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Organisational culture

February 2015, Issue 1

Editor’s note to readers

Welcome to the first edition of Human Capital Matters for 2015—the digest for leaders and practitioners with an interest in human capital and organisational capability. This edition focuses on Organisational Culture.

Human Capital Matters seeks to provide APS leaders and practitioners with easy access to the issues of contemporary importance inpublic and private sector human capital and organisational capability. It has been designed to provide interested readers with a monthly guide to the national and international ideas that are shaping human capital thinking and practice.The inclusion of articles is aimed at stimulating creative and innovative thinking and does not in any way imply that the Australian Public Service Commission endorses service providers or policies.

There is no single definition of Organisational Culture. The essence of what people mean by it was captured by a discussion on LinkedIn reported in the Harvard Business Review in May 2013. Aspects discussed are summarised below.

  • Culture is consistent, observable patterns of behaviour in organisations.
  • Culture is powerfully shaped by incentives.
  • Culture is a process of “sense-making” in organisations.
  • Culture is a carrier of meaning.
  • Culture is a social control system.
  • Culture is a form of protection that has evolved from situational pressures.
  • Organisational culture is shaped by and overlaps with other cultures—especially the broader culture of the societies in which it operates.
  • The cultures of organisations are never monolithic. There are many factors that drive internal variations in the culture of businessfunctions and units.
  • Cultures are dynamic. They shift, incrementally and constantly, in response to external and internal changes.

The above aspects also form the basis of the articles presented in this edition of Human Capital Matters.

The first article emphasises the importance of foundational history and periods of transition in influencing or creating an ‘imprint’ on the life in organisations. It emphasises the importance of understanding the present through considering thepast.

The second article presents an academic review of organisational culture and climate. In the articleorganisational climate is briefly defined as the meanings people attach to interrelated bundles of experiences they have at work. Organisational culture is briefly defined as the basic assumptions about the world and the values that guide life in organisations. The authors concluded that an integration of climate and culture theory and research has useful implications for practice.

The third article refers to a publication that was written for organisational leaders in the Victorian Public Sector-specifically, people working in executive and senior management roles. Organisational Culture is defined as the shared values and beliefs that guide how members of an organisation approach their work and interact with each other. The publication is a collection of ideas designed to stimulate and inform leadership thinking, judgement and decision making in the face of specific situations, opportunities and dilemmas.

The fourth article is built around three major steps central to changing the culture of an organisation. The author argues that executives in the organisation must support the cultural change, and in ways beyond verbal support. They must show behavioural support for the cultural change. Executives must lead the change by changing their own behaviours. It is extremely important for executives to consistently supportthe change.

The fifth article makes observation about culture change and transformation of the public sector in the context of recent UK government imposed changes.

Thank you to those who took the time to provide feedback on earlier editions of Human Capital Matters. Comments, suggestions or questions regarding this publication are always welcome and should be addressed to: humancapitalmatters [at] apsc.gov.au. Readers can also subscribe to the mailing list through this email address.

APS Human Capital Matters: Organisational culture

Marquis, Christopher and Tilcsik, András. Imprinting: Toward A Multilevel Theory (March 1, 2013). Academy of Management Annals, 7: 193-243, 2013.; Harvard Business School Organisational Behaviour Unit Working Paper No. 13-061; Rotman School of Management Working Paper No. 2198954

Nearly half a century has passed since Stinchcombe (1965) introduced the concept of imprinting to organisational research, describing how organisations take on elements of their founding environment and how these elements persist well beyond the founding phase. This article is a working draft paper that attempts to clarify the nature of imprinting, to integrate the disparate literatures that have engaged with the concept, and to guide research toward a multilevel theory of imprinting.

The authors advance a three-part definition of imprinting that emphasises:

  • brief sensitive periods of transition during which the focal entity exhibits high susceptibility to external influences
  • a process whereby the focal entity comes to reflect elements of its environment during a sensitive period
  • the persistence of imprints despite subsequent environmental changes.

The first unique feature of the imprinting argument is that an imprint is stamped onto the focal entity in limited time intervals during which the entity exhibits intensified receptivity to external influence. The authors suggest that while each sensitive period is relatively short, an entity might experience multiple sensitive periods over time. Similarly, research at the individual level suggests that, during periods of role transition—including periods of organisational and professional socialisation—individuals are particularly susceptible to influence. Overall across levels of analysis, the authors suggest that sensitive periods should be conceptualised as periods of transition. In this view, the founding period remains the key sensitive period for organisations, as it marks the fundamental transition from nonexistence to existence; similarly, the beginning of an individual’s career constitutes an important sensitive period because it represents a critical transition from the world of education to the world of work. Yet the possibility of multiple sensitive periods opens the way for discovering imprinting in a wider variety of instances.

A second important element of imprinting is that core features of the environment exert a significant influence on the focal entity during sensitive periods. In the case of organisations, for example, a “mapping of an environmental condition onto the organisation” takes place at this time. Organisations are initially structured to fit the existing environment and then, because of subsequent inertia and institutionalisation, continue to exhibit traces of the founding context.

The third element of the imprinting hypothesis is that imprints persistence even if significant changes take place in the environment. At the organisational level, Stinchcome suggested a number of reasons for the persistence of structures:

  • they may still be the most efficient form of organisation for a given purpose
  • traditionalising forces, the vesting of interests, and the working out of ideologies may tend to preserve the structure
  • the organisation may not be in a competitive structure in which it has to be better than alternative forms of organisation in order to survive.

The authors note that numerous studies have shown that organisational collectives bear imprints of their founding environment, including the stamp of economic, technological, and institutional conditions and the mark of founding individuals. Such collectives can be defined on the basis of organisational and market characteristics (e.g., industries), geography (e.g., organisational populations embedded in particular nation-states and geographic communities) or shared organisational form. In general, imprinting occurs in these collectives because the founding environmental conditions serve as constraints for early entrants, and the patterns that are established at that time are then perpetuated by subsequent organisations’ emulation of the collective’s older members.

By conceptualising imprinting in a theoretically grounded way, the author’s goal has been to unpack how and why the history of organisations and the individuals within them matters for understanding the present.

Editor’s Note to Readers

Schneider, B. Ehrhart, Mark G. Ehrhart,2 Macey, William H. (2013) Organisational Climate and Culture

This article presents an academic review of organisational culture and climate. In the article organisational climate is briefly defined as the meanings people attach to interrelated bundles of experiences they have at work. Organisational culture is briefly defined as the basic assumptions about the world and the values that guide life in organisations.

A brief history of climate research is presented, followed by the major accomplishments in research on the topic with regard to levels issues, the foci of climate research, and studies of climate strength. A brief overview of the more recent study of organisational culture is then introduced, followed by samples of important thinking and research on the roles of leadership and national culture in understanding organisational culture and performance and culture as a moderator variable in research in organisational behaviour.

The final section of the article proposes an integration of climate and culture thinking and research and concludes with practical implications for the management of effective contemporary organisations.

A major outcome of the climate research for psychology has been the acceptance of a level of theory and data other than the individual as relevant and important in organisational psychological research and practice.

Pettigrew (1979) added new dimensions to the study of organisational behaviour when he promoted a culture focus for organisational research. His emphasis on the relevance of myths, values, and history for understanding what organisations are was instructive to both researchers and practitioners. Although there were debates for decades about how to study organisational culture, including on what facets of organisations one might focus and whether culture should be expected to be related to organisational performance, since the turn of the millennium survey approaches have become more common, and increasingly there is an emphasis on the organisational performance consequences of organisational culture.

The work of Schein (1985, 2010) indicates that it is agreed by most that a major building block for organisational culture is attributable to the early decisions founders make about structures and organising principles and to what ends valuable resources will be expended.

The authors also devote time to outlining the Competing Values Framework (CVF) of Quinn & Rohrbaugh (1983). CVF is a way to summarise the wide range of issues that have been studied under the culture rubric, revealing how they combine to produce particular foci for organisations on outcomes. The finding that the cells in the framework are positively related suggests that organisations that do some things appropriately also are likely doing many other things appropriately.

The authors concluded that an integration of climate and culture theory and research has useful implications for practice, especially vis-`a-vis practice that yields data suggestive of organisational changes that might yield improvements in organisational behaviour and performance.

Editor’s Note to Readers

Victorian Public Sector Commission(2013) “Organisational Culture. A publication from the Leading Public Organisations series

This publication was written for organisational leaders in the Victorian Public Sector-specifically, people working in executive and senior management roles.

The publication is presented as an 'ideas sourcebook' rather than a step-by-step 'how to' guide. It is a collection of ideas designed to stimulate and inform leadership thinking, judgement and decision making in the face of specific situations, opportunities and dilemmas.

Organisational culture is the shared values and beliefs that guide how members of an organisation approach their work and interact with each other.

The paper notes that since the 1960’s workforces have become more diverse and it cannot be assumed that everyone shares the same values. It argues that culture matters because it impacts on most other organisational dynamics; it influences how organisations and their staff manage complexity, ambiguity and change. When organisational cultures are dysfunctional, staff become disengaged, and serious underperformance becomes a risk. A functional organisational culture is credited with improving organisational performance.

The paper suggests that the five top ways in which leaders can contribute to organisational culture include:

  • recognising their role in organisational culture
  • seeing and sharing the bigger picture
  • establishing cooperation and collaboration as the norm
  • understanding the power of symbols and messaging
  • acknowledging the different experiences andperspectives of staff across the organisation.

Organisational culture surveys and other empirical data sources provide a useful starting point for explorations of culture. But an understanding of the dynamics and subtleties of organisational culture will come from a leader’s own observations and intuition.

Editor’s Note to Readers

Heathfield, Susan (viewed 2015)“ How to change your culture: Organisational culture change”.

The author notes that when people in an organisation realize and recognize that their current culture needs to transform to support the organisation's success and progress, change can occur. The article is built around three major steps involved in changing an organisation’s culture. These include:

  • Take steps to understand the current culture.
  • Define the organisation’s vision, strategic direction and values.
  • Individuals in the organisation must then change behaviour to create the desired culture—it is recognised that this is the most difficult part of the process.

It is recognised that it is more difficult to change the culture of an existing culture than to create the culture of a new organisation. When an organisational culture is already established, people must unlearn the old values, assumptions, and behaviours before they can learn the new ones.

The two most important elements for creating organisational cultural change are executive support and training.

The author argues that executives in the organisation must support the cultural change, and in ways beyond verbal support. They must show behavioural support for the cultural change. Executives must lead the change by changing their own behaviours. It is extremely important for executives to consistently support the change.

Employees must clearly understand what is expected of them, and must know how to perform according to the new behaviours, once they have been defined. Training can be useful in both communicating expectations and teaching new behaviours.

The author notes that other ways to encourage change to organisational culture includes:

  • creating value and belief statements
  • practicing effective communication
  • reviewing organisational structure
  • redesigning the approach to rewards and recognition
  • reviewing all work systems.

The author doesn’t try to oversimplify the complexity of changing organisation culture. It is recognised that it requires time, commitment, planning and proper execution.

Susan Heathfield is a management and organisation development consultant who specialises in human resources issues and in management development to create forward thinking workplaces. Susan is also a professional facilitator, speaker, trainer, and writer. Susan has worked many years in HR. Since 1987, Susan has managed her own consulting company: she has consulted with over 100 clients and facilitated over 2,000 training and planning sessions.

Editor’s Note to Readers

CIPD in collaboration with PPMA (2012) Leading culture change - employee engagement and public service transformation

This report was written in the context of the UK Government wanting to oversee a transformation in public services so that service providers work collaboratively to deliver integrated services, and communities and individuals do more for themselves and on their own behalf.

The public sector leaders face significant challenges as they respond to the twin pressures of reducing spending and providing more customer-focused services. This involves looking at new ways of delivering services, for example increased commissioning of services and greater involvement of the private sector and non-profit organisations such as mutuals and co-operatives, as the role of the state is reduced and communities play a more active role. The chief executives and HR directors interviewed for this report recognise that to succeed they need to change the prevailing public service model to deliver greater value for money and more bespoke and localised service delivery.

Key points that emerge from the study include:

  • Cost reduction and service delivery transformation are two sides of the same coin
  • Public service ethos remains key
  • Staff involvement underpins buy-in
  • The ‘what’ and the ‘how’ of communication is critical
  • Culture change needed if service transformation is to be realised
  • Organisational development and leadership development lie at the heart of the change process
  • Values are important
  • Employee engagement is a valuable framework for values-based culture change
  • Employers need to build a new psychological contract
  • Engaging leadership starts at the top
  • Values form the foundation of leadership development
  • All managers need leadership skills
  • You can’t manage what you can’t measure
  • HR’s role in developing wider organisational leadership capability is critical
  • Employee voice key to service transformation
  • Industrial relations with unions are pragmatic

Public Sector People Managers’ Association (PPMA) serves and represents the professional interests of members working across the HR/OD professions within the public sector. The Association influences and contributes to the development of public policy and legislation in this respect, constantly advocating the need for higher standards of people management and development to further enhance the delivery of public services.

Editor’s Note to Readers