Organization Culture and its Importance

The July monthly meeting of NHRD Bangalore chapter discussed the subject of 'Organization culture and its importance'.Mr Saurav Mukherji, Professor of Organization behaviour, IIM Bangalore was the speaker of the day. He started of by stating that there has been a lot of discussion on 'Strategy' and "Culture' and as to what should take precedence. It is not a question of 'either, 'or' but both are equally important and essential for success. "I have this culture in this organization because I want to achieve this outcome." Culture is to be seen in conjunction with the strategy of the organization. Culture is difficult to define; it is beyond rules, processes and structure that an organization may have.

Prof Mukherji said that organizations have principal- agent problems at all levels. This is to be accepted as natural and it doesn't matter whether or not  there is a hundred percent convergence between their objectives. A partial convergence between the goals of the principal and agent is good enough so long as the objective of the organization is served. The lack of convergence  can be responded to in ways such as (1) Live with it (2) Give incentives and punishment  /  Carrot and stick.  The speaker said  that the organization culture is meant to control people's behaviour towards achieving organizational goals; It is not like a social club.

An increase in the goal congruence in an organization becomes possible with teamwork and collaboration. An organization is likely to have multiple cultures considering the fact that large number of people with various cultural backgrounds and motivations work in it. However, every organization has a dominant culture. We can say that we have the 'Right' culture if it is helping to achieve our goals. The culture has to be consistent with what you are seeking to do. The three big questions to be asked pertaining to culture are: 

(1) What culture does the organization have?
(2) Is it suitable for the organization's strategic objectives?
(3) If "Yes" how to nurture and sustain it? 
If "No' there is a need to deliberate on what changes are required and how they are to be made.

The speaker said that a lot more study and documentation needs to be done on the subject of 'Culture' in Indian organizations. However,in the west also,the focus and attention on 'culture' has reduced with accent now being more on organizational 'identity' (a set of statements that organization members perceive to be central, distinctive, and enduring to their organization(Albert & Whetten,1985. It is influential to behaviors of both leaders and members in many aspects within an organization).

Talking of the dimensions of organization culture, the speaker discussed the Competing Values Framework (CVF)  of Quinn, Rohrbaugh  developed initially from research conducted on the major indicators of effective organizations. The premise of the CVF is that there are four basic competing values within every enterprise: Collaborate, Create, Compete and Control. These values compete in a very real sense for a corporation's limited resources (funding, time, and people).

Thus companies now have to decide on the appropriate focus and culture for their organization- Flexibility and adaptability Vs stability/control/ continuity; internal focus and consistency Vs external focus. Another combination (followed by GE) could be external focus & stability with accent on the customer and competition. Here business is what matters and there is no attachment to products, customers or employees. The speaker reiterated that none of the cultural types are superior and that "What works for you is what matters." Prof Mukherji concluded by stating that creating and sustaining culture involves making difficult trade offs ( a  compromise - achieving a balance  between two desirable but incompatible features). 

The evening talk was for me a revelation; hitting at the very core of my own understanding of organization culture, formed over an entire work life spanning over three decades. I became aware that it is not  necessary for  culture to  be uniform, valid, true and dear across the board, to everyone  in the organization. The speaker had made it clear that the organization culture is merely a tool "meant to control people's behaviour towards achieving organizational goals"

 I guess this position is in tune with the times we are presently living in where winning is the 'be all and end all' of all activities and everything else are merely instruments to be used and dispensed with, when no longer useful to the strategic objectives of the organization. After all, today the entire world follows the western approach to life, the western business model, and western form of education in all  business schools including the IIMs, premier institutes of management education in India.