How Does Organizational Culture Form?

Spontaneous interaction in an unstructured group gradually lead to patterns and norms of behavior that become the culture of that group—often within just hours of the group’s formation. In more formal groups an individual creates the group or becomes its leader.

This could be an entrepreneur starting a new company, a religious person creating a following, a political leader creating a new party, a teacher starting a new class, or a manager taking over a new department of an organization. The individual founder—whether an entrepreneur or just the convener of a new group—will have certain personal visions, goals, beliefs, values, and assumptions about how things should be. He or she will initially impose these on the group and/or select members on the basis of their similarity of thoughts and values.

We can think of this imposition as a primary act of leadership,but it does not automatically produce culture. All it produces is compliance in the followers to do what the leader asks of them. Only if the resulting behavior leads to “success”—in the sense that the group accomplishes its task and the members feel good about their relationships to each other—will the founder’s beliefs and values be confirmed and reinforced, and, most important, come to be recognized as shared. What was originally the founder’s individual view of the world leads to shared action, which, if successful, leads to a shared recognition that the founder “had it right.” The group will then act again on these beliefs and values and, if it continues to be successful, will eventually conclude that it now has the “correct” way to think, feel, and act.

If, on the other hand, the founder’s beliefs and values do not lead to success, the group will fail and disappear or will seek other leadership until someone is found whose beliefs and values will lead to success.

The culture formation process will then revolve around that new leader. With continued reinforcement, the group will become less and less conscious of these beliefs and values, and it will begin to treat them more and more as nonnegotiable assumptions. As this process continues, these assumptions will gradually drop out of awareness and come to be taken for granted. As assumptions come to be taken for granted they become part of the identity of the group; are taught to newcomers as the way to think, feel, and act; and, if violated, produce discomfort, anxiety, ostracism, and eventually excommunication. This concept of assumptions, as opposed to beliefs and values, implies nonnegotiability. If we are willing to argue about something, then it has not become taken for granted. Therefore, definitions of culture that deal with values must specify that culture consists of nonnegotiable values—which I am calling assumptions.

In summary, we can think of culture as the accumulated shared learning of a given group, covering behavioral, emotional, and cognitive elements of the group members’ total psychological functioning. For such shared learning to occur, there must be a history of shared experience that, in turn, implies some stability of membership in the group. Given such stability and a shared history, the human need for stability, consistency, and meaning will cause the various shared elements to form into patterns that eventually can be called a culture.

Source:  Schein, E. H., 2004, “Organizational Culture and Leadership”

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