Organizational Culture: Assessment and Transformation

The stakeholder theory of management is founded on the belief that in order for an organization to contribute positively to society, organizational decision-makers should address four responsibilities, namely, economic, legal, moral and philanthropic [cf. Parmer, B., Freeman, R., Harrison, J., Wicks, A., Purnell, L., and de Colle, S. (2010) Stakeholder theory: the state of the art, The Academy of Management Annals, 4(1), pp. 403-445]. One distinguishing characteristic between organizations that contribute positively to society and those that do not is an ethical organizational culture. According to Schein [Schein, E. (2004) Organizational culture and leadership, 3rd edn (San Francisco, CA: Jossey-Bass], an organization's culture can be described in terms of a cultural elements' framework, comprising artefacts, espoused beliefs/values and underlying assumptions. Thus, in order to assess, develop and transform an organizational culture, organizational decision-makers should be aware of and operationalize Schein's cultural elements' framework. In this article, we integrate research on cultural typologies and organizational transformation. We describe the development and application of an Organizational Ethical Practices Audit (OEPA) in qualitatively assessing a 102-year-old family enterprise's organizational culture using Schein's cultural elements' framework. Furthermore, we summarize how the company's organizational decision-makers acted to transform and institutionalize the company's culture. This case demonstrates how practitioners and researchers can use OEPA as a tool to diagnose an organizational culture, and how a culture can be transformed. Implications and directions for future research are also discussed.