Post 2 of 5: The Impact of Organizational Culture on Performance – The Hidden Factors that Shape Organizational Culture

In the previous post, we discussed what organizational culture is and why it’s so important. But wait, have you ever stopped to think about what really influences organizational culture? Sometimes there are hidden factors, ones that we might not consciously notice, that significantly shape the culture in an organization.

What are the hidden factors in organizational culture?

There are several factors that we sometimes forget about, but they are an integral part of how our organization operates:

1. Management’s perceptions and beliefs

The way senior managers view the organization directly affects the culture. If managers believe in promoting innovation and giving freedom to employees, it’s likely that employees will feel more comfortable coming up with new ideas and acting independently. On the other hand, if management focuses only on results and the bottom line – this will affect the pressure and cause employees to work in a more tense manner.

2. Communication patterns

How do people talk to each other in the organization? Is communication open and flowing or does it go through many “filters” and bureaucratic processes? Research from the Journal of Business Communication shows that open and directed communication allows employees to be more involved, and ultimately improves organizational performance.

3. Daily behavior

It can be easy to miss the impact of daily actions on organizational culture, but they are an integral part of it. From how we deal with failure to how we praise successes – all of these affect employees’ feelings and values. An interesting example is Amazon, which maintains a culture of constant striving for improvement, bringing employees to always think about how processes can be improved.

4. Hidden assumptions

Hidden assumptions are those ideas and perceptions that have become so deeply ingrained that they’ve become almost invisible. This can be anything from a perception of “how a good employee should behave” to certain ideas about “what success is”. Once these assumptions are understood, it’s possible to start implementing changes that affect the entire culture.

Why does it matter?

Understanding these hidden factors is critical. Since organizational culture is more than just nice words or slogans, these are the factors that actually shape it and influence how everything operates in the organization – and ultimately business performance as well.

In the next post, we’ll delve deeper into how a positive organizational culture can improve performance, and how you can identify and influence these hidden factors in your organization.

Sources:

1. Journal of Business Communication – Articles on the impact of communication on employee engagement.

2. Amazon Leadership Principles – Amazon’s organizational culture and values: Amazon’s Leadership Principles