Business Organization, Culture, and Internalization 2

Organizational Culture

The importance of organizational culture

“a precondition of success is an integrated company with common corporate values and branding. All core activities will be linked with these values and the Nordea brand, while the local brands will only be maintained as long as it can be justified from a commercial point of view. All employees have the right to be part of the company’s culture and an obligation to live according to its values. The employees should know that Nordea stands for Nordic ideas which fulfill the customers’ dreams and aspirations” (Thorleif Krarup, CEO of Nordea)

The strength of organizational culture?

Benefits of strong organizational culture: enhanced control and coordination Improved goal alignment between company and

employees Increased employee effortDependent on organizational environment:Cultures of exploration and exploitation“strong-culture firms excel at exploiting established

competencies but have difficulty exploring and discovering new competencies that better suit changing environmental conditions”.

Sørensen “The Strength of Corporate Culture and the Reliability of Firm Performance” ASQ 2002.

Dealing with socio-cultural integration in Nordea

What was done to promote integration of organizational cultures?

What was the reaction to initiatives to create an integrated corporate culture?

Successes and failures? (Nordea Markets) What are the major obstacles in the

integration process?

Non-cultural organizational studies

Cultural organizational studies

Functionalistic approach to OC

Social-constructionist approach to OC

History of organizational culture concept (Smirchich)

“What we are seing with the linking of culture and organization is the intersection of two sets of images of order: those associate with organizations and those associated with culture”

“Given the less-then-hoped-for results from the wave of tools for strategic management that appeared in the sixties and seventies (Keichel, 1982), the idea of corporate culture is attracting an enthusiastic audience among those researchers and practitioners concerned with strategy formulation and implementation” (Smircich)

Describing the popularity of the concept of organizational culture

Model of culture levels – adapted from Gullestrup 2004

National culture

Local organizational culture

Local organizational subculture Local

organizational subculture

Local organizational subculture

TNC organizational culture

Local organizational culture

Culture as variable vs. culture as root metaphor

Culture as variable / Culture and identity as essence

Culture as an independent variable Functionalism “Culture is seen as a relatively stable, homogeneous,

internally consistent system of assumptions, values and norms transmitted by socialization to the next generation” (Søderberg /Bjørkman144)

Culture as independent variable (national culture influencing the organizational culture; comparative management, culture-related differences in leadership behavior

Culture as variable vs. culture as root metaphor

Culture as variable / Culture and identity as essence

Culture as a dependent variable Culture as dependent variable. Organizations produce

culture. Leaders may enact culture through symbolic means. “Firms that have internal cultures supportive of their strategies are more likely to be successful” (Smirchich 1983

Managerial concern: how to mold and shape internal culture in particular ways and how to change culture, consistent with management purposes” (Smircich 1983) (Example: introduction of LEAN principles)

When considering mergers and acquisition, management will look for ‘cultural fit’

Culture as variable or root metaphor

Culture as a root metaphor

Social constructionism Culture is not something that organizations has, it is

something that an organization is (Smirchich) (nothing outside the cultural perspective)

Cultures are seen as ‘symbolic practices’ (Søderberg & Björkman)

Methodological implications “to explore the phenomenon of organization as subjective experience and to investigate the patterns that make organized action possible”. (Smircich)

The use of metaphors for understanding organizational life

Advocates of metaphors (for example Morgan 1998) claim that understanding by way of metaphors is fundamental to the functioning of the human mind – we cannot understand without metaphors: “all theories of organization and management are based on implicit metaphors that persuade to see, understand, and act on situations in partial ways” (Morgan 1998: 9)

Metaphors underline that understanding is always partial and limited (other metaphors could be chosen)

Alvesson: ‘Culture’ is a metaphor, the specific content of the culture metaphor a second order metaphor (“culture as…”

Second order metaphor

First order metaphor

Metaphors for culture

Exchange regulator Compass Social glue Sacred cow Affect regulator Disorder Blinders World closure

References Alvesson, Mats, Understanding Organizational Culture

Sage Publications 2002 Alvesson, Mats: On the Popularity of Organizational

Culture In: Acta Sociologica 1990 (33) 1 (31-49) Morgan, Gareth, Images of Organization. Sage

Publications 1998. Smircich, L. Concepts of Culture and Organizational

Analysis. In: Administrative Science Quarterly 1983 (28) 3 (339-358)