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aPHRi
2022

Functional Area 01
HR Operations

Associate Professional in Human Resources – International

INTERNATIONAL HUMAN RESOURCE CERTIFICATION INSTITUTE

IHRCI® | www.ihrci.org
 Associate Professional in Human Resources – International (aPHRi) Workbook

Module One: HR Operations

2022 Edition

Copyright © 2022 by International Human Resource Certification Institute

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www.ihrci.org
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Introduction
As a purchaser of the aPHRi certification workbook serials, you have access to the
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a description of the key terms in HR. Also, the system consists of over 450 practice exam
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This workbook is not a textbook. These materials include workbooks and practice exams are
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HR Certification Institute. By using all of the preparation materials, you will be well-versed in
the five key functional areas that make up the HR Certification Institute aPHRi body of
knowledge. Studying these materials does not guarantee, however, that you will pass the
exam. These workbooks are not to be considered legal or professional advice.
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Table of Content
Introduction ................................................................................................................................ 3
Table of Content ......................................................................................................................... 4
Part One: HR and Business Environment ................................................................................... 7
1. Human Resource Management ...................................................................................... 7
1.1. Human Resources (HR) Department ................................................................... 7
1.2. HR Functions and Responsibilities....................................................................... 8
1.3. HR Responsibilities of Line Managers ................................................................. 9
1.4. HR Audits ........................................................................................................... 11
2. Strategic Management ................................................................................................. 12
2.1. Mission, goals, and strategies ........................................................................... 13
2.2. Environmental Scanning .................................................................................... 14
2.3. Strategy Formulation ......................................................................................... 16
2.4. Strategy Implementation................................................................................... 17
2.5. Strategy Evaluation ............................................................................................ 17
3. Organization Culture..................................................................................................... 17
3.1. Type of Culture .................................................................................................. 17
3.2. Layers of Culture ................................................................................................ 18
3.3. Values in Culture................................................................................................ 18
3.4. Culture Analysis ................................................................................................. 19
3.5. Culture and Climate ........................................................................................... 20
4. Organization Structure ................................................................................................. 20
4.1. Span of Control .................................................................................................. 21
4.2. Chain of Command ............................................................................................ 21
4.3. Bureaucracy ....................................................................................................... 22
4.4. Type of Structures ............................................................................................. 22
4.5. Organizational Charts ........................................................................................ 25
4.6. Levels of Management ...................................................................................... 25
5. HR Organization ............................................................................................................ 26
5.1. Service Centers .................................................................................................. 26
5.2. Corporate HR ..................................................................................................... 27
5.3. Embedded HR .................................................................................................... 28
5.4. Centers of expertise (CoE) ................................................................................. 28
5.5. Operational Executors ....................................................................................... 29
6. Business Functions ....................................................................................................... 31
6.1. Inbound logistics: .............................................................................................. 32
6.2. Operations ......................................................................................................... 32
6.3. Services .............................................................................................................. 32
6.4. Outbound Logistics ............................................................................................ 32
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6.5. Marketing and Sales .......................................................................................... 32

6.6. Procurement ...................................................................................................... 32
6.7. Technology Management .................................................................................. 32
6.8. Human Resource Management ......................................................................... 33
6.9. Infrastructure..................................................................................................... 33
7. Business HR Issues ........................................................................................................ 34
7.1. Mergers and Acquisitions (M&A) ...................................................................... 34
7.2. Total Quality Management ................................................................................ 34
7.3. Downsizing ........................................................................................................ 34
7.4. Reengineering.................................................................................................... 35
7.5. Outsourcing ....................................................................................................... 35
7.6. Supply Chain Management ............................................................................... 35
Part Two: Job Analysis and Design ........................................................................................... 37
1. Work Flow Analysis....................................................................................................... 37
1.1. Outputs .............................................................................................................. 37
1.2. Activities ............................................................................................................ 38
1.3. Inputs ................................................................................................................. 38
2. Job Analysis .................................................................................................................. 39
2.1. Applications of Job Analyses ............................................................................. 40
2.2. Elements of a Job Analysis ................................................................................ 44
2.3. Job Specification ................................................................................................ 48
3. Job Design..................................................................................................................... 49
3.1. Designing Efficient Jobs ..................................................................................... 50
3.2. Designing Jobs That Motivate ........................................................................... 50
3.3. Designing Ergonomic Jobs ................................................................................. 53
3.4. Designing Jobs That Meet Mental Capabilities and Limitations ....................... 53
4. Job Classification .......................................................................................................... 54
4.1. Exempt vs. Non-exempt .................................................................................... 54
4.2. Salary vs. Wage .................................................................................................. 54
4.3. Full-time vs. Part-time ....................................................................................... 55
4.4. Alternative staffing ............................................................................................ 55
Part Three: Employee Communication .................................................................................... 58
1. Personnel Management ............................................................................................... 58
1.1. Department Support ......................................................................................... 58
1.2. Documentation .................................................................................................. 58
1.3. Employee Relations ........................................................................................... 58
2. Employee Communication ........................................................................................... 58
2.1. Formal Communication ..................................................................................... 59
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2.2. Informal Communication .................................................................................. 59

2.3. Communication Channel ................................................................................... 60
2.4. Intercultural Communication ............................................................................ 63
3. Direction in Formal Communication ............................................................................ 64
3.1. Downward communication: .............................................................................. 65
3.2. Upward communication .................................................................................... 65
3.3. Lateral or horizontal communication: ............................................................... 66
3.4. Diagonal or Cross-wise ...................................................................................... 66
4. Employee Policies ......................................................................................................... 67
4.1. Employee Handbook ......................................................................................... 68
4.2. Policies Manual.................................................................................................. 68
4.3. Code of Conduct ................................................................................................ 68
4.4. Work Rules......................................................................................................... 68
Part Four: HR Information Management ................................................................................. 69
1. Employee Records Management ................................................................................. 69
1.1. Type of Employee Records ................................................................................ 69
1.2. Recordkeeping Policy......................................................................................... 69
1.3. Maintain accurate records................................................................................. 70
1.4. Other Considerations ........................................................................................ 72
2. HR Data ......................................................................................................................... 73
2.1. Data, Information, and Knowledge ................................................................... 73
2.2. Data Collection .................................................................................................. 74
2.3. Essentials of Statistics ........................................................................................ 77
2.4. Reporting ........................................................................................................... 79
2.5. Type of Dataset .................................................................................................. 79
3. Human Resource Information System (HRIS) ............................................................... 80
3.1. Benefits of HRIS ................................................................................................. 82
3.2. Types of HRIS ..................................................................................................... 83
3.3. Core HR .............................................................................................................. 85
3.4. Self-Services....................................................................................................... 87
3.5. Knowledge Management (KM) ......................................................................... 88
3.6. Talent Management Systems ............................................................................ 88
3.7. Workforce Analytics .......................................................................................... 91
4. HR and Social Media ..................................................................................................... 94
4.1. Social Media Helps Company Branding ............................................................. 94
4.2. Monitor Employees Activities ........................................................................... 95
4.3. Communication with Employees....................................................................... 95
Reference.......................................................................................................................... 96
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Part One: HR and Business Environment

1. Human Resource Management

Many organizations refer to Human Resource Management as involving “people practices”.
The concept of “human resource management (HRM)” implies that employees are
resources of the employer. As a type of resource, human capital means the organization’s
employees, described in terms of their training, experience, judgment, intelligence,
relationships, and insight—the employee characteristics that can add economic value to
the organization. In other words, whether it manufactures automobiles or forecasts the
weather, for an organization to succeed at what it does, it needs employees with certain
qualities, such as particular kinds of training and experience. This view means employees
in today’s organizations are not interchangeable, easily replaced parts of a system but the
source of the company’s success or failure. By influencing who works for the organization
and how those people work, human resource management therefore contributes to basic
measures of an organization’s performance, such as quality, profitability, and customer
satisfaction.

HRM is critical to the success of organizations because human capital has certain qualities
that make it valuable. In terms of business strategy, an organization can succeed if it has a
sustainable competitive advantage (is better than competitors at something and can hold
that advantage over a sustained period). Therefore, we can conclude that organizations
need the kind of resources that will give them such an advantage.

1.1. Human Resources (HR) Department

In all but the smallest organizations, a human resources (HR) department is
responsible for the functions of human resource management. On average, an
organization has one or two full-time HR staff persons for every hundred employees
on the payroll. One way to define the responsibilities of HR departments is to think of
HR as a business within the company with three product lines:

1.1.1. Administrative and transactions

Handling administrative tasks (for example, hiring employees and answering questions
about benefits) efficiently and with a commitment to quality. This requires expertise
in the particular tasks.

1.1.2. Business partner

Developing effective HR systems that help the organization meet its goals for
attracting, keeping, and developing people with the skills it needs. For the systems to
be effective, HR people must understand the business so it can understand what the
business needs.

1.1.3. Strategic partner

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Contributing to the company’s strategy through an understanding of its existing and

needed human resources and ways HR practices can give the company a competitive
advantage. For strategic ideas to be effective, HR people must understand the
business, its industry, and its competitors.

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2018) Fundamentals of Human
Resource Management (Seventh Edition). New York, NY: McGraw-Hill.

1.2. HR Functions and Responsibilities

Another way to think of HR responsibilities is in terms of specific activities. The
following table details the responsibilities of human resource departments. These
responsibilities include the practices introduced as above plus two areas of
responsibility that support those practices:

1.2.1. Establishing and administering personnel policies and

1.2.2. Ensuring compliance with labor laws.

Although the human resource department has responsibility for these areas, many of
the tasks may be performed by line managers or others inside or outside the
organization. No two human resource departments have precisely the same roles
because of differences in organization sizes and characteristics of the workforce, the
industry, and management’s values. In some companies, the HR department handles
all the activities listed in the table. In others, it may share the roles and duties with
managers of other departments such as finance, operations, or information.
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Function Responsibilities

Analysis and design of work Work analysis; job design; job descriptions

Recruitment and selection Recruiting; job postings; interviewing; testing;

coordinating use of temporary labor

Training and development Orientation; skills training; career development

programs

Performance management Performance measures; preparation and administration

of performance appraisals; discipline

Compensation and benefits Wage and salary administration; incentive pay;

insurance; vacation leave administration; retirement
plans; profit sharing; stock plans

Employee relations Attitude surveys; labor relations; employee handbooks;

company publications; labor law compliance;
relocation and outplacement services

Personnel policies Policy creation; policy communication

Employee data and information Record keeping; HR information systems; workforce

analytics

Compliance with laws Policies to ensure lawful behavior; reporting; posting

information; safety inspections; accessibility
accommodations

Support for strategy Human resource planning and forecasting; talent

management; change management

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2018) Fundamentals of Human
Resource Management (Seventh Edition). New York, NY: McGraw-Hill.

1.3. HR Responsibilities of Line Managers

Line managers are often referred to as supervisors, if at a more entry-level stage. Line
managers are more hands-on oriented and responsible for getting the work done,
maintaining employee performance and handling disciplinary issues. Line managers
play a central role in human resource management.

Line managers play an important role in practicing HR initiatives, because they are the
responsible managers for implementing HR practices in the production of products or
the provision of services. HR initiatives such as training have always been considered
as one of line managers’ job. Line managers are also expected to create a synergy
between human, financial and physical with the allocation of time, money, and energy
to enhance the development of their subordinate.
10

In fact, the primary responsibility for the role of HR belongs to the CEO and to every
line manager who must achieve business goals. Line managers have ultimate
responsibility for both the processes and the outcomes of the company. They are
answerable to shareholders for creating economic value, to customers for creating
product or service value, and to employees for creating workplace value. It follows
that they should lead the way in fully integrating HR into the company’s real work.
Indeed, to do so, they must become HR champions themselves. They must
acknowledge that competitive success is a function of organizational excellence. More
important, they must hold HR accountable for delivering it.

Although many organizations have human resource departments, HR activities are by

no means limited to the specialists who staff those departments. In large
organizations, HR departments advise and support the activities of the other
departments. In small organizations, there may be an HR specialist, but many HR
activities are carried out by line managers. Either way, non-HR managers need to be
familiar with the basics of HRM and their role in managing human resources.

The following figure shows some HR responsibilities that line managers are likely to be
involved in. Organizations depend on supervisors to help them determine what kinds
of work need to be done (job analysis and design) and how many employees are
needed (HR planning). Supervisors typically interview job candidates and participate
in the decisions about which candidates to hire. Many organizations expect
supervisors to train employees in some or all aspects of the employees’ jobs.
Supervisors conduct performance appraisals and may recommend pay increases. And,
of course, supervisors play a key role in employee relations because they are most
often the voice of management for their employees, representing the company on a
day-to-day basis. In all these activities, supervisors can participate in HRM by taking
into consideration the ways that decisions and policies will affect their employees.
Understanding the principles of communication, motivation, and other elements of
human behavior can help supervisors inspire the best from the organization’s human
resources.
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The tension between HR and line managers becomes an obstacle to putting strategy-
aligned policies and procedures into action. Managers are left feeling frustrated and
their teams are left in the dark. As a result, companies find it harder to pursue their
goals than they may have hoped.

To address this issue, HR and the line must find a smarter way of working together.
The most successful organizations give managers better sight of strategy-aligned HR
information, such as reward policies or grading procedures. This enables managers to
be clearer with their teams and make decisions more efficiently.

In turn, HR departments spend less time responding to requests for information,

seeing as the managers already have access to it. This enables them to spend more
time pursuing their strategic objectives.

1.4. HR Audits
The HR Audit is the process of evaluating the performance of Human Resource
Department and its activities undertaken and the policies followed towards the
accomplishment of organizational goals. An HR compliance audit generally consists of
two main parts:

• An evaluation of the organization's operational HR policies, practices and

processes with a focus on key HR department delivery areas (e.g., recruiting—
both internal and external, employee retention, compensation, employee
benefits, performance management, employee relations, training and
development).

• A review of current HR indicators (e.g., number of unfilled positions, the time it

takes to fill a new position, turnover, employee satisfaction, internal grievances
filed, number of legal complaints, absenteeism rates).

HR usually conducts an audit by using a questionnaire that asks for the evaluation of
specific practice areas. This document helps guide the audit team in scrutinizing all
critical areas of an organization's HR practices. The audit may also include interviewing
or using questionnaires to solicit feedback from selected HR employees and other
department managers to learn whether certain policies and procedures are
understood, practiced and accepted.

An HR audit can be structured to be either comprehensive or specifically focused,

within the constraints of time, budgets and staff. There are several types of audits, and
each is designed to accomplish different objectives. Some of the more common types
are:

1.4.1. Compliance

Focuses on how well the organization is complying with current federal, state, and
local laws and regulations.
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1.4.2 Best practices

Helps the organization maintain or improve a competitive advantage by comparing its

practices with those of companies identified as having exceptional HR practices.

1.4.3. Strategic

Focuses on strengths and weaknesses of systems and processes to determine whether

they align with the HR department’s and the organization's strategic plan. See
Engaging in Strategic Planning.

1.4.4. Function-specific

Focuses on a specific area in the HR function (e.g., payroll, performance management,

records retention).

2. Strategic Management
Management today are looking at HRM as a means to support a company’s strategy—its
plan for meeting broad goals such as profitability, quality, and market share. This means
they use their knowledge of the business and of human resources to help the organization
develop strategies and to align HRM policies and practices with those strategies.

Strategy can make a difference in how well an organization performs. It helps managers in
organizations of all types and sizes face continually changing situations. Strategic
management is the management of an organization’s resources to achieve its goals and
objectives. Strategic planning is the process of an organization deciding their corporate
direction, objectives and priorities, and then aligning their resources to accomplish the
actions necessary to meeting them. The strategic management process involves strategic
planning, implementation, and evaluation as follow:

Robbins, S.P., De Cenzo, D.A., & Coulter, M. (2017). Fundamentals of Management:

Management Myths Debunked!, Global Edition (10e). London, England: Pearson Higher Ed.
 13

2.1. Mission, goals, and strategies

A mission statement is a guiding light for a business and the individuals who run the
business. c) Once its mission has been identified, the organization can begin to look
outside the company to ensure that its strategy aligns well with the environment.
Mission is usually made up of three parts:

2.1.1. Vision (big picture idea of what you want to achieve)

Your vision communicates what your organization believes are the ideal conditions for
your organization – how things would look if the issue important to you were perfectly
addressed. This utopian dream is generally described by one or more phrases or vision
statements, which are brief proclamations that convey the organization's dreams for
the future. By developing a vision statement, your organization makes the beliefs and
governing principles of your organization clear to the greater community (as well as to
your own staff, participants, and volunteers).

2.1.2. Mission (general statement of how you will achieve your vision)

Developing mission statements are the next step in the action planning process. An
organization's mission statement describes what the group is going to do, and why it's
going to do that. Mission statements are similar to vision statements, but they're more
concrete, and they are definitely more "action-oriented" than vision statements. The
mission might refer to a problem without going into a lot of detail. They start to hint -
very broadly - at how your organization might go about fixing the problems it has
noted.

While vision and mission statements themselves should be short, it often makes sense
for an organization to include its deeply held beliefs or philosophy, which may in fact
define both its work and the organization itself. One way to do this without sacrificing
the directness of the vision and mission statements is to include guiding principles as
an addition to the statements. These can lay out the beliefs of the organization while
keeping its vision and mission statements short and to the point.

2.1.3. Value (how you will behave during the process)

Whether written to be effective or ineffective, Mission Statements and Vision

Statements are relatively common in this sector. But that is where most organizations
stop. Vision and Mission Statements of where we are headed, and what we will do to
get there. It is the rare organization that takes the time to then define HOW they will
do that work - the talk they want to walk.

The only way we can create an amazing future for our communities is if we do our work
in a way that reflects universally shared values. This ensures we do not squander our
time and resources rationalizing our actions. It helps to ensure we are not potentially
squandering our community's goodwill.

Further, if your goal is to create the future of your organization - the lofty goals of your
14

vision statement - then you will want to ensure your work reflects the values you want
to see in your organization.

A Values Statement provides the tools for the organization to accomplish that. First, the
Values Statement will look outside the organization, to the visionary outcomes you
want to create for your community, such as “what values will need to be present in the
community for your vision to come to pass?”, “what values would the community need
to emphasize?”, and “what values would have to be the norm?”

From there, the Values Statement will look inside, to see how your own work will
model those values, to teach those values by example: How will your work reflect
those values? How will you ensure you are modeling those values to the community?
When you have a tough decision to make, will you always err on the side of those
values?

2.1.4. Strategic goals

Strategic goals are goals created to identify the intended accomplishment of a

business strategy. When companies create strategic goals, they directly identify what
they see as the outcome of their business efforts. Strategic goals are most commonly
created when a company is mounting a new strategy. For example, if a company
adopts a new advertising campaign in an attempt to draw buyers to their products,
they may also create a strategic goal, or desired endpoint, of their new advertising
efforts.

2.1.5. Strategic issues

The creation of a strategic goal begins with the identification of strategic issues.
Strategic issues are strategy-related problems standing in the way of a company's
success. For example, failure to reach the intended audience with advertising attempts
could be a strategic issue that the company in question wants to address.

2.2. Environmental Scanning

Once the firm has specified its objectives, it begins with its current situation to devise
a strategic plan to reach those objectives. Environmental scanning is a useful
technique to identify the key internal and external factors that are important to
achieving the objective.

2.2.1. Internal Analysis (Strength and Weakness)

Organizations conduct an internal analysis, which provides critical information about

an organization’s specific resources and capabilities. An organization’s resources are its
assets—financial, physical, human, and intangible—that it uses to develop,
manufacture, and deliver products to its customers.

In comparison to assets, its capabilities are its skills and abilities in doing the work
activities needed in its business. The major value-creating capabilities of the
 15

organization are known as its core competencies. Both resources and core
competencies determine the organization’s competitive weapons.

After completing an internal analysis, managers should be able to identify

organizational strengths and weaknesses. Any activities the organization does well or
any unique resources that it has are called strengths. Weaknesses are activities the
organization does not do well or resources it needs but does not possess.

2.2.2. External Analysis (Opportunity and Threat)

Organizations conduct an external analysis so they can:

• Know what the competition is doing, how pending legislation might affect the
organization, and how stable the local labor supply is in locations where it
operates.

• Examine all components of the environment—that is, economic, demographic,

political/legal, sociocultural, technological, and global—to see the trends and
changes.

• Pinpoint opportunities that the organization can exploit and threats that it must
counteract.

2.2.3. SWOT Analysis

The combined external and internal analyses are called the SWOT analysis because,
together, they are an analysis of the organization’s strengths, weaknesses,
opportunities, and threats. After completing the SWOT analysis, managers are ready
to formulate appropriate strategies that:

• Exploit an organization’s strengths and external opportunities, and

• Buffer or protect the organization from external threats.

Mintzberg, H., Lampel, J.B., Quinn, J., Ghoshal, S. (2014). The Strategy Process:
Concepts, Contexts, Cases, 5/E . London: Pearson.
16

In other words, the aim of any SWOT Analysis is to identify the key internal and
external factors that are important to achieving the objective.

2.3. Strategy Formulation

Once a clear picture of the firm and its environment is in hand, specific strategic
alternatives can be developed. While different firms have different alternatives
depending on their situation, there also exist generic strategies that can be applied
across a wide range of firms. Michael Porter identified cost leadership, differentiation,
and focus as three generic strategies that may be considered when defining strategic
alternatives. Porter advised against implementing a combination of these strategies for
a given product; rather, he argued that only one of the generic strategy alternatives
should be pursued.

2.3.1. Cost leadership Strategy

Cost leadership is to drive cost down through all the elements of the production of the
product from sourcing, to labor costs. This strategy involves the organization aiming to
be the lowest cost producer and/or distributor within their industry. The organization
aims to drive cost down for all production elements from the sourcing of materials, to
labor costs. To achieve cost leadership a business will usually need large scale
production so that they can benefit from "economies of scale". Large scale production
means that the business will need to appeal to a broad part of the market. For this
reason a cost leadership strategy is a broad scope strategy.

2.3.2. Differentiation Strategy

Differentiation is to focus its effort on particular segments and charge for the added
differentiated value. To be different, is what organization striving for; companies and
product ranges that appeal to customers and "stand out from the crowd" have a
competitive advantage. Porter asserts that businesses can stand out from their
competitors by developing a differentiation strategy. With a differentiation strategy the
business develops product or service features which are different from competitors and
appeal to customers including functionality, customer support and product quality. New
concepts which allow for differentiation can be protected through patents and other
intellectual property rights; however patents have a certain life span and organization
always face the danger that their idea which gives them a competitive advantage will
be copied in one form or another.

2.4.3. Focus (Niche) Strategy

Focus or Niche is to form a competitive advantage for this niche market and either
succeeds by being a low cost producer or differentiator within that particular segment.
Under a focus strategy a business focuses its effort on one particular segment of the
market and aims to become well known for providing products/services for that
segment. They form a competitive advantage by catering for the specific needs and
 17

wants of their niche market. A focus strategy is known as a narrow scope strategy
because the business is focusing on a narrow (specific) segment of the market.

2.4. Strategy Implementation

The strategy likely will be expressed in high-level conceptual terms and priorities. For
effective implementation, it needs to be translated into more detailed policies that can
be understood at the functional level of the organization. The expression of the
strategy in terms of functional policies also serves to highlight any practical issues that
might not have been visible at a higher level. In addition to developing functional
policies, the implementation phase involves identifying the required resources and
putting into place the necessary organizational changes.

2.5. Strategy Evaluation

Strategy Evaluation is as significant as strategy formulation because it throws light on
the efficiency and effectiveness of the comprehensive plans in achieving the desired
results. The significance of strategy evaluation lies in its capacity to co-ordinate the
task performed by managers, groups, departments etc, through control of
performance. Strategic Evaluation is significant because of various factors such as -
developing inputs for new strategic planning, the urge for feedback, appraisal and
reward, development of the strategic management process, judging the validity of
strategic choice etc.

3. Organization Culture
Organization culture is a set of shared values, the unwritten rules which are often taken
for granted, that guide the employees towards acceptable and rewarding behavior.. It sets
the foundation for strategy. For a strategy within an organization to develop and be
implemented successfully, it must fully align with the organizational culture. Thus,
initiatives and goals must be established within an organization to support and establish
an organizational culture that embraces the organization’s strategy over time.

Just like people, organizations have their own personalities, values and overarching
attitudes. When the personality of the organization is understood, along with its culture,
attracting and hiring employees who fit – and therefore may be more likely to be
comfortable and excel in an organization – can become easier.

3.1. Type of Culture

3.1.1. National Cultures

National cultures comes a host of differences in assumptions, outlook, and rules that
can challenge communication and comprehension.

3.1.2. Subcultures

There can be significant distances between subcultures within the same national
culture. Subcultures may be defined by ethnicity, geographic region, race, religion, or
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class.

3.1.3. Organizational/Corporate Cultures

Organizational culture is defined by all of the life experiences, strengths, weaknesses,

education, upbringing, and so forth of the employees. While executive leaders play a
large role in defining organizational culture by their actions and leadership, all
employees contribute to the organizational culture.

3.1.4. Industry Cultures

Industry cultures have shared assumptions based on technological and social histories
of the industry.

3.1.5. Professional or Functional Cultures

Professional and functional cultures have shared assumptions based on specifics as

they relate to a special function or occupation.

3.2. Layers of Culture

3.2.1. Level 1-Artefacts: Described as being the ‘easiest’ level to observe, called explicit
culture.

3.2.2. Level 2-Espoused Values: To better understand and to help decipher why the
initial observations in Level 1 are taking place, one needs to ask ‘insiders’ of the
organization to try and explain.

3.2.3. Level 3-Shared Tacit Assumptions: To help understand this ‘deeper’ level of
culture, one needs to investigate the history of an organization.

3.3. Values in Culture

The word "value" means worth. It also refers to an ethical precept on which we base
our behavior. Values are basic convictions that people have regarding what is right and
wrong, good and bad, important or unimportant. Values are shaped by the culture in
which we live and by our experiences. However, there are values that are held high by
most cultures. These include fairness and justice, compassion and charity, duties and
rights, human species survival and human well-being.

Organizational culture and values are closely related because organizations are
generally founded with certain values in mind. These values tend to influence the
organizational structure, but they may change over time as different people take on
different roles in the organization and the overall culture changes. Organizational
culture and values, then, both affect each other over time and tend to change if a
conflict exists between them.
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3.4. Culture Analysis

Three important levels of cultural analysis in organizations are: observable culture,
shared values, and common assumptions. These levels may be envisioned as layers.
The deeper one gets, the more difficult it is to discover the culture.

External Organizational Climate

OBSERVABLE CULTURE

SHARED VALUES

COMMON ASSUMPTIONS

Internal

Schemerhorn, J., Hunt, J., & Osbom, R. (2008). Organizational Behavior. Hoboken, NJ:
John Wiley & Sons.

3.4.1. Observable Culture

The first level concerns observable culture, or “the way we do things around here.”
These are the methods the group has developed and teaches to new members. The
observable culture includes the unique stories, ceremonies, and corporate rituals that
make up the history of a successful work group.

3.4.2. Shared Values

The second level of analysis recognizes that shared values can play a critical part in
linking people together and can provide a powerful motivational mechanism for
members of the culture.

Many consultants suggest that organizations should develop a “dominant and coherent
set of shared values.” The term shared in cultural analysis implies that the group is a
whole. Every member may not agree with the shared values, but they have all been
exposed to them and have often been told they are important. At Hewlett-Packard, for
example, “quality” is part of everyone’s vocabulary. The firm was founded on the belief
that everyone could make a creative contribution to developing quality products.

3.4.3. Common Assumptions

At the deepest level of cultural analysis are common assumptions, or the taken-for-
granted truths that collections of corporate members share as a result of their joint
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experience. It is often extremely difficult to isolate these patterns, but doing so helps
explain why culture invades every aspect of organizational life.

3.5. Culture and Climate

Organizational Culture is a system of shared meaning. Just as tribal cultures have rules
and taboos that dictate how members will act toward each other and outsiders,
organizations have cultures that govern how its members should behave. A strong
organizational culture usually provides a sense of identity for employees and a
commonality of values and goals that leads to effective change management and
problem solving. Organizational climate, on the other hand, is often defined as the
recurring patterns of behavior, attitudes and feelings that characterize life in the
organization, while an organization culture tends to be deep and stable. Although
culture and climate are related, climate often proves easier to assess and change.

In other words, climate consists of the day to day feelings of the members of the
organization and is highly susceptible to changes within the organization. The climate
will be very good for a time if the staff receives raises or if the company is furnished
with new equipment. Conversely, if budget cuts occur or the number of staff reduced
the climate will suffer. These conditions are all temporary, whereas culture is more
permanent and lasting. Culture can and does change, but at a much slower rate than
climate. It is a powerful force that can encourage and support an individual effort or
thwart them before they are started. Organizational culture can be used to both
explain and create end results.

All companies have an organizational culture, which represents the intangible force
that centers on a company’s values and beliefs. Individuals typically work at a company
with which their values match the most. One result of organizational culture is to
develop a climate by which a company can measure successes attached to this
intangible force. This starts the relationship between the organizational culture and
climate. While organizational culture is often a naturally occurring phenomenon in
organizations, the organizational climate often takes more work to implement.

A company’s organizational culture and climate are not always static. As a company
evolves, so does its culture. This often leads to changes in the organizational climate as
managers and employees change, along with the values and beliefs in the business.
The organizational climate must adjust as necessary to ensure the company measures
the correct factors.

4. Organization Structure
Organizing is the function of management that determines what needs to be done; how it
will be done; and who is to do it. It creates the organizational structure. Organizational
structure is not simply an organization chart. Structure is all the people, positions,
procedures, processes, culture, technology and related elements that comprise the
organization. It defines how all the pieces, parts and processes work together (or don’t in
some cases). This structure must be totally aligned with strategy for the organization to
achieve its mission and goals. Structure supports strategy.