Organizational culture and structure interact to provide a setting that removes uncertainty about the role that an individual plays in an organization, and the acceptable behavior that should be adhered to while performing said role. In a small business environment, such as a sole proprietorship, the owner/leader must define and communicate the culture to his team in a manner that will create a team with shared values and beliefs that are in alignment with organizational goals.
Organizational culture refers to the shared values, principles, traditions and ways of doing things that influence the way that organizational members conduct themselves (Robbins & DeCenzo, 2013). It is important to note that culture is a perception not a tangible item. It is therefore important that managers promote the dimensions of organizational culture which contribute to meeting organizational goals. It is essential to remember that new organizational members will have different backgrounds and may have experienced significantly different social norms. As new members become part of an organization they will learn about the organizational culture in an informal manner by observing the customs of existing members and through hearing stories and learning organizational jargon (Robbins & DeCenzo, 2013).
Organizational structure refers to the way in which an organization divides its labor into distinct tasks and then coordinates those tasks (Clayton, Fisher, Harris, Brown, & NCVER, 2008). Unlike organizational culture, organizational structure is formalized and is communicated via an organizational chart, policies and procedures, and other formal communication methods (Clayton et al., 2008). Ultimately, structure describes how an organization’s division’s work together to manage work flows and service customers (Clayton et al., 2008).
According to Robbins & DeCenzo (2013), an organizations culture may have an effect on its structure. The combination of structure and culture can provide a framework of consistency that guides individuals to work together to achieve organizational goals. Robbins & DeCenzo (2013) further assert that the stronger an organizations culture, the more it can affect the way that managers plan, organize, lead and control. Furthermore, differences in organizational culture can explain why organizations in the same industry, with similar structures, can function quite differently (Clayton et al., 2008).
A simple structure is an organizational design with low departmentalization and with authority centralized in...