Lesson Seven: Organizational Culture

A great organizational culture is the key to developing the traits necessary for
business success. And you’ll see its effects in your bottom line: companies with
healthy cultures are 1.5 times more likely to experience revenue growth of 15 percent
or more over three years and 2.5 times more likely to experience significant stock
growth over the same period. Despite this, only 31 percent of HR leaders believe their
organizations have the culture they need to drive future business, and getting there is
no easy task — 85 percent of organizations fail in transforming their cultures.

Background of Organizational Culture

An organization's culture defines the proper way to behave within the organization.
This culture consists of shared beliefs and values established by leaders and then
communicated and reinforced through various methods, ultimately shaping employee
perceptions, behaviors and understanding. Organizational culture sets the context for
everything an enterprise does. Because industries and situations vary significantly,
there is not a one-size-fits-all culture template that meets the needs of all
organizations.

A strong culture is a common denominator among the most successful companies. All
have consensus at the top regarding cultural priorities, and those values focus not on
individuals but on the organization and its goals. Leaders in successful companies live
their cultures every day and go out of their way to communicate their cultural
identities to employees as well as prospective new hires. They are clear about their
values and how those values define their organizations and determine how the
organizations run. See What does it mean to be a values-based organization?

Conversely, an ineffective culture can bring down the organization and its leadership.
Disengaged employees, high turnover, poor customer relations and lower profits are
examples of how the wrong culture can negatively impact the bottom line.

Mergers and acquisitions are fraught with culture issues. Even organizational cultures
that have worked well may develop into a dysfunctional culture after a merger.
Research has shown that two out of three mergers fail because of cultural problems.
Blending and redefining the cultures, and reconciling the differences between them,
build a common platform for the future. In recent years, the fast pace of mergers and
acquisitions has changed the way businesses now meld. The focus in mergers has
shifted away from blending cultures and has moved toward meeting specific business
objectives. Some experts believe that if the right business plan and agenda are in place
during a merger, a strong corporate culture will develop naturally.

What is organizational culture?

Organizational culture is the collection of values, expectations, and practices that
guide and inform the actions of all team members. Think of it as the collection of
traits that make your company what it is. A great culture exemplifies positive traits
that lead to improved performance, while a dysfunctional company culture brings out
qualities that can hinder even the most successful organizations.

Don’t confuse culture with organizational goals or a mission statement, although both
can help define it. Culture is created through consistent and authentic behaviors, not
press releases or policy documents. You can watch company culture in action when
you see how a CEO responds to a crisis, how a team adapts to new customer demands,
or how a manager corrects an employee who makes a mistake.

An employer must begin with a thorough understanding of what culture is in a general

sense and what their organization's specific culture is. At the deepest level, an
organization's culture is based on values derived from basic assumptions about the
following:
Human nature. Are people inherently good or bad, mutable or immutable, proactive
or reactive? These basic assumptions lead to beliefs about how employees, customers
and suppliers should interact and how they should be managed.
The organization's relationship to its environment. How does the organization
define its business and its constituencies?
Appropriate emotions. Which emotions should people be encouraged to express, and
which ones should be suppressed?
Effectiveness. What metrics show whether the organization and its individual
components are doing well? An organization will be effective only when the culture is
supported by an appropriate business strategy and a structure that is appropriate for
both the business and the desired culture.

The importance of culture to your company

Organizational culture affects all aspects of your business, from punctuality and tone
to contract terms and employee benefits. When workplace culture aligns with your
employees, they’re more likely to feel more comfortable, supported, and valued.
Companies that prioritize culture can also weather difficult times and changes in the
business environment and come out stronger.

Culture is a key advantage when it comes to attracting talent and outperforming the
competition. 77 percent of workers consider a company’s culture before applying, and
almost half of employees would leave their current job for a lower-paying opportunity
at an organization with a better culture. The culture of an organization is also one of
the top indicators of employee satisfaction and one of the main reasons that almost
two-thirds (65%) of employees stay in their job.

Consider Microsoft and Salesforce. Both technology-based companies are world-class

performers and admired brands, and both owe this in part to prioritizing culture.
Microsoft, known for its cut-throat competitiveness under Steve Balmer, has been
positively transformed by Satya Nadella, who took over as CEO of the company in
2014. He embarked on a program to refine the company culture, a process that
upended competitiveness in favor of continuous learning. Instead of proving
themselves, employees were encouraged to improve themselves. Today Microsoft’s
market cap flirts with $1 trillion and it is again competing with Apple and Amazon as
one of the most valuable companies in the world.

Salesforce puts corporate culture front and center and has experienced incredible
growth throughout its history. Marc Benioff, Salesforce’s founder and CEO,
established philanthropic cultural norms that have guided the company over the past
two decades. All new Salesforce employees spend part of their first day volunteering
and receive 56 hours of paid time to volunteer a year. This focus on meaning and
mission has made Salesforce one of the best places to work in America according to
Fortune, and it hasn’t compromised profits either: Salesforce’s stock price has surged
year after year at an average of over 26% annually to date.

Business Case
If an organization's culture is going to improve the organization's overall performance,
the culture must provide a strategic competitive advantage, and beliefs and values
must be widely shared and firmly upheld. A strong culture can bring benefits such as
enhanced trust and cooperation, fewer disagreements and more-efficient decision-
making. Culture also provides an informal control mechanism, a strong sense of
identification with the organization and shared understanding among employees about
what is important. Employees whose organizations have strongly defined cultures can
also justify their behaviors at work because those behaviors fit the culture.

Company leaders play an instrumental role in shaping and sustaining organizational

culture. If the executives themselves do not fit into an organization's culture, they
often fail in their jobs or quit due to poor fit. Consequently, when organizations hire
C-suite executives, these individuals should have both the requisite skills and the
ability to fit into the company culture.

Qualities of a great organizational culture

Every organization’s culture is different, and it’s important to retain what makes your
company unique. However, the cultures of high-performing organizations consistently
reflect certain qualities that you should seek to cultivate:

• Alignment comes when the company’s objectives and its employees’ motivations
are all pulling in the same direction. Exceptional organizations work to build
continuous alignment to their vision, purpose, and goals.

• Appreciation can take many forms: a public kudos, a note of thanks, or a promotion.
A culture of appreciation is one in which all team members frequently provide
recognition and thanks for the contributions of others.

• Trust is vital to an organization. With a culture of trust, team members can express
themselves and rely on others to have their back when they try something new.

• Performance is key, as great companies create a culture that means business. In

these companies, talented employees motivate each other to excel, and, as shown
above, greater profitability and productivity are the results.

• Resilience is a key quality in highly dynamic environments where change is

continuous. A resilient culture will teach leaders to watch for and respond to change
with ease.

• Teamwork encompasses collaboration, communication, and respect between team

members. When everyone on the team supports each other, employees will get more
done and feel happier while doing it.

• Integrity, like trust, is vital to all teams when they rely on each other to make
decisions, interpret results, and form partnerships. Honesty and transparency are
critical components of this aspect of culture.
• Innovation leads organizations to get the most out of available technologies,
resources, and markets. A culture of innovation means that you apply creative
thinking to all aspects of your business, even your own cultural initiatives.

• Psychological safety provides the support employees need to take risks and provide
honest feedback. Remember that psychological safety starts at the team level, not the
individual level, so managers need to take the lead in creating a safe environment
where everyone feels comfortable contributing.Now that you know what a great
culture looks like, let’s tackle how to build one in your organization.

Classification of Organizational Cultures

The four organizational cultures are:
Adhocracy culture – the dynamic, entrepreneurial Create Culture.
Clan culture – the people-oriented, friendly Collaborate Culture.
Hierarchy culture – the process-oriented, structured Control Culture.
Market culture – the results-oriented, competitive Compete Culture.

Adhocracy culture
Adhocracy is a combination of the words ‘Ad hoc’ and bureaucracy. Therefore,
organizations with an adhocracy culture are flexible and not inhibited by bureaucratic
procedures and policies. There is an emphasis on constant innovation and
improvements, the pace is usually extremely fast, and the status quo, though it may be
working, will be challenged.

Most start-up and tech companies like Apple, Google, and Facebook are driven by
adhocratic culture because it provides them the latitude to be innovative. This is
critical to their brand and success in a market that is constantly changing and highly
competitive.

However, when start-ups become large tech giants like these organizations, an
adhocratic culture will become less feasible throughout the entire organization. There
will be some functions or business units that will need more structure, and moving
slower may actually be better for the organization, for example, in the areas of ethics
and compliance. Therefore, the adhocracy culture may be relegated to specific units to
ensure the organization remains innovative and competitive in the market.

Developing an adhocracy culture

Depending on your industry, it might not be easy to develop an authentic adhocracy
culture that also includes a high-risk business strategy. However, implementing
strategy and brainstorming sessions allows employees to share big ideas that can help
drive performance. Rewarding successful ideas encourages teams to think outside of
the box, too.

Clan culture
‘Clan’ is a group of close-knit and interrelated families or a group of people with a
strong common interest. Clan cultures are common in small or family-owned
businesses that are not hierarchical in nature. Employees are valued regardless of their
level and environments are supportive.
This culture aims to work collaboratively in teams by making sure all employees feel
like equals. They feel comfortable providing honest and open feedback. Apart from
teamwork, there may be a strong emphasis on mentorship and apprenticeship as
competencies and values are passed on from one generation to another. There is
usually high employee engagement in this culture, which makes for excellent
customer service. However, the downside to this type of culture is that it is difficult to
maintain it as the organization grows. Operations may lack focus and fluidity as the
organization grows.

Developing a clan culture

To cultivate a clan culture within your company, your first step is to turn to your
employees. Communication is vital to a thriving clan culture, so let your team know
that you’re open to feedback. Find out what they value, what they’d like to see change,
what ideas they have to help push the company further. Step two: take their thoughts
into account and put them into action.

Hierarchy culture
The hierarchy culture is a prevalent corporate culture in the US. It is defined by
structure, established procedures, and levels of authority. Employees in this culture
know precisely where they fit in the chain of command – who’s accountable to them,
who they report to, and what the rules are. It is imperative in this culture to do the
right thing.

Developing a hierarchy culture

The first step to establishing a hierarchy culture is to button up your processes. If the
chain of command has some gaps, fill them. Consider every team and department to
ensure they have clear long- and short-term goals.

Market culture
Market culture is all about profit margins and staying ahead of the competition. It is
results-oriented with a strong external focus to ensure customers are satisfied.
Examples of companies driven by a market culture are Tesla, Amazon, and General
Electric.

Having top-notch products or services is critical to the success of these organizations,

so there is a constant demand to be more creative and get new or improved products
to the market before their competitors. While this type of culture may secure the
longevity of the business, employees often burn out from the high expectations and
constant demand to produce. There may also be less emphasis on the employee
experience or employee satisfaction.

Developing a market culture

A market culture is tied to the company’s bottom line. Therefore, start by evaluating
each position within your organization. Calculate the ROI of every role and ascribe
reasonable benchmarks for production. Consider rewarding top performers to
encourage similar work.

Other types of organizational culture

Cultures can be dissected and described in more granular ways. The reason is that
each organization is uniquely shaped by its vision, mission, and leadership. Groysberg,
Lee, Price, and Cheng identified the following additional organizational cultures in
their research published in Harvard Business Review (2018).

Purpose culture – Company leaders and employees share altruistic values of

changing the world and ensuring global resources are shared with those who live the
margins.
Learning organizational culture – Focuses on research, innovation, creativity,
learning and development.
Enjoyment organizational culture – Having fun and a sense of humor is what
defines this culture.
Results organizational culture – Characterized by meeting targets, achieving goals,
and is performance-driven.
Authority organizational culture – Is defined by strong leadership and confident
employees. It is a competitive working environment where employees strive to be the
best in their field.
Safety organizational culture – May be risk-averse where leaders thrive on fostering
safety through planning and taking calculated or little risk and doing what has worked
in the past.
Order organizational culture – Is usually defined by rules, procedures and where
employees have very defined roles.
Caring organization culture – Will be characterized by an environment that cares
for its employees and where there may be strong engagement and loyalty.

Characteristics/Levels of an Organizational Culture

Financial Stability (Level 1)

Healthy organizations have a focus on financial stability; organizational growth,
revenues, a growing client base, and profit margins are important ingredients for
success.

Harmonious Relationships (Level 2)

Most of us can sense when there’s tension between people or within a culture. (I know
it within minutes of arriving at a restaurant from observing the wait staff.) We all have
a sixth sense for this kind of discord between individuals or within organizational
cultures. Likewise, you can also tell when things are going well because there is open
communication, employee and customer satisfaction, and a sense of loyalty and
friendship among team members.

High Performance (Level 3)

This developmental level is all about achievement and having the right systems,
quality, best practices, and pride in performance. It’s about knowing what you do well,
and what is not in your wheelhouse. It’s about traction and making your mark.

Continuous Renewal and Learning (Level 4)

Everyone is abuzz talking about the pace of change and innovation—and keeping up
with them. We, as organizations, must continuously adapt, learn, grow, set goals, and
empower one another in the quest forward.

Building Internal Community (Level 5)

This goes beyond having harmonious relationships. It’s about a shared sense of
purpose and values. It’s about having integrity in how we individually and
collectively act. And, it’s about building trust, passion, creativity, and openness
among us.

Making A Difference: Strategic Partnerships And Alliances (Level 6)

Once you have a clear sense of purpose and values, you can align with other teams
and organizations to make a larger difference. If we attempt to partner with other
organizations before we truly know our own value, the alliance erodes. Partnerships
require that both parties have skin in the game, have something at stake, and are
working together for a larger cause or mission.

Service To Humanity And The Planet (Level 7)

Service includes social responsibility, future generations, long-term perspective,
ethics, compassion, and wisdom. We sometimes jokingly call this the “Mother
Theresa level,” because it’s all about the difference you make to humanity and the
planet. It’s about the need to think of “we” before “me.” Some Native American tribes
considered the impact on seven generations before making any significant decision.

Full-Spectrum Performance (All Levels)

For optimum, full-spectrum performance, organizations should pay attention to each
of the 7 characteristics of organizational culture described above. I’ve seen nonprofits
with a wonderful focus on strategic partnerships and a deep commitment to service,
but without financial stability. A lack of financial stability can erode the best
intentions and the ability to create appropriate systems—and generally, hobble an
organization. On the other end of the spectrum, focusing solely on financial stability
and high performance is a short-term vision without a strong foundation. Enron and
the housing lenders that triggered the 2008 financial crisis, were perhaps the poster
children for this overemphasis on financial growth. As human beings, we have a
range of needs, and so do organizations. Employees want to believe they’re making a
difference, but also expect appropriate amounts of stability and control to keep things
running smoothly. The magic formula lies in the balance.
Steps to building a high-performing organizational culture
Creating a great organizational culture requires developing and executing a plan with
clear objectives that you can work towards and measure. The 8 steps below should
serve as a roadmap for building a culture of continuity that will deliver long-term
benefits across your company.

1. Excel in recognition
Recognizing the contributions of all team members has a far-reaching, positive effect
on organizational culture. When everyone on the team recognizes the
accomplishments of others, individuals start to see how they’re part of a whole. Even
the most jaded employees want to know their work matters, and they notice when
they aren’t appreciated — 76 percent of employees don’t feel especially recognized
by superiors. Experts agree that when an organization makes appreciating employees
part of its culture, important metrics like employee engagement, retention, and
productivity improve.

Making recognition part of your culture means it must be a regular occurrence, not
something that is only reserved for major milestones or work anniversaries.
Encourage team members to practice frequent social recognition in addition to
monetary recognition. Providing social recognition on a consistent basis has a
remarkable business impact: companies that invest in social recognition are four times
more likely to increase stock prices, twice more likely to improve NPS scores, and
twice more likely to improve individual performances.

Monetary recognition is valuable as well. Consider a points-based recognition

program that will allow employees to easily build up substantial point balances.
They’ll enjoy looking forward to redeeming their points for a reward that’s personally
meaningful to them, rather than being handed a generic mug or a years of service
award that will gather dust on a shelf.

To foster other cultural traits, recognition should also be clearly tied to company
values and specific actions. After all, 92 percent of employees agree when they’re
recognized for a specific action, they’re more likely to take that action again in the
future.

Last but not least, leadership needs to take center stage in your recognition efforts, as
they’re the cultural trendsetters for your entire company. Incorporate a recognition
talk track into your leadership training and share top tips with managers on how to
recognize others and why it matters.

2. Enable employee voice

Creating a culture that values feedback and encourages employee voice is essential, as
failing to do so can lead to lost revenue and demotivated employees.

First, you need to collect feedback using the right listening tools that make it easy for
employees to express what they’re feeling in the moment, like pulse surveys and
workplace chatbots. Then analyze the results to see what’s working and what isn’t in
your organization, and act on those findings while they’re still relevant. Not only does
this strengthen your culture, it leads to benefits like higher employee fulfillment and
greater profitability. According to a Clutch survey, 68 percent of employees who
receive regular feedback feel fulfilled in their jobs, and Gallup found that
organizations with managers who received feedback on their strengths showed 8.9
percent greater profitability.

In addition to gathering feedback using the methods described above, make sure
you’re paying attention to more subtle expressions of feedback that can reveal cultural
deficiencies. For example, pay attention to body language, as it can tell you much
even when employees aren’t willing to share. If you’re working with a remote team,
video conferences can help keep this nonverbal channel of communication open.
Managers should treat all their sessions with employees as opportunities to gather and
respond to feedback and act as a trusted coach.

3. Make your leaders culture advocates

Your company’s success in building a strong workplace culture rests in the hands of
team leaders and managers. For example, if your workplace culture prioritizes certain
values and your leadership team doesn’t exemplify them — or even displays
behaviors that go against them — it undermines the effort. Team members will
recognize the dissonance between stated values and lived behaviors. They may even
start to emulate negative behaviors because they believe those behaviors have been
rewarded by management.

Your leadership team can help build the culture you need by prioritizing it in every
aspect of their work lives. They need to openly and transparently discuss the
organization’s culture and values, and they should also be prepared to incorporate
feedback from employees into their cultural advocacy efforts. Leaders need their
employees’ perspective on culture — while 76 percent of executives believe their
organization has a well-communicated value system, only 31 percent of employees
agree. When employees see leaders living your culture, they’ll follow suit.

4. Live by your company values

Your company’s values are the foundation of its culture. While crafting a mission
statement is a great start, living by company values means weaving them into every
aspect of your business. This includes support terms, HR policies, benefits programs,
and even out-of-office initiatives like volunteering. Your employees, partners, and
customers will recognize and appreciate that your organization puts its values into
practice every day. You can also recognize employees for actions that exemplify your
values to show that they’re more than just words and incentivize employees to build
the value-based culture you want to see.

5. Forge connections between team members

Building a workplace culture that can handle adversity requires establishing strong
connections between team members, but with increasingly remote and terse
communication, creating those bonds can be challenging. Encouraging collaboration
and engaging in team building activities — even when working remote — are two
effective ways to bring your team together and promote communication.

Look for and encourage shared personal interests between team members as well,
especially among those from different generations that might otherwise have a
difficult time relating to each other. This can create new pathways for understanding
and empathy that are vital to improving communication, creativity, and even conflict
resolution.

6. Focus on learning and development

Great workplace cultures are formed by employees who are continually learning and
companies that invest in staff development. Training initiatives, coaching, and
providing employees with new responsibilities are all great ways to show your team
that you’re invested in their success.

A culture of learning has a significant business impact. Find Courses’ most recent
benchmark study found that companies with highly engaged employees were 1.5
times more likely to prioritize soft skills development. It also found that companies
that had experienced revenue growth in the previous financial year were twice more
likely to use innovative learning technologies and three times more likely to increase
their learning and development budgets.

7. Keep culture in mind from day one

When an employee’s perspective doesn’t match your company culture, internal
discord is likely to be the result. Organizations should hire for culture and reinforce it
during the onboarding process and beyond. Practices and procedures must be taught,
and values should be shared.

When hiring, ask questions focused on cultural fit, like what matters to the
interviewee and why they’re attracted to working at your company. But these
questions shouldn’t be the sole determining factor when evaluating a candidate, as the
best organizations keep an open mind to diverse perspectives that can help keep their
culture fresh.

You should also prioritize building social relationships during the onboarding process
so that employees have the insight necessary to understand your company’s culture
and values. These relationships will last throughout the employee’s time at the
company, so that cultural values are mutually reinforced on a continuous basis.

8. Personalize the employee experience

As modern consumers, your employees expect personalized experiences, so you need
to focus on ways to help each team member identify with your culture. Tools like
pulse surveys and employee-journey mapping are great ways to discover what your
employees value and what their ideal corporate culture looks like. Take what you
learn and tailor your actions to personalize the employee experience for your team.
Once you start treating your employees with the same care you treat your customers, a
culture that motivates each individual at your organization is sure to follow.

Developing culture made easy

Organizational culture will develop even without your input, but in the absence of that
guidance, it may not be healthy or productive. Keep these three basic techniques in
mind when developing your company culture: communication, recognition, and
action. By following the steps in this guide, you can improve communication with
employees, start creating a culture of recognition, and ensure that all members of your
team put your culture into action.
Dimensions of an Organizational Culture
Which values characterize an organization’s culture? Even though culture may not be
immediately observable, identifying a set of values that might be used to describe an
organization’s culture helps us identify, measure, and manage culture more effectively.
For this purpose, several researchers have proposed various culture typologies. One
typology that has received a lot of research attention is the Organizational Culture
Profile (OCP), in which culture is represented by seven distinct values. We will
describe the OCP as well as two additional dimensions of organizational culture that
are not represented in that framework but are important dimensions to consider:
service culture and safety culture.

Innovative Cultures
According to the OCP framework, companies that have innovative cultures are
flexible and adaptable, and experiment with new ideas. These companies are
characterized by a flat hierarchy in which titles and other status distinctions tend to be
downplayed. For example, W. L. Gore & Associates Inc. is a company with
innovative products such as GORE-TEX® (the breathable fabric that is windproof
and waterproof), Glide dental floss, and Elixir guitar strings, earning the company the
distinction of being elected as the most innovative company in the United States by
Fast Company magazine in 2004. W. L. Gore consistently manages to innovate and
capture the majority of market share in a wide variety of industries, in large part due
to its unique culture. In this company, employees do not have bosses in the traditional
sense, and risk taking is encouraged by celebrating failures as well as successes.
Companies such as W. L. Gore, Genentech Inc., and Google also encourage their
employees to take risks by allowing engineers to devote 20% of their time to projects
of their own choosing.

Aggressive Cultures
Companies with aggressive cultures value competitiveness and outperforming
competitors: By emphasizing this, they may fall short in the area of corporate social
responsibility. For example, Microsoft Corporation is often identified as a company
with an aggressive culture. The company has faced a number of antitrust lawsuits and
disputes with competitors over the years. In aggressive companies, people may use
language such as “We will kill our competition.” In the past, Microsoft executives
often made statements such as “We are going to cut off Netscape’s air
supply.…Everything they are selling, we are going to give away.” Its aggressive
culture is cited as a reason for getting into new legal troubles before old ones are
resolved. Recently, Microsoft founder Bill Gates established the Bill & Melinda Gates
foundation and is planning to devote his time to reducing poverty around the world. It
will be interesting to see whether he will bring the same competitive approach to the
world of philanthropy.

Outcome-Oriented Cultures
The OCP framework describes outcome-oriented cultures as those that emphasize
achievement, results, and action as important values. A good example of an outcome-
oriented culture may be Best Buy Co. Inc. Having a culture emphasizing sales
performance, Best Buy tallies revenues and other relevant figures daily by department.
Employees are trained and mentored to sell company products effectively, and they
learn how much money their department made every day. In 2005, the company
implemented a results oriented work environment (ROWE) program that allows
employees to work anywhere and anytime; they are evaluated based on results and
fulfillment of clearly outlined objectives. Outcome-oriented cultures hold employees
as well as managers accountable for success and utilize systems that reward employee
and group output. In these companies, it is more common to see rewards tied to
performance indicators as opposed to seniority or loyalty. Research indicates that
organizations that have a performance-oriented culture tend to outperform companies
that are lacking such a culture. At the same time, some outcome-oriented companies
may have such a high drive for outcomes and measurable performance objectives that
they may suffer negative consequences. Companies overrewarding employee
performance such as Enron Corporation and WorldCom experienced well-publicized
business and ethical failures. When performance pressures lead to a culture where
unethical behaviors become the norm, individuals see their peers as rivals and short-
term results are rewarded; the resulting unhealthy work environment serves as a
liability.

Stable Cultures
Stable cultures are predictable, rule-oriented, and bureaucratic. These organizations
aim to coordinate and align individual effort for greatest levels of efficiency. When
the environment is stable and certain, these cultures may help the organization be
effective by providing stable and constant levels of output.These cultures prevent
quick action, and as a result may be a misfit to a changing and dynamic environment.
Public sector institutions may be viewed as stable cultures. In the private sector, Kraft
Foods Inc. is an example of a company with centralized decision making and rule
orientation that suffered as a result of the culture-environment mismatch. Its
bureaucratic culture is blamed for killing good ideas in early stages and preventing the
company from innovating. When the company started a change program to increase
the agility of its culture, one of their first actions was to fight bureaucracy with more
bureaucracy: They created the new position of VP of business process simplification,
which was later eliminated.B

People-Oriented Cultures
People-oriented cultures value fairness, supportiveness, and respect for individual
rights. These organizations truly live the mantra that “people are their greatest asset.”
In addition to having fair procedures and management styles, these companies create
an atmosphere where work is fun and employees do not feel required to choose
between work and other aspects of their lives. In these organizations, there is a greater
emphasis on and expectation of treating people with respect and dignity. One study of
new employees in accounting companies found that employees, on average, stayed 14
months longer in companies with people-oriented cultures. Starbucks Corporation is
an example of a people-oriented culture. The company pays employees above
minimum wage, offers health care and tuition reimbursement benefits to its part-time
as well as full-time employees, and has creative perks such as weekly free coffee for
all associates. As a result of these policies, the company benefits from a turnover rate
lower than the industry average. The company is routinely ranked as one of the best
places to work by Fortune magazine.

Team-Oriented Cultures
Companies with team-oriented cultures are collaborative and emphasize cooperation
among employees. For example, Southwest Airlines Company facilitates a team-
oriented culture by cross-training its employees so that they are capable of helping
each other when needed. The company also places emphasis on training intact work
teams. Employees participate in twice daily meetings named “morning overview
meetings” (MOM) and daily afternoon discussions (DAD) where they collaborate to
understand sources of problems and determine future courses of action. In
Southwest’s selection system, applicants who are not viewed as team players are not
hired as employees. In team-oriented organizations, members tend to have more
positive relationships with their coworkers and particularly with their managers.

Detail-Oriented Cultures
Organizations with detail-oriented cultures are characterized in the OCP framework as
emphasizing precision and paying attention to details. Such a culture gives a
competitive advantage to companies in the hospitality industry by helping them
differentiate themselves from others. For example, Four Seasons Hotels Ltd. and the
Ritz-Carlton Company LLC are among hotels who keep records of all customer
requests, such as which newspaper the guest prefers or what type of pillow the
customer uses. This information is put into a computer system and used to provide
better service to returning customers. Any requests hotel employees receive, as well
as overhear, might be entered into the database to serve customers better. Recent
guests to Four Seasons Paris who were celebrating their 21st anniversary were greeted
with a bouquet of 21 roses on their bed. Such clear attention to detail is an effective
way of impressing customers and ensuring repeat visits. McDonald’s Corporation is
another company that specifies in detail how employees should perform their jobs by
including photos of exactly how French fries and hamburgers should look when
prepared properly.
Service Culture
Service culture is not one of the dimensions of OCP, but given the importance of the
retail industry in the overall economy, having a service culture can make or break an
organization. Some of the organizations we have illustrated in this section, such as
Nordstrom, Southwest Airlines, Ritz-Carlton, and Four Seasons are also famous for
their service culture. In these organizations, employees are trained to serve the
customer well, and cross-training is the norm. Employees are empowered to resolve
customer problems in ways they see fit. Because employees with direct customer
contact are in the best position to resolve any issues, employee empowerment is truly
valued in these companies. For example, Umpqua Bank, operating in the northwestern
United States, is known for its service culture. All employees are trained in all tasks to
enable any employee to help customers when needed. Branch employees may come
up with unique ways in which they serve customers better, such as opening their
lobby for community events or keeping bowls full of water for customers’ pets. The
branches feature coffee for customers, Internet kiosks, and withdrawn funds are given
on a tray along with a piece of chocolate. They also reward employee service
performance through bonuses and incentives.

What differentiates companies with service culture from those without such a culture
may be the desire to solve customer-related problems proactively. In other words, in
these cultures employees are engaged in their jobs and personally invested in
improving customer experience such that they identify issues and come up with
solutions without necessarily being told what to do. For example, a British Airways
baggage handler noticed that first-class passengers were waiting a long time for their
baggage, whereas stand-by passengers often received their luggage first. Noticing this
tendency, a baggage handler notified his superiors about this problem, along with the
suggestion to load first-class passenger luggage last. This solution was successful in
cutting down the wait time by half. Such proactive behavior on the part of employees
who share company values is likely to emerge frequently in companies with a service
culture.

Safety Culture
Some jobs are safety sensitive. For example, logger, aircraft pilot, fishing worker,
steel worker, and roofer are among the top 10 most dangerous jobs in the United
States. In organizations where safety-sensitive jobs are performed, creating and
maintaining a safety culture provides a competitive advantage, because the
organization can reduce accidents, maintain high levels of morale and employee
retention, and increase profitability by cutting workers’ compensation insurance costs.
Some companies suffer severe consequences when they are unable to develop such a
culture. For example, British Petroleum experienced an explosion in their Texas City,
Texas, refinery in 2005, which led to the death of 15 workers while injuring 170. In
December 2007, the company announced that it had already depleted the $1.6-billion
fund to be used in claims for this explosion. A safety review panel concluded that the
development of a safety culture was essential to avoid such occurrences in the future.
In companies that have a safety culture, there is a strong commitment to safety
starting at management level and trickling down to lower levels. M. B. Herzog
Electric Inc. of California, selected as one of America’s safest companies by
Occupational Hazards magazine in 2007, had a zero accident rate for the past 3 years.
The company uses safety training programs tailored to specific jobs within the
company, and all employees are encouraged to identify all safety hazards they come
across when they are performing their jobs. They are also asked to play the role of an
OSHA (Occupational Safety and Health Administration) inspector for a day to
become more aware of the hidden dangers in the workplace. Managers play a key role
in increasing the level of safe behaviors in the workplace, because they can motivate
employees day-to-day to demonstrate safe behaviors and act as safety role models. A
recent study has shown that in organizations with a safety culture, leaders encourage
employees to demonstrate behaviors such as volunteering for safety committees,
making recommendations to increase safety, protecting coworkers from hazards,
whistleblowing, and in general trying to make their jobs safer.

Factors That Shape an Organization's Culture

Organizational leaders often speak about the unusual natures of their company
cultures, seeing their domains as special places to work. But organizations such as
Disney and Nordstrom, which are well-known for their unique cultures, are rare.

Most company cultures are not that different from one another. Even organizations in
disparate industries such as manufacturing and health care tend to share a common
core of cultural values. For example, most private-sector companies want to grow and
increase revenues. Most strive to be team-oriented and to demonstrate concern for
others. Most are driven, rather than relaxed, because they are competing for dollars
and market share. Some of the cultural characteristics that distinguish most
organizations include the following.

Values
At the heart of organizations' cultures are commonly shared values. None is right or
wrong, but organizations need to decide which values they will emphasize. These
common values include:
Outcome orientation. Emphasizing achievements and results.
People orientation. Insisting on fairness, tolerance and respect for the individual.
Team orientation. Emphasizing and rewarding collaboration.
Attention to detail. Valuing precision and approaching situations and problems
analytically.
Stability. Providing security and following a predictable course.
Innovation. Encouraging experimentation and risk-taking.
Aggressiveness. Stimulating a fiercely competitive spirit.

Degree of Hierarchy
The degree of hierarchy is the extent to which the organization values traditional
channels of authority. The three distinct levels of hierarchy are "high"—having a
well-defined organizational structure and an expectation that people will work
through official channels; "moderate"—having a defined structure but an acceptance
that people often work outside formal channels; and "low" —having loosely defined
job descriptions and accepting that people challenge authority. An organization with a
high level of hierarchy tends to be more formal and moves more slowly than an
organization with a low level of hierarchy.

Degree of Urgency
The degree of urgency defines how quickly the organization wants or needs to drive
decision-making and innovation. Some organizations choose their degree of urgency,
but others have it thrust on them by the marketplace. A culture with high levels of
urgency has a need to push projects through quickly and a high need to respond to a
changing marketplace. A moderate level of urgency moves projects at a reasonable
pace. A low level of urgency means people work slowly and consistently, valuing
quality over efficiency. An organization with high urgency tends to be fast-paced and
supports a decisive management style. An organization with low urgency tends to be
more methodical and supports a more considered management style.

People Orientation or Task Orientation

Organizations usually have a dominant way of valuing people and tasks. An
organization with a strong people orientation tends to put people first when making
decisions and believes that people drive the organization's performance and
productivity. An organization with a strong task orientation tends to put tasks and
processes first when making decisions and believes that efficiency and quality drive
organization performance and productivity.Some organizations may get to choose
their people and task orientations. But others may have to fit their orientation to the
nature of their industry, historical issues or operational processes.

Functional Orientation
Every organization puts an emphasis on certain functional areas. Examples of
functional orientations may include marketing, operations, research and development,
engineering or service. For example, an innovative organization known for its
research and development may have at its core a functional orientation toward R&D.
A hospitality company may focus on operations or service, depending on its historical
choices and its definition in the marketplace. Employees from different functions in
the company may think that their functional areas are the ones that drive the
organization. Organizational leaders must understand what most employees perceive
to be the company's functional orientation.

Organizational Sub cultures

Any organization can have a mix of subcultures in addition to the dominant culture.
Subcultures exist among groups or individuals who may have their own rituals and
traditions that, although not shared by the rest of the organization, can deepen and
underscore the organization's core values. Subcultures can also cause serious
problems. For example, regional cultures often differ from the overall culture that top
leadership tries to instill. Perhaps aggressiveness that is common in one area may not
mesh with a culture emphasizing team building. Or an organization with a culture
built around equality may have trouble if the national culture emphasizes hierarchy
and expects people to bow to authority. Employers must recognize those differences
and address them directly.

Practices to Develop Culture

When an organization does a good job assessing its culture, it can then go on to
establish policies, programs and strategies that support and strengthen its core purpose
and values. In aligned organizations, the same core characteristics or beliefs motivate
and unite everyone, cascading down from the C-suite to individual contributors. There
are many tools for developing and sustaining a high-performance organizational
culture, including hiring practices, onboarding efforts, recognition programs and
performance management programs. The biggest challenge is deciding how to use
these tools and how to allocate resources appropriately.
Hiring Practices
Effective hiring practices can help an organization capitalize on its culture.
Traditionally, hiring focuses primarily on an applicant's skills, but when a hire's
personality also fits with the organization's culture, the employee will be more likely
to deliver superior performance. On the other hand, ill-fitting hires and subsequent
rapid departures cost approximately 50 percent to 150 percent of the position's annual
salary. Unfortunately, nearly one in three newly hired employees' leaves voluntarily
or involuntarily within a year of hiring, and this number has been increasing steadily
in recent years.

Some hiring practices to ensure cultural fit include these:

 Looking at each piece of the organization's vision, mission and values statements.
Interview questions should hone in on behaviors that complement these areas. For
example, if the organization works with a lot of intensity, then job applicants
should display that natural intensity to be considered for hire.
 Conducting a cultural fit interview. Ask questions that elicit comments about
organizational values such as honesty or integrity. If a candidate's description of
the worst place he or she ever worked sounds just like the organization where he
or she is interviewing, the candidate probably will not be successful.
 Leaving discussion of company culture for later. Do not tell candidates about
culture up front. First, listen to what they have to say about their experiences and
beliefs. This tactic will reveal more candid responses to help determine whether
they are a fit for the organization.
 Making sure at least three people are involved in the hiring process. Different
people will see and hear different things. These varied perspectives give a clearer
understanding of the person being considered for hire.
 Searching for employees who will fit in seamlessly can have drawbacks. The
biggest mistake an organization can make is to paint an inaccurate picture of itself
as it tries to attract candidates. If new hires discover they have been sold a bill of
goods, they will not be happy; they will probably not stick around, and, while
they are around, morale will decline.

Another possible drawback is that people are more reluctant to take negative actions
against people like themselves. As a result, mediocre workers are more likely to stay
employed if they share the cultural values. Similarly, although an organization's
comfort level is palpable when the culture is aligned, experts say, too much comfort
can result in group think and complacency.

Onboarding Programs
Onboarding teaches newcomers the employer's value system, norms and desired
organizational behaviors. Employers must help newcomers become part of social
networks in the organization and make sure that they have early job experiences that
reinforce the culture.

Reward and Recognition Programs

These programs are key mechanisms employers can use to motivate employees to act
in accordance with the organization's culture and values. For example, if teamwork is
a core value, bonuses should value teamwork and not be based on individual
performance. Employers should also put the spotlight on those who personify the
company's values.

Performance Management Programs

Employees who share values and aspirations tend to outperform those in
environments that lack cohesiveness and common purposes. Performance
management programs can greatly affect corporate culture by clearly outlining what is
expected from employees as well as by providing a feedback tool that informs
employees about proper behavior.

Sustaining a Culture
The management of organizational culture starts with identifying a company's
organizational culture traits or "artifacts." Artifacts are the core business activities,
processes and philosophies that characterize how an organization does business day-
to-day. Identifying these traits—and assessing their importance in light of current
business objectives—is a way to start managing culture.
Three broad concepts help identify the traits specific to a culture:
Social culture. This refers to group members' roles and responsibilities. It is the study
of class distinctions and the distribution of power that exists in any group.
Material culture. This involves examining everything that people in a group make or
achieve and the ways people work with and support one another in exchanging
required goods and services.
Ideological culture. This is tied to a group's values, beliefs and ideals—the things
people view as fundamental. It includes the emotional and intellectual guidelines that
govern people's daily existence and interactions.

Leaders and managers within an organization should approach culture management

by initially gaining an understanding of the common traits found in all businesses.
Then, they should take the following steps to manage their organization's culture:

1. Identify common artifacts or traits, including those from the standpoint of an

organization's social, material and ideological culture.
2. Convene groups of employees—representatives from all levels, functions and
locations of the organization—to assess the validity, significance and currency of
key artifacts.
3. Subject those traits to a rigorous assessment of their underlying shared
assumptions, values and beliefs.
4. Summarize findings and share them with all participants to solicit additional
insights.
5. Create a culture management action plan. The plan should enhance traits that
support corporate growth or organizational effectiveness and correct traits that
might hinder a company's advancement.

Typically, shared assumptions and beliefs originate with an organization's founders

and leaders. Because those beliefs proved successful (otherwise the company would
not exist and the leaders would not be in their positions), often they go unchallenged;
however, those assumptions and beliefs might be outdated and may hinder future
success.
How to Assess Culture Adoption: Metrics
Assessing organizational culture is a crucial step in developing sound strategies that
support enterprise objectives and goals. But how do you measure something as
potentially tough to describe as culture? After identifying the key dimensions of
culture such as values, degree of hierarchy, and people and task orientations,
performing these next steps will help organizations assess culture:

 Develop a cultural assessment instrument. This instrument should enable

members of the organization to rate the organization on the key cultural
dimensions, as well as on aspects of the organization not covered on the
assessment.
 Administer the assessment. Survey respondents should include individuals at all
levels, functions, divisions and geographical units of the organization.
 Analyze and communicate about assessment results. Leaders and managers
should discuss areas of agreement and disagreement about the organization's
culture.
 Conduct employee focus groups. Just because top management leaders agree on
organizational culture does not mean that all employees see things that way.
 Discuss culture until consensus forms around key issues. Focus on "Who are
we?" and "What makes us who we are?" Organizations that decide that where
they are now is not where they want to be may need to look at moving the
organization to embrace a different culture.
 Cultural assessments, and other activities such as cultural audits and 360-degree
feedback, may also help uncover cultural inconsistencies. Then leaders can
eliminate the inconsistencies. For example, if customer service is a focus of the
company's culture, evaluate how much time employees spend visiting customer
sites, how much interaction they have with customers, what customer service
training they receive and other indicators of a customer service focus.

Strength of Culture
A strong culture is one that is shared by organizational members. In other words, if
most employees in the organization show consensus regarding the values of the
company, it is possible to talk about the existence of a strong culture. A culture’s
content is more likely to affect the way employees think and behave when the culture
in question is strong. For example, cultural values emphasizing customer service will
lead to higher quality customer service if there is widespread agreement among
employees on the importance of customer service-related values.

It is important to realize that a strong culture may act as an asset or liability for the
organization, depending on the types of values that are shared. For example, imagine
a company with a culture that is strongly outcome oriented. If this value system
matches the organizational environment, the company outperforms its competitors.
On the other hand, a strong outcome-oriented culture coupled with unethical
behaviors and an obsession with quantitative performance indicators may be
detrimental to an organization’s effectiveness. An extreme example of this
dysfunctional type of strong culture is Enron.

A strong culture may sometimes outperform a weak culture because of the

consistency of expectations. In a strong culture, members know what is expected of
them, and the culture serves as an effective control mechanism on member behaviors.
Research shows that strong cultures lead to more stable corporate performance in
stable environments. However, in volatile environments, the advantages of culture
strength disappear.

One limitation of a strong culture is the difficulty of changing a strong culture. If an

organization with widely shared beliefs decides to adopt a different set of values,
unlearning the old values and learning the new ones will be a challenge, because
employees will need to adopt new ways of thinking, behaving, and responding to
critical events. For example, the Home Depot Inc. had a decentralized, autonomous
culture where many business decisions were made using “gut feeling” while ignoring
the available data. When Robert Nardelli became CEO of the company in 2000, he
decided to change its culture, starting with centralizing many of the decisions that
were previously left to individual stores. This initiative met with substantial resistance,
and many high-level employees left during his first year. Despite getting financial
results such as doubling the sales of the company, many of the changes he made were
criticized. He left the company in January 2007.

A strong culture may also be a liability during a merger. During mergers and
acquisitions, companies inevitably experience a clash of cultures, as well as a clash of
structures and operating systems. Culture clash becomes more problematic if both
parties have unique and strong cultures. For example, during the merger of Daimler
AG with Chrysler Motors LLC to create DaimlerChrysler AG, the differing strong
cultures of each company acted as a barrier to effective integration. Daimler had a
strong engineering culture that was more hierarchical and emphasized routinely
working long hours. Daimler employees were used to being part of an elite
organization, evidenced by flying first class on all business trips. On the other hand,
Chrysler had a sales culture where employees and managers were used to autonomy,
working shorter hours, and adhering to budget limits that meant only the elite flew
first class. The different ways of thinking and behaving in these two companies
introduced a number of unanticipated problems during the integration process.
Differences in culture may be part of the reason that, in the end, the merger didn’t
work out.

Communications
Conflicting messages regarding corporate culture may create distrust and cynicism,
which can prompt, or help employees justify, actions as deleterious as embezzlement.
Experts say that cultural inconsistencies may also cause workers to grow discouraged,
to believe management is disingenuous, to doubt statements from higher-ups and to
be less inclined to give their best effort.
Organizations may be investing significant time and money in creating a culture but
may not be reaping the commensurate rewards—especially if executives, supervisors
and rank-and-file employees have differing perceptions of the company's culture.
Employers must therefore ensure that the organization clearly and consistently
communicates its culture to all employees.

Legal Issues
Employers that emphasize cultural fit in their recruitment and selection process can be
vulnerable to discrimination claims if they are not careful. Employers should ensure
that hiring practices and selection decisions based on a cultural fit rationale do not
result in discriminating against any applicants who may not be "just like" the selectors.
Employers should also be aware that certain types of organizational cultures (for
example, cultures that are highly paternalistic or male-dominated) may tend to
perpetuate disparities in promotions, compensation and other terms of employment.
Those disparities may violate anti-discrimination laws.

Global Issues
Research suggests that national culture has a greater effect on employees than the
culture of their organization. Organizational leaders should understand the national
cultural values in the countries in which the organization operates to ensure that
management and company practices are appropriate and will be effective in
operations in those countries. National cultural differences should be considered when
implementing organizational culture management initiatives in global businesses.

Managers must be able to respond to nuances in communication styles, as well as deal

with different expectations that employees have of their leaders across national
cultures. Not meeting those expectations may doom the global organization's chance
for success in particular countries.

These issues become even more complex in global business mergers. Success in
international mergers depends on the merged organization's willingness to enable
people with different cultural perspectives to engage in meaningful and valuable
discussions about the new business.

National Culture
1. National culture is the norms, behaviors, beliefs, customs, and values shared by
the population of a sovereign nation (e.g.a Chinese or Canadian national culture).
It refers to specific characteristics such as language, religion, ethnic and racial
identity, cultural history and traditions.

2. A distinctive set of beliefs, values, and assumptions generally held by members

of a national group. National culture difference can be expressed as values on a
number of dimensions: power-distance, masculinity-femininity, individualism-
collectivism, and uncertainty-avoidance. These dimensions can be quantified and
provide country-specific profiles. It is important to recognize that: (a) scores on
these dimensions are statistical averages, with considerable individual variance
and overlap with other national cultures; and (b) national profiles are useful in
predicting behavior, but should not be used to pre-judge or stereotype others.

3. The behavior of the inhabitants of a nation is shaped by the values, beliefs and
cultural traditions that are common to them and which differ from other nation-
states.International companies normally develop management in conjunction with
the national culture.

4. National Culture is the combination of symbols, beliefs and artefacts typical for
members of one nation.

5. The culture associated with a geographical/political region and its inhabitants.

6. The pattern of values, beliefs, and practices shared among members of an
organization that influence thoughts and behaviour. Culture ca be viewed in terms
of both what one does and how one thinks based on their beliefs, traditions,
customs, norms, and even religion (Hofstede,1980).

7. Reflects the shared cultural meaning system of members of a certain country.

8. The collective programming of the mind distinguishing the members of one

group or category of people from others.

9. Refers to the cumulative deposit of knowledge, experience, beliefs, values,

attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations,
concepts of the universe, and material objects and possessions acquired by a
group of people in the course of generations through individual and group
striving that influence the success of the information system.

The differences between Organizational and National Cultures

The main difference between national culture and corporate culture lies in the area of
expectations from these two separate but related concepts. The two concepts are
separate because they represent two different concepts. National culture refers to the
vales of a nation, which includes aspects like the issue of morality, dressing, food,
dance, songs, languages and other related things. Organizational culture relates to the
way an organization is structured and run. It includes factors like the kind of
relationship between employees and management, the welfare package for employees,
and the type of behavior the company expects of its employees.
The differences and similarities between national culture and corporate culture are
becoming more intersected with the growth of globalization. The effects of
globalization mean that organizations from various nations are setting up shop in
different countries. In effect, the chances for national cultures and organizational
cultures to negatively clash are magnified when organizations are situated in countries
with vastly different national cultures. For example, an organization with an
organizational culture that expects its employees to dress in smart business suits only
may conflict with the culture of a nation in which the citizens are allowed to go to
work wearing traditional robes.
A company trying to establish itself abroad should ensure that it chooses
countries whose national culture closely matches its corporate culture.
Another area where the national culture and corporate culture may clash is in the area
of work hours. If a country has a national culture of observing a rest period or siesta in
the afternoon for a little while, this may clash with an organizational culture that only
allows its employees to have a 30-minute break for lunch. A national culture might
expect an expectant mother to stay at home for at least a year after giving birth to care
for the new baby. In contrast, the organizational culture might be for a woman to have
only a three-month maternity leave.
A national culture may expect a new mother to stay at home for at least a year
after giving birth.
The best policy for a company trying to establish itself abroad is to ensure that it
chooses countries with national cultures that closely match its organizational culture.
In situations where the country in question provides lucrative opportunities for the
organization, such an organization might have to adjust its organizational culture to
accommodate the national culture of the country. An example is an oil company that
mostly establishes its offices in countries with reserves of crude oil. These type
businesses often consider the difference between the national culture and corporate
culture. This is because the oil reserves might be situated in places with national
cultures that vastly differ from their organizational cultures.
The Bridge between Organizational and National Culture
Culture provides a guide or the directions for how we think and behave. Cateora et. al.
defines the five elements of culture as values, rituals, symbols, beliefs, and thought
processes. Cultural values that can influence business have been found in the work of
Geert Hofstede. Hofstede identified four cultural dimensions that can have a profound
impact on the business environment: individualism/collectivism, power distance,
uncertainty avoidance and masculinity/femininity.

The individualism/collectivism dimension of culture refers to how self-oriented

members of a culture are in their behavior. Individualist cultures place a high value on
individual achievement and self-interest. The United States is an example of an
individualistic culture. Collectivist cultures value working toward collective goals and
group harmony. Mexico and several countries in Asia adhere to more collectivistic
principles.

The power distance dimension refers to the “power inequality” between superiors
and subordinates. The United States has some elements of both a higher and a lower
power distance culture. Over the years, the U.S. business environment has adopted
forms of management, such as participative management, that place supervisors and
subordinates on more equal terms. Arab countries score higher on the power distance
dimension. Cultures with high power distance tend to be more hierarchical.

Uncertainty avoidance refers to how members of a society respond to uncertainty or

ambiguity. Cultures that score high on the uncertainty avoidance dimension, such as
Great Britain, tend to avoid risk-taking. Organizations within these cultures may have
more rules in place to ensure that employees do not deviate from accepted standards.
Cultures with less uncertainty avoidance, such as Canada, believe that risk-taking and
innovation are important in achieving successful outcomes.

A key question involves how culture affects consumer behavior around the world. For
instance, how would the individualism versus collectivism index in Hofstede’s
framework influence the purchase of clothing, a smartphone,or an iPad in the different
countries of Japan, the United States, and France? Why are KFC, Subway, and
McDonald’s successful in most countries, even when they have significantly different
cultures? Are there other reasons for these companies’ success?

Another area of interest is how the culture of a country influences the culture of a
business. Organizations that become global have to adjust to many different
environments. Many of these companies focus on the diversity of employees in
dealing with customers in different countries. While Hofstede describes the cultural
values of people in different countries, organizational cultures are different. The
culture of employees working in global businesses may be different from the national
culture of one country. This is because businesses develop their own values and
culture. However, do these values always reflect the national culture?

Organizational values are specific to a mission statement that guides conduct and
relationships with stakeholders. Organizational values may not be the same as
individual values in that they are identified and supported by top management to
develop a shared understanding for expected behavior. Values are selected by
leadership to make sure everyone understands what the organization stands for,
including ethical behavior and social responsibility.

Organizational values should be highly visible and demonstrated effectively by

managers. An organization’s culture is based on values, norms, and behavior. Unlike
values, norms are behavioral expectations and have a high degree of specificity and
clarity and require desirable behaviors in the form of policies and procedures.

Accelerating change in communication, especially social media and social sharing,

could be changing the nature of culture and its impact on both individuals and
organizations. On the other hand, national culture may be important in marketing for
organizations and understanding consumer behavior

How does National Culture Map onto Organizational culture

The figure below shows a framework that lays out multiple national cultures for
comparison against each other. What is important is to understand the placement and
then the gap between any two countries.