Organizational Culture

Prof. Pavni Kaushiva

DWO 2021-22
Organizational Culture: Set of shared values, norms, guiding beliefs, and
understandings that control members’ interactions with each other and with
suppliers, customers, etc.
◦ Terminal Value: Desired end state that people seek to achieve – Excellence,
responsibility, reliability, profitability, innovativeness, morality, quality
◦ Instrumental value: Desired mode of behavior – working hard, respecting
traditions and authority, being conservative, being creative, taking risks,
maintaining high standards. Embodied in norms, rules and SOPs

Organizational culture exists at two levels

◦ Observable symbols
◦ Underlying values

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Socialization
Process by which newcomers learn appropriate values, learn and internalize norms of an
organization’s culture
Institutionalized role orientation: Individuals are taught to respond to a new context in the same way
that existing members respond to it.
◦ Collective tactics by providing common learning experiences
◦ Formal tactic of segregating newcomers during the learning process
◦ Sequential tactic of providing information about the sequence in which they will occupy their new
roles as they advance in the organization
◦ Fixed tactic of providing of the timetable associated with completing each stage of learning
◦ Serial tactic of employing existing members as role models/ mentors
◦ Divestiture tactic of providing negative/ withholding social support till newcomers learn the ropes

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Individualized role orientation: Individuals are allowed and encouraged to be creative and
experiment with changing norms and values.

◦ Individual tactic of providing unique experiences to newcomers

◦ Informal tactic of learning on the job as members of a team
◦ Random tactic of training based on interests of the newcomer as there is no set time-bound
sequence of progress in the firm
◦ Variable tactic of not providing learning check posts, rather training depends on needs and
interests of the individual
◦ Disjunctive tactic of requiring newcomer to figure out and develop their own way of behaving
◦ Investiture tactic of providing positive support and encouragement

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Interpreting Culture
Rites and ceremonies: Planned activates that reinforce specific values, create a bond
Stories – fact/ fictional about the firm’s stars provides clues about values and norms
Symbols – Physical artifacts
Power relationships – formal/ informal basis
Control systems – Reward systems, decision making system
Organizational structure

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Purpose of Culture
Internal Integration – collective identity and know how to work together

External Adaption – how the organization meets goals and deals with outsiders

Guides decision making in the absence of written rules/ policies

Strength of culture is the degree of agreement among members about specific

values
◦ Strong culture: Frequent use of ceremonies, stories and symbols with alignment
of structure and processes
◦ Subcultures may develop to reflect common experiences shared by a unit

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Learning Organizations
Strong constructive culture
Encourages questioning and adaptation
Motivates and unifies people around shared
goals
Focus on the higher mission
Values:
1. The whole is more important than the
parts
2. Equality and trust are primary values
3. The culture encourages risk taking,
change, and improvement
Observable behavior:
Constructive: Managers pay attention to all
variables and initiate change when needed to
serve the broader interests. Reflects underlying
value of care for all stakeholders and useful change
Non-constructive: Managers tend to be isolated
and bureaucratic; do not take risks to adjust to
environment. Reflects underlying value of narrow
focus and resistance to change
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Psychological Safety
The belief that the workplace is conducive to interpersonal risk, is typically
taken-for-granted as the “way things are around here”, that is, whether it is
easy to speak up, admit error
What types of interpersonal risks are associated with behaviors such as asking
for help, admitting an error, or expressing a different point of view?
◦ Risk of looking ignorant
◦ Risk of being seen as incompetent
◦ Risk of being seen as intrusive
◦ Risk of being seen as negative

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Psychological Safety
Psy safety = f (interpersonal trust, mutual respect)

Learning = f (psy safety, …)

In teams with high psychological safety, members believe that the group will
not rebuke, marginalize, or penalize them for speaking up or challenging
prevailing opinion

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Social Capital
Resource derived from the structure and strength of interpersonal relationships in
social system
Nahapiet and Ghoshal (1998) - Three aspects of social capital
◦ Structural dimension: Overall pattern of relationships found in organizations.
Extent to which people in an organization are connected and know one another
◦ Relational dimension: Nature/ quality of the connections between individuals in
an organization. Are they characterized by trust, intimacy, liking?
◦ Cognitive dimension: The extent to which employees within a social network
share a common perspective or understanding.

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Ethics
Ethics: Code of moral principles and values that govern behaviors of person/ group
w.r.t. what is right/ wrong

◦ Professional/ Managerial ethics – Principles guiding decisions and behavior of

managers w.r.t. what is right/wrong.

◦ Individual ethics – Based on their experiences (national culture, religious heritage,

historical background) and societal morality. In organizations, their ethical stance
may be affected by peers, subordinates, supervisors and organizational culture

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Social Responsibility
“Manager’s duty to make decisions that nurture, protect, enhance and promote the welfare and
well-being of stakeholders and society as a whole”

Obstructionist Approach – Not to behave in a socially responsible way

Defensive Approach – No attempt to exercise social responsibility beyond the law

Accommodative Approach – Acknowledgement of need to support social responsibility

Proactive Approach – Actively engage in socially responsible behaviour

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Corporate Social Responsibility (CSR)
Management’s obligation to make choices and take action such that the
organization contributes to the welfare and interest of all stakeholders.
◦ Extension of managerial ethics
◦ Increase in social responsibility

Why do it?
◦ Customers and public are paying closer attention to what organizations do.
Can enhance a firm’s reputation
◦ Attract and retain high-quality talent
◦ Positively related to financial performance

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Shaping Culture and Ethics
Value-Based Leadership
◦ Managers play key role in providing leadership and examples of ethical
behavior
◦ Clearly articulate and communicate uncompromising vision for ethical
standards

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Shaping Culture and Ethics
Formal Structure and Systems
◦ Structure – ethics committee, ethics department, ethics hotline
◦ Disclosure Mechanisms – confidential medium to voice concerns
◦ Code of Ethics – broad or specific
◦ Training Programs
◦ Social audit – Measures and reports the ethical, social and
environmental impact of a company’s operations

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Organizational Design and Culture

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Categories of culture
Adaptability
◦ Entrepreneurial values, norms and beliefs
◦ Actively creates change
Mission
◦ Professionalism, aggressiveness and ambition are key values
◦ Focus on measurable goals with rewards for specific level of performance
Clan
◦ Involvement, participation, ownership
◦ Focus on employee needs
Bureaucratic
◦ Values of tradition, co-operation and following established practices

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 Read each of the following statements and rank your preference from 1 (highest)
to 7 (lowest) for each of the statements below:
Strong Slightly Slightly Not Strong
Preferred Neutral
Preference Preferred Dislike preferred Disklike
1 2 3 4 5 6 7

1. The organization is very personal, much like a family. Your response

2. The organization is dynamic and changing, where people take risks.
3. The organization is achievement oriented, with the focus on competition and getting jobs done.
4. The organization is stable and structured, with clarity and established procedures.
5. Management style is characterized by teamwork and participation.
6. Management style is characterized by innovation and risk-taking.
7. Management style is characterized by high performance demands and achievement.
8. Management style is characterized by security and predictability

SCORE - Clan: 1+5; Adaptability: 2+6; Mission: 3+7; Bureaucratic: 4+8

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Power
Ability of person/ group to influence and resolve conflict, and achieve a desired objective.
Power used to resole conflict involves coercion
Sources of Power
◦ Authority
◦ Resources
◦ Information
◦ Non-substitutability
◦ Centrality
◦ Unobtrusive power

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Authority
Weber’s rational-legal authority
When centralized, less scope for individuals to gain power, difficult to form
coalitions

Ability to control resources:

◦ Capital – allocation as well as generation
◦ human skills
◦ raw materials
◦ customers

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Control over information
Gate-keeping
Manipulating information
Generally built with specialization

Non-substitutability
Manager/ group is critical and irreplaceable for organizational functioning –
on the basis of expertise or network

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Centrality
Position of individual/ group in the process of decision making
◦ Information flow
◦ Resource allocation

Unobtrusive Power
Control over goals, norms, assumptions or values that guide decision-making

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Politics
Activities taken to acquire, develop, and use power and other resources to obtain preferred
outcome
Possessing and using power should be combined with knowledge of when and how to use it
effectively.
Power used, depletes

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