Organizational culture and its impact on business performance

Organizational Culture

What impact might an organizations culture have on the effectiveness of a change plan?

Organizations are not monoliths, any more than countries are homogeneous in their nature. Just like all of the nations that make up the United Nations, different organizations have different internal cultures. According to Yale management guru Jeffrey Sonnenfeld there are four distinct types of organizational cultures. Each culture is likely to experience changes differently, and to varying degrees of efficacy. (McNamara, 1998)

For example, an academy culture, where employees are highly skilled and tend to stay within the organization for their entire working lives usually provides a stable environment in which employees can develop their skills, thus generating employee loyalty. (McNamara, 1998) The disadvantage to these organizations when coping with change is that academic organizational cultures (a characterization not limited to universities, but also true of hospitals, and large corporations) can be quite bureaucratic and resistant to change because of its multifaceted nature, and the stability of the organizational structure and personality of its employees. However these cultures have the advantage of being more willing to see changes implemented, once the leaders of the various component bureaucracies are convinced of the need for change.

A baseball team culture's employees are less loyal, have highly prized skills. These organizations are fast-paced, high-risk organizations, such as investment banking and advertising. These organizations tend to embrace change, but because of a quick flow of persons in and out of the organization, the organizational change plan may not be as thoroughly instated, because employees are impatient to see results and may leave before the benefits of change are realized. A club culture, where the most important requirement for employees in the culture is to fit into the group, when employees start at the bottom and stay with the organization like military and some law firms is likely to be as resistant to change as an academy culture, and may have the added drawback that even higher-ups of the organization lack the confidence in the concept of change to provide effective leadership over the course of a change plan. Finally, a fortress culture where employees have timely, specialized skills like large car companies or volatile financial institutions, are more likely to embrace change like a baseball team culture. However, this culture may not foster the necessary organizational communication during the change process because of the hostile and competitive atmosphere and thus have difficulty fostering an effective change plan. (McNamara, 1998)