Cultural school focuses on the culture of the individual entities that form the organization. Culture, it asserts, drives the organization's judgment and operational strategy resulting in differences such as between a Japanese and American organization.
In contradistinction to the power school that places the loci on the individual as well as the entrepreneurial school that does likewise (this time on the leader), the cultural school insists that individuals are a homogenized whole, their decision, beliefs, judgments, and actions formed by their specific culture. In this way, therefore, to understand an organization necessitates understanding its culture. Organization culture -- the premise of the cultural school -- is, oftentimes, understood as collective cognition since a deeply rooted culture produces closely interwoven interpretations and activities.
Content and Process.
Culture is ineradicably part of the individual's makeup. His or her perspective on the world is shaped by this culture, and since organizations are a collection of individual entities, the surrounding culture will necessarily form the essence of the organization's decisions and output (unless they deliberately feature an equally distributed mix of inter-racial and inter-cultural individuals).
Culture consists of the collective interpretation of the world. Since individuals brought up in a certain environment perceive the world from a certain loci, there is a collective perspective, or organizational culture with collective cognition. These shared beliefs are reflected in traditions and habits as well as in the stories, symbols, products, and resources that the organization surrounds itself with and produces.
Organizational culture is the "expressive social tissue" of the organization (Pettigrew, 1985:44), and culture evidences itself though all veins of the organization from its dress, to its shared language and behavior pattern. The term itself can casually be employed in two different means and the two overlap. The first is the ideology of the organization itself, such as the ideology of McDonald's that is associated with belief in efficiency, service, and cleanliness or that of Starbucks that has linked itself to customer service above all else, or that, for instance, of Branson's Virgin corporations that have become affiliated to innovation and members in its industry wear casual clothing, act in innovative, 'fun' manners, and display a creative attitude towards their work in particular and towards life in general.
Secondly, there is the larger cultural environment of the whole, namely the environment of the surrounding socio-political system, which has its own ideology. This could be exemplified by the 'laid back' atmosphere of a Californian industry or the individualist and work-oriented ideology of an American industry in general as compared to the more laid back environment of a Continental or, possibly, European enterprise. Each reflects its larger environment. As Roth and Ricks (1994) point out, national cultures influence the way that the environment is interpreted, creating different strategic responses by the same company in different countries. Thus, for instance, structures and decision-making infrastructures of airlines of different nations reflect their particular nation's influence (Rieger, 1987).
The premises of the cultural school according to Mintzberg, Ahlstrand, and Lampel (1998, 267) can be summarized in the following manner (for similar delineation see Johnson, 1987, 50-57)
1. Organizational strategy formation initiates and is developed by the ideological social interaction (based on beliefs and ideologies) that is shared by members of the organization.
2. An individual acquires these beliefs through a process of implicit enculturation sometimes reinforced by more overt forms of indoctrination
3. The members of the organization are, therefore, blind to the layers of cultural and ideological meaning underlying the fabric of their culture. All that they can partially describe are a fragment of it.
4. As a result then, strategy is based more on intuition, mental schemas (or heuristics), and perspectives than on deliberately, formed, well-thought out and full conscious positions. Strategy, whilst being deliberate, is, simultaneously, not fully conscious.
5. Culture and ideology do not encourage change. Rather, they emphasize transmission and perpetuation of traditional cultural perspectives. This is so with organizational cultures in a micro fashion (e.g. McDonald's formulation) and organizational culture on macro manner e.g. larger cultural influences on the organization.
Roots of the Cultural School.
Interest in culture as determinant of organizational values and behavior really came into effect following the 1980s. In England, Pettigtrew's (1985) study of the British chemical company, ICI, revealed significant cultural determinants, whilst Feldman (1986) asked whether culture could contribute to strategic change, and Barney (1986) wondered whether culture could bestow competitive advantage. In 1987, Rieger produced his dissertation on the influence of national culture on airlines. In Scandinavia, culture played a dominant role in management literature way before the 1980s.
Context of the Cultural School
In contradistinction to the power school that places the loci on the individual as well as the entrepreneurial school that does likewise (this time on the leader), the cultural school insists that individuals are a homogenized whole, their decision, beliefs, judgments, and actions formed by their specific culture. Criticisms include the fact that individuals constitute the organization, and that, whilst culture may certainly play one component and a key component at that, the individual's particular mannerisms and oddities should not be overlooked. The most satisfactory perspective, therefore, would seem to be a mergence of the cultural school with its mirror image, the power school.
The cultural school also nicely balances out the individualism of the entrepreneurial, design, and cognitive schools, as well as showing the importance of politico-social processes by demonstrating the social processes at work within the organizational style. Similarly, in contrast to the ahistorical tendencies of the planning and positioning schools where seemingly the organizational workforce can arbitrarily and facilely change their positions, the cultural school indicates that it is not so simple to do so since many of these positions are implicit and rooted in a deeply layered past.
How market structure (within the cultural school) influences strategic options.
Culture influences beliefs, impacting, therefore, the process of thinking and decision-making style. As a dramatic case to illustrate: The 'computer geek' population in Silicon Valley is absorbed in digital technology. The Silicon Graphics Company, absorbed in the computer culture and thinking along its lines therefore implicitly and unanimously decided to revolve its Visionarium Reality Center around real-time, three-dimensional product visualizations all based on the latest technical designs. In Israel, on the other hand, different cultural constructs generally permeate their industries. The 'cafe ke'ilu' (cafe make-believe), for instance, serves its customers plates and mugs that are empty and charges guests $3 during the week and $6 for the weekend on the premise that Israelis often seek the social experience alone (Pine & Gilmore, 1998.). It is the rare American industry that would invent and perpetrate this scheme. In America, time and work are more urgent than simple social configurations.
On a micro scale, Mintzberg, Ahlstrand, and Lampel (1998) give the example of General Motors that had, in its early years been reorganized by Alfred Sloan and converted to an atmosphere that would absorb itself in careful analysis and deliberate decision-making. Many years later when DeLorean assumed the managerial position of General Motors he described a company that was still suffused by this same decision-making deliberate manner. The extent to which Sloan's influence permeated the company is best described by DeLorean himself where he records that before every meeting executives were expected to review the text of any presentation to be given:
There were never to be any surprises… we'd get the same material at least three times: when we read the text, heard the presentation of it in the meeting and then read the minutes of the meeting (in Wright, 1979:27-28).
Similarly, culture makes the organization emphasize certain components, whilst de-emphasizing others. The organization, as a whole, will act as an information filter, selecting data that it thinks important to focus on, whilst ignoring others. It is in this manner, that culture affects the nuances of organizational decision-making style
How fast-moving environments are best approached within the cultural school format.
The cultural school, actually, evidences resistance to strategic change, and, therefore, it finds fast-moving environments problematic. In fact, it generally approaches dramatic environmental change by fitting it into its traditional cultural perspective and formulating solutions and manners with which to deal with that change from within its classical ideological paradigm.
Karl Wick phrased it adroitly when he opined that: "A corporation doesn't have a culture. A corporation is a culture. That is why they're so horribly difficult to change." (Mintzberg et al., 270). Oftentimes, indeed, changes in fast-paced environments can go unnoticed since culture, as Lorsch notes (1986), can sometimes blind managers to situations in external conditions that need to be addressed with change. Organization may use any one of a number of rationalizations including that traditional methods can adequately deal with external conditions, or that the challenge is only temporary, or that their organization is strong enough to withstand change. Sometimes, variables in a fast-moving environment can cause cultural -- tended organizations to emphasize their characteristics even more, for instance, a firm that has historically offered products at a low cost may respond…