provides specific descriptions about task performance and the management of relationships in an organization. It emphasizes the surface level of organizational culture, the pattern of behaviors that produce business results and assesses key work behaviors that can be observed. The behavioral approach can be used to diagnose and assess the cultural risk of trying to implement organizational changes needed to support a new strategy because significant cultural risks can result when changes that are highly important to implementing a new strategy are incompatible with the existing patterns of behavior. It is an important approach to use when managers want to determine whether implementation plans should be changed to manage around the existing culture, whether the culture should be changed, or whether the strategy itself should be modified or abandoned.

2.2.2 Deep Assumptions Approach

The deep assumption approach typically begins with the most tangible level of awareness and then works down to the deep assumptions. It emphasizes the deepest levels of organizational culture, which are the generally unexamined assumptions, values, and norms that guide members’ behavior and that often have a powerful impact upon organization effectiveness.

2.2.3 The Competing Values Approach

The Competing Values approach assesses an organization’s culture in terms of how it resolves a set of value dilemmas. It suggests that an organization’s culture can be understood in terms of four important “value pairs”; each pair consists of contradictory values placed at opposite ends of a continuum. The four value pairs are internal focus versus external focus, organic processes versus mechanistic processes, innovation versus stability, and people orientation versus task orientation. Organizations are faced with these competing values of internal versus external focus and must choose between attending to internal operations or their external environment for continued survival. Too much emphasis on either can result in missing important changes in the competitive environment. As our study is identify organizational culture in which people have more job satisfaction and for the identification of organizational culture we will use competing values frame work. Therefore Competing Values Approach will be explained briefly here so that we can understand that how this approach will be used in our research method.

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2.3 Measuring Organizational Culture through Competing Values

Through decades of empirical research, scholars have established abundant links between organizational culture and organizational performance. While previously businesses were either unaware of culture’s importance or believed it too difficult to manage, today they recognize that it can be used for competitive advantage. This is something that Apple Computer gets. By leveraging their culture of innovation toward product as well as internal processes, they have been able to survive despite incredible competition as well as venture into new and profitable markets. But in order to use culture strategically, a company first needs to understand its culture. Culture is defined as complex issue that essentially includes all of a group’s shared values, attitudes, beliefs, assumptions, artifacts, and behaviors. Culture is broad encompassing all aspects of its internal and external relationships and culture is deep in that it guides individual actions even to the extent that members are not even aware they are influenced by it. Scholars tend to agree that the root of any organization’s culture is grounded in a rich set of assumptions about the nature of the world and human relationships. For example, the underlying belief that people are selfish and only out for themselves might unwittingly influence a company’s attitudes and behaviors toward outside salespeople, vendors, and consultants. This is profound stuff that is largely invisible, unspoken, and unknown to an organization’s members. So is it possible to really know a company’s culture? While admittedly it would be very difficult (and some might claim impossible) task to fully account for all components of a company’s culture, the dominant attributes can generally be identified. In focusing on “effective organizations”, research has uncovered many critical dimensions. John Campbell (1974) and his fellow researchers identified thirty-nine important indicators. While such a list is helpful, it is still impractical for organizations to account for so many dimensions to identify their own culture. Realizing this, Robert Quinn and John Rohrbaugh (1983) reviewed the results of many studies on this topic and determined that two major dimensions could account for such a broad range. Their Competing Values Framework combines these two dimensions, creating a 2×2 matrix with four clusters.

The Competing Values Framework has proven to be a helpful framework for assessing and profiling the dominant cultures of organizations because it helps individuals identify the underlying cultural dynamics that exist in their organizations. This framework was developed in the early 1980s as a result of studies of organizational effectiveness (Quinn & Rohrbaugh, 1981), followed by studies of culture, leadership, structure, and information processing (Cameron, 1986; Cameron & Quinn, 1999).

The framework consists of two dimensions, one that differentiates a focus on flexibility, discretion, and dynamism from a focus on stability, order, and control. Some organizations are effective if they are changing, adaptable, and organic, whereas other organizations are effective if they are stable, predictable, and mechanistic. This dimension ranges from organizational versatility and pliability (flexibility) on one end to organizational steadiness and durability on the other end.

The second dimension differentiates a focus on an internal orientation, integration, and unity from a focus on an external orientation, differentiation, and rivalry. That is, some organizations are effective if they have harmonious internal characteristics, whereas others are effective if they focus on interacting or competing with others outside their boundaries. This dimension ranges from organizational cohesion and consonance on the one end to organizational separation and independence on the other. Together these two dimensions fo

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