The term organisational culture refers to the basic assumptions and beliefs shared by members of an organisation.

The key elements of organisational culture are:

■   Observed behavioral regularities when people interact, such as the language used and the rituals surrounding deference and demeanor

■  The  norms that evolve in working groups, such as the norm of a fair day’s work for a fair day’s pay

■  The  dominant values espoused by an organisation, such as product quality or low prices

■  The  philosophy that guides an organisation’s policy toward employees and customers

■  The  rules of the game for getting along in the organisation—“the ropes” that a newcomer must learn when joining the organisation

■  The  feeling or climate that is conveyed in an organisation by the physical layout and the way in which members of the organisation interact with one another, customers, and outsiders

An increase in egalitarianism

In their book, ‘Managing Human Resources,’ Luis R. Gómez-Mejía, David B. Balkin, Robert L. Cardy  contest that because information is now available both instantaneously and broadly, organisational structures are becoming more egalitarian, meaning that power and authority are spread more evenly among all employees. Networks, which enable hundreds of workers to share information simultaneously, can share insights previously available only to their bosses.

Changing an entrenched organisational culture is not easy. For example, Carleton S. Fiorina, an outsider with a nontechnical background, was brought into Hewlett-Packard (HP) as CEO in 1999 in order to overhaul the company. Yet she was fired just six years later because her marketing focus, aggressiveness, autocratic style, flair for public drama, and what many thought was an overblown ego alienated key HP employees, managers, and members of the board of directors.

Firms that make cultural adjustments to keep up with environmental changes are likely to outperform those whose culture is rigid and unresponsive to external jolts. Campbell’s Soup Co.’s problems in the 2000s are often attributed to norms and values that have not kept up with rapidly changing consumer tastes.

According to Khermouch, writing in BusinessWeek:

“It’s definitely a risk-averse, control-oriented culture. It’s all about two things: financial control and how much they can squeeze out of a tomato. Campbell needs to reward risk-taking, remove organisational roadblocks, and summon up the courage to move bold initiatives from proposal to execution quickly and regularly.”