Notes on Organizational Culture

Introduction to Organizational Culture

• Every human organization (family, village, nation, corporation) develops its own culture over time.
• Organizations, from small businesses to multinational corporations, form a unique identity.

Importance of Core Values

• Many organizations aim to establish a foundation based on core values.
• Example core values: communication, respect, integrity, excellence.
• Case study: Enron's stated values vs. actual practices led to severe consequences.
• Key Lesson: Organizations must not only aspire to values but also actively implement them.

Definitions of Corporate Culture

1. Culture as Practice:

   • "The way we do things around here."
   • Difficult to explain to outsiders.
   • Unique characteristics develop over time.

2. Culture as Code:

   • "The core logic, the software of the mind that organizes behavior."
   • Emphasis on mindset as a precursor to behavior and structure.

3. Culture as Legacy:

   • Reflects lessons learned in the past that leaders deem important.
   • Decisions on what wisdom to pass on to the next generation.

4. Culture as Conduct:

   • "What we do when we think no one's looking."
   • Personal principles and human nature dictate behavior in absence of oversight.
   • Lack of a strong culture can lead to competitive disadvantages.

Visualizing Culture: The Iceberg Analogy

• Visible vs. Invisible Culture:
  • Only 10% of culture is visible above water; 90% is hidden.
  • Hidden aspects can lead to significant issues if not managed properly.
  • Leaders must understand and manage the unseen elements of culture.

Building and Preserving Culture

• Culture develops over time through lessons learned and survival processes.
• Important to pass on values and lessons to the next generation.
• Leaders should:
  • Understand historical values and their significance.
  • Project these values into the future while adapting to new challenges.