It’s widely accepted that culture is hugely important to organizational success, but how cultures are created, and indeed how they change, remains somewhat unexplored. Research from Cambridge Judge Business School highlights a four-stage model for the creation of functional workplace cultures.
“We conclude that organizations should regularly go through the four-stage cycle to create cultures that fit the ever-changing external factors or environments that companies and other types of organizations face,” the researchers explain. “All members of an organization should continually engage in these types of assessments because adaptation to change is not a one-off organizational event.”
Forming culture
The research was compiled based on 74 previous studies that covered a range of disciplines to try and ensure that various types of culture change were analyzed. The analysis resulted in a four-stage model that calls for:
- diagnosing the various forms of environmental changes, such as those in the market, the environment, and technology
- assessing the efficacy of the existing culture to tackle those changes
- the search for different cultures to better meet the challenges
- creating and then implementing that alternative
At the heart of the approach is the understanding that decision-making is seldom as rational as we like to think it is, and that it’s unlikely that organizations will go through each stage in an orderly fashion.
“The theories of rational decision-making assume that a decision-making agent can obtain and use complete information to assess the current environment… and has the unlimited cognitive capacity to process all the information needed to make optimal decisions”, the researchers explain. “These assumptions are unrealistic in real-world decision-making settings.”
Making change
The researchers believe that while individual decision-making may have inherently irrational elements to it, organizations can inject rationality into proceedings via coordinated actions.
To achieve this, it’s likely that leaders and employees will have very different roles to play. For instance, leaders should initiate coordinated actions to try and drive functional culture, whereas employees are more of an enabler of the process.
The researchers believe that leaders tend to have both social power and formal authority, so are best placed to initiate the cultural change process. They can’t create culture on their own, however, so must be able to recruit employees from across the organization to pool efforts together.
As a result, it’s vital that leaders and employees are able to collaborate effectively to ensure that coordinated activities take place. This should ideally be an ongoing process to reflect the ever-changing nature of the business environment.
