What Matters More? The Impact of Industry and Organisational Factors on Organizational Culture
Anjali Chaudhry, Ling Yuan, Jia Hu, Robert A. Cooke (2016)
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ARTICLE SUMMARY
What Matters More? The Impact of Industry and Organizational Factors on Organizational Culture
Anjali Chaudhry, Ling Yuan, Jia Hu, Robert A. Cooke (2016)
INSTRUMENTS USED: ORGANISATIONAL CULTURE INVENTORY® (OCI®), ORGANISATIONAL EFFECTIVENESS INVENTORY® (OEI)
The Study:
Organisational characteristics, including leadership and human resource practices around rewards and performance appraisals, play an important role in the evolution and nature of an organization’s culture. This article focuses on whether cultural norms are influenced by industry factors as well. For example, organizations in low-growth industries may require employees to strictly follow standard procedures and take few risks whereas those in high-growth industries might encourage developing personal skills and teamwork. Similarly, organisations in industries that invest heavily in innovation (i.e., “high R&D intensity”) may be more likely than others to encourage employees to be creative and take risks.
Research:
The OCI and OEI were completed by 3,245 members of 424 organisations in 12 industries to describe their organization’s culture and factors such as leadership behaviors, rewards, and fairness of appraisals. Information on industry growth rates and R&D intensity was obtained from the COMPUSTAT database.
Findings:
Culture was not as strongly related to industry characteristics as organisational characteristics. The results shown in the table below indicate that the effects of organisational factors on the strength of the three types of culture assessed by the OCI were many times greater than those of industry factors. Variation in Culture
Implications:
Leaders should resist the temptation to attribute the cultures of their organisation, good or bad, to the industry in which they’re operating. Internal factors, many of which are under their control, have a much greater impact. Additionally, given the similarity in cultures across industries, they have little to gain by comparing their organisation only to others in their industry—they may learn as much (if not more) from comparisons to organisations in general. They should look at high-performance organisations, regardless of industry, for role models and levers for moving their culture toward the ideal.
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Summary based on: Chaudhry, A., Yuan, L., Hu, J., & Cooke. R. A. (2016). What matters more? The impact of industry and organizational factors on organisational culture. Management Decision, 54(3), 570-588. DOI: 10.1108/MD-05-2015-0192