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Saturday, June 25, 2011

Best Business Books #10--Organizational Culture

Organizational Culture and Leadership by Edgar Schein (originally published in 1985 and republished by Jossey-Bass, 2004) stands as the bedrock for trying to understand corporate culture—a term that Schein coined. According to Schein, corporate culture is a series of assumptions, patterns and behaviors that organizations develop in response to external influences and internal adaptation. In response to external changes, organizations experiment, adapt (to survive), and pass along teachings to protect the organization. The basics of corporate culture involve a number of assumptions, including humanity’s relation to nature (determinism vs. self determination); the nature of truth and reality (the accepted norm of truth); human nature (Theory X—people are lazy and must be closely watched and Theory Y—people want to achieve and belong). Shein also shed much light on the development of culture (and organizations). Three stages are birth and early youth (the entrepreneur and founder); organizational midlife as new cultures infiltrate into the organization; and, organizational maturity where organizations sentimentally “hang on” to outdated beliefs and assumptions. Here is where the company is weakest and most vulnerable unless change takes place. Changing the corporate culture happens only with consensus in 5 areas: core mission, goals, means to accomplish goals, ways to measure progress, and remedial or repairing strategies.

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