ORGANISATIONAL CULTURE

-SWATI SISODIA
swati.sisodia@nmims.edu
What is Organisational Culture
The basic paTTern of shared
values and assumpTions governing
The way employees wiThin as
organisaTion Think abouT and acT
on problems and opporTuniTies
A system of meaning
shared by the
organizations members
Cultural values are
collective beliefs,
assumptions, and feelings
about what things are
good, normal, rational,
valuable, etc.
Aspects of culture
Values
Customs
Symbols
Language
Cultural Diversity
Coca-Colas name in China was
first read as Kekoukela, meaning
Bite the wax tadpole or female
horse stuffed with wax,
depending on the dialect.
Coke then researched 40,000
characters to find a phonetic
equivalent kokou kole,
translating into happiness in the
mouth.
Culture and the workplace (Hofstede)
Purpose: understanding of business situations across-cultures
MUST understand own culture AND other culture(s)
Geert Hofstede sampled 100,000
IBM employees 1963-1973
Compared employee attitudes and
values across 40 countries
Isolated 4 dimensions summarizing
culture:
1. Power distance
2. Individualism vs. collectivism
3. Uncertainty avoidance
4. Masculinity vs. feminity
Managerial Implications
Ethnocentrism vs Polycentrism
Must a company adapt to local
cultures or can corporate -- often
home-country dominated -- culture
prevail?
Cross-cultural literacy essential
Do some cultures offer a national
competitive advantage over others?
Organisational Culture at people soft
PeopleSoft is one of the loopiest places on the planet. The Pleasanton, California, business
management software company has mini golf tournaments in the hallways.
Dress-down day is every day of the week. A white collar is usually a T-shirt. The gourmet
coffee are free. Having fun is so ingrained.
In other words, give the bagel delivery guy the same respect as the company president.
PeopleSoft is also extreme on technology and flexible customer service. Job applicants use
an automated voice response system to accept their job offer. On the first day of work,
newcomers are outfitted with a notebook computer and a backpack. They also receive
tools for posting personal web pages on the company intranet.
This corporate culture has contributed to PeopleSofts success. The company has grown
faster than SAP and Oracle and is now the second largest provider of business management
software (after SAP). Our true competence is our culture, explains Dave Duffield.
Thats what attracts people and keep them here. It also helps sell customers. Customers
want to work with companies that are competent, trustworthy, and fun.
How Employees
Learn Culture/
How it is reinforced
Material
Symbols
Language
Stories Rituals
Oakley, Inc.s headquarters symbolizes a corporate culture in which employees
believe they are at war with competitors.
Oakleys combat-ready headquarters symbolizes a
corporate culture that attacks such rivals as Nike with
gladiator glee. The lobby of the two-year-old, $40-
million building looks like a bomb shelter.
Its huge, echoing vault is straight out of Star Wars.
Sleek pipes,
watertight doors, and towering metallic walls
studded with oversize bolts suggest a place that is
routinely subjected to laser fire and floods.
Ejection seats from a B-52 bomber furnish the
waiting area.
Oakleys culture is also apparent in its annual report,
which reads more like the Art of War than a financial
report. Weve always had a fortress mentality, says
Colin Baden, Oakleys vice president of design. What
we make is gold, and people will do anything to get it,
so we protect it.
Examples of few culture
Innovation and risk taking (3M)
Outcome orientation (Bausch &
Lomb)
Aggressiveness (Microsoft)
Cultures Effects on Managerial Process
Decision Making
(Central/Decentralization)
Safety vs. Risk
Individual vs. Group Rewards
Informal/Formal Procedures
Organizational Loyalty
Co-operation vs. Competition
Time Horizons- Long or Short
Stability Innovation
The Nature of Organizational Culture
Organizational culture
Shared values and beliefs that enable members to
understand their roles and the norms of the organization,
including
Observed behavioral regularities, as typified by common
language, terminology, and rituals.
Norms, as reflected by things such as the amount of work to be
done and the degree of cooperation between management and
employees.
Dominant values that the organization advocates and expects
participants to share, such as high product and service quality,
low absenteeism, and high efficiency.
A philosophy that is set forth in the MNCs beliefs
regarding how employees and customers should be
treated.
Rules that dictate the dos and donts of employee
behavior relating to areas such as productivity,
customer relations, and intergroup cooperation.
Organizational climate, or the overall atmosphere
of the enterprise as reflected by the way that
participants interact with each other, conduct
themselves with customers, and feel about the way
they are treated by higher-level management
What are the values/beliefs/norms of the
following companies?
Indias second largest bank exudes a performance-oriented
culture. Its organizational practices place a premium on
training, career development, goal setting, and pay-for-
performance, all with the intent of maximizing employee
performance and customer service.
We believe in defining clear performance for employees
and empowering them to achieve their goals -MD ICICI
BANK
ICICI BANK
Wal-Mart, Inc.
Wal-Marts headquarters almost screams out frugality and
efficiency.
The worlds largest retailer has a Spartan waiting room for
suppliers, rather like a government office waiting areas.
Visitors pay for their own soft drinks and coffee.
In each of the buildings inexpensive cubicles, employees sit at
inexpensive desk finding ways to squeeze more efficiencies and
lower costs out of suppliers as well as their own work processes.
Importance of Organisational Culture
Talent attractor
Talent Retainer
Engages People
Creates energy and momentum
Changes the view of work
Creates greater Synergy
Makes evryone ,ore successful
Types of Organisational Culture
Organisational culture can vary in a
number of ways. It is these variances
that differentiate one organisation from
the others. Some of the bases of the
differentiation are presented here:
Strong vs weak culture
Soft vs hard culture :
Formal vs informal culture
Types of Cultures
The Clan Culture
A very friendly place to work where people share a lot of
themselves. It is like an extended family.
The Hierarchy Culture
A very formalized structured place to work.
Procedures govern what people do.
Example
Hewlett Packard (HP) is a global organization with a
corporate culture that is spread to employees around
the world. Whether at HPs Far East distribution center
in Singapore or at research labs in California,
employees live by five well-established values known
as The HP Way:
These values include trust and respect for individuals, a
focus on achievement and contribution, the conduct of
business with uncompromising integrity, achievement
of common objectives through teamwork, and
encouragement of flexibility and innovation.
The Adhocracy Culture
A dynamic entrepreneurial, and creative place to work.
People stick their necks out and take risks.
The Market Culture
A results oriented organization whose major concern is
with getting the job done. People are competitive and
goal-oriented.
Collaborate (Clan) Culture
An open and friendly place to work where
people share a lot of themselves. It is like an
extended family. Leaders are considered to be
mentors or even parental figures. Group loyalty
and sense of tradition are strong. There is an
emphasis on the long-term
benefits of human resources development and
great importance is given to group cohesion.
There is a strong concern for people.
The organization places a premium on teamwork,
participation, and consensus.
Create (Adhocracy) Culture
A dynamic, entrepreneurial, and creative place to
work. Innovation and risk-taking are embraced by
employees and leaders. A commitment to
experimentation and thinking differently are
what unify the organization. They strive to be on
the leading edge. The long-term emphasis is on
growth and acquiring new resources. Success
means gaining unique and new products or
services. Being an industry leader is important.
Individual initiative and freedom are encouraged.
Control (Hierarchy) Culture
A highly structured and formal place to work. Rules
and procedures govern behavior. Leaders strive to
be good coordinators and organizers who are
efficiency-minded. Maintaining a smooth-running
organization is most critical. Formal policies are
what hold the group together. Stability,
performance, and efficient operations are the
long-term goals. Success means dependable
delivery, smooth scheduling, and low cost.
Management wants security and predictability.
Compete (Market) Culture
A results-driven organization focused on job
completion. People are competitive and goal-
oriented. Leaders are demanding, hard-driving,
and productive. The emphasis on winning unifies
the organization. Reputation and success are
common concerns. Long-term focus is on
competitive action and achievement of
measurable goals and targets. Sucess means
market share and penetration. Competitive
pricing and market leadership are important.
Each year Fortune magazine releases its
list of indias Top Employers. Visit the
site and do a keyword search on best
companies to work for. Who are some
of the top companies to work for
according to Fortune? What might
employees find appealing about the
organizational culture of those
companies?
Functions of
Organizational Culture
Culture provides a sense of identity to members
and increases their commitment to the
organization
Culture is a sense-making device
for organization members
Culture reinforces the values
in the organization
Culture serves as a control
mechanism for shaping
behavior
Adaptive
Perspective
Theories about the
relationship between
organizational culture
and performance
Strong
Culture
Perspective
Fit
Perspective
Strong cultures facilitate performance
because:
They are characterized by goal alignment
They create a high level of motivation because of
shared values by the members
They provide control without the oppressive
effects of bureaucracy
Strong
Culture
Perspective
Argument that a culture is
good only if it fits the
industrys or the firms
strategy.
Fit
Perspective
Organizational characteristics that may affect culture
Customer requirements
Competitive environment
Societal expectations
An organizational culture that
encourages confidence and risk
taking among employees, has
leadership that produces change,
and focuses on the changing needs
of customers
Adaptive Nonadaptive
Most managers care
about themselves,
their work group, or
an associated product
Most managers care
about customers,
stockholders, and
employees
Managers tend to
behave somewhat
politically,
and bureaucratically
Managers pay close
attention to all
their constituencies,
esp. customers
Core Values
Common
Behavior
Adaptive
Perspective
Situations That May Require Cultural
Changes
Merger or acquisition
Employment of people from different countries
Technology
Market forces
Political and
regulatory forces
Social trends
Environmental forces include:
Creating and sustaining
culture
Creating Corporate Culture
The ultimate source of an organisational culture is its
founders
Culture creation occurs in three ways:
- Employee hired and kept with same thinking
- Indoctrinate and socialize the employee with the
organization's thinking
- The founders behavior acts as role model for the
employees
- With the organizations' success the founders
personality is embedded in the organisational culture.
Sustaining Organisational culture
Three forces play a particular important part
in sustaining a culture
1. Selection Practices
2. Action of top management
3. Socialization Methods
Selection
Explicit goals- Identifying and hiring
individuals having knowledge, skills and
abilities to perform the jobs successfully
Individuals having values consistent with
those of the organization are selected as per
the decision makers guidelines
TOP MANAGEMENT
The action of top management establishes the
norms so as to:
Whether risk taking is desirable
How much freedom should be given to their
subordinates
What actions will pay off in terms of pay rise,
promotions and other rewards, etc
SOCIALISATION
New employees are not familiar with the
organisational culture and are potentially likely to
disturb the existing culture
The process through which the employees are
proselytized about the customs and traditions of
the organization is known as socialization
It is the process of adaption by which new
employees are to understand the basic values
and the norms for becoming accepted member
of the organization
SOCIALISATION PROCESS
Pre arrival:
Newcomers form expectations regarding particular occupations and what it
would be like to be a member of a particular organization
Encounter
Newcomer confronts the reality of his or her organizational role
Not yet an insider (uncertainty vs. information seeking)
Not socialized by the organization
Not individualized role requirements - affect organizational situation
Metamorphosis
When new employees begin to change some of his behaviors and
expectations in order to meet the standards of the new environment
Create an individual identity
A time of ethical dilemmas
CHANGING ORGANISATIONAL CULTURE
Lewins Three-Step Change Model
The model given by Lewin has three steps:
Refreezing Moving Unfreezing
Making the
change
getting
ready for
change
stabilizing the
change
Murlidhar Puthran
Unfreezing
Arouse dissatisfaction with the current state
Activate and strengthen top management
support
Use participation in decision making
Build in rewards
Murlidhar Puthran
Moving
Establish goals
Institute smaller, acceptable changes that
reinforce and support change
Develop management structures for
change
Maintain open, two-way communication
Murlidhar Puthran
Refreezing
Build success experiences
Reward desired behaviour
Develop structures to institutionalize the
change
Make change work
Live Example
ICICI Bank merger with
Bank of Madura
(December 2000)
It reveals the importance of change management for the
Bank of Madura and how effective management of
change could bring out best results from the employees in
the Bank of Madura.
Facts
ICICI Bank Ltd
ICICI was established by the
Government of India in 1955
3 times the size of BoM
Staff strength was only 1,400
departments into individual
profit centers
Bank of Madura (BoM)
Established in 1943 at
Madurai, Tamil Nadu. By
2000, it was number one bank
in Tamil Nadu
One third the size of ICICI
Staff strength was 2,500
management concentrated on
the overall profitability of the
Bank
Immediate Impact
There were large differences in profiles, grades,
designations and salaries of personnel
there was uneasiness among the staff of BoMas
they felt that ICICI would push up the productivity
per employee, to match the levels of ICICI
BoMemployees feared that their positions would
come in for a closer scrutiny.
They were not sure whether the rural branches
would continue or not as ICICI's business was
largely urban-oriented.
Employee behavioral pattern study
PERIOD EMPLOYEE BEHAVIOR
Day 1 Denial, fear, no improvement
After a month Sadness, slight improvement
After a Year Acceptance, significant
improvement
After 2 Years Relief, liking, enjoyment, business
development activities
Steps taken to Decrease resistance of change
by ICICI
Established clear communication channels
throughout
Training programmes were conducted which
emphasized on knowledge, skill, attitude and
technology to upgrade skills of the employees
direct dialogue with the employee unions of
the BoMto maintain good employee relations
By June 2001, the process of integration
between ICICI and BoMwas started
ICICI transferred around 450 BoMemployees to
ICICI Bank, while 300 ICICI employees were
shifted to BoMbranches.
Promotion schemes for BoMemployees were
initiated and around 800 BoMofficers were
found to be eligible for the promotions.
End of the year, ICICI seemed to have successfully
handled the HR aspects of the BoMmerger.
The win-win situation created
We do put people under stress by raising the bar
constantly. That is the only way to ensure that
performers lead the change process. K. V. Kamath, MD
& CEO, ICICI
Noticing Small Changes EarlyHelps You Adapt To The
Bigger Changes That Are To Come
Change Happens, Anticipate Change, Monitor Change,
Adapt To Change Quickly.
Enjoy Change!
Be Ready To Change Quickly And Enjoy It Again