Anthropologists believed that the term "culture" could be used to differentiate human kind and other animals. Initially culture was projected as an answer to one of the various reasons of existence of human. On a basic idea of developing the meaning to the word "culture", anthropologists argued that it is a possible explanation for the "uniqueness of human development". This argument resulted in development of new ideas about culture which include, various cultural groups, the societies which formed depending on the stage of development varying from primitive to modern. (Hatch; 1997).
Culture was always considered as one facet of anthropology (Robbins; 1983) but there were various other definitions to the word "culture" proposed by various other researchers. These include,
An interdisciplinary phenomenon with contributions from psychology, sociology, anthropology and social psychology -Lewis, 1998
The concept of culture is frequently linked with exotic, distant people and places as well as with myths, rites, foreign languages and practices (Lund; 2003)
. Schermerhorn et al. (1995) in Corbett and Rastrick (2000) describes culture as not an inborn thing but it is passed on through contact with others and is shared amongst them
Culture has got something related to people and the unique quality and style of management- Kilman et. Al 1985.
Culture is the way things are done. - Deal and Kennedy (1982)
Culture is the integrated pattern of human behavior that incorporates thought, speech and action.- Pennington (2003)
Various organizations relate culture and the people in the organization as the bridge and the backbones of the organizations. The bridge coordinates the company, people and relative communities. Pennington (2003) states that technology, value chains, distribution models etc of the company without the culture are baseless. Thus, the concept of culture plays a prominent role in the study of organizations and this is the main reason that many researchers have been associated with the concept of culture and their impact on other organizational variables.
2.1 Organizational Culture and its role:
Organizational culture was considered as one of the complex organizational terms to define (Hatch; 1997). Organizational culture was defined by Jaques (1952) as the customary and traditional way of working out the common aspects that are shared by the members in the organization. This was one of the earliest definitions made on the term organizational culture and it also said that the new members in the organization are supposed to learn and adapt to the customary and traditional way of working in order to be accepted into the services of the organization. According to Kilman et al. (1985), organizational culture explains the ideology, values, beliefs, shared philosophies, assumptions, expectations, attitudes and norms of an organization. Hofstede (1991) defined organizational culture as the communal programming of the mind of people in as organization and this individualize each organization. As per the analysis made by Hampden-Turner (1994), organizational culture motivates an individual, guides towards a proper behavior and suggests solutions in a state of ambiguity.
After the wide range of definitions proposed by various researchers for the term "organizational culture", the definition proposed by Schein in 1992 was widely accepted. He stated that organizational culture is "A pattern of basic assumptions - invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and integral integration - that has worked well enough to be considered valuable and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems". In 1983, Jones stated that the organizational culture could as well act as an imaginary map that can influence the definition of the framework and the selection of norms and mechanism. It can also be considered as a pattern of beliefs, symbols, myths, rituals and practices that were developed and adapted by an organization over a certain period of time according to Pheysey (1993).
Culture to an organization is as phenomenal as personality to human and it is main guide to the employee behavior that can be obtained from a system of shared meanings, beliefs and values - says Van de Post et al. (1998). Various people had various conclusions made on the uses of organizational culture. According to Schein (1999), it is the control method and structure to produce behavioral standards. Irani et. Al (1997) says organizational culture is a series of separate beliefs that are being dragged in various directions at the same point of time.
According to Robbins (1996), organizational culture plays a vital role in successful functioning of the organization and setting a similar path of working amongst the employees in the organization. As discussed earlier, culture in an organization plays a major role and this can be categorized into functions based on the role played by the organizational culture and its influence in different processes in the organization. These functions of organizational culture include
Integration function: socializing of new members, loyalty towards the organization, the feeling of individuality among employees and setting boundaries to the organization.
Coordination function: creating a competitive edge and to make a sense of environment in stipulation of acceptable behavior and social stability. (Martins and Terblanche; 2003)
For the success of the organization, these functions should be properly mended and utilized. If the functions are not utilized in an effective way, the success of organization with respect to culture would be low. (Furnham and Gunter; 1993). This also answers the difference between the reality and the declared results which helps the organization to keep the strategy working. (as Martins 2000 in Martins and Terblanche 2003).
2.2 Conceptual Models of Organizational Culture:
The previous chapter highlighted the definitions of organizational culture and its effect in an organizational perspective. The adverse effects of not maintaining the culture were highlighted as well. This chapter throws light on different models proposed by several eminent authors. Various models of organizational culture have been developed in order to explain the links between phenomena and variables of organizational culture (Martins and Terblanche; 2003).
According to the model developed by Edgar Schein in early 1980s, existence of culture can be divided into three different levels. The order was artifacts on the top followed by the values and behavioral norms and beliefs with assumptions at the bottom. (Hatch; 1997). Schein explains that the term level refers to the views of a primary viewer on the cultural phenomenon. Culture is basically sharing of meanings and assumptions made amongst the employees of the company and these assumptions can be managed by the hierarchy having known the operation procedures. (Huczynski and Buchanan; 2007).
Figure 1: Levels of Culture
Adapted from Schein (1992: 17)
Level 1: Surface Manifestation of Culture: this is considered as the first level of the model and is considered as a easy method to get to the forms of culture. This mainly associates the physical objects and behavior patterns that can be visible, audible and sensed. (Huczynski and Buchanan; 2007). Rollinson and Broadfield (2002) describes that these visible demonstrations of culture include the building lay out, people's attire and communication skills amongst them. Viewing these demonstrations individually may be risky. The drawback of this level is that it is very tough to decipher as the observer can easily explain the content that has been observed but cannot regenerate the observed content. (Schein 1992). These observations could lead to generation of hints on underlying values and beliefs (Rollinson and Broadfield 2002).
Level 2: Values and Beliefs: This level consists of justifications of people's behavior as they tend to do (Sathe 1985). The organizational values and beliefs are differentiated into terms 'good' and 'normal' within an organization (Hofstede et. Al; 1990). These are the things that have personal or organizational worth to the founders or senior management are usually based on moral societal or religious perceptions made during educating and implemented all the way through experience. (Huczynski and Buchanan; 2007).
Level 3: Basic Assumptions: These are basically the assumptions made by the employees on the employers regarding the operation strategy of the organization and these assumptions are taken for granted by the individuals with respect to aspects of human behavior. These assumptions are fundamental beliefs that are invisible and preconscious and are difficult to access. ( Huczynski and Buchanan; 2007).
Criticism has to be faced by everything. Schein's model was criticized because of the fact that it could not explain the importance of assumptions and beliefs in forming and changing organizational culture (Hatch; 1993).
Sathe developed another model to describe the organizational culture in 1985 and this theory is a part of organizational reality and emphasizes on the influence of leadership, organizational effectiveness and the level of personnel satisfaction brought with respect to the real and predictive behavior patterns. This model could not explain the effects of external factors on organizational culture (Martins and Terblanche ; 2003).
Another model was proposed to describe organizational culture by Martins in 1987. This theory was based on the interaction of organization's sub-systems (goals and values, structural, managerial, technological and psycho-sociological sub systems), the two continued existence functions, referred as the internal systems (artifacts, values and basic assumptions) and the external environment (social, industrial and corporate culture), and finally the dimensions of culture (leadership, inter-personal relationships, mission and vision, management processes, image of the organization, employee needs and objectives, external environment and means to achieve objectives). This model explains almost all aspects of organization that can be effected by organizational culture and hence it can be used to explain organizational culture in an organization (Martins and Terblanche; 2003).
Another model was developed in 1997 by Hawkins which was a variation to Schein's model and this model has complex structure if cultural layering compared to the later one. This model has been derived in the shape of a lotus and comprises five major elements. First element among them was artifacts, buildings, attires, mission statements etc. Second was behavior of the people, communicating and addressing the problems and way of rewarding. Behavior was followed by marking surface. The 'mind- sets' i.e., the belief system and the assumptions were considered as the fourth element followed by emotional ground. Emotional ground is a collective group of organization environment and the feel it provides. Further, motivational roots which binds the relationship between the individual alignment and the purpose of the organization was attached.
Every model had to face criticism even though they clearly explain various aspects of organizational culture. Schein was criticized for not explaining the three levels of culture and Sathe's cultural model mainly focused on the effects of various internal organizations factors on the organizational culture. Matrin's model explained the external factors as well and Hawkin's model was considered as an extended version of Schein's model which covered the influence of organizational culture and motivational factors as well.
2.3 The nature of organization culture:
In order to understand the complexity of organizational culture literature, it is very important to emphasize on the various perspectives of organizational culture that were adopted by the researchers. These perspectives were discovered by Martin and Meverson (1988) which include
Integration perspective
Differentiation perspective
Fragmentation perspective.(Wilson; 2001).
2.3.1 The integration perspective:
Integration perspective on culture asserts that culture is an organization wide phenomenon consisting of a set of shared values and beliefs to which all or most of the organizational members subscribe that make their life less ambiguous (Rollinson and Broadfield; 2002). It is the integration perspective that is linked with the work of Peters and Waterman (1982) and which became prominent in the 1980s (Parker and Bradley; 2000). According to Martin and Meyerson, the integration perspective assumes that a strong or desirable culture is one where there is consistency, organizational-wide consensus, and clarity (Frost et. al; 1991) and a weak or negative culture is one where inconsistencies, conflict or sub-cultural differentiation occurs (Wilson; 2001).
The pattern of relationships among various cultural manifestations that are included in a cultural portrait describes consistency. Espoused values are consistent with formal practices that in turn are consistent with informal norms, beliefs, stories, rituals and attitudes. This commonly strengthened matrix of manifestations creates organizational-wide consensus and thus cultural members share the same values and understandings. This consensus results in clarity and ambiguity is eliminated from this approach to understand culture (Frost et. al; 1991). This is the view that appeals the most to many managers (Rollinson and Broadfield; 2002), as these integrating features will result in enhanced organizational effectiveness through better employee commitment and control as estimated by productivity and profitability (Huczynski and Buchanan; 2007).
2.3.2 The differentiation perspective:
The differentiation perspective declines the concept of organizational-wide consensus, highlighting the significance of sub-cultures coupled with demographics or professional occupational categories (Martin and Frost; 1996) and emphasizes that consensus only crops up within the boundaries of sub-cultures rather than being organization wide (Wilson; 2001). According to Martin and Meyerson, the differentiation perspective views organizational culture as a mixture of inconsistencies. Meanings are shared at times, but mostly with in sub cultural boundaries and with in these boundaries, everything is clear. Ambiguity comes into view only in the interstices between sub-cultures. (Frost et. al; 1991)
Differentiation perspective on culture asserts that organizations are generally made up of different groups with their own sub-cultures. This statement is likely to be true about the different parts of the organization and is supported by the work of Sackman (1992), who explains that in most of the organizations, the entirety of knowledge is not accessible to everyone within the organization and as a result of which different groups became the curators of different type of information, which then results in developing their own systems of shared meanings and interpretations (Rollinson and Broadfield; 2002). Wilson (2001) suggests that distinct sub-cultures may co-exist in agreement, conflict or indifference to each other at different levels of organization. In his study of Disneyland, Van Maanen (1991) found out that a number of groups of employees considered themselves as being distinct and each of these subcultures are further separated by different jobs, gender, class and different levels of organizational status. Claims of harmony from management and the appearance of homogeneity masked an excess of inconsistencies and group antagonisms. In spite of this complexity, things appeared understandable from the viewpoint of any one of the subculture (Frost et. al; 1991).
In differentiation perspective, the main aim is to recognize the ineffectiveness of cultural consensus with in the organizations and the attention is centered upon the way in which the organizational reality is created and recreated. Thus, this perspective sees culture as an essential aspect of all organizations and seeks to realize the difficulty and the interaction among regularly incompatible subcultures. (Huczynski and Buchanan; 2007)
2.3.3 The fragmentation perspective:
The fragmentation perspective holds a postmodern view of organizational culture which looks for neither consistency nor stability. It looks or focuses more on the ways in which organizational cultures are inconsistent, ambiguous, multiplicitous and in a constant state of flux (Hatch; 1997) and can be seen as a post modern critique of the differentiation perspective (as Martin in Hatch; 1997). This third perspective suggests that the relationships between cultural manifestations are described by lack of clarity as well as paradox and ambiguity and hence culture is neither fully integrated nor completely differentiated. Individuals may agree on certain issues at one point of time and at other times they may be unaware, unresponsive and in total opposition to the governing managerial view. Fragmentation perspective stresses individual adjustment to environment fluctuations that also includes the patterns of attention and adaptation. (Kelemen and Papasolomou-Doukakis; 2004)
This perspective views ambiguity as the norm, with consensus and disagreement existing simultaneously in frequently changeable patterns influenced by proceedings and explicit areas of decision making (Wilson; 2001). Frost et al. (1991) explains that studies influenced by fragmentation perspective examine cultural manifestations that are neither clearly consistent nor clearly inconsistent with each other. The relationships between espoused values, formal practices, informal norms, rituals etc. are difficult to interpret and are seen as vague. From this perspective, consensus falls short to combine on an organizational-wide or sub cultural basis, apart from transient, issue-specific ways. It more looks on what is unclear, rather than the clear unity of integration viewpoint or the clear conflicts of the differentiation one (Wilson; 2001). The fragmentation perspective offers no comfort for the managers or academics who looks for transparency (as Cohen et al, 1972; Becker, 1982 in Huczynski and Buchanan; 2007).
Wilson (2001) argues that there are also methodological differences between these perspectives. Much of the work identifying integration perspective has involved small scale qualitative research in which the interviews has only been carried out with the top management of chosen organization like by Peters and Waterman (1982) and Deal and Kennedy (1982). However, Martin et al (1983) criticizes such approach as this provides a deficient picture of an organization's culture, imitating only what the top management look forward to see. In contrast the studies identifying a differentiation perspective have inclined to be quantitative, involving interviewing large numbers by the use of some form of standard research instrument (as Martin and Frost; 1995 in Wilson; 2001). Schein (1992) criticizes such approach for its lack of depth and its lack of ability to appraise the distinctive characteristics of an organization.
Most of the studies regarding organizational culture are focused on only one of the above stated perspectives with an argument that whether it or it alone is obvious with in organizations (Wilson; 2001). However, Harris and Ogbonna (1998) provide an interesting insight on these perspectives by arguing that all of these perspectives exist side by side in different parts of same organization. In order to view organization as one big family, the top management adopts an integrationist view. Middle management or managers, who are generally focused on their functional roles, have differentiationist perspective (Rollinson and Broadfield; 2002). This is further supported by Wilson (2001) who argues that middle management may want to detach itself from top management and as a result subcultures and a differentiation perspective may be more suitable. Where as the fragmentationist view is more suitable at the very bottom of an organization, where people (shop floor workers) focus on their immediate tasks while keeping their heads down. (Rollinson and Broadfield; 2002)
To sum up it can be concluded that integration perspective is the perspective which is mostly adopted by various authors in their research to describe the culture-performance relationship and there is a lot of literature published describing the integrative viewpoint and culture-performance relationship which is described in the latter part of this section.
2.4 Assessing and Measuring Organizational culture:
Organizational culture as a concept has been significant, yet it is not clear whether it will continue to exist as a valuable and feasible addition to the conceptual armamentarium of organization studies. It revolves around the core definition, both from a formal conceptual as well as from a practical applied point of view and hence in order to build it as a useful concept, it is very important to agree on how to measure it, study it and apply it in the real world organizations. (Schein; 1991)
Louis (1985) in Lau and Ngo (1996) proposes that the roots of culture can be measured by looking out for certain provoked terms under which implicit understandings and methods are accessible and hence natural and historical happenings can be used to interpret organizational culture. Feldman (1986) in Lau and Ngo (1996) intercepts culture as a context and is a symbolic methodology which people use to express their actions and thus culture can be measured with the help of symbols and roles that they play in organizational actions. Also in view of the fact that artifacts and deeper level values are organizational level phenomena, thus organizational culture can be assessed at organizational level and authors like Bernstein and Burke (1989) developed questionnaires to measure organizational belief systems while Cooke and Rousseau (1988) devised a structured questionnaire in order to access various norms and expectations of dissimilar units and levels in an organization. (Lau and Ngo; 1996)
Maull et al (2001) states that the Hofstede process of measuring organizational culture entails two interweaved steps i.e. in-depth area in each business unit and a questionnaire survey of samples of managers and other workers. Maull et al (2001) also explains that Hofstede in 1980 used this approach to assess culture across countries while in later years he has applied this approach in order to examine internal organizational culture. Liu et al (2006) in their work of studying organizational culture has diversified the study into two types i.e. the typological approach (cultural types) and the trait approach (cultural dimensions).
Furnham and Gunter (1993) explains that assessing organizational culture is difficult and the problem surrounds whether to assess subjective beliefs, unconscious assumptions, attitudes and expectations or more recognizable phenomena like rites, rituals and behavioral norms. Measuring artefacts, patterns of human behaviour and behavioral norms are done quite differently as compared with measuring attitudes, beliefs values and primary assumptions. Moreover differences between objective versus subjective, superficial versus deep, accessible versus inaccessible, conscious versus unconscious have not been so helpful because one part of the dimension is normally considered as good and the other part as bad.
The issue of measuring organizational culture is fraught with ambiguity due to the role of the unconscious, the uniqueness of organizations and rehearsed epistemological and ethical debates. This debate is between the emic/insider and etic/outsider perspective, where the former believes culture as a highly subjective, idiosyncratic, exclusive, sensitive and interactive probing concept which cannot be studied correctly by apron research constructed categories and scales, and the latter seeks to compare and contrast organizations on standard measures by means of psychometrics and survey research. (Furnham and Gunter; 1993)
Rousseau (1992) in Furnham and Gunter (1993) offers a critical review of some of the currently used and psychometrized culture inventories which throws light on aspects of culture measurement, focus, dimensions, levels and format as well as deals with traditional criteria like reliability and validity. But many found that the criteria were non-existent or poor source which leaves a huge question mark about traditional measurement criteria and they are also appeared very inconsistent in their work like Allen and Dyer (1890) measures seven behavioural norms, Kilmann and Saxton's (1983) four behavioural norms in a 2 by 2 framework, O'Reilly, Chatman and Caldwell (1988) evaluates nine categories of values, Sashkin's (1984) ten values shared by the members of the organization and Glaser (1983) measures Deal and Kennedy's (1982) four types of shared values and beliefs. (Furnham and Gunter; 1993)
After all this thorough analysis, it is understood that culture is a complex substance which makes it difficult to be measured and accessed in a precise manner.
2.5 Organizational Culture and Performance:
Culture is undoubtedly a vital element of effective organizational performance (Mullins; 2007) and without any exception, the business literature emphasizes that culture has a considerable effect on organizational performance (Lewis; 1998). Laitinen (2002; p. 66) defines performance as "the ability of an object to produce results in a dimension determined a priori, in relation to a target". Kotter and Heskett (1992) found that corporate culture has a significant impact on organization's long-term economic performance and firms with cultures that emphasizes all key managerial constituencies like customers, stakeholders, employees and leadership from managers at all level, performed well against firms that do not have such cultural traits. A positive culture with in an organization could result in immense benefits for the organization and provides a competitive edge over other rival firms where as negative culture could have an adverse effect on organizational performance (Sadri and Lees; 2001). The results of the study conducted by Van der Post et al. (1998) in order to study the relationship between culture and performance of organizations in South Africa showed a positive relationship among culture and performance.
According to Alvesson (2002), there are four views on the relationship of organizational culture and performance. They are:
The most common of all is the strong-cultural thesis and it is assumed that the commitment of an organization's employees and managers to the same set of beliefs, norms and values within an organization will show positive results.
The other view suggests that there is a reverse relationship between organization culture and performance i.e. High performance leads to the creation of strong cultures within an organization and culture is just a by-product of high performance.
Another observation throws light on contingency thinking and suggests that under certain circumstances a particular type of culture is appropriate and thus contributes to performance.
Still another vision suggests that adaptive cultures are the main contributors to good performance. These are those cultures that are clever to react to changes in the environment and are represented by people, who are willing to take risks, proactive, trust each other etc. But for the organizations that are established and fit with in a stable environment, a great deal of changes can direct to instability, low-cost efficiency and a loss of sense in direction.
Since the main aim of this research is to find the impact of strong organizational cultures on organizational performance (effectiveness), it is essential to throw light on the concept of strong organizational cultures which is discussed below,
2.5.1 Strong Organizational Cultures:
The most elegant culture-performance perspectives, associates strong cultures with performance (Kotter and Heskett; 1992) and also one of the most widely reported hypothesis is that a strong culture facilitates an organization to achieve excellent performance (Brown; 1998). According to Deal and Kennedy (1982, p.15) "A strong culture is a system of informal rules that spells out how people are to behave most of the time". The presence of strong culture enables employees to know what is expected of them and hence employees will waste less time in deciding how to work in certain circumstances as compared with weak cultures where employees waste a great deal to time in deciding what to do and how to do it in a given situation (Deal and Kennedy; 1982). Strong culture can have a major impact on the success of the organization because of its pervasive control throughout any organization (Kilman et al; 1985).
A strong culture is characterized by homogeneity, simplicity and clearly ordered assumptions (Alvesson; 1993). In a strong culture, the core organization values are both widely shared and intensely held. The more the number of members is accepting these core values and the more their commitment to those values, the stronger the culture is. Thus strong culture has a great influence on the behaviour of the members of that particular organization as the high degree of sharedness and intensity crafts an internal atmosphere of high behavioural control (Robbins; 1996). Zuckerman (2002) suggests that companies with strong cultures, where values and norms are widely shared and strongly held are most likely to outperform their counterparts. He also argues that the companies with strong cultures are likely to enjoy better return on their investments, higher net income growth and bigger increase in share prices than the companies with weaker cultures.
Brown (1998) explains the logic of how a strong culture leads to exceptional performance by three key arguments which are discussed below:
1. A strong organizational culture facilitates goal alignment
In a firm with strong cultures, employees tend to follow to the same drummer (Kotter and Heskett; 1992). Brown (1998) states the idea behind this argument is that employees sharing the same basic assumptions can not only agree on what goals to pursue but also on the means by which they should be attained. This is further supported by Alvesson (2002) by stating that a common culture makes it easier to agree upon goals as well as correct measures for achieving them. Zuckerman (2002) in his argument states that when values are clear and broadly accepted i.e. strong cultures, internal coordination and control are more effective and hence the alignment between goals and behaviour are significantly improved. Moreover, fewer amounts of time and resources are wasted in deciding what actions to take and how to organize these actions.
2. A strong culture leads to high levels of employee motivation
The presence of strong organizational culture creates an unusual level of motivation among employees. It is believed that shared values and behaviours make people feel good about working for their organization and that the feeling of commitment and loyalty make people strive harder. Most of the time certain practices are believed to be common among organizations with strong cultures and these practices are said to make work intrinsically rewarding (Kotter and Heskett; 1992). This is further supported by Brown (1998) by suggesting that strong culture organizations incorporate practices which make working for employees rewarding such as employee participation in decision making and various recognition schemes.
It is also assumed that a shared culture pushes people to identify with the organization and feel belongingness and responsibility for it (Brown; 1995) and hence resulting in positive effect on motivation. Strong cultures are also believed to assist performance as they make available needed structures and controls without having to rely on an airless formal bureaucracy that can diminish motivation and innovation (Kotter and Heskett; 1992).
3. A strong culture is better able to learn from its past:
The grass root of this discussion is that strong cultures possess agreed norms of behaviour and integrative rituals and ceremonies and these reinforce consents on the explanation of issues and events based on previous experience; provide examples which helps to decide how to meet new challenges and encourages self-understanding and social cohesion through shared understanding of the earlier period. Hence an organization with strong cultures will be able to reflect on its development and also be able to learn from their past successes and failures and is likely to perform better than competitors that are unable to do so. (Brown; 1998)
Further to these three arguments, another argument was highlighted by Robbins (1996) stating that the presence of strong culture lowers the employee turnover rate due to the fact that strong culture exhibits high level of agreement among employees about what the organization stands for. Such an agreement of purpose builds cohesiveness, loyalty and commitment among employees and thereby reducing employee's tendency to leave the organization.
2.6 Organizational Effectiveness:
Effectiveness is one of the most frequently used words in discussing organizations and there is neither a universally accepted theory of organizational effectiveness nor a universally accepted definition (Rollinson and Broadfield; 2002). However, Organizational effectiveness can be defined as the degree to which an organization recognizes its goals and is a broad concept that takes into consideration a number of variables both at the organizational as well as departmental levels and it also evaluates the extent to which various organizational goals whether official or operative are accomplished. (Daft; 1995)
2.6.1 Models of Organizational Effectiveness:
There has been a continuous search for a model of organizational effectiveness by scholars throughout the 20th century but the model of organizational effectiveness changes with each theory of organization (Lewin and Minton; 1986). However agreement among scholars that different situations and constituents involve different organization theories and effectiveness criteria led to a series of models of organizational effectiveness (Zammuto; 1984). They are:
2.6.1.1 Goal attainment model:
This is the oldest and the best-known approach to organizational effectiveness (Rollinson and Broadfield; 2002) based on the theory that organizations are rational systems that subsist to achieve stated goals (Baker et al; 1997). This approach to effectiveness consists of identifying an organization's output goals and evaluating how well the organization has achieved them (Price; 1972). Baker et al (1997) considers this as a logical approach to effectiveness as organizations certainly aims to achieve definite levels of output, profit or customer satisfaction.
This model speculates that organizations are effective to the degree by which they attain their stated goals and hence the focus is on efficiently accomplishing them. The more strongly the outcomes match the goals, the more effective is the organization (Baker et al; 1997). This model is mainly used in business organizations as output goals can be readily measured but there are also two main problems that needs to be resolved which are issues of multiple goals and subjective indicators of goal attainment (Daft; 1995). Baker et al; (1997) also agreed with the above stated problems and identified the shortcomings of this model as the problematic nature of goals, measuring issues like adapting to organization changes and complexity in making organization comparisons.
2.6.1.2 Open system model:
This model hypothesizes that organizations are effective to the degree by which they are able to exploit or bargain with its environment in order to acquire scarce and valued resources (Harrison; 1987). The criteria of assessing effectiveness is the acquiring of resources to maintain organization systems and the effectiveness indicators includes bargaining position, maintaining internal day-to-day organization activities, ability of system's decision-maker to properly recognize and understand the properties of external environment and organizations ability to respond to environment changes (Daft; 1995). The main focus of this model is on competitive advantage and the more the numbers of resources obtain by an organization from the environment, the more effective the organization is (Baker et al; 1997).
2.6.1.3 Human relations model:
This model is similar to multiple constituency approach which is an evaluation of organization's effectiveness against the measure by which organization persuades the interests of its internal as well as external stakeholders (Rollinson and Broadfield; 2002). Each stakeholder has a different approach to effectiveness depending upon their interest in the organization (Daft; 1995).
This model takes into account the human side of organizations e.g. the impact of employees on organizational effectiveness and is based on the theory that the employee's motivation, performance and job satisfaction are influenced by organization's informal system. This model speculates that organizations are effective to the degree by which the organization goals and the employee's personal needs are complementing each other. The greater the fit between goals and employee needs, the more effective is the organization (Baker et al; 1997).
2.6.1.4 Internal process model:
This approach or model of effectiveness does not consider the external environment and effectiveness is measured as internal organizational health and efficiency. Organization's having a smooth, well-oiled internal processes where employees are pleased and satisfied and departmental activities co-relates with each other in order to guarantee high productivity are considered as effective and efficient. Indicators of an organizational effectiveness from the viewpoint of internal process model are strong corporate culture, positive work climate, team spirit and team work, communication, rewards for performance, growth and sharing of facts and feelings. Efficient communication, information management and decision-making can be considered as the subgoals of this model. (Daft; 1995)
The above are the different models of organizational effectiveness. Each model measures organizational effectiveness depending upon the viewpoint it takes. Rollinson and Broadfield (2002) summarizes that all these models or approaches to evaluate effectiveness of an organization mainly depend upon how appropriate the organization behaviour is but each model uses different behaviour criteria as the basis for assessment of organizational effectiveness in different situations.
2.7 Linking culture with performance (effectiveness):
The relationship between organizational culture and performance has always been a topic for debate among eminent authors over the last decade. As discussed earlier there are a number of books and articles published regarding this aspect of culture. Cameron and Freeman (1991) in their research found out relationship between the type of culture and organizational effectiveness and argued that each type of culture was linked to certain features of organizational effectiveness. It has also being argued that the basis for a firm's sustained competitive advantage is formed by organizational culture (Lau and Ngo; 1996). Culture is also vital for developing high performers and leads to better commitment by employees (O'Reily; 1989, Sherwood; 1988) where as Calori and Sarnin (1991) found minute association between organization's value and profitability.
Denison (1990) suggested that there are four different facets of organizational culture that impacts organizational effectiveness and discussed these facets in the form of four hypothesis tagged as involvement, consistency, adaptability and mission hypothesis. According to Denison (1990) these are those four hypotheses that conjointly associate those cultural variables that have an influence on organization's performance. Kotter and Heskett (1992) works are built on the ideas of Denison and their findings concluded that cultures having many shared values and practices, cultures that are able to adapt to change and are strategically appropriate and cultures which value both stakeholders and effective leadership at all organizational levels are performance-enhancing organizational cultures.
The work done by Denison and Fey (2003) in order to link culture with effectiveness resulted in dissimilar patterns of correlations between cultural variables and objective measures of organizational effectiveness. Denison et al (2004) pursued the same approach to examine the link by looking for correspondence between twelve organizational culture factors and overall organizational effectiveness and found out that all the twelve factors are related to effectiveness in their sample of 169 firms in America but no relationship existed in their sample of seven Asian firms.
However in order to find evidence to link strong organizational cultures and effectiveness in this research, Denison's four cultural determinants of effectiveness would be most appropriate and are discussed below:
2.7.1 Cultural determinants of Effectiveness:
2.7.1.1 The Involvement Hypothesis:
This hypothesis explains that organizational effectiveness is a function of the level of involvement and participation of the members of an organization and the involvement may be either informal and spontaneous or formal and planned (Brown; 1998). The argument behind this is that high level of involvement and participation constructs a sense of ownership and responsibility and this result in greater commitment of employees towards the organization and an increased ability to work under conditions of greater autonomy. Increase in employee commitment also results in increasing the quality of decisions and their execution. (Denison and Mishra; 1989)
According to Denison (1990) both voluntary and bottom up involvement and structured move towards attaining involvement demonstrates a positive impact on effectiveness.
Ouchi (1980, 1981) described that a high involvement organization has a characteristic of a clan culture. Denison and Mishra (1989) argues that this hypothesis is not unique to cultural literature and has several examples in organizational behaviour including both classics and recent works. However, the latest assessment on participation literature by Locke and Schweiger in 1979, found out that there was a modest link between participation and performance. As a whole, the involvement hypothesis is a convincing one and continues as a central hypothesis for linking organizational culture and effectiveness. (Denison and Mishra; 1989)
2.7.1.2 The Consistency Hypothesis:
This hypothesis stresses the positive impact of strong culture on effectiveness by arguing that a shared systems of beliefs, values and symbols that are broadly understood by organizational members, are effective source for reaching consensus and carrying out coordinated actions. The basic idea in this hypothesis is that implicit control systems are more effective than external control systems for achieving coordination (Denison and Mishra; 1989). Communication can be regarded as more trustworthy process for exchanging information in consistent cultures as there is a common agreement on the meaning of words, actions and other symbols. Also effectiveness can be assisted by consistently held value-based principles which advise actions when members encounter unfamiliar situations. (Brown; 1998)
However consistency can also be regarded as a double edge sword and there are two arguments behind this statement. First statement is whether value based principles impacts performance mainly depends upon whether they are suitable to business environment and secondly, where there is inconsistency among the culture in practice and espoused culture, integration and coordination may have a tendency to break down. (Brown; 1998)
In whole, there is a clear distinction between the involvement and consistency hypothesis. While the former asserts that the inconsistency and non-conformity linked with a more self-governing internal process can be outweighed by high level of involvement and participation of members in various organization tasks where as the latter asserts that high levels of consistency, conformity and consensus will offset low levels of participation and involvement. Organizations that are effective seem to combine both these principles where involvement is used to create potential ideas and solutions, which are then developed into a more specific set of principles. (Denison and Mishra; 1989)
2.7.1.3 The adaptability hypothesis:
As both the involvement and consistency takes internal integration as their primary focus, these two concepts cannot alone confine the organizational member's statements about the linkages between their organizations and their environment (Denison and Mishra; 1995). Schein (1985) highlighted the relationship among culture and adaptation, emphasizing that a culture typically consists of communal behavioral responses that are adaptive in the past. This hypothesis holds that in order for an organization to boost its chances for survival, growth and development, it must hold a system of norms and beliefs which will provide support to the ability of an organization to gather understand and translate signals from its environment (Denison and Mishra; 1989).
Theorists like William Starbuck in Denison and Mishra (1989) discussed the concept of morphogenesis which can be used to express the ways by which an organization increases its survival chances by continuously changing its internal structure and processes. Also Kanter (1983) talked about the issue of ability to restructure and its link with adaptation and argued that managers with the potential for integration are more expected to be successful at initiating change.
Hence, three aspects of adaptability impacts organizational effectiveness. Firstly the capability of an organization to recognize and respond to the external environment, second is the ability to respond to internal customers and finally the capacity to restructure and re-institutionalize a set of behaviors and processes and thus allowing an organization to adapt. An organization cannot be effective without these three aspects or ability to execute an adaptive response. (Denison and Mishra; 1989)
2.7.1.4 The mission hypothesis:
The last of the four hypothesis depicts the importance of a mission or shared definition which provides meaning and direction to organizational members. The mission hypothesis contrasts the adaptability one, as it emphasizes the strength of organization's central purpose and de-emphasizes its ability for situational adaptability and change. (Denison and Mishra; 1995)
Very few authors have written regarding this but all agreed that a sense of mission provides two key influences on functioning of an organization. First a mission offers purpose and meanings by defining a social role of an organization as well as defining the significance of individual roles with admiration to organizational one. This process of identification contributes to both short and long term commitment and leads to effectiveness. Second is that a mission provides clarity and direction to the organization and its members by defining the appropriate course of action. (Denison and Mishra; 1989)
For an organization to be effective, it must have an understandable sense of purpose and direction by defining goals and objectives and expressing a vision for the future. (Denison and Fey; 2003)
2.7.1.5 A framework for integrating the hypothesis:
Figure 2: Culture and Effectiveness Model
Adapted from Denison (1990)
Denison (1990) suggested that these four cultural determinants can be integrated into a single descriptive framework as shown in figure. The main aim of designing this framework is to acknowledge two contrasts: the contrast between internal integration and external adaptation and between change and flexibility (Denison and Mishra; 1995). Firstly, it can be noted that involvement and consistency are mainly concerned with the internal dynamics of an organization where as adaptability and mission concentrate on the dynamics of external adaptation. Secondly, involvement and adaptability stress the organizations capacity for flexibility and change while mission and consistency provides stability and direction (Brown; 1998).
Denison (1990) argues that this framework is functional as it brings out some of the intrinsic contradictions between the hypotheses, for example, highly consistent culture might be deficient in the flexibility to deal with change. But for an effective organizational performance, both consistency and flexibility are necessary. For Denison (1990), an effective organization must provide all the elements enclosed by these entire four hypotheses. Thus an ideal culture must concurrently resolve the conflicting demands of being adaptive, consistent, involving and directed. (Brown; 1998)
