Organizational Culture Explained [2023]

Summary

This script delves into the formation and significance of organizational culture, using Amazon's frugal beginnings as a case study. It explains how culture shapes behaviors and decision-making, discussing the 'iceberg' model comprising visible artifacts and underlying norms and values. The video outlines four distinct organizational cultures based on the competing values framework: Clan, Adhocracy, Hierarchy, and Market, illustrating each with relatable characters. It highlights how Amazon's culture, a blend of Adhocracy and Market, fosters innovation and performance, emphasizing the importance of managing competing values for organizational success.

Takeaways

• 🛒 Jeff Bezos' early cost-saving measure of using a door as a desk at Amazon embodies the company's core value of frugality.
• 🌳 Organizational culture shapes behaviors and decision-making, influencing how employees act and think within a company.
• 📚 Culture is defined by what is celebrated, tolerated, and forbidden within an organization, attracting individuals with compatible personalities and preferences.
• ❄️ Organizational culture is like an iceberg, with visible artifacts and behaviors on top, norms and values in the middle, and underlying assumptions at the bottom.
• 🔑 Amazon's culture is symbolized by its door desks and rituals like the '6-pager', which emphasizes substance over delivery and ensures everyone is on the same page.
• 📈 Amazon's stated values include customer obsession, long-term thinking, eagerness to invent, and pride in operational excellence, guiding hiring and performance management.
• 🤝 Mr. Clan represents a culture that values cooperation, trust, and loyalty, often found in small businesses, local governments, or customer service organizations.
• 💡 Mrs. Adhocracy's culture is flexible and focused on innovation, experimentation, and meeting customer needs, common in tech startups and creative fields.
• 📚 Mr. Hierarchy's organization is characterized by order, procedures, and structure, with clear roles and responsibilities, often seen in the military or regulated industries.
• 🏆 Mrs. Market's culture is results-driven and competitive, prioritizing market leadership and performance, typical in sales, investment, and professional services.
• 🌐 Organizations can have multiple cultures or subcultures, with different parts of the organization embodying different values and behaviors.
• 📊 Amazon's culture, as analyzed through the competing values framework, is a blend of Mrs. Adhocracy's innovation and Mrs. Market's performance orientation, indicating a focus on both results and creativity.

Q & A

What was the significance of the door desk in Amazon's early days?

The door desk symbolized frugality, which became one of Amazon's core values. It demonstrated the company's commitment to finding the easiest and least expensive way to solve problems, setting a precedent for cost-effective decision making.

How does organizational culture influence employee behavior?

Organizational culture shapes employee behavior by establishing what is celebrated, tolerated, and unacceptable within the organization. It helps to build desired behaviors and can engage and retain a productive workforce.

What is the concept of the 'iceberg model' in understanding organizational culture?

The iceberg model represents the visible and invisible parts of organizational culture. The visible part includes artifacts and behaviors, while the invisible part consists of norms, values, and underlying assumptions that inform a company's culture.

What are the 'artifacts and behaviors' in the context of organizational culture?

Artifacts and behaviors are the symbols, rituals, and stories that are easily recognizable in an organization. They include the dress code, office layout, ceremonies, and events, which are part of the culture's visible surface.

Why does Amazon not use PowerPoint in its meetings?

Instead of PowerPoint, Amazon uses a 6-pager document for meetings. This practice ensures everyone is on the same page, focuses on substance over delivery, and promotes a culture that values results and operational excellence.

What are the four clearly stated values of Amazon?

Amazon's four values are customer obsession, long-term thinking, eagerness to invent, and pride in operational excellence. These values guide the company's hiring and performance management processes.

What are 'underlying assumptions' in an organization's culture?

Underlying assumptions are the unconscious and often unspoken values that inform a company's culture. They are taken for granted and can be the true motivators behind people's behavior within the organization.

How are the four types of organizational cultures categorized in the competing values framework?

The competing values framework categorizes organizational cultures into four types based on their orientation: clan (internally focused and collaborative), adhocracy (externally focused and innovative), hierarchy (internally focused and structured), and market (externally focused and results-driven).

What is the difference between Mr. Clan and Mrs. Adhocracy in terms of organizational culture?

Mr. Clan represents a culture that values cooperation, trust, and loyalty, often found in small or family-owned businesses. Mrs. Adhocracy represents a culture that is flexible, innovative, and customer-focused, often found in startups and creative industries.

How does the concept of 'subcultures' apply to an organization?

Subcultures are distinct cultural elements within an organization, where different parts of the organization may exhibit different cultural traits. For example, a customer service department may have a more clan-like culture, while the sales department may have a market-oriented culture.

What does the term 'managing competing values' refer to in organizational culture?

Managing competing values refers to the ability of an organization to balance and integrate different cultural elements, such as innovation and results, to achieve greater success. It requires strong leadership and the ability to handle the tensions that arise from these cultural differences.