A. Figueroa OLCU 487 Senior Research Project Final Paper_Organizational Culture

1

Running head: A RESEARCH STUDY TO UNDERSTAND ORGANIZATIONAL CULTURE

AND ITS AFFECTS ON COMPANIES

A RESEARCH STUDY TO UNDERSTAND

ORGANIZAIONAL CULTURE

and

ITS AFFECTS ON COMPANIES

by

Anthony Figueroa

A research project report

submitted to the faculty of

Brandman University College

in partial fulfillment

of the requirements for the degree of

Bachelor of Arts in Organizational Leadership

August 15, 2014

ORGANIZATIONAL CULTURE 2

TABLE OF CONTENTS

Page

Abstract ................................................................................................................................4

Introduction ..........................................................................................................................6

Statement of the Issue ..............................................................................................6

Background ..............................................................................................................6

Purpose .....................................................................................................................7

Research Questions ..................................................................................................8

Significance of the Study .........................................................................................9

Conclusions ..............................................................................................................9

Literature Review...............................................................................................................11

Research Question 1: What are the factors that affect organizational culture? ....11

Research Question 2: What are the factors that affect organizational culture? ....15

Research Question 3: What is the relationship between profit and growth (the

effectiveness of having a culture that works) and organizational culture? ............20

Conclusions and Recommendations ..................................................................................26

Conclusions: Research Question 1.........................................................................26




Recommendations and Action Plan .......................................................................29

References ..........................................................................................................................34


Abstract

There have been several companies that have not only survived through recessions but

also have had exceptional growth and profit. Many C-level leaders wonder why do these

successful companies do better than others; what is giving them the competitive edge? The

leaders in the successful companies understand organizational culture and that it is one of the

main driving forces for their success. An effective organizational culture is a requirement for

today’s companies and is one of their most important issues for success. The purpose of this

literature review is to address the issues concerned with organizational culture. In answering

three research questions, this paper will show how organizational culture can positively affect

companies by understanding what organizational culture means to them, the factors of

organizational culture, and the relationship between growth and profit and organizational culture.

The literature showed that organizational culture is basically how business is done in a

company; the climate and environment of how people feel and how they conduct their everyday

business. It enormously affects companies in retention, effectives, production and ultimately the

bottom line. C-level leaders must insure organizational culture must be aligned with company’s

values, mission, and vision. Organizational culture once established is easy to maintain. The key

universal factors influencing organizational culture are: Leadership, C-level leadership and

leaders at every level; Connection how people connect and do they have buy in; Trust a factor

that is needed in every organization, Mission Values and Vision must be aligned and with

organizational culture by directed by C-level leadership; Communication, how is the story or

narrative of organizational culture communicated; Right people, getting HR involved; the

Environment or space where people interact. The relationship between profit and growth and

organizational culture had direct correlation. According to Buble (2012) “corporate culture can


have a significant impact on a firm’s long-term economic performance, is an even more

important factor in determining the success or failure of firms” (p.85).

This research finds and concludes that even though the basic definition and factors of

organizational culture can apply to all companies, C-level leaders of companies need to

understand how their unique organizational culture applies to their company. C-level leaders

must take the knowledge of their organizational culture, and manage it to insure it aligns or fits

their company. All of the authors mentioned came to the same conclusion as Wherry (2014) who

best states “culture is what makes an organization unique or special” (n.p.). Leadership was

found to be one of the biggest key factors for having an organizational culture that is effective

and helps the company be successful. The C-level leaders at the top must align and manage the

organizational culture of the company and leaders at every level must convey that culture

throughout. The other factors play a significant role in organizational culture and needs to be

managing by leaders at every level. The authors all concluded literally that “organizational

culture affects the bottom line” in so far as companies who manage an effective organizational

culture will have positive retention, growth, innovation…etc.

It is recommended that leaders need to conduct self-assessment of their organizational culture,

make organizational culture one of the top priorities, and constantly manage it. Leaders at every

level must learn and understand the factors that influence organizational culture. Human

Resources should screen and test personnel to see if they match companies organizational

culture. More research needs to be conducted on this subject.


Introduction

Statement of Issues

Defining organizational culture can be seen as “How we do things around here” and is

the underlining meaning of organizational culture in all companies (Gerstner, as cited in

Strategic Communication Management, 2013, p.22). However, because companies are unique,

each of them must have a culture that fits their needs. Companies will not be affective if they

just try to copy another company’s culture. For a company to be successful they must

understand the factors that influence organizational culture. There are many factors like

communication and trust that need to be considered. Innovation or how ideas are treated within

an organization is also an important factor. Additionally, how the culture is aligned with the

vision and mission of the company is a factor that cannot be forgotten about. These are just

some factors that need to be considered. Several companies have utilized their understanding of

the importance of organizational culture to positively affect their company. Amazon, Boeing,

Microsoft, etc.; all have effective organizational cultures and each company is successful

because of the uniqueness of their own culture, even though they utilize many of the same

factors of an effective culture. Companies with an excellent culture that promotes trust,

communication, innovation and customer focus, and also a positive understanding when people

make mistakes, and help them learn from those mistakes, they will be successful. Companies

like these, understand the mechanisms of their organizational culture are effective because of

their understanding and application in managing culture. The overall thought for this research

comes to how organizational culture affects successful companies.


Background

The 2008 recession has proven that having the right organizational culture will help a

business succeed though hard times. Kotter and Heskett (as cited by Strategic Communication

Management, 2013) state in their book “Corporate Culture and Performance” states,

Those firms with a strong corporate culture, based on a foundation of shared values,

experienced revenue growth that was more than four times faster than average; job

creation that was seven times higher; stock price growth 12 times faster; and profit

performance that was 750 percent higher. (p.22)

An effective organizational culture is a requirement for today’s companies and is one of their

most important issues for success.

Leaders within companies need to truly understand what affect organizational culture has

on them. Wherry (2014) explains “When we think of company culture, we focus on what we can

see and touch – the foosball tables, happy hours, and free lunches. But these are only artifacts,

what our culture produces” (n.p.). Leaders need to get to the heart of what organizational culture

is and how it can positively affect the success of their company.

Purpose / Objective of the Research

The purpose of this research paper is to show how organization culture can positively

affect companies. This paper will investigate what the organizational culture means to

successful companies. Using empirical studies as a source, this paper will determine what is

different, and also, what is the same between different successful companies when it comes to

Organizational Culture. This paper will also outline the key factors of organizational culture;

factors like communication, trust, being people oriented, and utilization of change management,

that have made certain companies successful. This paper will point out several companies that


have had an effective organizational culture such as Amazon, Boeing, and others, where their

organizational culture has made them very successful. It will identify the uniqueness of these

companies, and what they do that are the same. This paper will show how these companies

understand what to do in managing the organizational culture.

Research Question

What does organizational culture mean to successful companies?

Organizational culture means many things to many leaders. Overall it is how business is done in

a company, the climate and environment of how people feel. Leaders within companies need to

understand organizational culture. A thorough understanding of organizational culture will allow

managers to not only manage the organization, but predict the culture's effects and act

accordingly. Leaders need to know what the unique organizational culture of their company is

and what makes it theirs.

What are the factors that affect organizational culture?

Leaders must also know what factors affect organizational culture so they can properly

manage and develop or sustain it to benefit their company. Each of these factors will influence

the type of culture a company has and whether it makes the company successful or not. Many of

these are common among different companies, but some are also unique the way companies

view them.

What is the relationship between profit and growth (the effectiveness of having a culture

that works) and organizational culture?

Companies that fully understand organizational culture and its effects on their mission or

bottom line will ensure that they manage it to their benefits. Several companies have not only

survived but they also thrived during the recent recession, due to their knowledge on the effects


of organizational culture. Companies like Amazon, Boeing, Nordstrom, etc…have all been able

to profit and grow because of their own unique organizational culture.

Significance of the study

There has been a shift in the corporations today in understanding the need for leaders who know

how organizational culture is and how it affects their bottom line. The information contained in

this paper can help anyone wanting to understand organizational culture. There are many

reasons leaders would want to know information contained in this paper for improving the

organizational culture of their company. “Fitting in” as to employees fitting into the culture of

an organization is very important. People looking for employment can benefit from the

information in this paper when searching for a job where they where they will “fit in.” Business

owners and entrepreneurs will also benefit from this information in learning how organizational

culture uniquely belongs to a company.

Conclusion

How organizational culture can positively affect companies has become a popular

question for leaders that want their companies to succeed. Knowing what defines organizational

culture and what it specifically means to a company will help in determining what factors are

affecting the culture of your organization. Next, leaders must also know what factors affect

organizational culture so they can properly manage and develop or sustain it to benefit their

company. There are several key factors they must understand. Factors like communication,

trust, being people oriented, and utilization of change management, that have made certain

companies successful. But, leaders must understand how these factors affect their company

specifically. Finally you can see in this paper the relationship between profit and growth (the

effectiveness of having a culture that works) and organizational culture. Companies have


benefited from understanding how their organizational culture can work for them to improve

their bottom line. Companies like Amazon, Boeing, and others have been able to do this. All of

this information will help readers understand how organizational culture affects successful

companies.


Literature Review

The Literature Review will use secondary, expert sources to answer the following

research questions.






Actual definition of organizational culture can mean many things to many people or

companies. Likewise, organizational culture means many things to many leaders of companies

and organizations. In general, organizational culture is: how things are done, how business is

done in a company, the climate and environment of how people feel. The authors all seem to

feel the same in that “Culture is what makes an organization unique or special” (Wherry, 2014,

n.p.). Understanding organizational culture is essential for knowing how it affects an

organization and how to manage it. Leaders need to know what the unique organizational

culture of their company is; what makes the culture theirs.

Organizational culture is how people behave in their organization based on, norms,

values, perceptions, habits, how they work, dress, their social order or rules on how things are in

the organization and what they feel is acceptable or not. “Culture is an outcome of leadership

styles, beliefs and values at all levels” (Reid, 2013, p.2). Everyone and everything is affected by

the culture of an organization, yet it is specific to each company. Organizational culture can be

entirely different amongst companies in the same industry.


Numerous sources noted that the organizational culture takes ownership of the company.

Everything people do in the company, the way they behave, their daily actions, is influenced by

the culture of the organization. Strategic Communication Management (2013) suggests

organizational culture is, in a sense, “The way we do things around here” (p.22). People will act

based on the culture, so it is paramount that the culture fosters the best attitudes to encourage the

best performance. Authors also suggest organizational culture is specific and significant to the

company; it can affect communication, hinder or help growth and deter or attract new employees

(Kirby, J., & Stewart, T. A., 2007, p.76; Financial Executive, 2012, p.33). The organizational

culture of one company will not be the same as another’s. Companies cannot use a cookie cutter

approach to organizational culture. Because what works for some companies, such as strict

adherence to policy and order in the military settings, will not work in companies that thrive on

creativity.

Some of the basic factors are the same, but utilized differently they can have different

effects on different companies. All companies have a different perspective on what they feel

their culture should be so they can have an effective organization. Organizational culture must

be unique to each company. “There is no single “right’ culture, but rather the one that is aligned

with a company’s business and innovation strategy” (Financial Executive, 2012, p.33).

Companies cannot just “copy and paste another culture”, a culture needs to be unique to the

organization (Laurin, 2010, p.26). Leaders who understand and connect to the story being told

will have a better understanding of what their companies’ culture means to them.

The organizational perspective. Medical firms, law firms, the Veterans of

Administration, Amazon, and Boeing, all have a values and a mission unique to their

organizations. The same must hold true for their organizational culture, and this culture must


align with their mission and values of the company. One of the biggest obstacles companies

have is “not having the culture alignment with the “business strategy, mission, vision, and

values” (Reid, 2013, p.3). It is essential for the success of a company to have its culture aligned

with these four critical components of every organization. Amazon is an example of a company

with its culture aligned with its focus on the customer. Customer orientation helps both the

customer and the company and programs like “defect reduction” helps Amazon and its

customers save money. “It is strategically smarter to align yourself with the customer, in today’s

increasingly transparent, information perfection world” (Kirby, 2007, p.77). A company with an

open communication culture would mesh well with a strategy that relies on everyone’s input.

Oppositely, an example of a vision not meshing well with the culture would be a company that

does not foster open communications, but rather values hierarchy and chain of command.

Having a culture that produces what the company wants is the key to a successful

company. Some companies focus on innovation, others on customer service. Innovation and

idea sharing make some companies in the information technology industry succeed. “Google is

famously open to risk and tolerant of failure” (Financial Executive, 2012, p.34). Google does

this to bring out innovation in its top employees. It is important to set up an organizational

culture to bring out these top performers and how to do it. Laurin (2010) states, “creating this

kind of environment involves giving up some authority usually associated with leadership and

even some ownership, whether legal or psychological, in the organization” (p.26). Innovation

might not stand on its own, but a company that fosters it via its culture is on a better track to

success. A company might need in addition to innovation a culture of trust.

Several authors explain that some leaders feel the best culture is one that “in designing

democratic structures; innovation and creativity flourishes” (Laurin, 2010, p.26). C-level leaders


must understand that an organizational culture will be different for different types of companies.

Types of culture like customer oriented or service oriented like a hotel chain will be different

than one such as Google, which needs a certain type of innovation from its engineers for solving

complex problems.

Background / History. The meaning and focus of organizational culture has changed

immensely over the years. Companies that have grown to understand how organizational culture

affects their bottom line have made efforts to study their culture and work to making it in-line

with their strategies and ultimate visions. In speaking to the background to organizational

culture, Marshall and Adamic (2010) state “A few decades ago, ‘‘corporate culture’’ might have

referred to a company’s dress code or its working hours. Today, however, most business leaders

recognize that organizational culture is both more sophisticated and more powerful than anything

contained in an employee manual” (p.18). This statement has become even more evident four

years later when companies of all sizes have given a higher priority organizational culture.

Leaders recognize that the root of problems is not always policy and procedures but how they are

implemented, how things are done. There is a current lack of studies and the importance of

organizational leadership currently in the business world. Organizational Culture traditionally

was not a priority. Only since 1980s has its priority increase in importance, possibly because of

“misunderstandings that values and other characteristics of organizational culture are something

objectively granted” (Buble, 2012, p.85). This is why now the focus on organizational culture

has grown so considerably. Some feel that once an effective culture is set then it becomes easy

to maintain. “The truth is that corporate cultures are incredibly stable over time. They are self-

perpetuating, because they attract new people who like that kind of culture, while the people who

don’t like it eject themselves” (Kirby, 2007, p.80) This makes it so once a company has the an


effective culture that is aligned with their mission statement, values and business strategies,

culture must consistently be managed for effectiveness. Nevertheless, to get to this point they

must understand the meaning of organizational culture and the factors that influence it.


Leadership plays a key role in establishing and maintaining an organizational culture that

will be beneficial. The majority of authors feel that it may be one of the most important factors

when it comes to organizational culture. In the article “Something Fishy about Boeing” the

author explains the importance of leadership and how it plays a key role in setting the

organizational culture. Laurin (2010) points out four, “pillars of organizational greatness:

leadership, the business culture, along with the political and reward structures” (p.25). Effective

organizations have a well thought out organizational structure and understand why leadership is

the key to maintaining that structure. The leaders in the organization are the ones that are going

to set the culture of that organization. The author explains that leaders know the effects of

organizational culture; leaders must recognize that “culture is a major contributing factor to a

sustainable competitive advantage…culture fosters and rewards creativity, inventive thinking,

and very bright ideas” (Laurin, 2010. p.26). When leaders know this they will help to set the

tone of the culture by living it themselves. They will also expect their personnel to embrace the

culture as they have. Laurin (2010) discusses the leader’s role, “My job is to connect people to

their future, whatever and wherever that might be” (p.27). By doing this, the author as a leader is

establishing the mindset that people come first in the organization. This enhances the

relationship between the leaders and their personnel. In turn, it helps to establish an effective

organizational culture.


When leaders in the organization do not understand that leadership is a key factor to

organizational culture it will prevent them from having an effective company. Organizations

need to work through items, like lack of leadership, that prevent or hinder organizational culture.

In the article “Winning workplace cultures” Reid cites results on studies conducted on culture.

Reid (2013) cites: “Waterston’s 2011 Corporate Culture Study, over 90% said leadership is the

number one contributor to culture, that culture is the number one contributor to performance …

and, therefore, leadership drives performance” (p.3). The significance of the amount of the

organization impacted by culture validates the importance of having leadership at every level.

The implementation of leadership must be a priority with leaders at all levels and the

organizational culture must also connect with its people.

Connections. Personnel must connect with the culture and have buy-in. “Culture is

voluntary and cannot be forced on employees” (Garvin, 2014, p.116). Having people that

connect with organizational culture is an important factor that will drive the culture throughout

the organization. One way the author says this can be done is with having a strong participation

with the Human Resource office. It is important for HR to have “cradle to grave” involvement.

Reid (2013) cites an interviewee “people need to believe the success of the organization is

directly related to their success; they need to have clear goals they can believe in” (p.3). Having

this type of connection with its people the organizational culture will be strong and implemented

by everyone. This article also mentions some of the same factors many other articles mention.

There are several more factors besides leadership and having a connection to the culture from its

people that are important to the effects on a company’s organizational culture. Factors like:

trust, values, communication, and respect are all important in building and maintaining an

affective organizational culture.


Trust is another critical factor in organizational culture. Building a culture of trust is

important in any organization. Trust will help people with connecting and for successful buy-in

into the culture the company wants to establish and maintain. In the article “What is Culture” the

author gives his take on how trust affects culture and why it is a key factor. In understanding

culture, Wherry states “you have to ask these three questions: how is truth defined; is individual

trust given or earned; and where do ideas come from” (Wherry, 2014, n.p.). The importance of

these questions is evident in how trust is understood by a company’s leaders. It is common

knowledge that trust can be given but it is preferably earned; “company leaders must treat

everyone equally and not play favorites” (Natarajan as cited by Garvin, 2014, p.116). Giving

trust means giving “sufficient data and support” and the autonomy for one’s people to make the

right decisions (Wherry, 2014, n.p.). A culture of trust helps build communication,

relationships, collaboration and more. Successful companies understand this point and also

understand the different factors of trust and openness will benefit the company to have an

effective culture.

Values, vision, mission, and organizational culture alignment. Values, vision, and the

mission of the company must align with the organizational culture for the company to be

effective, this factor must be established from the leaders or executives of the company. In the

article “Six components of a great corporate culture” Coleman (2013) feels values are “the core

of the company’s culture. “Value offers guidelines on the behaviors and mindsets needed to

achieve that vision. [They must be authentic]” (Coleman, 2013, n.p.). Many people can be

asked what the company’s mission statement is, or what the values of the company are. They

would read from a prepared card or at logo painted or imprinted on a plaque on the wall. For an

effective organizational culture these must be aligned and the people must truly believe in them.


The author identifies six components to an effective culture. Coleman (2013) identifies these six

components as: “vision, values, practice, people, narrative, and place” (n.p.). Coleman (2013)

also mentions as many other authors on culture that it needs to be specific to the organization.

“Each culture is unique and myriad factors go into creating one” (n.p.). It is also mentioned in

the article “Customize your Culture” when the authors state “Very successful organizations have

a clear vision and strong set of values, upon which culture ‘hooks’ on to” (Strategic

Communication Management, 2013, p.23). By understanding the numerous factors leaders can

effectively establish an organizational culture that is aligned with the company’s values, their

vision, and a workable mission statement; a mission statement that really connects, one that is

not for show but also is valued by the personnel of the organization.

Communication. Communication is an essential part of leadership, the organization,

and culture. When pertaining to organizational culture that is in need of change, communication

is a powerful factor used to move people towards the new direction in-line with the culture

leaders are trying to establish. The authors Mashall & Adamic (2010) touch on leaders trying to

change bad cultures. “For leaders trying to change a cynical culture … the need for powerful

and persuasive communication is even more acute” (Mashall & Adamic, 2010, p.21). This is

done through communication with their personnel. There are several ways to approach

communication, the best is using one that really sticks or relates to the personnel.

Telling the story or “The Narrative” is one of the best ways of conveying the culture

throughout the organization. The key factor on defining and developing the corporate culture is

by leaders connecting their culture through story telling; much the same way people have done

through folklore (Marshall & Adamic, 2010, p.18). This has been mentioned in several articles.

Story telling is a great way for a message to stick. “Ideally, the story not only reaches its


immediate audience, but spreads through word of mouth and managers at all levels until it

becomes part of corporate heritage and culture” (p.19). The authors stress how storytelling by a

company’s leaders about the organization, is one of the best ways for people to receive and keep

the message of how the culture in the organization should be. Parker points out (as cited by

Marshall & Adamic, 2010) “People remember stories a lot better than they remember lectures”

(p.19). Through communication and story telling the authors express that leaders can set, or

change the organizational culture into a winning culture. As Reid (2013) states “a winning

workplace culture is imperative for enabling success” (Reid, 2013, p.2). The factors that have

been mentioned so far are the ones that have been most common throughout all the articles.

There are though some additional factors that are worth mentioning because of their importance.

Having the right people. Having the right people is a continuing theme when it comes

to having an effective organizational culture. Getting the right people starts at the beginning.

Coleman (2013) states “Make sure you have the right people to fit and buy into your culture …

[recruiting is a big part]” (n.p.). Then he gives data that is in line with other articles on

organizational culture that shows positive results from having the right culture. Coleman (2013)

refers to a “Monster.com study, which found that applicants who were a cultural fit would accept

a 7% lower salary, and departments with cultural alignment had 30% less turnover” (n.p.). Once

more, this is why many authors feel “corporate cultures are incredibly stable over time. They are

self-perpetuating, because they attract new people who like that kind of culture” (Kirby, 2007,

p.80).

This is the reason why once leaders have established the culture they want in your organization it

is easy to maintain. Repeated throughout this research is that idea that “best firms are “fanatical

about recruiting new employees who are not just the most talented but also the best suited to a


particular corporate culture” (Coleman, 2013, n.p.). All the successfully large companies like

Boing, Amazon, Costco, are having their HR recruit people that fit their culture. Doing this is

like making sure you are only planting the crops you want and not planting weeds in your garden

that will kill destroy your garden or your company.

Environment, setting or place. Environment setting or places are also to be considered

when assessing organizational culture.

According to Coleman (2013)

Open architecture is more conducive to certain office behaviors, like collaboration.

Certain cities and countries have local cultures that may reinforce or contradict the

culture a firm is trying to create. Place — whether geography, architecture, or aesthetic

design — impacts the values and behaviors of people in a workplace. (n.p.)

The environment where people can have unplanned integration is important. Places within the

company and the company’s geographical location will affect choices of areas where people can

congregate freely. This can be a break or lunch room. The layout of a work center will affect

the culture as in closed off cubicles versus an open floor plan to promote collaboration. Leaders

must understand this applies not only to within their building but the location in the country or

world will also be a factor that affects culture. People in New York City have different values

and act differently than people in Seattle, something that leaders would need to consider when

managing organizational culture. The same will hold true for people of countries who will have

different cultural values. All of these factors are important and must be considered when

understanding and dealing with how they affect organizational culture.




The benefits of having an effective organizational culture are numerous. According to

Buble (2012) “corporate culture can have a significant impact on a firm’s long-term economic

performance, is an even more important factor in determining the success or failure of

firms”(p.85). Success can be measured in many ways such as in growth, ingenuity, job

satisfaction of employees and of course, the bottom line. In the article “Winning workplace

cultures: An imperative for enabling business success,” the author cites some quantitative

evidences that show the benefits of having an effective organizational culture (Reid, 2013, p.2).

According to Parker (as cited by Reid, 2013) “2013 winners of ‘Canada’s 10 Most Admired

Corporate Cultures’ outpaced the S&P/TSX 60 by an average of 400 %, in terms of a three-year

compound annual growth rate” (p.2). As studies are done on the relationship between profit and

growth and organizational culture; the evidence consistently grows in that there is a correlation

when it comes to performance of a company and culture. Other authors explain and express

more quantitative relationship in that “those firms with a strong corporate culture, based on a

foundation of shared values, experienced revenue growth that was more than four times faster

than average; job creation that was seven times higher; stock price growth 12 times faster; and

profit performance that was 750 percent higher” (Strategic Communication Management, 2013,

p.22).

A culture of innovation. Boeing Corporation is one company used by authors to show

the relationship between an effective organizational culture and innovation. Boeing’s C-17 is

one airframe that has benefited with profit and growth as a result of the organizational culture

their leaders have built. The author Laurin (2010) “explains the top 10% of people in a company


[are the top performers], and having an organizational culture of innovation; helps to cultivate

top performers, this also encourages thinking and action that drives innovation into your

business” (Laurin, 2010, p.27). Many companies cultivate a culture of innovation, which in turn

helps the business go in the direction they want. A strong culture of innovation helps businesses

such as Boeing, Google, Apple and many others deal with complex problems. Dale and Kennedy

(1982) “concluded that organizational culture is twined into all of an organization’s activities …

Such a significance of organizational culture encourages the conclusion that a strong

organizational culture is the prerequisite for the success and development of modern

organizations” (as cited by Buble, 2012, p.86). This is why successful companies have made the

management of organizational culture a priority right alongside other major programs like

marketing and finance.

Leadership. According to author Schein (1997) ‘‘[Southwest] has developed a

generation of future leaders who daily live the core values and business principles that have

contributed to creating and preserving the Southwest culture’’ (as cited by Marshall & Adamic,

2010, p.21). Southwest understood and utilized effectively the factors of an effective

organizational culture. Companies and researchers of organizational culture look to Southwest

for the relationship of profit and growth.

A non-affective culture. In the article “Interdependence of organizational culture and

leadership styles in large firms” the authors talk about how leadership style can have

consequences to an effective culture. Cameron & Quinn (1999), “demonstrating that most

organizations develop a dominant style of leadership, from whence they developed a model of

mutual relationship between organizational culture, leadership, and efficiency” (Buble, 2012,

p.86). Leaders using the dominant style of leadership will inhibit a culture of innovation. They


will also inhibit a culture of trust. Having a collaborative conflict management culture works

because it promotes “cooperative behavior…which best serve the interests of the group as a

whole, are rewarded” (Youngyoung, 2013, p.688). On the other hand having a dominant conflict

management culture breeds “open disagreement and competitive behavior”… and resulted in

lower job satisfaction among the sample taken. The author does note one of the limitations to the

study was that “only participants in a service industry area [were surveyed]” (Younyoung, 2013,

p.692). With more research being conducted the effects of leadership style and conflict

management will show more of the relationship of organizational culture and relationship

between profit and growth or bottom line.

More links on how not having the right culture negatively affects profit and growth talks

about a study done in Croatia. According to Buble (2012) the study showed “showed [a large

firm] developing an “authoritative and dominant style of leadership will likely produce excessive

bureaucracy in the organization, which prevents entrepreneurial orientation, and in the large

firms in Croatia, paid less attention to human factors” (Buble, 2012, p.90). Having this type of

leadership has an overall negative affect on the culture and in turn their profit and growth. Buble

(2012) goes on to state that “This can be quite dangerous for further development of this firm,

considering the significant and quick changes in the globalized world” (p.91). It will be

detrimental for IT companies like Apple, Google and Microsoft, to be lead in an authoritative

and dominate style because it will inhibit a creative or innovative culture.

Overall there has not been enough research on organizational culture and its relationship

to factors of leadership (Buble, 2012, p.86). The author in the article “The influence of conflict

management culture on job satisfaction” explains the relationship of organizational culture and

profit and growth. The author explains “researchers showed that effectiveness of conflict


management culture does relate to the job environment, types of jobs, and cultural differences”

(Rahim, 2002, as cited by Younyoung, p.692). A point leader at all levels needs to understand

when incorporating their leadership style and assessing their conflict management approach.

According to Lawson, Hatch, and Desroches (2013):

Conflict Resolution Dresner’s fourth criterion for a performance-directed culture

concerns conflict resolution. Effective conflict resolution requires the identification of

issues, consideration of all factors involved, and the resolution of the conflict on a fair

and reasonable basis. Unfortunately, effective conflict resolution is the exception rather

than the norm. (p.48).

Conflict resolution and an effective organizational culture are linked. According to

Lawson, Hatch, & Desroches (2013) “There’s a very strong, positive relationship between

having effective conflict resolution procedures in an organization and its achieving benefits from

a CPM system” (p.48). All of these will show a positive relationship to profit and growth. Even

results of the survey showed; “The collaborative conflict management culture had a statistically

significant positive direct effect on job satisfaction, holding all else constant” (Younyoung, 2013,

p.690). Additional surveys show quantitative results on the correlation of a conflict management

culture to job satisfaction. Based on analysis of surveys the Younyoung (2013) conducted

resulted and showed “that a collaborative conflict management culture has a positive effect on

job satisfaction whereas a dominant management culture has a negative effect on job

satisfaction” (Younyoung, 2013, p.687).

Companies such as Apple, Google, 3M, the Palo Alto Research Center Inc. (PARC),

Pixar Animation Studios, P&G and dozens more have demonstrated strong records of innovation

success and the cultures needed to support that success” (Financial Executive, 2012, p.35). All


of them understand the relationship between an effective organizational culture of the company

and the bottom line. According to Lawson, Hatch, and Desroches (2013) “Technology supports

system effectiveness, but a performance-oriented culture—one that values people, performance,

transparency, and accountability—is key to system effectiveness. Technology is important for a

successful CPM implementation as an enabler of people—not the other way around” ( p.44).

The effective companies all use a culture management program that continuously helps to drive

their success. All the articles researched showed a positive relationship between profit and

growth having an effective organizational culture. The bottom line as Reid (2013) states is “A

winning culture is truly the ultimate competitive advantage” (Reid, 2013, p.2). It is backed up by

many articles containing quantitative empirical evidences supporting this positive relationship.


Conclusion and Recommendations

Conclusions and recommendations are drawn from the findings of the Literature Review

that explored the following research questions:





Conclusion

What does organizational culture mean to successful companies? Companies today

who understand what organizational culture means to them and why it is important are

successful. The basic definition of organizational culture is: how things are done or how

business is conducted in a company, the behavior of personnel, the climate and environment of

how people feel. Even though the basic definition and factors of organizational culture can apply

to all companies; C-level leaders of companies need to understand how their unique

organizational culture applies to their company. C-level leaders must take the knowledge of

their organizational culture, and manage it to insure it aligns or fits their company.

All of the authors mentioned came to the same conclusion as Wherry (2014) who best

states “culture is what makes an organization unique or special” (Wherry, 2014, n.p.).

Understanding organizational culture is essential for knowing how it affects an organization and

how to manage it. For the most part, organizational culture is, “The way we do things around

here” (Strategic Communication Management, 2013, p.22). But organizational culture is much

more. It is how people behave in their organization based on norms, values, perceptions, habits,


how they work, dress, their social order or rules on how things are done in the organization and

what they feel is acceptable or not.

The general meaning of organizational culture can be identical to companies in its basic

form, but it also different to different types of companies. One company might value having a

culture of innovation. Another company might value having a culture of quality control. The

culture of Google and the organizational culture of Amazon will have some the same basic

factors, but these two companies will each have a very different culture.

One thing that will hold true for all companies is that their organizational culture must

align with a company’s mission and values of the company. C-level leaders must have an active

role in this because it is one of the biggest obstacles companies face in being successful. “Not

having the culture alignment with the “business strategy, mission, vision, and values” will

definitely disrupt the company’s effectiveness (Reid, 2013, p.3). It is essential for the success of

a company to have its culture aligned with these four critical components of every organization.

Amazon is an example of a company with its culture aligned with its focus on the customer.

Companies that have aligned their organizational culture did so by managing it with a self-

assessment to understand where they are when it comes to organizational culture.

What are the factors that affect organizational culture? This research has also

provided a practical list of important factors that affect organizational culture of all companies.

First of all, leadership is one of the biggest key factors for having an organizational culture that is

effective and helps the company be successful. Connection is another important factor. Leaders

must connect with their people to effectively influence them. In organizational culture the

personnel of a company must connect with the company’s culture to be effectively influenced by

it. As in most aspects of organizations and leadership, trust is a vital component of


organizational culture. Next, organization culture must align with values, mission, and vision of

company, as mentioned earlier. A factor that will help leaders convey the culture throughout

their company is how the organizational culture is communicated, “the narrative.” One of the

factors that will help keep the organizational culture the C-level leaders want is to have the right

people. Finally, one factor that often gets overlooked is location or the environment.

The level of importance of these factors can be disputed but in general most of the

authors concluded all of these being important with leadership being the most. Leadership at

every level (C-level, managers, front line supervisor) is important in management of

organizational culture. Leaders are the ones who convey and set the example they wish others to

follow. C-level or executives, leaders at the top of the organization, are the ones that insure

alignment with company’s values, business strategy, mission, and vision. A good leader will

know the effects of organizational culture; leaders must recognize that “culture is major

contributing factor to a sustainable competitive advantage…culture fosters and rewards

creativity, inventive thinking, and very bright ideas” (Laurin, 2010. p.26). In knowing this

leaders will help to set the tone of the culture by living it themselves. They will also expect their

personnel to embrace the culture as they have.

Connection between the people and the culture is another key factor. Personnel within

the company must accept and embrace the culture; it must not just be a fancy slogan on the wall

or website. When they take ownership it becomes self-perpetuating. The author Coleman

(2013) refers to “Monster.com study found applicants who were a cultural fit would accept a 7%

lower salary, and departments with cultural alignment had 30% less turnover” (n.p.). This

quantitative evidence is in partly why many authors feel “corporate cultures are incredibly stable

over time. They are self-perpetuating, because they attract new people who like that kind of


culture” (Kirby, 2007, p.80). Once leaders have established the culture they want in their

organization, when people are connected to it, it is easy to maintain.

The other factors such as trust, how the culture is communicated, and picking the right

people are also factors that will apply to most companies. Trust is an important factor in every

type of organizational culture. It is one of the foundations for leadership. It ties the

organization, people and culture together. A culture of trust is essential. Without trust the

organization most likely will fall apart. Just as stories have been told throughout time, when

leaders communicate the culture as in a story it will stick in the minds of their people. They are

able to make a better connection with the culture the leaders are trying to establish. Human

Resources must hire individuals that match their organizational culture. Leaders must also

recognize people that just refuse to embrace the organizational culture, counsel, find them

alternative positions, or even possibly let them go. The factor of environment, space or the

location where people meet was not mentioned by many authors, but is important when it comes

to organizational culture. Location, spaces, or the geographical setting refers to the places where

people interact. Cultural diversity also affects these places where interaction occurs and

influences organizational culture. Leaders must consider and manage the spaces where people

interact to help people positively affect organizational culture.

What is the relationship between profit and growth (the effectiveness of having a

culture that works) and organizational culture? In this research one will find that having the

right culture helps the overall effectiveness of the company which in turn helps the bottom line.

Several of the articles showed a correlation between the relationship between profit and growth

(the effectiveness of having a culture that works) and organizational culture. Having the right

organizational culture will yield positive results in their companies. Amazon, Google and


Starbucks are just some examples of companies who have done well even through the recent

recession that has occurred in this country because of the cultures they have established in their

organization. On the other hand having a wrong culture can inhibit innovation, obstruct effective

communication, and negatively affect the bottom line. The authors all concluded literally that

“organizational culture affects the bottom line” in so far as companies who manage an effective

organizational culture will have positive retention, growth, innovation…etc. Those companies

that do not effectively manage organizational culture will not.

Recommendations

Three points can be made in recommending anyone wanting to effectively manage the

culture in a company or organization. First, C-level leaders need to make organizational culture

a priority and should do an assessment to understand the current culture of their organization. C-

level leaders can create an action plan in doing this and use resources as in “Diagnose Your

Culture” guide in “Building a culture that Energizes Innovation” or similar self-assessment to

establish a base line to determine what is their company’s current organizational culture and

where do they want their company to be (Financial Executive, 2012, p.24). Second, Leadership

should evaluate the type of culture that would be most beneficial for their organization. They

should create an action plan in which executives evaluate the organizational culture to insure that

it is in line with company’s values, mission, and vision. Third, leaders must understand that the

six factors of an effective organizational culture (Leaders involvement, Recruitment,

Communication Trust, Innovation, Location or settings) are universal and all organizations

should incorporate them. Leaders should create an action plan to incorporate these factors by

having leadership involvement in making organizational culture as a priority. This includes

leadership at every level. Also as part of the leader’s action plan he or she should establish


procedures or tests to insure the company’s recruitment of personnel that fit the organizational

culture. Leaders must learn and understand ways to establish a culture of trust and innovation.

Leaders at every level must learn to communicate the culture and can do so by telling a story.

Additionally, in their action plan they must incorporate and manage the locations or settings and

use them to stimulate the organizational culture a company wants.

Recommendation for Further Research. In addition to the recommendation just

mentioned, further research on organizational culture should be conducted not only by leaders

wanting to manage organizational culture, but anyone studying leadership or behavioral sciences.

“Overall there has not been enough research on organizational culture and its relationship to

factors of leadership” (Buble, 2012, p.86). Even though successful companies today have done

the research on organizational culture and understand the importance of it, it seems not much of

the findings have been added to the recent surge of books on leadership and how to run a

successful company. The information on how to establish, manage and maintain an effective

organizational culture should be a high priority of anyone who is studying leadership, learning

how to run an organization, or C-level leaders and executives wanting to enhance the

effectiveness of their company.

My Personal Action Plan. While attending a transition assistance program prior to

separating from the military I understood that I was leaving the organizational culture I was used

to for 24 years and going to look for employment at a company that would most likely have a

very different culture. What I experienced many also do. One of the findings mentioned was

that organizational culture effects retention. People will be more successful if they take a couple

of steps prior to applying for work at a company to insure they fit into that company’s

organizational culture. My action plan was to create a list of important items to research in


companies that I plan to apply for work at and use this checklist in my job search. The following

is a list of items anyone should use in researching a company’s organizational culture:

o Get organized! Make a list of companies you might want to work for and find out as

much information you would like to know about them.

o Analyze personal values and compare with those of the company. You can do this

first by looking at the company’s website. Look for the mission statement, posted values,

posted vision, etc. Research who they invest in; what if they invest in a country that

supports terrorism, or child labor? Research what outreach programs they have and also

what have they done to help or hinder the community, environment.

o Analyze work-related values with those of the company. How is life balance viewed

in the company? Do they expect you to be on 24/7 call? How is the leadership in the

company? What is the retention of personnel like? Also should know the size of

company and how many employees the company has.

o Once you have researched all you can about the company online, then call the

company and set up an interview for you to research the company with one of their

employees. You can talk to the Human Resources personnel, but also set up an interview

with someone in the company that has the same position. Have a list of questions ready

and ask about many of the items you research, like company values, work-related values,

etc.

This is just a short list that anyone can do to research a company. One can find more online or in

job search information literature. By doing these individuals can help to ensure they will “fit in”

the organizational culture of the company they are applying to. These will also help the


company by requiting the right people, and help them in maintaining an effective organizational

culture.


References:

Buble, M. (2012). Interdependence of organizational culture and leadership styles in large firms/

Management: Journal Of Contemporary Management Issues, (2), 85.

Building a culture that energizes innovation. (2012). Financial Executive, 28(2), 32-35.

Coleman, J., (2013) Six components of a great corporate culture. Harvard Business Review Blog

Network. hardvardbusiness.org

Customize your culture. (2013). Strategic Communication Management, 17(4), 22-25.

Garvin, D. A. (2014). Can a strong culture be too strong? Leaders at an IT services firm

contemplate whether its family-like atmosphere draws talent in or drives it away.

Harvard Business Review, (1-2), 113.

Kirby, J., & Stewart, T. A. (2007). The institutional yes: How Amazon’s CEO leads strategic

change in a culture obsesses with today’s customer. Harvard Business Review, (10), 74-

82.

Laurin, C. (2010). Something “Fishy” about Boeing. Journal for Quality & Participation, 33(1),

25-27.

Lawson, R., Hatch, T., & Desroches, D. (2013). How corporate culture affects performance

management. Strategic Finance, 95(1), 42-50.

Marshall, J., & Adamic, M. (2010). The story is in the message: Shaping corporate culture.

Journal of Business Strategy, 31(2), 18-23.

Reid, J. (2013, Sept-Oct.). Winning workplace cultures: An imperative for enabling business

success. Ivey Business Journal Reprints.

Wherry, E. (2014). What is culture? Forbes Women; Forbes online Retrieved

from: http://www.forbes.com

http://www.forbes.com/


YOUNYOUNG, C. (2013). The influence of conflict management culture on job satisfaction.

Social Behavior & Personality: An International Journal, 41(4), 687-692.

doi:10.2224/sbp.2013.41.4.687

Documents

A. Figueroa OLCU 487 Senior Research Project Final Paper_Organizational Culture