Small Business Today Magazine MAY 2014 CUSTOMIZED REAL STATE SERVICES | Page 21

EDITORIALFEATURE

Why Organizational

Culture Is Important
By Aaron Kaplan

T

here is a great deal of talk about
organizational culture these days in
both academic and popular literature.  However, the concept of organizational culture is fairly recent.  Culture became a significant concern in the
U.S during the 1980s due to an interest
in learning why U.S. companies were not
performing as well as Japanese companies. 
It was thought that organizational as well
as national cultures could explain those
differences.

Culture can be defined as the set of key
values, assumptions, beliefs, understandings,
and norms that are shared by members of
an organization and taught to new members as correct.  At its most basic, culture
is a pattern of shared assumptions about
how things are done in the organization. 
On the surface, an organization’s culture
can be thought of in terms of manner of
dress, patterns of behavior, physical symbols, organizational ceremonies, and office
layout.  These include all the things a person can see, hear, and observe by watching members of the organization.  On a
deeper level, culture is expressed values
and beliefs, which are not observable, but
can be discerned from how people explain
and justify what they do.  These are values
that members of the organization hold at
a conscious level.  Some values become so
deeply embedded in a culture that organizational members may no longer be consciously aware of them.

Cultures develop among any group of
people who interact with one another
over a long period of time.  When people are successful at what they undertake,
the ideas and values that led to success
become institutionalized as part of the
organization’s culture.  Though ideas and

values that become part of the culture can
come from anywhere within the organization, a founder or early leader typically has
a significant impact on the organization’s
early culture.  A founder may articulate
and implement particular ideas and beliefs
as a vision, philosophy, or business strategy.  When these ideas and beliefs lead to
success, an organizational culture begins
to develop what reflects the vision of the
founder or early leader.  Culture gives employees a sense of organizational identity
and generates a commitment to particular values and ways of doing things.  Organizational cultures serve two important
functions which are integrating members
so that they know how to relate to one
another and helping the organization adapt
to the external environment.

Culture helps members develop a collective identity and learn how to work to-

gether effectively.  It is culture that guides
day-to-day working relationships and determines how people communicate in the
organization what behavior is acceptable
or not acceptable and how power and
status are allocated.  Culture can imprint
a set of unwritten rules inside employees’
minds that can be very powerful in determining behavior, thus affecting organizational performance.  Comparative studies
of traditional American management practices and Japanese management methods
suggest that relative success of Japanese
firms in the 1980s can be partly explained
by their strong corporate cultures that emphasize internal integration based on employee participation, open communication,
security, and equity.

»Continued on Page 34

[ MAY 2014 ] www.SBTMagazine.net 19