Interpreting Culture

Observable Aspects of Organizational Culture

Identifying and interpreting culture requires that people make references based on observable artifacts.

  • Artifacts can be studied but are hard to decipher accurately.
  • An award ceremony in one company might have a different meaning than it does in another company.

To understand what is really going on in an organization requires detective work and probably some experience as an insider.

Figure X2 shows some aspects of the organization that can be observed to help decode the organizational culture. These include rites and ceremonies, stories and myths, symbols, organizational structures, power relationships, and control systems.

Figure X2 Observable Aspects of Organizational Culture Figure X2 Observable Aspects of Organizational Culture: Rites and Ceremonies | Stories and Myths | Symbols | Organization Structures | Power Relationships | Control Systems

Rites and Ceremonies

Cultural values can typically be identified in rites and ceremonies, the elaborate, planned activities that make up a special event and are often conducted for the benefit of an audience.

Managers hold rites and ceremonies to provide dramatic examples of what a company values. These are special occasions that reinforce specific values, create a bond among people for sharing an important understanding, and anoint and celebrate heroes and heroines who symbolize important beliefs and activities.

One type of rite that appears in organization is a rite of passage, which facilitates the transition of employees into new social roles. Organizations as diverse as religious orders, sororities and fraternities, businesses, and the military use rites to initiate new members and communicate important values.

Another type often used is a rite of integration, which creates common bonds and good feelings among employees and increases commitment to the organization. Consider the examples (1 & 2) underneath:

  1. A rite of passage at Gentle GiantOpens in new window, a Somerville, Massachusetts moving company that has won nine Best of Boston awards from Boston magazine, is the “stadium run.” CEO Larry O’Toole decided to have new hires run the tiers of Harvard University stadium as a way to emphasize that people at the company work hard, challenge themselves, and go the distance rather than letting up if things get tough. After the run, O’Toole provides a hearty breakfast and gives an orientation speech. “You’re not a Gentle Giant until you’ve done the run,” said employee Kyle Green.
  2. Whenvever a Walmart executive visits one of the stores, he or she leads employees in the Walmart cheer: “Give me a W! Give me an A! Give me an L! Give me a squiggly! (All do a version of the twist.)

    Give me an M! Give me an A! Give me an R! Give me a T! What’s that spell? Walmart! What’s that spell? Walmart! Who’s No 1? THE CUSTOMER!” The cheer strengthens bonds among employees and reinforces their commitment to common goals. This is a rite of integration.

Stories and Myths

Stories are narrativesOpens in new window based on true events that are frequenty shared among employees and told to new employees to inform them about an organization.

Many stories are about company heroes who serve as models or ideals for upholding cultural norms and values. Some stories are considered legendsOpens in new window because the events are historic and may have been embellished with fictional details. Other stories are mythsOpens in new window, which are consistent with the values and beliefs of the organization but are not supported by facts.

Stories keep alive the primary values of the organization and provide a shared understanding among all employees. Examples of how stories shape culture are as follows:

  1. A story is told at Ritz-Carlton hotelsOpens in new window about a beach attendant who was stacking chairs for the evening when a guest asked if he would leave out two chairs.

    The guest wanted to return to the beach in the evening and propose to his girlfriend. Although the attendant was going off duty, he not only left out the chairs, he stayed late, put on a tuxedo, and escorted the couple to their chairs, presenting them with flowers and champagne and lightning candles at their table.

    The story is firmly entrenched in Ritz-Carlton’s folklore and symbolize the value of going above and beyond the call of duty to satisfy guests.
  1. Employees at IBM often hear a story about the female security guard who challenged IBM’s chairman. Although she knew who he was, the guard insisted that the chairman could not enter a particular area because he wasn’t carrying the appropriate security clearance.

    Rather than getting reprimanded or fired, the guard was praised for her diligence and commitment to maintaining the security of IBM’s building. By telling this story, employees emphasize both the importance of following the rules and the critical contributions of every employee from the bottom to the top of the organization.


Another tool for interpreting culture is the symbol.

A symbol is something that represents another thing.

In one sense, ceremonies, stories, and rites are all symbols because they symbolize deeper values. Another symbol is a physical artifact of the organization. Physical symbols are powerful because they focus attention on a specific item.

Examples of physical symbols are as follows:

  1. At the headquarters of Mother, a small London-based advertising agencyOpens in new window known for its strong culture and offbeat ads, there are no private offices. In fact, except for the restrooms, there are no doors in the whole place. This headquarters design symbolizes and reinforces the cultural values of open communication, collaboration, creativity, and equality.
  2. When employees at Foot Levelers,Opens in new window a maker of chiropractic products, see the “Rudy in Progress” sign taped to the conference room door, they know there’s a group of new employees watching a DVD of RudyOpens in new window, the 1993 inspirational football drama about the ungifted but determined Notre Dame football player Rudy Ruettiger, who finally took the field in the last minutes of a game against Georgia Tech and sacked the quarterback.

    The film is a symbol of the high value the company puts on determination, passion, commitment, and tenacity. Whenever an employee approaches a manager with a tough problem, the manager will ask “Did you Rudy that?” meaning, did you do all that you possibly can to try to solve the problem.

Organization Structures

How the organization is designed is also a reflection of its culture. Does it have a rigid mechanistic structure or a flexible organic structureOpens in new window?

Is there a tall or a flat hierarchy? The way in which people and departments are arranged into a whole, and the degree of flexibility and autonomy people have, tells a lot about which cultural values are emphasized in the organization. Here are a couple of examples:

  1. Nordstrom’s structure reflects the emphasis the department store chain puts on empowering and supporting lower-level employees. NordstromOpens in new window is known for its extraordinary customer service. Its organization chart, shown in Figure X3, symbolizes that managers are to support the employees who give the service rather than exercise tight control over them.
  2. To get a struggling Chrysler back on its feet quickly after bankruptcy reorganization, CEO Sergio Marchionne cut several layers of management to flatten the structure and get top executives closer to the business of making and selling vehicles.

    chiasmus diagram showing abba pattern
    Fig1. Phrase attributed to Churchill — The pattern shown here is a notation for the meaning of the word “chiasmus,” which comes from the Greek letter X (chi).

Power Relationships

Looking at power relationships means deciphering who influences or manipulates or has the ability to do so. Which people and departments are the key power holders in the organization?

In some companies, finance people are quite powerful, whereas in others engineers and designers have the most power.

Another aspect is considering whether power relationships are formal or informal, such as whether people have power based primarily on their position in the hierarchy or based on other factors, such as their expertise or admirable character. Consider the following examples:

  1. An investment firm in Atlanta, Georgia, has an “inner sanctum” with special offices, restrooms, and a dining room for senior executives. The entry door has an electronic lock that only members can access. Mid-level managers hold the title of “director” and eat in a separate dining room. First-level supervisors and other employees share a general cafeteria. Dining facilities and titles signal who has more power in the vertical hierarchy of the organization.
  2. At W.L. GoreOpens in new window, a few people have titles, and no one has a boss. Rather than people having power based on their position, leaders emerge based on who has a good idea and can recruit people to work on it.

Control Sytems

The final element shown in Figure X2 relates to control systems or the inner workings of how the organization controls people and operations.

This includes such things as how information is managed, quality control systems, methods of financial control, reward systems, how decisions are made, and whether managers apply behavior or outcome controlOpens in new window related to employee activities.

Two examples of how control systems reflect culture are as follows:

  1. At Anheuser-Busch InBev, distribution center managers frequently start the day with a sort of pep rally reviewing the day’s sales targets and motivating people to get out and sell more beer. The company’s incentive-based compensation system and its focus on increasing sales while relentlessly cutting costs are key elements of a highly competitive corporate culture.
  2. Facing regulatory and legal problems related to multibillion-dollar losses from the “London Whale” investment fiasco and other issues, JPMorgan Chase CEO Jamie Dimon said, “Fixing our control issues is job No. 1.” Dimon shifted the reporting lines so that Morgan’s top compliance officer reports directly to the bank’s chief operating officer, not to the general counsel.

    In addition to giving compliance and risk managers more stand-alone authority, Dimon added thousands more staff members to work on legal and regulatory matters. These changes symbolize that Morgan is as dedicated to maintaining control as it is to recording profits, Dimon says.

Recall that cultureOpens in new window exists at two levels — the underlying values and assumptions and the visible artifacts and observable behaviors. The rites and ceremonies, stories and sayings, symbols, organization structures, power relationships, and control systems just described are visible manifestations of underlying company values.

These visible artifacts and behaviors can be used to interpret culture, and they are also used by managers to shape company values and to strengthen the desired corporate culture. Thus, the summary of cultural artifacts shown in Figure X2 can serve as both a mechanism for interpretation and a guideline for action when managers need to change or strengthen cultural values.

Remember This!
  • Cultural values help determine the organization’s social capital, and the right values can contribute to organizational success.
  • Culture is the set of key values, beliefs, and norms shared by members of an organization.
  • Organizational cultures serve two critically important functions — to integrate members so that they know how to relate to one another and to help the organization adapt to the external environment.
  • Culture can be both interpreted by and shaped by the organization’s rites and ceremonies, stories and sayings, symbols, structures, control systems, and power relationships. Managers can also use these elements to change the organization’s culture.
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