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Organizational Structure and Culture
The Relationship between Organizational Culture and Structure
Organizational structure refers to the way in which an organization is divided and run. Structure refers to the formal hierarchy of power and includes a determination of subordinate and superior positions. In contrast, organizational culture refers to an organization's personality, and is composed of less formal aspects such as the organization's values and normative behavior. There is no doubt that structure has an impact on culture; however, the relationship is not a simple correlation between structural type and organizational culture. Instead, organizational structure determines how much an organization's culture will be impacted by a leader's personal style.
On one end of the spectrum, organizations with an extremely hierarchical structure, consisting of employees, levels of managers with progressively more decision-making responsibility, and one person in charge of an organization or department, give more influence to the person in charge of the department. Therefore, that person sets the tone for what behavior and values will be considered normal in the department. This can be seen when employees emulate the boss' style of dress, work ethic, and approach to interpersonal relationships within the office. Therefore, the culture of the organization can range from very formal to very casual, depending on the personal style of the company's leader. (For example, Google has a hierarchical structure, but is led by a person with a casual style, which has resulted in a very casual office culture).
On the opposite end of the spectrum are organizations that lack a clearly defined hierarchy or where management has little power over employees. In those circumstances, it is not the influence of the organization's leader, but that of the workers, which defines the organization's culture. Again, the culture can range from very formal to very casual, depending on the personal style of the individuals involved, but will be a function of the normative culture of the group, rather than establishing the norms for the group.
In this study, the researchers explored the concept of "psychological contract" and how it applies to and potentially determines cultures and sub-cultures that would emerge in organizations. Defining it as "individual beliefs or perceptions concerning the terms of…relationship between the individual and the organization," psychological contracts are identified into the following dimensions: (1) vertical or horizontal, referring to social status and power in "exchange relationships" and (2) individualism and
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