Factors That Shape an Organization's Culture
Organizational leaders often speak about the unusual natures of their company cultures, seeing their
domains as special places to work. But organizations such as Disney and Nordstrom, which are well-
known for their unique cultures, are rare. See Viewpoint: 3 Steps to Cultivating a Customized Culture.
Most company cultures are not that different from one another. Even organizations in disparate
industries such as manufacturing and health care tend to share a common core of cultural values. For
example, most private-sector companies want to grow and increase revenues. Most strive to be team-
oriented and to demonstrate concern for others. Most are driven, rather than relaxed, because they are
competing for dollars and market share. Some of the cultural characteristics that distinguish most
organizations include the following.
VALUES
At the heart of organizations' cultures are commonly shared values. None is right or wrong, but
organizations need to decide which values they will emphasize. These common values include:
Outcome orientation. Emphasizing achievements and results.
People orientation. Insisting on fairness, tolerance and respect for the individual.
Team orientation. Emphasizing and rewarding collaboration.
Attention to detail. Valuing precision and approaching situations and problems analytically.
Stability. Providing security and following a predictable course.
Innovation. Encouraging experimentation and risk-taking.
Aggressiveness. Stimulating a fiercely competitive spirit.
See Trust Engenders Trust: A Q&A with Paul J. Zak.
DEGREE OF HIERARCHY
The degree of hierarchy is the extent to which the organization values traditional channels of authority.
The three distinct levels of hierarchy are "high"—having a well-defined organizational structure and an
expectation that people will work through official channels; "moderate"—having a defined structure but
an acceptance that people often work outside formal channels; and "low" —having loosely defined job
descriptions and accepting that people challenge authority.
An organization with a high level of hierarchy tends to be more formal and moves more slowly than an
organization with a low level of hierarchy.
DEGREE OF URGENCY
The degree of urgency defines how quickly the organization wants or needs to drive decision-making
and innovation. Some organizations choose their degree of urgency, but others have it thrust on them
by the marketplace.
A culture with high levels of urgency has a need to push projects through quickly and a high need to
respond to a changing marketplace. A moderate level of urgency moves projects at a reasonable pace. A
low level of urgency means people work slowly and consistently, valuing quality over efficiency. An
organization with high urgency tends to be fast-paced and supports a decisive management style. An
organization with low urgency tends to be more methodical and supports a more considered
management style.
PEOPLE ORIENTATION OR TASK ORIENTATION
Organizations usually have a dominant way of valuing people and tasks. An organization with a strong
people orientation tends to put people first when making decisions and believes that people drive the
organization's performance and productivity. An organization with a strong task orientation tends to put
tasks and processes first when making decisions and believes that efficiency and quality drive
organization performance and productivity.
Some organizations may get to choose their people and task orientations. But others may have to fit
their orientation to the nature of their industry, historical issues or operational processes.
FUNCTIONAL ORIENTATION
Every organization puts an emphasis on certain functional areas. Examples of functional orientations
may include marketing, operations, research and development, engineering or service. For example, an
innovative organization known for its research and development may have at its core a functional
orientation toward R&D. A hospitality company may focus on operations or service, depending on its
historical choices and its definition in the marketplace.
Employees from different functions in the company may think that their functional areas are the ones
that drive the organization. Organizational leaders must understand what most employees perceive to
be the company's functional orientation. See Building a Customer-Centric Culture: Five Lessons Learned.
ORGANIZATIONAL SUBCULTURES
Any organization can have a mix of subcultures in addition to the dominant culture. Subcultures exist
among groups or individuals who may have their own rituals and traditions that, although not shared by
the rest of the organization, can deepen and underscore the organization's core values. Subcultures can
also cause serious problems.
For example, regional cultures often differ from the overall culture that top leadership tries to instill.
Perhaps aggressiveness that is common in one area may not mesh with a culture emphasizing team
building. Or an organization with a culture built around equality may have trouble if the national culture
emphasizes hierarchy and expects people to bow to authority. Employers must recognize those
differences and address them directly.
