You are on page 1of 15

Organizational Culture

Individuals have relatively enduring and stable traits that help predict their attitudes and behaviors. Organizations also have personalities, which are referred to as “cultures.” Organizational cultures govern how that organization’s members behave.

A. Defined. A system of shared meaning held by members that distinguishes the organization from other organizations. There are seven primary characteristics that capture the essence of an organization's culture. These characteristics are measured on a scale of high to low and provide a composite picture of an organization's culture. This becomes the basis for the feelings of shared understanding that members have about the organization, how things are done in it, and the way members are supposed to behave. 1. Innovation and Risk Taking: The degree to which employees are encouraged to be innovative and take risks. 2. Attention to Detail: The degree to which employees are expected to exhibit precision, analysis, and attention to detail. 3. Outcome Orientation: The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes. 4. People Orientation: The degree to which management decisions take into consideration the effect of outcomes on people within the organization. 5. Team Orientation: The degree to which work activities are organized around teams rather than individuals.


These cultures have little impact on member behavior. situations. 2. Weak Culture: In this case. 2 . It is concerned with how employees feel about the organization. Organizational Culture versus Job Satisfaction. 2. loyalty. and organizational commitment. the organization's core values are not widely held or intensely felt. C. Strong versus Weak Cultures. 1. or experiences that are unique to members of certain departments or geographical areas. Job satisfaction seeks to measure affective responses to the work environment. It is a descriptive term.6. 1. Strong cultures have a greater impact on employee behavior and are more directly related to reduced turnover. A strong culture creates an internal climate of high behavioral control and builds cohesiveness. 2. Aggressiveness: The degree to which people are aggressive and competitive rather than easy-going. D. they normally describe the dominant culture: a macro view that gives an organization its distinct personality. 7. Organizational culture describes how employees perceive the characteristics of an organization’s culture. the stronger the culture is. It is an evaluative term. Layers of Organizational Culture. The greater the number of members who accept the core values and the greater their commitment to these values. therefore individuals of dissimilar backgrounds or at varying levels in the organization should describe the organization's culture in similar terms despite their differences. Strong Culture: This exists when an organization's core values are both intensely held and widely shared. When people are asked to portray an organization's culture. not whether or not they like those characteristics. 1. Culture is a system of shared meaning. Dominant Culture: This is the overall organizational culture as expressed by the core values held by the majority of the organization's members. This doesn't mean however that an organization's culture is completely uniform. Subcultures: These subsets of the overall culture tend to develop in larger organizations to reflect the common problems. Stability: The degree to which organizational activities emphasize maintaining the status quo in contrast to growth. The subculture retains the core values of the dominant culture but modifies them to reflect their own distinct situation. B.

Organizations seek to hire people of diverse backgrounds in order to increase the quality of decision-making and creativity. The Functions of Organizational Culture: Overall. Commitment. often seek to minimize diversity. b. 2. a. Functions and Liabilities of Organizational Culture. Culture is the social glue that helps hold the organization together by providing appropriate standards for socially acceptable employee behavior. by their very nature. But strong cultures. e. Defines Boundaries: Culture creates distinctions between one organization and another. 3 . In today's organizations. Barrier to Diversity: There is a managerial conflict that exists because of culture. Social Stability. Culture generates commitment to something that is larger than one's own self-interest.E. they can create a barrier to implementing the necessary organizational changes. it may create barriers in the organization. culture benefits organizations by increasing organizational commitment and the consistency of employee behavior. There are five basic functions of culture that help achieve these benefits: a. Organizational Culture versus National Culture. Identity. d. Culture conveys a sense of identity for its members. where direct and close managerial control appears to no longer be an option. culture is one of the ways to enforce organizational standards and to maintain effectiveness. Barrier to Change: When the cultural values are not aligned with those that will increase an organization’s effectiveness in dynamic environments. Balancing the need for diversity with the need for a strong culture is an ongoing managerial challenge. Culture serves as a control mechanism that guides and shapes the attitudes and behavior of employees. Control Mechanism. It helps employees make sense of the work environment: it defines the rules of the game. National culture has a greater impact on employee behavior than does an organization's culture. c. Culture as a Liability: Because culture is difficult to change in the short run and defines proper behavior. There may be self-selection biases during the hiring process whereby companies hire people most likely to fit into their organizational culture. 1. b. rather than a person who more accurately reflects the national culture. F. It also aids employees by reducing ambiguity. which may make employees more likely to follow the organizational culture than a typical person from own national culture.

training and development activities. 4 . The ultimate source of an organization's culture is its founder(s). These practices include the selection process. Founders have a vision of what the organization should be and they are unconstrained by previous customs or ideologies. The new organization's small size facilitates the founder’s imposition of his or her vision on all organizational members. Employee Selection: The selection process needs to identify potential employees with relevant skill sets. and promotional procedures: those who support the culture are rewarded and those who do not are penalized. Any organizational success is attributed to the founder’s vision. Founders create culture in three ways: 1. attitudes. one of the more critical facets of this process is ensuring that those selected have values that are consistent with those of the organization. 1. and assumptions. Socialization: Founders indoctrinate and socialize their employees toward the founders’ way of thinking and feeling. The Creation of Culture. Barrier to Acquisitions and Mergers One of the primary concerns in mergers and acquisitions in recent years has been the cultural compatibility between the joining firms as the main cause for the failure of these combinations has been cultural conflict. CREATING AND SUSTAINING CULTURE A. III. Once a culture exists. and behavior. 3.c. or self-select out of the applicant pool. In a sense. values. Sustaining Culture. performance evaluation criteria. Modeling: The founder acts as a role model and encourages to employees identify with him or her and to internalize the founder’s beliefs. the organization becomes an extension of the founder’s personality. 2. B. OB practices within the organization serve to maintain it by giving employees a similar set of experiences. Employees Selection: Founders hire and keep only those employees who think and feel the same way the founders do. Employees whose values and beliefs are misaligned with those of the organization tend to not be hired.

In this final stage. collective. Successful metamorphosis should have a positive effect on new employee productivity. How well employees are socialized will depend on management’s selection of socialization method and the closeness of the new employees’ values to those of the organization. These norms include the desirability of risk taking. Encounter: This is when the new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge. Each individual arrives with his or her own unique set of values. The success of this socialization will affect employee productivity. are the two critical predictors of how well the new employees will adjust to the new culture. plus how proactive their personality is. and outlining successful career paths. serial. There are three stages in this initial socialization. But when expectations and reality differ. organizational commitment. fixed. Exhibit 15-3 provides a simple model of this cultural creation process. appropriate attire. Culture Creation Model. At the extreme. a. relatively long-lasting changes take place as the employee has adjusted to the work itself and internalized the workgroup’s values and norms.2. which in turn strongly influences the criteria used in hiring. and turnover. the more likely he or she is to be committed. Employee Socialization: New employees must adapt to the organizational culture in a process called socialization. and turnover. Actions of Top Management: The verbal messages and actions of top management establish norms of behavior throughout the organization. c. Metamorphosis. and expectations both surrounding the work and the organization. b. attitudes. Prearrival: This encompasses all the learning that occurs before a new member joins the organization. commitment. emphasize divestiture. 5 . level of employee empowerment. While socialization continues throughout an employee's career. the greater the likelihood that the newcomer’s differences and perspectives will be stripped away and replaced by standardized and predictable behaviors. 3. The actions of top management set the general climate of what is acceptable behavior. The more management relies on socialization programs that are formal. C. If the employee's expectations prove to be reasonably accurate. a new member may become disillusioned with the actualities of the job and resign: an indication of the failure of the selection process. the initial socialization is the most critical. That knowledge. new employees must undergo socialization that will detach them from their previous assumptions and replace them with another set the organization deems desirable. The greater the number of friendship ties a newcomer has in the organization. The original culture is derived from the founder's philosophy. the encounter stage merely provides a reaffirmation of the perceptions gained earlier.

the loss of a major customer. These are morality tales: the stories are designed to teach lessons of how things should be done in the organization. and language. The Difficulty of Cultural Change: Culture is relatively stable and rooted in the deeply held values to which employees are strongly committed. A Dynamic Crisis Exists or Is Created : Crises such as a surprising financial setback. These rituals run the gambit from simple public “attaboys” to formal retirement ceremonies. Stories: Stories typically revolve around key events such as rule breaking. Some executives purposely create a crisis in order to stimulate cultural change. the degree of egalitarianism desired by top management. and the kinds of appropriate behavior. the elegance of furnishings. MANAGING CULTURAL CHANGE A. HOW CULTURE IS LEARNED A. unlikely successes. acronyms or jargon serve as a means to identify and segregate members of a culture or subculture.IV. Four conditions indicate when the organizational environment is ripe for change: 1. the specialized language acts as a common denominator that unites members of a given culture or subculture V. Culture is embedded in every aspect of the organization. Rituals: These are repetitive sequences of activities that express and reinforce the key values of the organization. or a dramatic technological breakthrough by a competitor may act as a shock that undermines the status quo and calls into question the relevance of the current culture. reactions to past mistakes. Language: Specialized languages. While changing an organization's culture may be difficult. perquisites. 4. Culture is transmitted to employees in a number of forms: stories. and methods of organizational coping that involve the organization's founders or other key personnel. and the attire worn. Transmission. rituals. 3. workforce reductions. Material Symbols: Material symbols such as the size of offices. Once assimilated. 6 . all convey to employees who is important. material symbols. awards and trophies. there are times when it is necessary. 1. 2.

cultural change is a lengthy process should be measured in years rather than months. Weaker Cultures: The stronger a culture of the more difficult it will be to change. Younger and Smaller Organizations: These organizations have lessentrenched cultures. it provides a positive behavioral guideline for all employees. VI. 4. and addresses possible ethical dilemmas. B.2. Visibly Reward Ethical Acts and Punish Unethical Ones : Performance appraisals must include the means taken to achieve goals as well as the ends themselves. their cultures are easier to change than are those of larger and better-established organizations. A Turnover in Leadership: Replacing top leadership with people from outside the organization can provide an alternative set of key values and is likely to increase the chances that new cultural values will be introduced. 7 . low-to-moderate in aggressiveness. Cultural Change Timeline. Practices that Encourage Development of an Ethical Culture: Top management can: 1. 2. clarifies ethical practices. Provide Ethical Training: Training acts to reinforce the organization’s standards of conduct. and focuses on means as well as outcomes is the one most likely to shape high ethical standards. Employees tend to act in ways that will gain them the greatest rewards (see Expectancy Theory in Chapter 5): tie ethical actions into the reward structure to modify behaviors. 3. Communicate Ethical Expectations: The creation and use of an organizational code of ethics helps reduce ethical ambiguities and enforce the organization's primary values. Even if these factors are favorable. Weak cultures are relatively easy to change. Be a Visible Role Model: When senior management is seen as taking the ethical highroad. CREATING AN ETHICAL ORGANIZATIONAL CULTURE A. B. 4. Favorable Conditions: A strong organizational culture that is high in risk tolerance. 3.

B. Selection: Building a customer-responsive culture starts with hiring the correct service contact people. procedures. 3. Organizational Citizenship Behavior: Employees should be conscientious in their desire to please the customer. CREATING A CUSTOMERRESPONSIVE CULTURE A. and regulations make this difficult. Rigid rules. 6.5. They have to please both management and customers. Provide Protective Mechanisms: Organizations must create formal mechanisms that allow employees to discuss ethical dilemmas or report unethical behavior without fear of reprimand (such as ethical counselors. employees need discretion to do what is necessary to please the customer. Key Variables in Shaping Customer-Responsive Cultures. Role Clarity: Service employees act as “boundary spanners” between the organization and its customers. Low Formalization: Service employees need to have the freedom to meet changing customer-service requirements. Good Listening Skills: Employees must have the ability to listen and understand messages sent by the customer. 1. Widespread Use of Empowerment: Related to low formalization. Type of Employees: Successful. Purpose: Creating an organizational culture that builds a strong and loyal customer base is generally rewarded with revenue growth in better financial performance. Suggested Managerial Actions: To create a more customer-responsive culture. service-oriented organizations hire employees who are outgoing and friendly. or ethical officers) to facilitate the change to an ethical culture. ombudsman. 4. Managers should clarify employee roles as to the best way to perform the jobs and activities. 2. which may lead to role ambiguity and conflict. managers should do the following: 1. 5. They need to be able to take initiative to provide service beyond customer expectations. VII. C. 8 . reducing job satisfaction and hindering performance.

Performance Evaluation: Behavior-based performance evaluations are consistent with improved customer service.Organizations should seek personalities and attitudes consistent with a high service orientation. Leadership: Leaders must model customer-centric behaviors if they wish their employees to act responsively toward their customers. attitudes. Organizational climate has strong impact on the performance of the organization. 5. As with structural design. shared by organizational members. 3. Structural Design: Organizations that wish to become customer-oriented should reduce the numbers of rules and regulations so that employees are empowered to change their behavior to meet the needs and requests customers. Training: Organizations with large numbers of existing employees should focus on training. 6. Organizational culture has its key functions and they include sense of identity. 4. teamwork. commitment. It is expressed in terms of norms. CHARACTERISTIC OF ORGANIZATION CULTURE Organizational culture is the set of important understandings. active listening. values. 9 . friendliness. attitudes and beliefs shared by organizational members. The training should encompass improvement of product knowledge. The essential core of organizational culture is system of shared meaning among members. The focus of such appraisals is based of how employees behave or act (effort. It has basic elements of culture and they are artifacts. Reward Systems: Organizations that wish to deliver good service need to reward employees who provide it. and beliefs. 7. and displaying emotions. showing patience. values. Empowerment: Employees should be given discretion to make day-to-day decisions about job-related activities. VIII. and problem solving) rather than on measurable outcomes. espoused values and basic assumptions. such as norms. 2. Pay and promotions should be contingent on outstanding customer service. this allows customer service representatives to satisfy consumers completely and immediately.

Performance-Reward: It can be described as the degree or extent to which reward in the organization are based on employee work performance. 11. 4. independence. Stability: It can be described as the degree or extent to which maintaining status quo is emphasized in contrast to growth. 9. 12. Conflict Tolerance: It can be described as the degree or extent of conflict present in relationships between peers and work groups as well as the motivation to be honest and 10 . Structure: It can be described as the degree or extent of rules and regulations and the amount of direct supervision that is used to supervise and control behavior. 13. Aggressiveness: It can be described as the degree or extent to which people are aggressive or competitive rather than unconcerned or relaxed. 10. The primary characteristics of an organizational culture are as follows: 1. Outcome Orientation: It can be described as the degree or extent to which management focuses outcome rather than on process to achieve outcome. 3. Innovation and Risk Taking: It can be described as the degree or extent to which employees are encouraged to take innovative steps and calculated risk. Attention to Detail: It can be described as degree or extent to which employees are expected to pay attention to details. Individual Autonomy: It can be described as the degree or extent of responsibility. People Orientation: It can be described as the degree or extent to which management gives attention to effect of decisions on people working in the organization and on its shareholders. Team Orientation: It can be described as the degree or extent to which works are organized around team rather than individuals. 8. Identity: It can be described as the degree or extent to which members identify with the organization as a whole rather than with their particular work group or field of professional expertise. Support: It can be described as the degree or extent of assistance and warmth managers provide for their subordinates.enhancement of commitment and reinforcement of behavior. 5. 6. 7. and opportunities for exercising initiative that individuals in an organization have. 2.

and in other directions as spelled out by the culture. across the organization. ways. Communication. According to Edgar Schein it is. Different organizations follow different kinds of 11 . upward. 19. 21. Openness. Excitement. and esprit de corps: It can be described as a perceptibly good feeling about the organization and its activities. Pride. that operate unconsciously. 20. Attitude towards Change: It can be described as the response given to new methods. 15. Market and Customer Orientation: It can be described as the degree or extent to which the organization is responsive to its markets and customers. and values. 16. 18.’ Many people say that a positive culture is essential for a business organization to thrive in the market. Rituals: It can be described as the expressive events that support and reinforce organizational standards and values. ‘The deeper level of basic assumptions and beliefs that are: learned responses to the group's problems of survival in its external environment and its problems of internal integration. and that define in a basic "taken -for-granted" fashion in an organization's view of itself and its environment. and Supervision: It can be described as the amount and type of interchange permitted. are shared by members of an organization. The communication flow can be about differences. Focus: It can be described as the vision of the goals and objectives of an organization’s operations as communicated by those in control. EFFECTIVE WAY TO BUILD AND MAINTAIN A POSITIVE ORGANIZATIONAL CULTURE An organizational culture can be defined in many ways. Standard and Values: The levels of performance and behavior considered to be acceptable by both types of criteria – formal and informal. 14. 17. IX. Commitment: It can be described as the degree or extent to which individuals are willingly working towards goals on a long-lasting basis.

12 . If some method like this can be implemented in any organization. it is also important to implement the methodologies at the team level. if possible. The task of creating a positive wave in the organization is mostly the responsibility of the leaders in the organization. In a positive work culture. however. However. Like the way it is important to develop satisfaction and culture at individual level. it should impact the employees in a positive way. Setting realistic and quantifiable goals and motivating the employees towards reaching them is a productive and positive culture. Whichever way the organization chooses to get the job done. the employees. For other organizations. an open door policy for managers etc are all efficient methods. if the employee does something extremely beneficial for the company. They should take some steps forward to the employees to motivate the employees. the accomplishments needs to be appreciated and mistakes corrected without hurting the emotions. The managers and top level officials at the company should be involved in matters outside management functions. Within a team of employees. it will do only good for the company and organizational culture. There is no denying that a positive organizational culture contributes a lot to the overall efficiency of the organization. Employees should be given the feel where the managers are always approachable and you can take your concerns to them. It is a sad fact that there are also organizational cultures which prove destructive to the organization. In most of the companies. we see companies whose employee’s lackluster performance affecting the output of the company. Holding monthly or occasional meetings involving all or most of the staff is something which can be implemented. instances can be found where the employees and management indulge in an open communication. Better management and productivity can be achieved if proper goals are set for the teams. Sending communications through emails to the employees which ask for their views and opinions. the effort and accomplishment goes unnoticed and unappreciated. this could not be possible all the time. is not a possibility in every organization or a practical method. The meeting should be made casual. and any official differences should be kept apart. it will only affect the morale of the employees negatively. the leaders and managers have to understand the needs of employees and work towards meeting them. This. For employees working in most organizations. Employees will be taunted again and again by the managers and fellow employees regarding the mistake. Today. However. the top level management tends to hide critical company information with the most important part of the organization. it is important to develop interdependence because no single employee can alone lift an organization or company to the greatest heights. experience has been bad when something wrong happens from their part.methods and depend on varied resources to get their job done. A good organizational culture only motivates the employees to give their best towards their productivity. transparency is a big part in their culture’s success stories. Every employee would be eager to know what is happening in their company and if the company management is reluctant to share the information. As part of the positive culture that some organizations follow. For motivating the employees. There should be enough level of trust among the team members and the environment needs to be motivating.

and desire to connect with other human beings and be part of a community. Implementing good culture in an organization is a time consuming process and everyone has to be patient enough to accept the changes. The Men’s Warehouse. seek to find meaning and purpose in their work. concern about an employee’s inner life had no role in the perfectly rational model. the management and top leaders are responsible for maintaining a good organizational culture while the employees are the ones who carry the legacy over. The myth of rationality assumed that the well-run organization eliminated feelings. Historical models of management and organizational behavior had no room for spirituality. What do Southwest Airlines. So why has the search for meaning and purposefulness in work surfaced now? There are a number of reasons. Of course. X. The concept of workplace spirituality draws on our previous discussions of topics such as values. In any organization. The culture at the organization will definitely impact the productivity and efficiency of the organization. As you’ll see. SPIRITUALITY AND ORGANIZATIONAL CULTURE Workplace spirituality is not about organized religious practices. and work/life balance. motivation. leadership. A good system should also be in place to track all the actions. They have the power to transform the culture of an organization for good or bad. for instance. However. Workplace spirituality recognizes that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community. an awareness of spirituality can help you to better understand employee behavior in the twenty first century. employees have always had an inner life. It’s not about God or theology. ethics. But just as we’ve now come to realize that the study of emotions improve our understanding of organizational behavior. once accepted it will definitely do good to both the employees as well as the organization as a whole. it is the leaders who decide what all needs to remain unchanged and which parts require changes. In the culture that a company follows. AES. Similarly. Hewlett-Packard. spiritual organizations are concerned with helping people develop and reach their full 13 . Organizations that promote a spiritual cultural recognize that people have both a mind and a spirit. Wetherill Associates and Tom’s of Maine have in common? They’re among a growing number of organizations that have embraced workplace spirituality.Every member of a team must understand the relevance of that team and his role in the team.

Maximizing profits may excite investors but it rarely stirs employees’ emotions or imaginations. What differentiates spiritual organizations from their non-spiritual counterparts? Although research on this question is only preliminary. XI. languages spoken. they’re not the primary values of the organization. WORK CULTURE DIFFERENCE BETWEEN INDIA AND US A very strong culture difference which I noticed was that Indian co-workers within a very short period of time would have fully become acquainted with all of your personal details: Your native place. AES. for instance. They go together for lunch. work experience. I have hardly observed any worker hanging out with his colleague for a lunch or for a weekend outing. In US. hang out together after office hours. religion. Within a day or two of joining the office. Strong Sense of Purpose: Spiritual organizations build their cultures around a meaningful purpose. seeks to provide electricity around the globe and to fundamentally change people’s lives and their economic well-being. Indian co-workers are very social and very quickly become friendly. relationship status. and educational qualifications. property owned and so on. People want to be inspired by a purpose that they believe is important and worthwhile. The relationship with ones colleague extends much beyond the professional relation and many times the personal binding is stronger than the professional binding.potential. is strongly committed to providing the lowest airfares. it would be very surprising if you knew the names of all of your US co-workers sitting around your cubicle. Similarly organizations that are concerned with spirituality are more likely to directly address problems created by work/life conflicts. our review identified five cultural characteristics that tend to be evident is spiritual organizations. How are you doing" greetings in the office. On the contrary. the world’s largest independent power producer. and a pleasant experience for customer. Southwest Airlines. Tom’s of Maine strives to sell personal care household products that are made from natural ingredients and are environmentally friendly. your entire floor would have known your full personal details. 14 . While profits may be important. meet each other during the weekends and visit each other’s house during various festivals. on-time services. apart from the regular "Hello.

movie gossip. sports. the discussion is mostly restricted to weather. a wide range of topics ranging from politics. Whereas in US. 15 . in India. to your colleagues new affair are discussed.The third major difference which I have observed has been the topic selected to discuss for non-work related conversation.