Understanding Organisations Through the Lens of Organisational Culture

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Understanding Organisations Through the Lens of Organisational Culture

Introduction

Organisational culture is one of the most influential yet intangible forces shaping how organisations function, adapt, and succeed. It refers to the shared values, beliefs, and assumptions that influence how people behave within a company. Scholars such as Schein (2010) argue that organisational culture forms the foundation for understanding how decisions are made, how employees interact, and how change is managed. This essay critically examines how organisational culture is central to understanding the nature of organisations by exploring its theoretical foundations, its influence on behaviour and performance, and the complexities it introduces when managing change or global diversity.

Defining Organisational Culture

Organisational culture can be described as the social glue that holds an organisation together. Edgar Schein’s (2010) model is among the most influential, proposing that culture exists at three levels: artefacts (visible symbols and behaviours), espoused values (stated principles), and basic underlying assumptions (deeply ingrained beliefs). These layers explain not only what organisations do, but why they do it. Hofstede (1991) expands this idea by linking organisational culture to national cultural values, suggesting that cultural patterns shape workplace expectations and leadership styles.

This theoretical foundation shows that organisational culture is not just an abstract concept, it directly affects how employees interpret their roles, make decisions, and interact with management and colleagues.

The Role of Culture in Shaping Organisational Behaviour

Culture guides employee behaviour and decision-making by providing a sense of identity and shared purpose. Deal and Kennedy (1982) argued that a strong culture leads to commitment, motivation, and productivity, while a weak or fragmented culture results in confusion and disengagement. For instance, Google’s culture of innovation encourages creativity and autonomy, which directly contributes to its reputation for groundbreaking products and high employee satisfaction. Conversely, rigid and hierarchical cultures, such as those seen in some government institutions, can limit adaptability and innovation.

Research also suggests that organisational culture influences leadership effectiveness. Transformational leaders often thrive in cultures that value openness and collaboration, while transactional leaders perform better in rule-based, process-oriented environments (Bass & Avolio, 1993). This alignment between leadership style and culture determines whether employees feel supported or constrained, shaping the overall organisational climate.

Culture and Organisational Performance

Empirical studies show a strong link between organisational culture and performance outcomes. Kotter and Heskett (1992) found that companies with adaptive cultures, those that emphasise innovation and flexibility, outperform those with rigid, bureaucratic cultures. Similarly, Denison (1990) demonstrated that cultural traits such as involvement, consistency, and adaptability predict long-term organisational effectiveness.

However, culture can also be a double-edged sword. A strong culture can promote unity, but it may resist necessary change. For example, Nokia’s strong engineering-focused culture was initially a strength but later became a barrier to innovation when the smartphone market shifted. This shows that while culture is central to understanding an organisation’s success, it can also explain its decline if it becomes misaligned with external realities.

Culture and Organisational Change

Understanding organisational culture is critical when implementing change. Schein (2010) notes that leaders often underestimate how deeply culture influences employees’ willingness to adopt new behaviours. Lewin’s (1951) three-stage model of change, unfreeze, change, refreeze, highlights the importance of challenging existing cultural assumptions before introducing transformation.

Cultural resistance is particularly evident in mergers and acquisitions. Research by Weber and Camerer (2003) found that cultural clashes between merging firms often lead to communication breakdowns and employee turnover. For instance, the failed merger between Daimler-Benz and Chrysler is widely attributed to incompatible cultural values between the two companies. This demonstrates how culture can either enable or obstruct strategic goals.