Organization Culture

A.THE NATURE OF ORGANIZATION CULTURE

Attributes emerge:
1. First, all the definitions refer to a set of values held by individuals in an organization. These values
define good or acceptable behaviors and bad or unacceptable behavior.
2. The values that make up an organization’s culture are often taken for granted;
3. An emphasis on the symbolic means through which the values in an organization’s culture are
communicated.

Organization culture is the set of shared values, often taken for granted, that help people in an organization
understand which actions are considered acceptable and which are considered unacceptable. Often these
values are communicated through stories and other symbolic means.

Historical Foundations

Contributions:

1. Anthropological Contribution. Anthropology is the study of human cultures.12 Of all the social science
disciplines, anthropology is most closely related to the study of culture and cultural phenomena
2. Sociological Contributions Sociology is the study of people in social systems such as organizations and
societies
3. Social Psychology Contributions Social psychology is a branch of psychology that includes the study of
groups and the influence of social factors on individuals
4. Economics Contributions The influence of economics on the study of organization culture is substantial
enough to warrant attention, though it has been less significant than the influence of anthropology and
sociology. Economic analysis treats organization culture as one of a variety of tools that managers can
use to create some economic advantage for the organization.

Culture versus Climate

The two concepts are similar in that both are concerned with the overall work atmosphere of an organization.
In addition, they both deal with the social context in organizations, and both are assumed to affect the
behaviors of people who work in organizations.

The two concepts differ in several significant ways, however. Much of the study of climate was based in
psychology, whereas the study of organization culture was based in anthropology and sociology

Organization climate is based on individual perceptions and is often defined as the recurring patterns of
behavior, attitudes, and feelings that characterize life in the organization; it refers to current situations in an
organization and the linkages among work groups, employees, and work performance.

Organization culture, on the other hand, usually refers to the historical context within which a situation occurs
and the impact of this context on the behaviors of employees. Organization culture is generally considered
much more difficult to alter in short-run situations because it has been defined over the course of years of
history and tradition.

The two concepts also differ in their emphases. Organization culture is often described as the means through
which people in the organization learn and communicate what is acceptable and unacceptable in an
organization—its values and norms.27 Most descriptions of organization climate do not deal with values and
norms. Organization climate are concerned with the current atmosphere in an organization, whereas
organization culture is based on the history and traditions of the organization and emphasizes values and
norms about employee behavior.

B. CREATING THE ORGANIZATION CULTURE

STEPS:
Step 1—Formulate Strategic Values
Step 2—Develop Cultural Values
Step3—Create Vision
Step 4—Initiate Implementation Strategies
Step 5—Reinforce Cultural Behaviors

Establish Values
The first two steps in the process involve establishing values. First, management must determine the strategic
values of the organization.
Strategic values are the basic beliefs about an organization’s environment that shape its strategy. They are
developed following an environmental scanning process and strategic analysis that evaluate economic,
demographic, public policy, technological, and social trends to identify needs in the marketplace that the
organization can meet.
Cultural values are the values employees need to have and to act on for the organization to carry out its
strategic values. They should be grounded in the organization’s beliefs about how and why the organization
can succeed.

Create Vision
After developing its strategic and cultural values, the organization must establish a vision of its direction. This
“vision” is a picture of what the organization will be like at some point in the future. It portrays how the
strategic and cultural values will combine to create the future.

Initiate Implementation Strategies

The next step, initiating implementation strategies, builds on the values and initiates the action to accomplish
the vision. The strategies cover many factors, from developing the organization design to recruiting and
training employees who share the values and will carry them out.
Reinforce Cultural Behaviors
The final step is to reinforce the behaviors of employees as they act out the cultural values and implement the
organization’s strategies.

Reinforcement can take many forms.

First, the formal reward system in the organization must reward desired behaviors in ways that employees
value.
Second, stories must be told throughout the organization about employees who engaged in behaviors that
epitomize the cultural values.
Third, the organization must engage in ceremonies and rituals that emphasize employees doing the things
that are critical to carrying out the organization’s vision.

APPROACHES TO DESCRIBING ORGANIZATION CULTURE

A.The Ouchi Framework

1. COMMITMENT TO EMPLOYEES
2. EVALUATION
3. CAREERS
4. CONTROL DECISION MAKING
5. RESPONSIBILITY
6. CONCERN FOR PEOPLE
7. Theory Z and Performance

B. The Peters and Waterman Approach

ATTRIBUTES OF AN EXCELLENT FIRM
1. Bias for action
2. Stay close to the customer
3. Autonomy and entrepreneurship
4. Productivity through people
5. Hands-on management
6. Stick to the knitting
7. Simple form, lean staff
8. Simultaneously loose and tight organization

C.EMERGING ISSUES IN ORGANIZATION CULTURE

Typical of these approaches are the total quality management movement, worker participation,
procedural justice, and team-based management, which were discussed in earlier chapters. Three other
movements are briefly discussed in this section: innovation, empowerment, and appropriate cultures.
Innovation
Innovation is the process of creating and doing new things that are introduced into the marketplace as
products, processes, or services. Innovation involves every aspect of the organization, from research through
development, manufacturing, and marketing

Types of Innovation
1. A radical innovation (sometimes called disruptive innovation) is a major breakthrough that changes or
creates whole industries.
2. Systems innovation creates a new functionality by assembling parts in new ways.
3. Incremental innovation continues the technical improvement and extends the applications of radical
and systems innovations.

New Ventures
New ventures based on innovations require entrepreneurship and good management to work. The profile of
the entrepreneur typically includes a need for achievement, a desire to assume responsibility, a willingness to
take risks, and a focus on concrete results. Entrepreneurship can occur inside or outside large organizations.
Outside entrepreneurship requires all of the complex aspects of the innovation process. Inside
entrepreneurship occurs within a system that usually discourages chaotic activity.

Large organizations typically do not accept entrepreneurial types of activities. Thus, for a large organization to
be innovative and develop new ventures, it must actively encourage entrepreneurial activity within the
organization. This form of activity, often called intrapreneurship, usually is most effective when it is a part of
everyday life in the organization and occurs throughout the organization rather than in the research and
development department alone.

Corporate Research
The most common means of developing innovation in the traditional organization is through corporate
research, or research and development. Corporate research is usually set up to support existing businesses,
provide incremental innovations in the organization’s businesses, and explore potential new technology bases.
It often takes place in a laboratory, either on the site of the main corporate facility or some distance away
from normal operations. Corporate researchers are responsible for keeping the company’s products and
processes technologically advanced.

Empowerment
One of the most popular buzzwords in management today is “empowerment.” ,
empowerment is the process of enabling workers to set their own goals, make decisions, and solve problems
within their spheres of responsibility and authority.

Appropriate Cultures
Much of the literature on organization culture has focused on describing the concept of organization culture,
linking culture to performance, and then creating an organization culture

D. MANAGING ORGANIZATION CULTURE

The work of Ouchi, Peters and Waterman, and many others demonstrates two important facts.
First, organization cultures differ among firms;
Second, these different organization cultures can affect a firm’s performance.
Based on these observations, managers have become more concerned about how to best manage the cultures
of their organizations. The three elements of managing organization culture are (1) taking advantage of the
existing culture, (2) teaching the organization culture, and (3) changing the organization culture.

1. Taking Advantage of the Existing Culture Most managers are not in a position to create an
organization culture; rather, they work in organizations that already have cultural values.
2. Teaching the Organization Culture: Socialization
Socialization is the process through which individuals become social beings.

Organizational socialization is the process through which employees learn about their organization’s
culture and pass their knowledge and understanding on to others.
Employees are socialized into organizations, just as people are socialized into societies; that is, they
come to know over time what is acceptable in the organization and what is not, how to communicate
their feelings, and how to interact with others.
 3. Changing the Organization Culture Much of our discussion to this point has assumed that an
organization’s culture enhances its performance.

Managing Symbols
Research suggests that organization culture is understood and communicated through the use of
stories and other symbolic media. If this is correct, managers interested in changing cultures should
attempt to substitute stories and myths that support new cultural values for those that support old ones.
They can do so by creating situations that give rise to new stories

The Difficulty of Change. Changing a firm’s culture is a long and difficult process.

The Stability of Change. The processes of changing a firm’s culture start with a need for change and
move through a transition period in which efforts are made to adopt new values and beliefs.

SYNOPSIS. Organization culture has become one of the most discussed subjects in the field of organization
behavior. It burst on the scene in the 1980s with books by Ouchi, Peters and Waterman, and others. Interest
has not been restricted to academics, however. Practicing managers are also interested in organization
culture, especially as it relates to performance. There is little agreement about how to define organization
culture. A comparison of several important definitions suggests that most have three things in common: They
define culture in terms of the values that individuals in organizations use to prescribe appropriate behaviors;
they assume that these values are usually taken for granted; and they emphasize the stories and other
symbolic means through which the values are typically communicated. Current research on organization
culture reflects various research traditions. The most important contributions have come from anthropology
and sociology. Anthropologists have tended to focus on the cultures of one or two organizations and have
used detailed descriptions to help outsiders understand organization culture from the “natives’ point of view.”
Sociologists typically have used survey methods to study the cultures of larger numbers of organizations. Two
other influences on current work in organization culture are social psychology, which emphasizes the
manipulation of symbols in organizations, and economics. The economics approach sees culture both as a tool
used to manage and as a determinant of performance.

Creating organization culture is a four-step process. It starts with formulating strategic and cultural values for
the organization. Next, a vision for the organization is created, followed by the institution of implementation
strategies. The final step is reinforcing the cultural behaviors of employees. Although no single framework for
describing organization culture has emerged, several have been suggested.

The most popular efforts in this area have been Ouchi’s comparison of U.S. and Japanese firms and Peters and
Waterman’s description of successful firms in the United States. Ouchi and Peters and Waterman suggested
several important dimensions along which organization values vary, including treatment of employees,
definitions of appropriate means for decision making, and assignment of responsibility for the results of
decision making.

Emerging issues in the area of organization culture include innovation, employee empowerment, and
appropriate cultures. Innovation is the process of creating and doing new things that are introduced into the
marketplace as products, processes, or services.

The organization culture can either help or hinder innovation. Employee empowerment, in addition to being
similar to employee participation as a motivation technique, is now viewed by some as a type of organization
culture. Empowerment occurs when employees make decisions, set their own work goals, and solve problems
in their own area of responsibility. Finally, experts are beginning to suggest that there are cultures that are
appropriate for particular organizations rather than there being any one best type of culture. Managing the
organization culture requires attention to three factors. First, managers can take advantage of cultural values
that already exist and use their knowledge to help subordinates understand them. Second, employees need to
be properly socialized, or trained, in the cultural values of the organization, either through formal training or
by experiencing and observing the actions of higher-level managers. Third, managers can change the culture of
the organization through managing the symbols, addressing the extreme difficulties of such a change, and
relying on the durability of the new organization culture once the change has been implemented.