Creating and Sustaining Culture

An organization’s culture doesn’t pop out of thin air, and once established it rarely fades away. What influences the creation of a culture? What reinforces and sustains it once in place?

How a Culture Begins

An organization’s customs, traditions, and general way of doing things are largely due to what it has done before and how successful it was in doing it. This leads us to the ultimate source of an organization’s culture: the founders.38 Founders have a vision of what the organization should be, and a firm’s initially small size makes it easy to impose that vision on all members.

Culture creation occurs in three ways.39 First, founders hire and keep only employees who think and feel the same way they do. Second, they indoctrinate and socialize employees to their way of thinking and feeling. And finally, the behavior of the founder(s) encourages employees to identify with them and internalize their beliefs, values, and assumptions. When the organization succeeds, the personality of the founder(s) becomes embedded in the culture. For example, the fierce, competitive style and disciplined, authoritarian nature of Hyundai, the giant Korean conglomerate, exhibits the same characteristics often used to describe founder Chung Ju-Yung. Other founders with sustaining impact on their organization’s culture include Bill Gates at Microsoft, Ingvar Kamprad at IKEA, Herb Kelleher at Southwest Airlines, Fred Smith at FedEx, and Richard Branson at the Virgin Group.

Keeping a Culture Alive

Once a culture is in place, practices within the organization maintain it by giving employees a set of similar experiences.40 The selection process, performance evaluation criteria, training and development activities, and promotion procedures ensure those hired fit in with the culture, reward those employees who support it, and penalize (or even expel) those who challenge it. Three forces play a particularly important part in sustaining a culture: selection practices, actions of top management, and socialization methods. Let’s look at each.

Selection

The explicit goal of the selection process is to identify and hire individuals with the knowledge, skills, and abilities to perform successfully. The final decision, because it is significantly influenced by the decision maker’s judgment of how well candidates will fit into the organization, identifies people whose values are consistent with at least a good portion of the organization’s.41 The selection process also provides information to applicants. Those who perceive a conflict between their values and those of the organization can remove themselves from the applicant pool. Selection thus becomes a two-way street, allowing employer and applicant to avoid a mismatch and sustaining an organization’s culture by removing those who might attack or undermine its core values, for better or worse.

Top Management

The actions of top management have a major impact on the organization’s culture.42 Through words and behavior, senior executives establish norms that filter through the organization about, for instance, whether risk taking is desirable, how much freedom managers give employees, what is appropriate dress, and what actions earn pay raises, promotions, and other rewards.

Socialization

No matter how good a job the organization does in recruiting and selection, new employees need help adapting to the prevailing culture. That help is socialization.43 Socialization can help alleviate the problem many employees report when their new jobs are different than they expected. For example, Clear Channel Communications, Facebook, Google, and other companies are adopting fresh onboarding (new hire assimilation) procedures, including assigning “peer coaches,” holding socializing events, personalizing orientation programs, and giving out immediate work assignments. “When we can stress the personal identity of people, and let them bring more of themselves at work, they are more satisfied with their job and have better results,” researcher Francesca Gino of Harvard said.44

We can think of socialization as a process with three stages: prearrival, encounter, and metamorphosis.45 This process, shown in Exhibit 16-2, has an impact on the new employee’s work productivity, commitment to the organization’s objectives, and decision to stay with the organization.

An illustration depicts various components of a socialization model.

Exhibit 16-2

A Socialization Model

  1. Prearrival stage. The prearrival stage recognizes that each individual arrives with a set of values, attitudes, and expectations about both the work and the organization. One major purpose of a business school, for example, is to socialize students to the attitudes and behaviors companies want. Newcomers to high-profile organizations with strong market positions have their own assumptions about what it’s like to work there.46 Most new recruits will expect Nike to be dynamic and exciting and a stock brokerage firm to be high in pressure and rewards. How accurately people judge an organization’s culture before they join the organization, and how proactive their personalities are, become critical predictors of how well they adjust.47

  2. Encounter stage. The selection process can help inform prospective employees about the organization as a whole. Upon entry into the organization, the new member enters the encounter stage and confronts the possibility that expectations—about the job, coworkers, boss, and organization in general—may differ from reality. If expectations were fairly accurate, this stage merely cements earlier perceptions. However, this is not often the case. At the extreme, a new member may become disillusioned enough to resign. Proper recruiting and selection should significantly reduce this outcome, along with encouraging friendship ties in the organization—newcomers are more committed when friendly coworkers help them “learn the ropes.”48

  3. Metamorphosis stage. Finally, to work out any problems discovered during the encounter stage, the new member changes or goes through the metamorphosis stage. The options presented in Exhibit 16-3 are alternatives designed to bring about metamorphosis. Most research suggests two major “bundles” of socialization practices. The more management relies on formal, collective, fixed, and serial socialization programs while emphasizing divestiture, the more likely newcomers’ differences will be stripped away and replaced by standardized predictable behaviors. These institutional practices are common in police departments, fire departments, and other organizations that value rule following and order. Programs that are informal, individual, variable, and random while emphasizing investiture are more likely to give newcomers an innovative sense of their roles and methods of working. Creative fields such as research and development, advertising, and filmmaking rely on these individual practices. Most research suggests high levels of institutional practices encourage person–organization fit and high levels of commitment, whereas individual practices produce more role innovation.49

    An exhibit depicts five sets of entry socialization options.

    Exhibit 16-3

    Entry Socialization Options

Researchers examine how employee attitudes change during socialization by measuring it at several time points over the first few months. Several studies have now documented patterns of “honeymoons” and “hangovers” for new workers, showing that the period of initial adjustment is often marked by decreases in job satisfaction as idealized hopes come into contact with the reality of organizational life.50 Newcomers may find that the level of social support they receive from supervisors and coworkers is gradually withdrawn over the first few weeks on the job, as everyone returns to “business as usual.”51 Role conflict and role overload may rise for newcomers over time, and workers with the largest increases in these role problems experience the largest decreases in commitment and satisfaction.52 It may be that the initial adjustment period for newcomers presents increasing demands and difficulties, at least in the short term.

Summary: How Organizational Cultures Form

Exhibit 16-4 summarizes how an organization’s culture is established and sustained. The original culture derives from the founders’ philosophy and strongly influences hiring criteria as the firm grows. The success of socialization depends on the deliberateness of matching new employees’ values to those of the organization in the selection process and on top management’s commitment to socialization programs. Top managers’ actions set the general climate, including what is acceptable behavior and what is not, and employees sustain and perpetuate the culture.

An illustration depicts how organizational cultures are formed.

Exhibit 16-4

How Organizational Cultures Form

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