ORGANISATIONAL CULTURE

by : DR. T.K. JAIN

Components of Organizational Culture
 Routine ways of communicating  Norms shared by individuals and teams  Dominant values held by an organization  Guiding philosophy for management’s

policies and decision making  Rules of the game for getting along in the organization  Climate of the organization
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Layers of Organizational Culture
Cultural Symbols Shared Behaviors Cultural Values Shared Assumptions
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Issues Associated with External Adaptation and Survival
 Identifying the organization's primary mission and

selecting strategies to pursue it
 Setting specific targets  Determining how to pursue the goals, including selecting

an organizational structure and reward system
 Establishing criteria to measure how well individuals,

teams, and departments are accomplishing their goals

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Issues Associated with Internal Integration
 Identifying methods of communication and developing a

shared meaning for important concepts
 Establishing criteria for membership in groups and teams  Determining rules for acquiring, maintaining, and losing

power and status
 Developing systems for encouraging desirable behaviors

and discouraging undesirable behaviors

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How Cultures Emerge
Top Management
• Agrees on shared assumptions of human behavior • Develops a shared vision of cultural values

Behaviors
• Employees behave in ways that are consistent with shared values and assumptions

Results
• Financial performance • Market share • Employee commitment

Culture
• Strong culture emerges • Traditions are maintained • Socialization practices for new employees

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Methods of Maintaining Organizational Culture
Methods of Maintaining Organizational Culture •What managers and teams pay attention to •Reactions to organizational crises •Managerial role modeling •Criteria for rewards •Criteria for selection and promotion •Organizational rites, ceremonies, stories

Recruitment of employees who fit the culture

Organizational Culture

Removal of employees who deviate from the culture
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Organizational Rites and Ceremonies
TYPE
Rites of passage

EXAMPLE
Basic training, U.S. Army

POSSIBLE CONSEQUENCES

Facilitate transition into new roles; minimize differences in way roles are carried out Reduce power and identity; reaffirm proper behavior Enhance power and identity; emphasize value of proper behavior Encourage common feelings that bind members together

Rites of degradation

Firing a manager

Rites of enhancement Rites of integration

Mary Kay Cosmetics Company ceremonies Office party

Source: Adapted from Trice, H. M., and Beyer, J. M. The Cultures of Work Organizations. Englewood Cliffs, N.J.: Prentice-Hall, 1993, 111. www.afterschoool.tk 8

Requirements for Successfully Changing Organizational Culture
 Understand the old culture first  Support employees and teams who have ideas for a better

culture and are willing to act on those ideas
 Find the most effective subculture in the organization and

use it as a model
 Help employees and teams do their jobs more effectively  Use the vision of a new culture as a guide for change  Recognize that significant cultural change takes time  Live the new culture
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Framework of Types of Cultures
Flexible Clan Culture Entrepreneurial Culture

Formal Control Orientation
Stable

Bureaucratic Culture Internal

Market Culture External

Forms of Attention
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Source: Adapted from Hooijberg, R., and Petrock, F. On cultural change: Using the competing values framework to help leaders execute a transformational strategy. Human Resource Management, 1993, 32, 29-50; Quinn, R. E. Beyond Rational Management: Mastering the Paradoxes and Competing Demands of High Performance. San Francisco: Jossey-Bass, 1988.

Attributes of a Bureaucratic Culture Long-term concerns are predictability, efficiency, and stability Members value standardized goods and services Managers view their roles as being good coordinators, organizers, and enforcers of written rules and standards Tasks, responsibilities, authority, rules, and processes are clearly defined
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Attributes of a Clan Culture Members understand that contributions to the organization exceed any contractual agreements A clan culture achieves unity with a long and thorough socialization process Members share feelings of pride in membership, as well as feelings of personal ownership of a business, a product, or an idea
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Attributes of a Clan Culture

Peer pressure to adhere to important norms is strong Success is assumed to depend substantially on sensitivity to customers and concern for people Teamwork, participation, and consensus decision making are believed to lead to success
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Attributes of an Entrepreneurial Culture There is a commitment to experimentation, innovation, and being on the leading edge This culture does not just quickly react to changes in the environment—it creates change Effectiveness depends on providing new and unique products and rapid growth Individual initiative, flexibility, and freedom foster growth and are encouraged and well rewarded
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Attributes of a Market Culture
 Contractual relationship between individual

and organization  Independence and individuality are valued and members are encouraged to pursue their own financial goals  Does not exert much social pressure on an organization’s members, but when it does, members are expected to conform
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Attributes of a Market Culture
 Superiors’ interactions with subordinates

largely consist of negotiating performance– reward agreements and/or evaluating requests for resource allocations  Has a weak socialization process  Few economic incentives are tied directly to cooperating with peers  Often tied to monthly, quarterly, and annual performance goals based on profits
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Organizational Uses of Culture
 Organizational culture has the potential to

enhance organizational performance, individual satisfaction, and a variety of expectations, attitudes, and behaviors in organizations  If an organization’s culture is not aligned with the changing expectations of internal and/or external stakeholders, the organization’s effectiveness can decline
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Organizational Uses of Culture
 Organizational culture and performance are

related, although the evidence regarding the exact nature of this relationship is mixed  Organizational culture affects employee behavior and performance  Assessing which attributes of an organization’s culture need to be preserved and which ones need to be modified is a constant organization need
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Relationship Between Culture and Performance Organizational culture can have a significant impact on a firm’s long-term economic performance Organizational culture will probably be an even more important factor in determining success or failure of firms during the next decade
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Relationship Between Culture and Performance Organizational cultures that inhibit strong long-term financial performance are not rare; they develop easily, even in firms that are filled with reasonable and intelligent people Although tough to change, organizational cultures can be made more performance enhancing if managers understand what sustains a culture
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Effects of Organizational Culture on Employee Behavior and Performance  Allows employees to understand the firm’s history
and current methods of operation
 Fosters commitment to corporate philosophy and

values
 Serves as a control mechanism for employee

behaviors
 Certain cultural types may produce greater

effectiveness and productivity
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Effects of Organizational Culture on Ethical Behavior A culture emphasizing ethical norms provides support for ethical behavior Top managers play a key role in fostering ethical behavior by exhibiting correct behavior The presence or absence of ethical behavior in managerial actions both influences and reflects the culture
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How Employees Can Change Unethical Behavior
 Secretly or publicly reporting unethical actions to

a higher level within the organization
 Secretly or publicly reporting unethical actions to

someone outside the organization
 Secretly or publicly threatening an offender or

responsible manager with reporting unethical actions
 Quietly or publicly refusing to implement an

unethical order or policy
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Actions for Creating a Culture that Encourages Ethical behavior
Be realistic in setting values and goals regarding employee relationships Encourage input from organization members regarding appropriate values and practices for implementing the culture Opt for a “strong” culture that encourages and rewards diversity and principled dissent Provide training on adopting and implementing the organization’s values
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Guidelines for Managing Cultural Diversity
 Organization members must:

Understand the nature of diversity and value a variety of opinions and insights Recognize the learning opportunities and challenges presented by the expression of different perspectives Foster expectations for high standards of performance and ethics for everyone Stimulate personal development Encourage openness Make workers feel valued

 The organizational culture must:

  

The organization must have a well-articulated and widely understood mission
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Steps in Socialization
7. Role model to sustain culture 6. Rituals, taboos, rites, and stories to reinforce culture 5. Adoption of cultural value policies 4. Rewards that sustain the culture 3. Training to develop capabilities consistent with culture 2. Challenging early work assignments 1. Careful selection www.afterschoool.tk Removal of candidates who do not “fit” culture 26 Removal of employees who deviate from culture

Slide 15.23 Possible Outcomes of the Socialization Process
Successful socialization is reflected in:
        

Unsuccessful socialization is reflected in:
        

Job satisfaction Role clarity High work motivation Understanding of culture, perceived control High job involvement Commitment to organization Tenure High performance Internalized values

Job dissatisfaction Role ambiguity and conflict Low work motivation Misunderstanding, tension, perceived lack of control Low job involvement Lack of commitment to organization Absenteeism, turnover Low performance Rejection of values
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