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Tetsu Hirasawa

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Understanding organizations through the lens of organizational culture and identity

Tetsu Hirasawa
Associate Professor, Faculty of Commerce, Chuo University
Area of Specialization: Organization Theory

Introduction

 The phrase “organizational culture” has taken root in today’s society. Organizational culture is a useful terminology to capture ambiguous aspects which cannot be easily identified with job descriptions or organizational charts. Moreover, attempts are currently conducted to manage organizations by changing their culture. The concept of organizational culture works as a lens to help us understand the phenomena that we are facing. Just as a camera lens zooms in on the subject, the concept of organizational culture helps us focus on particular aspects of organizations and construct a plausible explanation for them. In this article, I will explain how we can interpret the ambiguous phenomena through the lens of “organizational culture” and “organizational identity.”

Organizational culture

 The term “culture” originated from cultural anthropology and sociology has become popular in the field of management since 1980s. This trend was accelerated by an influential book, In search of excellence: lessons from America's best-run companies, which criticized the dominant style of rational management emphasizing on strategy and quantitative analysis, and instead asserted that culture was a primary requirement to develop an outstanding company. The authors identified eight key characters of successful American companies; “bias for action, active decision making”, “close to the customer”, “autonomy and entrepreneurship”, “productivity through people”, “hands-on, value-driven”, “stick to the knitting”, “simple form, lean staff” and “simultaneous loose-tight properties”. Now business people have come to recognize the importance of developing a better culture in order to align various interests of organizational members and spontaneously adapt to changes in the business environment.

 For example, if we take Chuo University, we cannot capture its actual dynamics by attending only to the school motto, management plan, organizational chart, codes of conduct, and lists of faculty members, staff, current students and alumni. Indeed, in order to understand its activities in depth, we need to examine not only the “hard” or tangible aspects including university facilities, the management policy/plan, the organization structure and specialized tasks, but also the “soft” or intangible aspects including intention and action of students, staff and faculty members as well as the “organizational culture” emerging from their interaction.

 Now, exactly what is organizational culture? According to Schein, it can be defined through three levels: 1) artifacts, 2) espoused beliefs and values, and 3) basic underlying assumptions. Artifacts include items such as internal documentation and office layout while espoused beliefs and values include management philosophy and the guiding principles of a company. These first two levels are supported by basic underlying assumptions which include unconscious belief and feelings. As seen here, the term “organizational culture” actually represents a complicated phenomenon.

 The company founder plays a central role in the formation of organizational culture. For example, the founders of Chuo University expressed the school spirit of “fostering the ability to apply knowledge to practice” in the 19th century. This tradition of practical learning has been inherited to the university message in the 21st century, as “Knowledge into Action.” Even if organizational members have changed over the long history, organizational culture imprinted by the founders has endured through various systems including education, human resources, procedures and customs.

Side-effects of the lens of organizational culture

 However, there are side-effects associated with this lens. Since it helps us smoothly interpret—almost like magic—intangible aspects, there is the risk that it may constrain our further thought. Although individuals might easily attribute organizational success or failure to culture, it might be quite difficult to objectively prove such causality. Furthermore, after the episode of successful strategic reorganization at General Electric spread worldwide, people in business have the tendency to assume that culture can be changed without serious difficulty. Nevertheless, in fact, it is not a simple task to change underlying assumptions deeply rooted in individual unconsciousness. As Schein insists that “people do not control culture; culture controls people,” changing organizational culture is almost impossible.

 I have experience of being enthralled by the explanatory power of the concept of organizational culture. When I observed a broad range of activities from morning meetings to senior management meetings at a R&D start-up in my field research, I came to easily understand a variety of events through the lens of organizational culture. An accepted explanation that a founder creates and embeds culture in an organization in the initial stage well fitted my daily observation. However, as I continued my observation, I began to feel something which could not be sufficiently explained by the lens of culture alone. I realized that the founder actually attempted to create a ‘soft’ aspect of his R&D start-up by considering the “eyes” of a variety of stakeholders such as investors, scientists, business partners, public institutions for industrial development, and mass media. Such a soft aspect seemed something which operated like the interface between the internal and external world of the organization, rather than organizational culture referring to the internal world only.

Organizational identity

 Another lens for interpreting intangible aspects is “organizational identity,” an academic term referring to the members’ collective understanding of ‘who we are as an organization’. The word of individual identity includes both the external view, or how others see the individual self, and the internal view, or how the individual sees himself. The social psychologist Mead labels the former as “me” and the latter as “I.” Such duality of individual identity is also contained in the concept of organizational identity. While organizational culture concerns internal dynamics within an organization, organizational identity attends to the interrelationship between the organization and its external environment. For example, Czarniawska illustrates how the Swedish state agencies engaged in a ‘muddling-through’ process to transform its organizational identity when it was criticized for the inefficient operation in the context of a budget deficit in the nation.

 In my case study at the R&D start-up, I was able to shed light on the gap between the internal view projected by its founders and organizational members and the external view projected by outside stakeholders as well as the conflicts emerging from this gap after I switched lenses from organizational culture to organizational identity. In particular, a high-tech start-up aiming at innovation using cutting-edge science might face difficulties in obtaining necessary resources and support since its activities tend to be seen as strange and contrary to common sense.

 However, even in such difficulty, the entrepreneur expanded the social network of supporters by inserting new categories that were recognizable for external constituents into the organizational identity. Indeed, the construction of attractive identity was the key for venture growth. In such a process, entrepreneurs need to symbolize not only organizational uniqueness but also its familiarity in the social world. Organizational identity becomes more attractive when it symbolizes both uniqueness and familiarity.

Interdependent organizational identity

 In fact, even the lens of organizational identity did not sufficiently fit my observation at the start-up. Such a gap came from the assumption of the word of organizational identity. The concept of “identity” contains the original nuance of establishing an independent self. Regarding this point, cultural psychologists discover that while western people have tendency to see the self-identity as being independent from others, eastern people tend to see the self-identity within interdependent relationships with others.

 I discovered a similar tendency in the Japanese start-up. In particular, the start-up built close relationship with key stakeholders, developed a sense of “we-ness”, and shared the same symbols as identity when trying to create innovations unlike anything that currently exists. As opposed to independently-minded organizational identity in western organizations, this identity can be regarded as “interdependent organizational identity”. This gives rise to the new question of whether the characteristics of organizational identity might differ among regions. In this way, new understanding leads me to further questions.

Conclusion

 The two lenses of organizational culture and organizational identity are quite useful in order to interpret the intangible aspects of organizations. However, each lens has its specific scope. It helps us recognize some phenomena more vividly but others less vividly. Their usefulness, in turn, leads to the risk of over reliance. Therefore, it is important for us to adjust these lenses according to circumstances which we are facing. Such adjustment may help us understand organizational phenomena deeper.

Reference
Czarniawska, B. (1997). Narrating the organization: dramas of institutional identity. Chicago, IL: University of Chicago Press.
Mead, G. H. (1934). Mind, self, and society: from the standpoint of a social behaviorist. Chicago, IL: University of Chicago Press. (Translated by Michio Inaba, Masaki Takizawa and Osamu Nakano (1973), Aoki Shoten)
Peters, T. J. and Waterman, R. H. (1982). In search of excellence: lessons from America's best-run companies. New York, NY: Harper & Row. (Translated by Kenichi Omae (1983), Kodansha)
Schein, E. H. (1999). The corporate culture survival guide: sense and nonsense about cultural change. San Francisco, CA: Jossey-Bass. (Translation supervisor: Toshihiro Kanai; translators: Joichi Ogawa, Kayoko Katayama (2004), Hakuto Shobo Publishing)

Tetsu Hirasawa
Associate Professor, Faculty of Commerce, Chuo University
Area of Specialization: Organization Theory
Tetsu Hirasawa was born in Tokyo. In 2013, he completed the Doctoral Program (Ph.D.) at Judge Business School, University of Cambridge. His major papers include Unknown Innovation and Organizational Identity (Organizational Science, 2013), Inquiring into the gap between an application of scientific knowledge and everyday practice in management (Hitotsubashi Business Review, 2008), and Rethinking Organizational Learning (The Journal of Business Management, 2007).