professional diploma in the psychology of organisations

Professional Diploma in

The Psychology of Organisations

The way we do things around here Module 3 Lesson 3

Summary Notes

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PROFESSIONAL DIPLOMA IN THE PSYCHOLOGY OF ORGANISATIONS

Contents

3 Introduction

3 Lesson Outcomes

3 Defining organisational culture

7 A practical model of organisational

culture

10 Measuring organisational culture

11 Conclusion

12 References



Introduction Imagine you are starting a new job at a new company. You arrive bright and early for your first day, you are dressed in a brand-

new suit, your shoes are shined, your hair is brushed, and you have got a bright smile, ready to meet new faces and take on

new challenges. You go to your first meeting and suddenly it strikes you: everyone there is wearing shorts and t-shirts. No one

arrives on time and when they do, they barely greet each other. One of the employees falls asleep in the meeting. You ask

yourself, how is this allowed to go on? Why are they all behaving like this? Is this the way they do things around here? You

have just experienced organisational culture shock. Suddenly you have a whole new way of doing and being as an employee

to get used to. And the question is, can you get used to it? Today's lesson is all about organisational culture. We are going to

unpack what it is, how it gets created and why it is so powerful.

Defining organisational culture What is organisational culture? Organisational culture is the typical and accepted patterns of behaviour, much like any other

kind of culture. It is the way in which people behave and what is seen to be normal in that culture. Depending on the accepted

norms of the organisational culture, employees will or will not behave in certain ways. Culture defines what is common practice

in a company. The really important point to make is that in the norm, new employees conform to organisational culture, and

so behaviour norms are reinforced and inculcated.

What influences or shapes organisational culture?

In any organisation, culture is shaped by multiple factors, all of which inter-relate and influence each other. These are the

common shapers of culture in the workplace:

Leadership

The values and principles of senior leadership set the tone for culture. What they see as important and the way they behave

becomes the model that other people follow and emulate. The way leaders take risks, what they see as acceptable behaviour

and their dominant views infiltrate the culture. Who the leader is and the way they see the world often becomes the defining

feature and character of the organisation’s culture.

Structure

In our previous lesson we learnt about organisational design, and how the way companies are structured and designed

profoundly affects their culture. Organisational structure determines the levels of authority and control, and that has an impact

on the way people do things. For example, do employees feel free, autonomous, able to make decisions and be creative? Or

are they heavily monitored? Are they very much under the control of supervision where people have high degrees of authority?

The power dynamics created through organisational design will affect the way in which people operate and behave.

Lesson outcomes By the end of this lesson, you should be able to:

• Explore organisational culture theory

• Understand the drivers of culture in a workplace

• Unpack a practical model of organisational culture

• Analyse why changing the culture of an organisation is challenging



Reward practices

Reward practices are a very powerful shaper of culture. The way in which you reward people gives rise to certain kinds of

behaviours which effectively become ‘the way we do things around here’. The questions one should ask are: ‘What is

celebrated and rewarded in the organisation?’ What are people incentivised to do? How are people deterred from certain

ways of thinking and behaving? Who is held up as the model employee? What kind of behaviour gets you noticed and

rewarded? Ultimately, whatever gets measured, monitored, and incentivised in the organisation will effectively create the

culture.

History and memory

Every organisation has a history, a timeline, and a memory journey. There is always a narrative about where the organisation

came from, how it began and how it progressed. The prominence of that narrative plays a large part in shaping the culture.

Some organisations have a very proud history. Companies such as General Electric or Coke who have been operating for a very

long time. They will hold onto some very proud traditions, and that history becomes inculcated in the culture of the

organisation. It is also something that all employees are proud of and want to retain in the way they behave.

Another way that history and memory shape culture is through the heroes and the stalwarts of the company. Perhaps it could

be the founder, the person who started the organisation, or it could be somebody who saved the organisation from failure.

Those heroes and role models get spoken about over and over again and their memory gets kept alive. The stories and

anecdotes about those previous leaders or employees are told to new joiners, and so they become part of the psyche of the

organisation. Some organisations that are holding onto their history and memory will display signs or artefacts of that history

very prominently. It is almost a sign for employees of what is really respected, revered, and valued.

Signs and symbols

Signs and symbols are another shaper of organisational culture. These are the unspoken but powerful signifiers of what is

valued and important. Imagine you walk into the building of a company and right there at the reception where everybody

enters, there is a big sign which shows the financial performance of that year. What this signifies to employees is that the

company really cares about performance, cares about profit, cares about hitting targets, and is really driven by those things.

Those signs and symbols of the culture send an unspoken message to employees about what gets valued and what the culture

is really about. At times, this symbolism is intentional and sometimes it is unintentional. Nonetheless, it communicates to staff

what the organisation values and acts as a reminder to employees what is required of them.



Key theorists of organisational culture There are many theories and models of organisational culture and many prominent management studies experts have

contributed to this field. Here are some key theorists whose work is regarded as fundamental to the organisational culture

field. Edgar Schein

Edgar Schein was a renowned professor at the M.I.T. Sloan School of Management. He proposed a model of culture which had

three main components. These were assumptions, values, and artefacts. Schein drew a distinction about what is below the line

and what is above the surface; what is observable and spoken about, and what is covert and less obvious. He also distinguished

between the espoused values of the organisation i.e., what they say they value, and then the real underlying assumptions

which is what they really value.

Together, he said that these three components create the organisational culture. He also said that organisations do not adopt

a culture in a single day. They do not suddenly become something. They learn from past experiences and gradually over time,

start practising certain things. In this way, slowly, through the assumptions, values and artifacts of the company culture is

formed.

John Kotter

Kotter is a renowned Harvard professor and a management studies guru. He closely connected the idea of organisational

change to culture change. Effectively, he outlined eight steps to organisational culture change. He said that there are eight

important things that an organisation needs to go through in order to shift their culture. What is really important about John

Kotter's view about organisational culture is that he identified healthy and unhealthy characteristics of organisational culture.

He was able to draw this dichotomy between what is functional, what is good, what is valuable about organisational culture

and what is unhealthy or dysfunctional about organisational culture.

He also spoke about how some people will support or resist positive change, and he believed that this response to change is

actually ingrained in the culture of the organisation. He believed that the way in which people respond to change has much to

do with the culture of the company and less to do with the nature of change itself.



Geert Hofstede

Geert Hofstede was a contemporary Dutch social psychologist who only recently died, in February 2020. He developed the

Cultural Dimensions Theory. Effectively, he proposed six dimensions within a framework in order to understand culture.

Originally, he developed this framework in the organisational context when he was helping to research what employees value.

Later the model was applied to cross-cultural psychology, and today, this framework is a key way of understanding societal,

cultural differences.

The six dimensions and their meaning are the following:

Power distance: The degree to which the less powerful members of a society accept and expect that power is distributed

unequally. Effectively the extent to which they believe power is distributed appropriately.

Individualism: The Individualism/Collectivism dimension is about the relative importance of individual versus group interests.

Uncertainty avoidance: This dimension expresses the degree to which the members of a society feel uncomfortable with

uncertainty and ambiguity. It outlines the extent to which they prefer structure and rules.

Masculinity: The Masculinity/Femininity dimension is about what values are considered more important in a society. The

masculine side of this dimension represents a preference in society for achievement, heroism, assertiveness, and material

rewards for success. Usually, the society is then more competitive. In opposition, femininity stands for a preference for

cooperation, modesty, caring for the weak and quality of life.

Long term orientation: Every society has to maintain some links with its own past while dealing with the challenges of the

present and the future. Some societies prefer to maintain time-honoured traditions and norms while viewing societal change

with suspicion. Others are more pragmatic and prefer a future orientation.

Indulgence vs. restraint: Defined as the extent to which people try to control their desires and impulses, based on the way they

were raised.

Richard Barrett

The next way of understanding culture was developed by Richard Barrett. He developed this model of organisational culture

in the late 1990s while writing a book called ‘Liberating the Corporate Soul’. Effectively, Barrett built on Maslow's hierarchy of

needs, and he connected the idea of culture to values. He said that organisations have varied sets of values which are

prominent, and which drive the typical behaviour in the organisation. He identified seven levels of needs and seven value

classifications, and a way of measuring which values are most at play within a company.



He also articulated a key concept called cultural entropy in an organisation. Entropy is the level of decay in the culture. What

is dysfunctional or unhealthy about the organisational culture, which is something you can actually measure and track over

time.

A practical model of organisational culture We have spoken about how organisational culture can be defined as ‘the way we do things around here’. This means the typical

ways in which employees behave and understand the world of work. The model below is a practical way of understanding how

culture is created and how it can be shifted.

The dominant mindset is the commonly held perspective of the world that is held by people in the organisation. It is a view

about the context in which the organisation is located and in which it operates. It is a certain lens through which employees

see and understand the world around them at work. It becomes the typical way that problems get analysed and how issues

get understood.

The dominant discourse is about the common narrative, the descriptive language that is mainly used in the organisation and

how organisational issues are explained. The idea of discourse is that the way in which you talk about things, effectively creates

the reality. In this way, culture is socially constructed through talk, and the dominant discourse gives rise to the culture of the

company.



The dominant behaviour patterns are the typical ways that people interact with each other; the behaviour that they typically

demonstrate, and the kind of behaviour that is accepted and endorsed in the organisation. The dominant behaviour patterns

are created by what is allowed and not allowed within the company, and by the exemplary behaviour shown by leadership. It

is the common everyday interactions that take place during ‘moments of truth’. Those are the powerful and authentic points

when the way in which people behave signifies what is really allowed. It is the typical, the norm, the dominant behaviour

patterns which give rise to culture.

How do you change organisational culture? In order to shift the way we do things around here, there are few levers that can be actively managed in order to create change. These levers are very similar to influencers of culture that we previously discussed.

• The first of these are the people processes that exist in the organisation. These are the processes that are used to manage people, including things like recruitment, training, and performance management.

• Next, leadership is a powerful driver of culture. It is important to look at the expectations and standards set for leaders and how that is impacting their behaviour

• Another way in which you can shift culture is through the organisation’s design, its hierarchy and structure. What impact is the level of authority and control having on how people interact with each other and the power dynamics that exist?

• There are also specific projects and initiatives which are intentionally set up to change culture. They are targeted at shifting culture in a particular way, perhaps because they are intentionally designed to create awareness or to change the employee mindset about certain issues. A good example is safety. If you really want to inculcate the idea that safety comes first in the organisational culture, you might have a campaign around that which reminds and encourages certain safety conscious behaviours and stops others.

• Another lever to shift culture is the policies, rules and exceptions that exist in the organisation. This is about the phrasing in policies and rules, as well as the typical messaging in those documents about what is allowed or not allowed. It is also about the rules which govern the organisation and how those rules are actually applied.

• Looking at your reward and celebration practices and what is actually being incentivised in the organisation is another way to change culture. What is being celebrated, recognised, and endorsed? How is that driving people to behave in the company?

• Decision-making processes are another lever of cultural change. This is about looking at who really decides in the

organisation. The company may have a formal decision-making process, but what actually happens in reality? Also,

the speed at which decision- making happens dramatically impacts culture. In some organisations, the culture is too

deliberate for a very long time and be very slow to make decisions. In others, fast decision- making creates a culture

of urgency and quick action.

• Another lever is physical spaces, and the physical proximity of people with power to people without it. What are the boundaries or hurdles between the powerful and the powerless? Are there any physical blockers to leadership? Also, things like light, air, and space. Although these are actually ergonomic issues, they have a significant impact on the way in which people do things.

• Lastly, history and memory. How important is the story of the organisation? Is the history of it told often, and what is the level of attachment to precedent? Is there a connection to the artefacts and mementos of the past or is the company more pragmatically focused on the here and now?



Examples of typical organisational cultures Every organisation is different, and their cultures will be very varied and unique. Below are just some examples of typical

cultures which have been well researched and understood in organisational psychology.

The boy’s club culture

Have you ever experienced an organisational culture which is very male dominated? This is a very macho culture which is often

borne out of the historical prevalence of men in leadership positions. Some people would describe it as sexist, elite and

misogynistic. This culture places a strong focus on ego, performance and prowess and subtly excludes some people (typically

women) by the nature of the behaviour that is accepted, the language that gets used and the common mindset around society.

Recently, there has been an active drive by organisations who have this kind of culture to shift it and to move it towards

something more inclusive, progressive, and open-minded.

Performance over people

Another kind of typical culture which is often seen in workplaces is one where performance is valued over people. This is where

delivery and achievement matter more than anything else. The mindset is one of ends justify the means. It does not matter

how you do things as long as you get them done. Obviously, this creates very little care or empathy for people who may get

hurt in the process. Employees in this kind of culture are seen as expendable and they are to be worked and sweated like an

asset. This organisation would typically be very target driven and very competitive. If you apply our model that says culture is

made of the dominant mindset, the common narrative, and typical behaviour patterns, you can imagine the way people would

think, talk, and behave in a company that values performance over people.

Face time

Another typical culture that is often spoken about is a culture of face time. This is where being seen to work is more important

than doing the actual work. It is all about managing perceptions and managing your reputation. It is more important to appear

as if you are working hard, regardless of what you are actually doing. In this culture, work ethic can only be shown through

physical presence, which drives people to put in a lot of hours and be physically very present in the organisation. They may or

may not actually be working when they are there, but the culture demands that they demonstrate a commitment to work by

being physically in the office for many hours. Typically, this kind of organisational culture encourages people to manage

upwards, which means that they are managing the perception that their boss has of them. And they spend a lot of time and

energy doing that, which you can imagine is a distraction from doing the actual work.

Innovation is king

Another kind of typical organisational culture is innovation is king. This is where new ideas and concepts are worshipped. This

kind of culture is very prevalent in the tech industry and in organisations who are on the forefront of research and development.

They value innovation above everything else. It is really what they strive for. And people who can generate new ideas and come

up with new things are given a very special status in the organisation. One of the downsides of this kind of culture is that

sometimes you change for the sake of change, because you are constantly trying to reinvent and come up with new things,

sometimes to the detriment of productivity and efficiency. In this culture there is a huge value placed on smart ideas. Thus,

people who come up with ingenious ways of doing things, new products, or services thatreally break boundaries are highly

rewarded for that.

Unethical culture

We touched on this when we spoke about the dark side of leadership. This is a culture where dishonest or unethical behaviour

is tacitly accepted. There might be policies and rules which tell people they are not allowed to do certain things, but in truth,

below the surface, people somehow realise that they actually are allowed to behave however they need to achieve a certain

outcome. Within the culture, there is a tacit permission given to ‘do whatever needs to be done’. This gives people the

permission to behave in unethical or dishonest ways in order to achieve their goals. Greed and corruption become part of the

system, and effectively, people become complicit in this organisational culture because it becomes a mutually understood way

of doing things. Nobody really challenges those unspoken rules. And in fact, the further up the ladder you are, the more senior

you are, the more impunity you have from the rules.



Measuring organisational culture Given how important culture is, how can organisations measure their culture? How can they find out what it is like and whether

it is healthy? Here are some common methods of measurement.

Employee opinion surveys One of the typical ways that organisations measure culture is through opinion-based surveys. This is really where employees are asked to give their view on the culture through a survey of some kind. There are lots of different pros and cons to this approach. On the pro side, it gives everyone a voice. It gives every employee a chance to have a say about what they are enjoying or not enjoying about the organisational culture. It also provides quantitative data, which means the organisation can collect powerful statistical information. One of the downsides of measuring culture in this way is that the sample of opinions collected in the data may not be representative enough. This is true particularly if people do not participate in the survey or if the sample is really small. It could also be that the data only comes from one part of the business, and so it is unclear whether the information is really telling you a compelling story about the organisational culture, or is it just the view of a small group of people? Another concern is honesty. Will employees give their honest views? Do they believe that participating in the survey is confidential or will they hold back or potentially say what they think management wants to hear? Pulse checks Another way in which organisations today are measuring culture is through pulse checks. These are short, sharp measurements, really just asking one or two questions to take a quick pulse check on the ‘temperature’ of the organisational culture. It is quick and up-to-date and gives a real-time view. Organisations who are doing this are not running one annual survey. They are taking a pulse check at multiple points throughout the year to really get an up-to-date view about how people are experiencing the culture. For employees, pulse checks are quick and easy to respond to. It could be a thumbs up or thumbs down signal. Or giving a happy or unhappy face as a response. So, the data collected is short, sharp, and powerful. Some of the disadvantages of this method include the following: Is the pulse check comprehensive enough? Are you really getting intelligent data that can help you determine how to shift culture? Is it influenced by contextual factors? If today an employee was given a bonus for previous performance, then perhaps he/she is feeling really good, and so they might answer the question about culture in a very positive way and the inverse could also be true. How valid is the data gathered in this way? Focus groups Another way in which organisations are looking to find out about their culture is through qualitative measures or focus groups. This is not about surveys or opinions. This is about getting people in a room and really engaging them in a conversation. Some of the advantages of this are that you get proper depth of data because you have the ability to probe. You can ask people a question about their response and find out their reasons. They can respond and you can explore those responses further. Some of the downsides might be that participants in those focus groups may not feel able to really give their honest views. They may hold back for fear of retribution, because obviously it is not an anonymous response. Also, the dynamics in that small group will impact the data you get. If you have people who are colleagues or a subordinate employee with their manager in the same group, that will shape the way in which they are answering the questions and the information they are providing about the organisational culture.



Practical realities of trying to shift organisational culture Changing the organisational culture is not an easy thing to do. These are my practical insights into why this is so. Firstly, subcultures are real. It is very rare to have one organisational culture. There are cultures within cultures and in many organisations, particularly large ones, this makes culture shift very hard. Business units or divisions will create their own way of doing things, so if you are trying to shift culture toward one way, you are actually having to look at multiple behaviour patterns and subcultures within a culture – which creates complexity. Another challenge to culture change is that time is essential. When you are talking about culture change, it is unlikely that the culture will change quickly or in drastic ways overnight. They usually just shift gradually over time. There is a more natural process of evolution and of adaptive change. Cultures change over time slowly as they evolve and respond to what is going on around them and to those levers that we learnt about previously. Having said that, culture does not ever stay the same either. Whether we know it or not, every organisation's culture is shifting and changing gradually over time – so it is a perpetually moving dynamic to manage. Context is really important, and if you are trying to change culture, you need to be aware of that. You cannot separate the organisation from its particular socio-economic context. You can never divorce what is going on inside the organisation from what is happening in the external world. Social changes have a dynamic effect on employees. The way people see the world is impacted by what is happening in the society in which they live, and the norms of society cannot be divorced from the company norms. It was not so long ago that it was absolutely abnormal for women to be in the workplace. That was a societal norm and organisations mimicked that norm. Clearly, that has shifted over time. The last thing I want to say here is that culture is an asset. It can be a source of competitive advantage. Of course, you have to have the kind of culture that is really healthy, and that gives rise to higher levels of performance and employee engagement. It can really enhance the employer brand. People will want to work for a company where they believe the organisational culture is particularly effective and powerful. Employees inside the business will dip into their discretionary effort, they will do more without expecting anything extra if the culture is facilitative of that. However, to achieve that kind of culture, which is an asset, organisations need to be managing culture. They must make investments in the organisational culture which is why measuring it becomes really important. Like any other asset, culture can depreciate over time, without proper management and investment.

Conclusion Organisational culture is a complex concept to understand and to manage. And yet for many organisations today, it is the

make-or-break factor. Organisational culture is far more powerful than strategy. It does not matter what great plans or

leadership ideas the company has, or if they have amazing new innovations coming up. If the organisational culture is not

healthy, productive and one which drives greater levels of performance, collaboration and effective behaviour among

employees, the organisation will not be sustainable.



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Journals.sagepub.com. Available at: <https://journals.sagepub.com/doi/pdf/10.1177/2158244012441482>

Del Marmol, L., 2021. Organizational Culture Theory: Things To Know And How To Use It In The Workplace - World Of

Digits - Blog. [online] World of Digits - Blog. Available at: <https://creativecorporateculture.com/organizational-

culture-theory-things-know-use-workplace/>

MSG Management Study Guide. 2021. Edgar Schein Model Of Organization Culture. [online] Available at:

<https://www.managementstudyguide.com/edgar-schein-model.htm>

Barrett Values Centre. 2021. The Barrett Model - Barrett Values Centre. [online] Available at:

<https://www.valuescentre.com/barrett-model/>

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