11/6/19

ORGANIZATIONAL
CULTURE

LOGO

1. What is organizational culture?

Employee Perspective Customer Perspective

Culture Brand

1. What is organizational culture?

1.1. Definition
“Organizational or corporate culture is the
system of shared actions, values, and
beliefs that develops within an organization
and guides the behavior of its members.”
(Edgar Schein, “Organizational Culture”, American
Psychologist, Vol. 45 (1990), pp. 109–119)

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1. What is organizational culture?

1.2. Five basic functions

v Defines the boundary.
v Conveys a sense of identity for its members.
v Facilitates the generation of commitment to
something larger than self-interest.
v Enhances the stability of the social system.
v Serves as a sense-making and control
mechanism.

1. What is organizational culture?

1.3. Organizational culture as a liability

v Barrier to change

v Barrier to diversity

v Barrier to acquisitions and mergers

2. Cultures in organizations
v Dominant culture is a unitary set of
shared actions, values, and beliefs.
v Subcultures are unique patterns of
values and philosophies within a group that
are consistent with the dominant culture of
the larger organization or social system.
v Countercultures are the patterns of
values and philosophies that outwardly
reject those of the larger organization or
social system.

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3. Models of organizational culture

3.1. Schein’s model

Visible, but not always

Artifacts obvious, recognized initially,
or associated with values

Generally a higher level of

Values awareness of what is valued
in the organization

Basic Invisible, not usually stated,

Edgar H. Schein
Assumptions taken for granted

3. Models of organizational culture

3.1.1. Artifacts
Artifacts and creations are the constructed
physical and social environment. This includes
physical space and layout, the technological
output, written and spoken language and the
overt behavior of group members.

3. Models of organizational culture

3.1.2. Values
v Hewlett-Packard: Quality.
v Prudential: Worthy of trust, Customer
focused, Respect for each other, Winning.
v Walmart: Respect for the Individual,
Service to our Customers, Striving for
Excellence.

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3. Models of organizational culture

3.1.3. Assumptions
v Hewlett-Packard: Everyone could make a
creative contribution to developing quality
products.
v Walmart: We continually find ways to
improve our customer service and how to better
serve our associates. We continue to learn how
to be a more efficient, more environmentally
friendly company.
v Apple: We can change the world.

3. Models of organizational culture

3.2. Johnson and Scholes’ model

Stories Symbols

Rituals Paradigm Power

Control Structures

3. Models of organizational culture

3.2. Johnson and Scholes’ model

v Stories – told by members of the organisation
which embed the present and flag up important
events and personalities, and typically have to do
with successes, failures, heroes, villains, and
mavericks.

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3. Models of organizational culture

3.2. Johnson and Scholes’ model
v Rituals – the special events through which the
organisation emphasises what is particularly
important and can include formal organisational
processes and informal processes.

§ New hire trainings, new hire

welcome lunches.
§ Annual corporate conferences,
awards.
§ Offsite meetings and trainings.
§ Social activities…

3. Models of organizational culture

3.2. Johnson and Scholes’ model
v Symbols – such as logos, offices, cars, titles,
type of language or terminology commonly used
which become a shorthand representation of the
nature of the organization.

3. Models of organizational culture

3.2. Johnson and Scholes’ model
v Organization structure – which reflects
power structures and delineates important
relationships and activities within the organization,
and involves both formal structure and control and
less formal systems.

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3. Models of organizational culture

3.2. Johnson and Scholes’ model
v Power structures – the most powerful
individuals or groups in the organisation which may
be based on management position and seniority but
in some organisations power can be lodged with
other levels or functions.

3. Models of organizational culture

3.2. Johnson and Scholes’ model
v Control systems – the measurement and
reward systems that emphasise what it is important
to monitor, and to focus attention and activity upon
– for example, stewardship of funds or quality of
service.

3. Models of organizational culture

3.2. Johnson and Scholes’ model
v Control systems

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Elements of strong organizational culture

v A widely shared real understanding of what

the firm stands for, often embodied in slogans.
v A concern for individuals over rules, policies,
procedures, and adherence to job duties.
v A recognition of heroes whose actions
illustrate the company’s shared philosophy and
concerns.
v A belief in ritual and ceremony as important
to members and to building a common identity.

Elements of strong organizational culture

v A well-understood sense of the informal

rules and expectations so that employees and
managers understand what is expected of
them.
v A belief that what employees and managers
do is important and that it is important to
share information and ideas.

4. Sources of organizational culture

National culture

Industry demand
Organizational
Values of founders & culture
succeeding leaders

Learned values

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4.1. National culture

4.1.1. Hofstede & Bond’s 5 Dimensions

INDIVIDUALISM The interests of the individuals vs. the COLLECTIVISM
The interests of the individual interests of the group The interests of the group take
take precedence precedence

POWER TOLERANCE
POWER RESPECT Individuals assess authority in
The appropriateness of power/
Authority is inherent in one’s authority within organization view of its perceived rightness
position within a hierarchy
or their own personal interests

UNCERTAINTY UNCERTAINTY AVOIDANCE

ACCEPTANCE An emotional response to Prefer structure and a
uncertainty and change
Positive response to change consistence routine
and new opportunities

MASCULINITY FERMENITY
assertiveness and What motivates people to A stress upon the quality of life &
achieve different goals
competitiveness concern with environment

LONG –TERM OUTLOOK Members of a culture adopt an

SHORT–TERM OUTLOOK
Value dedication, hard work, outlook on work and life Value traditions, social
and thrift obligations

4.2. Industry Demands

The industry characteristics and demands

act as a force to create similarities among
organizational culture.
v Insurance and banking industries are
stable and rule-oriented.
v Many companies in the high-tech industry
have innovative cultures.
v Those in nonprofit industry may be people-
oriented.

4.3. Values of founders

and succeeding leaders
4.3.1. Values of founders
v Founders hire and keep only employees who
think and feel the same way they do.
v Founders indoctrinate and socialize these
employees to their way of thinking and feeling.
v 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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4.4. Learned values

In 1975, Sam Walton was inspired by

workers at a Korean tennis ball factory who
started each morning with a company cheer.
Walmart Cheer

Give me a W! What's that spell?

Give me an A! Walmart!
Give me an L! Whose Walmart is it?
Give me a squiggly! It's my Walmart!
Give me an M! Who's number one?
Give me an A! The customer!
Sam Walton, our founder, Give me an R! Always!
leads the Walmart cheer. Give me a T!

5. Maintenance of organizational culture

Attraction-Selection-Attrition

New Employee Onboarding Maintenance of

organizational
Leadership culture

Rewards

6. Organizational culture change

Creating a Sense of Urgency

Changing Leaders & Key players

Role Modeling

Training

Changing the Reward System

Creating New Symbols and Stories

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6. Organizational culture change

6.1. Creating a Sense of Urgency

Reasons to change: Failure to achieve some
goals or conflicts arising.

6. Organizational culture change

6.2. Changing Leaders & Key players

6. Organizational culture change

6.3. Role Modeling

Role modeling is the process by which
employees modify their own beliefs and
behaviors to reflect those of the leader.

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6. Organizational culture change

6.4. Training
Well-crafted training programs may be
instrumental in bringing about culture change
by teaching employees the new norms and
behavioral styles.

6. Organizational culture change

6.5. Changing the Reward System

v Switching from a commission-based incentive
structure to a straight salary system?

v Rewarding and promoting employees who

embrace the company’s new values and
promoting these employees, organizations can
make sure that changes in culture have a
lasting effect.

6. Organizational culture change

6.6. Creating New Symbols and Stories

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7. Types of organizational culture

7.1. Roger Harrison (1972) and Charles

Handy (1985)

Power culture Role culture

Task culture Person culture

7.1. Roger Harrison (1972) and Charles

Handy (1985)

7.1.1. Power culture

v Control is exercised from the center by the
selection of key individuals.
v There are few rules and procedures, and
little bureaucracy.
v Frequently found in small entrepreneurial
organizations.

7.1. Roger Harrison (1972) and Charles

Handy (1985)

7.1.2. Role culture

v Position power is the main source of power.
v Role or job description is often more
important than the individual.
v Role culture rests on the strength of strong
organizational ‘pillars’ – the functions of
specialists in, for example, finance, purchasing
and production.

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7.1. Roger Harrison (1972) and Charles

Handy (1985)

7.1.3. Task culture

v Influence is widely spread and based more
on expert power than on position or personal
power.
v Task culture seeks to bring together the right
resources and people, and utilises the unifying
power of the group.
v Found in projects.

7.1. Roger Harrison (1972) and Charles

Handy (1985)

7.1.4. Person culture

v Management hierarchies and control
mechanisms are possible only by mutual
consent.
v Found in only a few organizations many
individuals have a preference for person
culture, for example university professors and
specialists..

7. Types of organizational culture

7.2. Quinn (1988)

Flexibility & Descretion
External focus & Differentiation
Internal focus & Intergration

Clan Adhocracy

Hierarchy Market
Stability & Control

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Attributes of a Clan Culture

v Members understand that contributions to

the organization exceed any contractual
agreements.
v A clan culture achieves unity with a long and
thorough socialization process.
v Members share feelings of pride in
membership, as well as feelings of personal
ownership of a business, a product, or an idea.

Attributes of a Clan Culture

v Peer pressure to adhere to important norms

is strong.
v Success is assumed to depend substantially
on sensitivity to customers and concern for
people.
v Teamwork, participation, and consensus
decision making are believed to lead to success.

Attributes of a Hierarchy Culture

v Long-term concerns are predictability,

efficiency, and stability.
v Members value standardized goods and
services.
v Managers view their roles as being good
coordinators, organizers, and enforcers of
written rules and standards.
v Tasks, responsibilities, authority, rules, and
processes are clearly defined.

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Attributes of an Adhocracy Culture

v There is a commitment to experimentation,

innovation, and being on the leading edge.
v This culture does not just quickly react to
changes in the environment - it creates change.
v Effectiveness depends on providing new and
unique products and rapid growth.
v Individual initiative, flexibility, and freedom
foster growth and are encouraged and well
rewarded.

Attributes of a Market Culture

v Contractual relationship between individual

and organization.
v Independence and individuality are valued
and members are encouraged to pursue their
own financial goals.
v Does not exert much social pressure on an
organization’s members, but when it does,
members are expected to conform.

Attributes of a Market Culture

v Superiors’ interactions with subordinates

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

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7.2. Quinn (1988)

Clan 50% Adhocracy

40%
30%
20%

10%

Hierachy Market

7.2. Quinn (1988)

C H.1 A
1. Education, training... C H.2 A

2. Designers, Fashion,
Advertisement, …
H M H M

3. Manufacturing, C H.3 A C H.4 A

Quality cosulting.

4. Distribution, Retailing.
H M H M

LOGO

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