Chapter Learning Objectives After studying this chapter, you should be able to: –Define organizational culture and describe its common characteristics.

Chapter Learning Objectives Chapter Learning Objectives After studying this chapter, you should be able to:

– Define organizational culture and describe its common characteristics.

– Compare the functional and dysfunctional effects of organizational culture on people and the organization.

– Identify the factors that create and sustain an organization’s culture.

– Show how culture is transmitted to employees.

– Demonstrate how an ethical culture can be created.

– Describe a positive organizational culture.

– Identify characteristics of a spiritual culture.

– Show how national culture may affect the way organizational culture is transported to a different country.

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ORGANISATIONAL CULTUREORGANISATIONAL CULTURE

Culture is the soul of the organization — the beliefs and values, and how they are manifested.

A common perception held by the organization’s members; a system of shared meaning

The beliefs, values and norms tell people: “What is to be done.” “How it is to be done.” The culture determines the type of leadership,

communication, and group dynamics within the organization.

Organizational Culture –(What)Organizational Culture –(What)

Organizational Culture– A common perception held by the organization’s members; a

system of shared meaning– Seven primary characteristics

1. Innovation and risk taking-Microsoft, google2. Attention to detail3. Outcome orientation4. People orientation5. Team orientation6. Aggressiveness7. Stability

SEE E X H I B I T 16-1SEE E X H I B I T 16-1

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What Do Cultures Do? (Why)What Do Cultures Do? (Why)

Culture’s Functions

1. Defines the boundary between one organization and others

2. Conveys a sense of identity for its members

3. Facilitates the generation of commitment to something larger than self-interest

4. Enhances the stability of the social system

5. Serves as a sense-making and control mechanism for fitting employees in the organization

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How Culture BeginsHow Culture Begins

Stems from the actions of the founders:

– Founders hire and keep only employees who think and feel the same way they do.

– Founders indoctrinate and socialize these employees to their way of thinking and feeling.

– The founders’ own behavior acts as a role model that encourages employees to identify with them and thereby internalize their beliefs, values, and assumptions.

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How Employees Learn CultureHow Employees Learn Culture

Stories– Anchor the present into the past and provide explanations

and legitimacy for current practices

Rituals– Repetitive sequences of activities that express and reinforce

the key values of the organization

Material Symbols– Acceptable attire, office size, opulence of the office

furnishings, and executive perks that convey to employees who are important in the organization

Language– Jargon and special ways of expressing one’s self to indicate

membership in the organization

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Types of Organization culture Types of Organization culture Dominant Culture-Expresses the core values that are shared by a

majority of the organization’s members

Sub –Culture-Minicultures within an organization, typically defined by department designations and geographical separation

Clan culture

Bureaucratic/Hierarchy culture

Adhocracy culture

Market culture

The Impact of Culture on OrganizationsThe Impact of Culture on Organizations

Impact of Positive culture Shared values and

beliefs create a setting in which people are committed to one another and share an overriding sense of mission.

Organization Goals are achieved on time

Employees Support and help each other

Friendly environment due to healthy work culture

Impact Of Negative culture A strong culture can cause

a resistance to change

Not accomplishing targets on time

Employees work individually

Employees blame each other

Ego Clashes

Culture as a LiabilityCulture as a Liability

Institutionalization– A company can become institutionalized where it is valued

for itself and not for the goods and services it provides

Barrier to change– Occurs when culture’s values are not aligned with the values

necessary for rapid change

Barrier to diversity– Strong cultures put considerable pressure on employees to

conform, which may lead to institutionalized bias

Barrier to acquisitions and mergers– Incompatible cultures can destroy an otherwise successful

merger

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Keeping a Culture AliveKeeping a Culture Alive

Three forces play a particularly important role in sustaining a culture:

Selection– Identify and select individuals who are high performers and

whose values are consistent with at least a good portion of the organization’s values

Top Management– Through words and behaviors, senior executives establish

norms that filter through the organization

Socialization– The process that helps new employees adapt to the

prevailing organizational culture

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Socialization Program OptionsSocialization Program Options

Choose the appropriate alternatives:– Formal versus Informal

– Individual versus Collective

– Fixed versus Variable

– Serial versus Random

– Investiture versus Divestiture

Socialization outcomes:– Higher productivity

– Greater commitment

– Lower turnover

SEE E X H I B I T 16-3SEE E X H I B I T 16-3

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Source: Based on J. Van Maanen, “People Processing: Strategies of Organizational Socialization,” Organizational Dynamics, Summer 1978, pp. 19–36; and E. H. Schein, Organizational Culture,” American Psychologist, February 1990, p. 116.

Stages in the Socialization ProcessStages in the Socialization Process Prearrival

– The period of learning prior to a new employee joining the organization

Encounter– The stage at which the new employee sees what the organization is

really like and confronts the possibility that expectations and reality may diverge

Metamorphosis – The stage at which the new employee changes and adjusts to the

work, work group, and organization

E X H I B I T 16-2E X H I B I T 16-2

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Summary: How Organizational Cultures FormSummary: How Organizational Cultures Form

Organizational cultures are derived from the founder They are sustained through the selection process,

managerial action, and socialization methods

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E X H I B I T 16-4E X H I B I T 16-4

Creating an Ethical Organizational CultureCreating an Ethical Organizational Culture

Characteristics of Organizations that Develop High Ethical Standards– Has high tolerance for risk

– Low to moderate in aggressiveness

– Focused on means as well as outcomes

Managerial Practices Promoting an Ethical Culture– Being a visible role model

– Communicating ethical expectations

– Providing ethical training

– Visibly rewarding ethical acts and punishing unethical ones

– Providing protective mechanisms

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Creating a Positive Organizational CultureCreating a Positive Organizational Culture

Positive Organizational Culture– A culture that:

• Builds on employee strengths

– Focus is on discovering, sharing, and building on the strengths of individual employees

• Rewards more than it punishes

– Articulating praise and “catching employees doing something right”

• Emphasizes individual vitality and growth

– Helping employees learn and grow in their jobs and careers

Limits of Positive Culture:– May not work for all organizations or everyone within them

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Spirituality and Organizational CultureSpirituality and Organizational Culture

Workplace Spirituality– Recognizes that people have an

inner life that nourishes and is nourished by meaningful work in the context of the community

– NOT about organized religious practices

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Global ImplicationsGlobal Implications

Organizational cultures, while strong, can’t ignore local culture

Managers should be more culturally sensitive by:– Adjusting speech to cultural norms

– Listening more

– Avoiding discussions of controversial topics

All global firms need to be more culturally sensitive

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Summary and Managerial ImplicationsSummary and Managerial Implications

Strong cultures are difficult for managers to change– Strong cultures tend to be stable over time

Selecting new hires that fit well in the organizational culture is critical for motivation, job satisfaction, commitment, and a low turnover

Socialization into the corporate culture is important As a manager, your actions as a role model help create

the cultural values of ethics, spirituality, and a positive culture

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