Practical Application: Recognizing Dysfunction in Organizational Culture

Instructor: Scott Tuning

Scott has been a faculty member in higher education for over 10 years. He holds an MBA in Management, an MA in counseling, and an M.Div. in Academic Biblical Studies.

Organizational leaders often have the power to set direction or issue orders in a specific situation, but a more organic way of influencing the workforce is through its culture. When organizational culture is dysfunctional, leaders will have a limited ability to facilitate change.

Why Organizational Culture Matters

If you've heard the old adage, ''You can catch more flies with honey than you can with vinegar,'' then you already know a bit about the importance of company culture. The saying means that it's more effective to facilitate change by making allies rather than by decreeing it. This is where organizational culture becomes so important.

As you learned in the lesson about Dysfunction in Organizational Culture, the culture of a company can become so poor that it actually prevents the organization from making satisfactory progress toward its mission and vision. Organizational culture turns like a cruise ship - not a fighter jet. A single initiative or lone memo isn't going to change corporate direction. For this reason, it's important to identify any cultural dysfunction in its earliest stages.

Identifying dysfunction sooner rather than later helps leaders effect change before the culture is too off course to recover quickly. Let's look at a scenario that will give you the opportunity to apply your new knowledge of a dysfunctional corporate culture.

Dysfunctional Culture and Its Impact on Business

In the last three quarters, financial performance had gone from being perceived as ''a slow time'' to ''we might not survive this.'' The company facing this situation was XYZ Coal & Energy Partners, and their chief operating officer (COO) Kristen Myers couldn't put her finger on the problem. In her eyes, not much had changed since the company performed at its all-time best.

However, as Kristen sought to turn around the company's financial performance, she noted several concerns:

  • Employee turnover was high and continuing to rise.
  • The number of documented disciplinary actions was rising.
  • There was clear evidence that breaches and walls were developing among departments and employees.
  • Individual employee performance was dropping consistently.

Kristen stopped for a minute to take it all in. ''What was going on here?'' she wondered.

Important Questions

  1. In a relative sense, how concerned should Kristen be about her observations? Do they indicate a dysfunctional corporate culture?
  2. Were you able to spot a common denominator among Kristen's observations?
  3. What should Kristen do moving forward?
  4. What will the impact be if Kristen misinterprets her company's corporate culture?

Thoughtful Answers

Kirsten's findings are, in fact, major issues of concern. This is due in no small part to the fact that they're all indicators of a dysfunctional culture. When an organization's culture is toxic, employee turnover will skyrocket. Additionally, two of Kristen's observations (increased employee discipline and decreased productivity) are telltale indicators that employees are lacking in motivation. Sharply declining morale is also a frequent indicator of a dysfunctional corporate culture.

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