How organizational culture enables family organic farms to succeed

Organizational Analysis of Family Farms

When family-run businesses such as organic farms succeed they do so because the organizational culture of both family and business are similar.

There are a number of different ways of using the tenets of organizational theory to understand how organizational culture both differs from corporate culture and produces financial success.

Key Points

* Corporate culture is imposed from above.

* Organizational structure is created organically from within.

* Organizations are held together by "push" factors as well as pulled apart by centrifugal forces.

Organizational theory tends to overlook the specific and particular ways in which family-based businesses are constructed and in particular how organizational culture helps these businesses succeed.

Organizational Theory and the Family Business

There are two different perspectives in looking at organizational theory -- or organizational studies, as the field is also called. The first is the theoretical model itself, and in this paper I shall begin with an overview of some of the most important perspectives on the ways in which people organize themselves within businesses. The second is the type of organization itself. For most types of organizations can be analyzed from a number of different perspectives, and often the best way to understand an organization is to match the type of organization to the most appropriate model. In this paper I will analyze a certain kind of business -- the family organic farm -- from a number of perspectives, determining which one is the most appropriate.

I should note before beginning my analysis that organizational theory can be applied to a range of human activities -- from social protest movements to family reunions to the ways in which English football fans can become violent. Thus while I am focusing on how to use organizational analysis to understand a certain kind of business that has been growing in popularity in recent years, there is nothing inherent in organizational analysis that restricts its use to the world of business.

There are a number of highly distinct methods or perspectives in analyzing organizations. One of the most important ways of dividing organizational strategies. One of these is a distinction between the level of analysis -- a distinction that can very broadly be divided into top-down and bottom-up models. Micro-organizational analyses look at the ways in which individuals in an organization interact with each other as well as with the organization as a whole -- a bottom-up analysis. Macro-organizational analyses (which are top-down examinations) focus on the organization as a whole as well as on the ways in which whole organizations interact with each other.

Some researchers also posit another level of organizational perspective -- that of a meso-organization. "Meso" simply means "middle," and focuses on the middle-ground between micro and macro analyses. Such a perspective focuses on the culture of organizations. Many of the researchers who study this aspect of organizations have a background -- whether formal or practical -- in anthropological perspectives. This may seem a rather exotic perspective to take on a business, for the local employer is hardly the kind of traditional society that is the stereotypical subject of anthropological studies. However, this is an antiquated view of the ways in which studies that focus on culture can be used. All human endeavors contain their own cultures and often the best way to understand the ways in which power and organization are played out in both the short- and the long-term is to consider the culture of the organization.

Whenever there are groups of people who come together to interact overtime there are numerous dynamics at work, some of which tend to keep these individuals together and some of which tend to drive them apart. The types of what sociologists would call "push" and "pull" forces vary with the type of organization. For example, families tend to be both centripetal and centrifugal around the same types of dynamics -- love, money, loyalty, shared heritage. All of these can bring people together or send them fleeing from each other.

Businesses, on the other hand, tend to bring people together around common economic goals and tend to be pulled apart when these common economic goals are no longer extant. Such a dissolution of economic goals can result from a competitor taking over market share, from the product that a company makes becoming obsolete, or from key personnel leaving so that the required expertise is no longer available. One of the more fascinating -- and to some extent neglected -- subfields of organizational theory is when researchers examine the intersection of these two types of organization -- the family business and its structures and culture.

Organizational Culture v. Corporate Culture

Corporate culture tends to be very much a top-down phenomenon. It is a "culture" (a set of values, rituals, and activities, and ways of operating) that the management of a company devises and institutes. It is explicit and imposed and as such differentiates itself from real human cultures. This is not to say that there is anything inherently wrong -- and certainly not devious or malicious -- in an imposed corporate culture. For example, the managers of an artists' cooperative may decide to institute weekly meetings in which everyone shares their concerns, a practice that creates an atmosphere of open communication and solidarity.

(of course it is possible that corporate culture can be malicious or at least misguided, such as Walmart's encouraging its employees to apply for public health benefits rather than supplying health insurance to its workplace.)

But culture is something organic, something that arises organically and over time from the multitudes of interactions between and among each individual through informal interactions as well as between each individual worker and the formal structures of the organization, such as the laws and legal regulations that affect the industry involved and the ethical standards of the company. Corporate culture can become a part of organizational culture, but it is always more limited.

We can see the limitations of the concept of corporate culture in the following definition from BNET:

[Corporate culture is] the combined beliefs, values, ethics, procedures, and atmosphere of an organization. The culture of an organization is often expressed as "the way we do things around here" and consists of largely unspoken values, norms, and behaviors that become the natural way of doing things. An organization's culture may be more apparent to an external observer than an internal practitioner. The first person to attempt a definition of corporate culture was Edgar Schein, who said that it consisted of rules, procedures, and processes that governed how things were done, as well as the philosophy that guides the attitude of senior management toward staff and customers. The difficulty in identifying the traits of culture and changing them is borne out by the fact that culture is not merely climate, power, and politics, but all those things and more. There can be several subcultures within an organization, for example, defined by hierarchy, shop floor or executive or by function, sales, design, or production. Changing or renewing corporate culture in order to achieve the organization's strategy is considered one of the major tasks of organization leadership, as it is recognized that such a change is hard to achieve without the will of the leader (BNET, http://dictionary.bnet.com/definition/Corporate+Culture.html).

This last point is especially important: Corporate culture is primarily the purview of a company's management and of its leaders. It is something that top executives in a company attempt to manage through a number of strategies.

Such attempts to manage the culture of a company are often highly unsuccessful, and an examination of many -- if not most attempts -- to bring about changes within a business tend to fail precisely because managers work to impose changes through a ready-made shift in corporate culture in which employees (as well as the managers themselves) are asked to make a number of changes in a short period of time without any time to allow these changes to be internalized, examined, adapted, and "owned" as being an authentic expression of the ways in which business is done in that organization.

The following description of organizational culture emphasizes the difference between corporate culture and organizational culture:

Gareth Morgan has described organizational culture as: "The set of beliefs, values, and norms, together with symbols like dramatized events and personalities, that represents the unique character of an organization, and provides the context for action in it and by it." Beliefs and values are words that will pop up frequently in other definitions, as well. Norms might be described as traditions, structure of authority, or routines....

Schein's definition of organizational culture is: "A pattern of shared basic assumptions that the group learned as it solved its problems that has worked well enough to be considered valid and is passed on to new members as the correct way to perceive, think, and feel in relation to those problems." Although the words are different, the two definitions are nearly the same in terms of content.

Another more simple way of looking at organizational culture is to view it as a group's general reaction to stimulus. An organizational culture is a group of people who have been trained, or who simply have learned by those around them, how to act in any given situation. In this way, corporate culture functions just as any social learning does.

The other aspect of organizational culture that is often true is that it becomes very deeply rooted. It is the identity of a company, and because of that, in some ways it becomes an identity of those who work there, as well. This is always important to remember, as culture becomes like a circular argument. The people end up affecting the culture as much as the culture is affecting them. (Definition of organizational culture, http://www.organizationalculture101.com/definition-of-organizational-culture.html)

I have quoted this definition at length because it so precisely encapsulates what I believe is the key distinction (or the key set of integrated concepts) between corporate and organizational culture. Organizational culture -- as can be seen in the sentences that I have added emphasis to -- is something that is a form of learning, trial, more social learning, more experimentation.

Organizational culture might be seen as analogous to the formation of a coral reef. Such reefs are created section by section through the coordinated effort of individuals acting within their own small sectors. If there were some sort of Coral Supreme God (or perhaps Senior Manager of Coral Reef Construction) attempting to direct the construction of an entire reef from above and without the result would be far less effective as well as far less vital and enduring. We learn far more from our neighbors -- and the co-workers on our own level -- and so create a culture that serves both us and our organization far better than if we are simply asked to submit to a ready-made culture designed by someone else.

An Example of a Successful Family Business

Of course there are any different number of types of any different form of business. There are highly functional -- and terribly dysfunctional -- large corporations. And highly functional and terribly dysfunctional entrepreneurial start-ups. And highly functional and terribly dysfunctional small family businesses. And when small family businesses fail it tends to be because the culture of the family itself is unable to be converted, transformed, or modified into that of a business. Another possibility is that a family may have a culture that is inherently attuned to being woven into that of a business.

This might imply that there is something wrong with a family's culture -- that it should so easily conform to that of a business, for while families are supposed to be about support and love, businesses are supposed to be about profit. But those who own family businesses that are geared both toward profit and social justice tend to find that their familial values are easily transferred to that of a business.

A typical -- though by no means extraordinary -- example of such a business is the Straus Family Creamery in Marin County, just north of San Francisco. A multi-generation family business, the current generation has incorporated the values of their forebears -- who believed in being respectful of the land and in acknowledging that each person's talents are both unique and complementary. This is how they describe their business:

We call the creamery, where we process our products, StrausFAMILY Creamery. Four siblings grew up on the farm, where we get the milk to make Straus products. This farm is a very important part of our lives. When the farm made a new beginning in 1993, we all jumped in to take part in helping to make sure that Straus Family Creamery succeeded. Like other family operations, we all have different talents and interests. (Tales from the family farm, http://www.strausfamilycreamery.com/?section=Farm%20Tales

http://www.strausfamilycreamery.com/?section=Farm Tales

This family is primarily motivated by their concerns for the environment and the welfare of animals.

Other families are motivated by other philosophies that are also transferable to the world of business, such as the Thorpe family that also runs an organic farm in Aurora, New York. They describe their family and business interests as follows:

Our family is happy to welcome you to our farm. We, Mike & Gayle and our 6 children and 3 grandchildren;Jeremiah & Aubrey with Levi age 3, and Janie age 1,Abraham & Kristen with Noah age 4 months, Elijah, Abigal, Naomi, and Hannah; along with Grandma Carol Ewert and our dedicated helpers believe God created a very complex, magnificent system of life. (Thorpes Farm, http://thorpesorganicfamilyfarm.com/)

In both of these cases, family organizational culture and business culture merge seamlessly and any analysis of why such businesses succeed must begin with an acknowledgement of such a merger.