Organizational Analysis of Family Farms

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.

The Culture of Organizations: Ethnography Joins the Modern Age

While the terms "organizational culture theory" or "industrial anthropology" (Black, 2003, p. 19) and similar ones are used by different researchers who are interested in the culture of businesses, in fact these are simply different terms for organizational analysis with a particular focus. As Hill & Jones (2001) describe this focus, an organizational theoretical approach that focuses on the culture of the organizational combines ideas from psychology as well as anthropology. Thus researchers who take this perspective are interested in both the beliefs and values of the organization's members (the psychology elements) and its rituals and common activities (the anthropological elements).

Hill & Jones (2001) detail this perspective as a systematic analysis of "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization" (p. 21). They further describe this perspective as an examination of a group's common or organizational values as the investigation of:

...beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another. (p. 23)

This concept -- of a cultural analysis of a business organization -- may sound like the older concept of "corporate culture" -- a concept that was utilized primarily in the 1980s by both managers and researchers. However, organizational culture (and analyses) of it are more complex and deeper than corporate culture (Huczynski, 2001).

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.