Strong Organizational Culture: Asset or Liability?

According to the Encyclopedia of Management, “An organizational culture is the shared assumptions, values, and beliefs that guide the actions of its members” (“Organizational Culture,” 2012, p. 766). While culture is not directly perceptible, it is expressed through artifacts and rituals that may be sensed through observation or other means (Schein, 1990; Rothaermel, 2013; “Organizational Culture,” 2012). A strong culture is said to be in place “when the company’s core values are widely shared among the firm’s employees and when the norms have been internalized” (Rothaermel, 2013, p. 318).

Beginning in the 1980s, the presence of a strong organizational culture began to be seen as an important factor in a company’s success (Schein, 1990; “Organizational Culture,” 2012). More recently, however, observers have suggested that, under certain conditions, a strong culture can actually hinder organizational success. This paper will draw from two literatures—management and biblical studies—to clarify the merits and pitfalls associated with strong organizational culture.

Business Strategy Perspective

Strong organizational culture is said to have played an important part in the success of many companies, including Apple, Zappos, Netflix, and Walmart (Rothaermel, 2013; McCord, 2014). However, Rothaermel (2013) cited General Motors as an example of a firm whose culture hindered innovation, warning that “an organization’s culture can turn from a core competency into a core rigidity if it no longer has a good fit with the external environment” (p. 319). Similarly, fraud remained hidden at Enron long enough to bring the company down, impacting the welfare of numerous employees and investors. Xerox failed to capitalize on important technological innovations that emerged from its Palo Alto Research Center. Toyota’s reputation for producing safe vehicles has been tarnished in recent years. And the U.S. Department of Veterans Affairs has gained a reputation for providing substandard medical care to current and former members of the armed forces.

In each of the cases just cited, prevailing organizational culture led to negative outcomes: financial decline or failure, diminished reputation, legal actions, and the like. Cultural values were strongly entrenched, but failed to address the needs of important stakeholders. The evidence thus reveals that organizational culture is powerful—for better or for worse. In and of itself, a strong culture provides no assurance of success. Nevertheless, as the Encyclopedia of Management concluded, “A strong culture that is aligned with the organization’s strategic context and is adaptive to environmental changes can enhance an organization’s long-term financial performance” (p. 768).

Biblical Perspective

Modern business organizations did not exist in biblical times, so it is impossible to look in the Scriptures for overt examples of corporate culture. Nevertheless, throughout history, people have acted collectively and have exhibited cultural behavior. In the Bible, one can see people expressing themselves culturally on the basis of their affiliations (e.g., ethnic, political, religious, or military).

One example of cultural expression underlies the event described in Matthew 15:1–20. In this text, which is paralleled in Mark 7:1–23, Jesus confronted members of a particular Jewish sect, the Pharisees. At issue was the Pharisees’ willingness to adhere so firmly to their religious tradition that they would dismiss the higher duty of obeying divine directives. Jesus responded to this failure by asking, “And why do you break the commandment of God for the sake of your tradition?” (Matt. 15:3).

According to Keener (1997), in this instance, Jesus was exposing “the danger of evaluating morality on the basis of extrabiblical traditions” (p. 260). The conflict between tradition and transcendent values that is found in this gospel account is roughly analogous to what modern-day organizations with strong cultures may encounter. Within a given organization, the observance of tradition can outlive the tradition’s original purpose, and indeed can come to supersede values that members of the organization would profess to honor (serving customer needs, innovating, ensuring profitability for investors, etc.). It was absurd for the Pharisees to approve of unlawful behavior by observing tradition rigidly. Similarly, it is irrational for companies to jeopardize their future success by perpetuating cultural practices that no longer suit the environment.

References

Keener, C. S. (1997). Matthew. InterVarsity Press. Retrieved from https://books.google.com/ books?isbn=0830818014

McCord, P. (2014). How Netflix reinvented HR. Harvard Business Review, 92(1/2): 70–76. Retrieved from http://search.ebscohost.com.ezproxy.liberty.edu:2048/login.aspx?direct=true&db=bth&AN=93302820&site=ehost-live&scope=site

Organizational culture. (2012). In S. D. Hill (Ed.), Encyclopedia of management (7th ed., pp. 766–769). Detroit: Gale. Retrieved from http://ezproxy.liberty.edu:2048/login?url=http://go.galegroup.com/ps/i.do?id=GALE%7CCX4016600233&v=2.1&u=vic_liberty&it=r&p=&sw=w&asid=6ede43117c889b84eec77b8671efd361

Rothaermel, F. T. (2013). Strategic management: Concepts & cases. New York: McGraw-Hill/Irwin.

Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109–119. doi:10.1037//0003-066X.45.2.109

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