Strengths and weaknesses of

organizational culture
management, How is culture actually exhibited in
business, organization, corporate organizations? The issues we will address are the
culture, organizational culture, strength or weakness of the organization's culture
excellent organizations and the identification of an organization's culture.
Strength of Culture
Three features that determine a culture's strength can be identified. The first is thickness
of culture, measured by the number of important shared assumptions. Thick cultures have
many such assumptions, thin cultures few. The second dimension is extent of sharing. In
strong cultures, layers and layers of beliefs are shared. Clarity of ordering is the third
determinant of cultural strength. At McDonald's, product quality and customer service are
clearly the highest priorities, but the two goals appear to be equally important. In some
cultures, shared beliefs and values are clearly ordered, and their importance in relation to
one another is known. Strength of culture is significant because strong cultures—that is,
thick cultures in which the sharing of clearly ordered beliefs and values is pervasive—are
more resistant to change than are weak cultures.

Two factors affect the strength of an organizational culture: the number of employees and
geographic dispersion. Small work forces and more localized operations contribute to the
development of strong cultures because beliefs and values easily develop and become
shared. These characteristics are not essential for a strong culture, however. With 10,000
restaurants spread around the world, from Illinois to Yugoslavia to Russia, McDonald's
clearly employs a large number of people and is very dispersed.

Nevertheless, it enjoys a strong organizational culture. Similarly, Nordstrom's, a

department store chain from the Northwest that is expanding nationally, has cultivated a
strong culture based on customer service. According to one story about the chain,
"Salespeople have paid parking tickets for customers unable to find legal spots, delivered
purchases to customers' homes on Christmas Eve and lent a few dollars to customers who
have found themselves short at the cash register." The result was a tenfold growth in sales
in the 1980s and a jump in size from 15 stores to 42.

Strong cultures are not always desirable. There appear to be organizational conditions
that do not necessarily warrant them. If one looks at organizations as mechanisms for
governing transaction costs (the organization requires something of the employee, who in
turn benefits from the organization), there are three ways to manage those transaction
costs. Whichever method is used to mediate costs, it must be viewed as equitable to
everyone.

The first two mechanisms, the marketplace and bureaucracy, are used under conditions of
fairly low uncertainty and complexity. The market form, appropriate in competitive
situations, manages transaction costs with a price mechanism. Contracts are made and
kept between parties at a "fair" price so that competitors won't take over the business.
Bureaucracy creates the appearance of equity by creating an employment contract,
whereby employees contract to receive wages and in turn submit to supervision, which is
designed to reduce uncertainty and monitor employee performance. A hallmark of
bureaucracy is the simplification of complex tasks into discrete, easily monitored
activities. The bureaucracy uses the mechanism of rules or standards of behavior; as long
as uncertainty is low, the rules in place can guide behavior.

When uncertainty or complexity increases, these mechanisms do not work. A third

mechanism, a clan or culture, then becomes viable. The clan is a culturally homogeneous
organization in which members share a common set of values, objectives, and beliefs;
this common core empowers them to act with greater flexibility in a fluid situation. This
approach addresses the social exchange problem quite differently than either the
marketplace or bureaucracy method: it socializes parties to the exchange in such a way
that all participants see their objectives in the exchange as congruent. Clans require a
tremendous amount of group process activity.