Organisational culture is a critical factor that can make or break business success. However, the question of how to create and change cultures has not received as much attention as it deserves. In a recent study published in the Journal of Management, researchers from Cambridge Judge Business School, the University of Toronto, and Shanghai Tech University have outlined a four-stage model that organisations can use to create functional cultures that can adapt to changing environmental factors.
The study co-authored by Yeun Joon Kim, Associate Professor in Organisational Behaviour at Cambridge Judge Business School, calls for organisations to engage in coordinated actions to adjust their cultures to various changes in their environment. The model entails diagnosing different types of environmental changes, assessing the efficacy of current cultures to meet such changes, searching for alternative cultures to adapt to diagnosed environmental changes, and creating or implementing alternative cultures.
The first stage of the model involves diagnosing internal and external environmental changes. This means understanding whether different identified environmental factors affect performance and whether these changes create opportunities or pose threats. The second stage involves assessing the efficacy of current cultures for environmental changes through a cultural audit that involves the participation of all or most members of the organization. The third stage entails searching for alternative cultures that can properly address key issues arising from environmental changes, while the fourth stage involves creating or implementing alternative cultures.
While the model draws on the theories of rational decision-making and assumes that organisations are perfectly rational to go through the four stages, the authors acknowledge that decision-making is far from perfect and rational. However, they suggest that organisations can closely follow the rational decision-making processes through coordinated actions.
Leaders play a key role in initiating coordinated actions, while members enable the creation of functional cultures by putting their efforts together. Therefore, close collaborations among leaders and members are crucial to successfully go through the four stages of creating functional cultures.
In summary, adopting a fit-for-purpose culture requires a strategic approach that involves continuous collaboration among leaders and members. By following the four-stage model outlined in this study, organisations can create functional cultures that can adapt to changing environmental factors and boost their chances of business success.
As the business environment is seldom static, it is essential for organisations to carry out coordinated actions continually. With the right mindset, approach, and actions, organisations can create a culture that drives business success.
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