LEADERSHIP AND ORGANISATIONAL CULTURE PART 2
Block 1
Organizational culture determines how people behave in an organization. Leaders and founders have a
huge role in developing an organizational culture.
An organization is defined as a group of people working together to attain some common goals under a
certain structure.
A more precise definition:
Organizations also may have differences in terms of reasons for existence. The fundamental reason is to
exist per-se.
The cost needs at least to equal the profit. The organizations need to maximize profit. An organization goes
beyond money: a culture and a fulfilment of social responsibilities are important, and also welfare of
employees.
Organizations can be defined through metaphors.
Morgan (1986) defines organizations through many different metaphors:
• An organization as a machine emphasizes the fact that organizations are made of subsystems that
are interrelated in a logical order. People are parts of the machine, and if they do not fit they shall
be replaced.
• Organizations are like an organism that has to survive by adapting to its environment that is always
changing.
• As a brain: organizations are a depository of knowledge, a collective intelligence. It is designed to
process information and learn overtime.
• Like a cultural system: it is like a mini-society, defined by the norms and rituals of its members.
, • As a political system emphasizes the power distribution.
• As an instrument of domination: emphasizes exploitation and domination of organizations.
The organism metaphor is the most relevant for our approach.
The cycle perspective sees an organization as a system that develops until decline and death. There are
different stages, and unlike human beings organizations can have a recovery stage and not die.
1. The entrepreneurial stage is the infancy of organizations. The founder now has a crucial role for
the survival of the organizations: he has to gather resources to ensure survival. There is no
structure usually.
2. In the collectivity stage, the organization is still young, but survival chances are now higher. The
organization is doing an effort to clarify its identity. Although there is some structure in place, there
still is a lot of informality as regards how things are done in the organization.
3. In the formalization and control stage, everything becomes more formalised. The role of the
founder now becomes less important.
4. Elaboration of structure stage: the organization has a large size and is big. The organization is a
rigid bureaucracy with a complex structure in place. It requires a lot of resources to ensure survival
and always has to keep up to date with the changing environment. Decision making is now very
formal and very decentralized.
5. The decline stage (or recovery stage) occurs when the organization is put in a crisis state: it has to
reinvent itself or make sure it does not end to exist. There may be unfavourable market conditions,
or poor leadership styles. At this stage, the best talent is leaving the company, there is a shortage
of resources and there is disagreement about the methods the organization uses to operate.
A specific example:
There is no fixed timeline for these stages: every organization may differ in their timing.
An organization can have a negative (toxic) or positive culture.
A positive culture is seen by the strong values, the human centred approach used and the psychological
safety of employees.
Research shows that people are most attracted to the organizational culture rather than other things.
Furthermore, organizational culture is associated with organizational success. Strategy is also dependent
on culture. This is the definition of culture provided by Schein (learn well):
, Schein says that culture exists on different levels of observability:
Culture is everything that characterizes a group. Alvesson proposed metaphors to understand cultures:
• The idea of culture as a social glue means that it helps integrating people through shared norms,
values and beliefs, contributes to avoidance of fragmentation and works as a mean to create a
community feeling.
• As a compass, (this metaphor aims to target the direction pointing capacity of the culture): as an
individual is guided by his values, company values serve as a guidance for organizational goals,
policies and strategies.
• As an exchange regulator (similar to machine metaphor): culture is a control mechanism.
• Sacred cow: deep level assumptions created as a result of the historical processes where the group
internalizes beliefs and values based on a vision of the leader.
• Affect regulator: cultures guide and inform emotions of employees.
• As disorder: the culture does not provide clarity.
• Blinders (similar to psychic prison): this metaphor focuses on the restriction and controlling of the
unconscious processes of members of the organization.
• World closure: prevents people to understand some part of the social reality and leads to blind
spots.
How is a culture created?
A group is driven by a purpose. To move towards it, group identity is required. The group tries different
strategies and the environment feeds back to them which strategies are successful and which are not. The
successful strategies (beliefs, values and norms) are then internalized and a group identity becomes clear.
In the 5 monkeys experiment, even the newcomer who had never been sprayed with water punched the
monkey who climbed the ladder. It had learned the culture.
Schein proposed that there are 4 main characteristics of a culture:
Block 1
Organizational culture determines how people behave in an organization. Leaders and founders have a
huge role in developing an organizational culture.
An organization is defined as a group of people working together to attain some common goals under a
certain structure.
A more precise definition:
Organizations also may have differences in terms of reasons for existence. The fundamental reason is to
exist per-se.
The cost needs at least to equal the profit. The organizations need to maximize profit. An organization goes
beyond money: a culture and a fulfilment of social responsibilities are important, and also welfare of
employees.
Organizations can be defined through metaphors.
Morgan (1986) defines organizations through many different metaphors:
• An organization as a machine emphasizes the fact that organizations are made of subsystems that
are interrelated in a logical order. People are parts of the machine, and if they do not fit they shall
be replaced.
• Organizations are like an organism that has to survive by adapting to its environment that is always
changing.
• As a brain: organizations are a depository of knowledge, a collective intelligence. It is designed to
process information and learn overtime.
• Like a cultural system: it is like a mini-society, defined by the norms and rituals of its members.
, • As a political system emphasizes the power distribution.
• As an instrument of domination: emphasizes exploitation and domination of organizations.
The organism metaphor is the most relevant for our approach.
The cycle perspective sees an organization as a system that develops until decline and death. There are
different stages, and unlike human beings organizations can have a recovery stage and not die.
1. The entrepreneurial stage is the infancy of organizations. The founder now has a crucial role for
the survival of the organizations: he has to gather resources to ensure survival. There is no
structure usually.
2. In the collectivity stage, the organization is still young, but survival chances are now higher. The
organization is doing an effort to clarify its identity. Although there is some structure in place, there
still is a lot of informality as regards how things are done in the organization.
3. In the formalization and control stage, everything becomes more formalised. The role of the
founder now becomes less important.
4. Elaboration of structure stage: the organization has a large size and is big. The organization is a
rigid bureaucracy with a complex structure in place. It requires a lot of resources to ensure survival
and always has to keep up to date with the changing environment. Decision making is now very
formal and very decentralized.
5. The decline stage (or recovery stage) occurs when the organization is put in a crisis state: it has to
reinvent itself or make sure it does not end to exist. There may be unfavourable market conditions,
or poor leadership styles. At this stage, the best talent is leaving the company, there is a shortage
of resources and there is disagreement about the methods the organization uses to operate.
A specific example:
There is no fixed timeline for these stages: every organization may differ in their timing.
An organization can have a negative (toxic) or positive culture.
A positive culture is seen by the strong values, the human centred approach used and the psychological
safety of employees.
Research shows that people are most attracted to the organizational culture rather than other things.
Furthermore, organizational culture is associated with organizational success. Strategy is also dependent
on culture. This is the definition of culture provided by Schein (learn well):
, Schein says that culture exists on different levels of observability:
Culture is everything that characterizes a group. Alvesson proposed metaphors to understand cultures:
• The idea of culture as a social glue means that it helps integrating people through shared norms,
values and beliefs, contributes to avoidance of fragmentation and works as a mean to create a
community feeling.
• As a compass, (this metaphor aims to target the direction pointing capacity of the culture): as an
individual is guided by his values, company values serve as a guidance for organizational goals,
policies and strategies.
• As an exchange regulator (similar to machine metaphor): culture is a control mechanism.
• Sacred cow: deep level assumptions created as a result of the historical processes where the group
internalizes beliefs and values based on a vision of the leader.
• Affect regulator: cultures guide and inform emotions of employees.
• As disorder: the culture does not provide clarity.
• Blinders (similar to psychic prison): this metaphor focuses on the restriction and controlling of the
unconscious processes of members of the organization.
• World closure: prevents people to understand some part of the social reality and leads to blind
spots.
How is a culture created?
A group is driven by a purpose. To move towards it, group identity is required. The group tries different
strategies and the environment feeds back to them which strategies are successful and which are not. The
successful strategies (beliefs, values and norms) are then internalized and a group identity becomes clear.
In the 5 monkeys experiment, even the newcomer who had never been sprayed with water punched the
monkey who climbed the ladder. It had learned the culture.
Schein proposed that there are 4 main characteristics of a culture:
