Chapter 9 Managing Organizational Culture

CHAPTER 9
MANAGING
ORGANIZATIONAL
CULTURE
Principles of Management Second Edition

© Oxford Fajar Sdn. Bhd. (008974-T) 2014
All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T) 2014 Ch. 9: 3
9.1 INTRODUCTION
 Culture is vital.
 It is a way of life, affecting not only how an
organization creates values but also how the
organization is perceived.
 An organization will develop its own unique culture
— two organizations belonging to the same industry
and location will display distinctively different ways
of operating.
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9.2 ORGANIZATIONAL CULTURE
AND MANAGEMENT
 Organizational culture is the specific collection of

values and norms that are shared by people and
groups in an organization
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9.2.1 Evolution of Culture
 The founder of an organization is usually the main

influence on its culture.
 The founder’s assumptions about success form the
foundation of the organization’s culture.
– A set of beliefs about the organization’s distinctive
competence will differentiate the organization from
others in new organizations.
– These beliefs will directly affect organizational
strategies and operations.
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9.2.2 Impact of Culture on Strategy
 Organizational culture can either facilitate or hinder

an organization’s strategic actions.
 Successful organizations developed cultures that
emphasized three key groups of stakeholders —
customers, stakeholders and employees.
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9.2.3 Building a Strategy
Supportive of Culture
 Organization intending to create a fit between

organizational strategy and culture has to consider
the following elements:
– Symbolic actions and substantive actions
– Building a culture or spirit of high performance
– Fostering a strategy supportive of climate and culture
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9.2.3 Building a Strategy
Supportive of Culture (cont,)
– Maintaining internal responsiveness and

innovativeness
– Dealing with organization politics
– Enforcing ethical behaviour
– Leading the process of making corrective adjustments
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9.3.1 Elements of Organizational
Culture
Organizational culture includes:

 Values
 Symbols
 Stories
 Heroes
 Rituals and ceremonies
 Sagas
 Myths
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Culture
 Values
 Values are the elements which are important to us- they are deep
seated, pervasive standards that influence almost every aspect of our
lives, moral judgments, responses to others, and the commitments to
personal and organizational goals.
 Eg Most of Japanese company holds strong discipline values as part
of their core organizational culture
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Culture
Symbols
Symbols represent or suggest something. It might be a natural object, a
manufactured object, a seting or even a performer.
Eg an organization can use of a uniform as in the case of Bank
Simpanan Nasional or a clown as in the case of the Mc Donald’s
franchise as its symbol.
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Culture
 Stories
 Stories are narratives (usually based on facts) that are
repeated among employees. Stories act as maps on how
things are done and help to pass on a culture.
 Heroes
 Heroes are organization role models, who embody the values
an organization wishes to reinforce. Heroes are often the
main chracters of the stories related through an organization.
They are usually the motivator, someone everyone counts on
when things get tough
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Culture
 Rituals and ceremonies
 Rituals and ceremonies are outward
signs of what an organization values.
They provide a forum for the
organization to communicate strategic
plans.
 Eg Annual dinner, weekly meeting,
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Culture
Sagas
These are historical accounts that describe the unique accomplishements of
a group and its leaders. Sagas will feature the legendary accomplishements
of the founders, as such it is used to communicate the unique way of doing
things to outsiders or newcomers.
Eg PROTON was established on May 7, 1983 and was the first Malaysian
car manufacturer. Its establishment was the idea of Dr Mahathir Mohamad,
Prime Minister of the time to achieve the aspirations of the industrial
countries. Proton has produced the first model of the Proton Saga in Sept
1985 in Shah Alam.
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Culture
 Myths
 Myths are unproven beliefs that are accepted and used to justify
current actions by communicating the practical benefits of certain
techniques and behaviours.
 Eg Japanese myth about number 4 in unlucky, therefore marketer
shouldn’t give any symbol or price with number 4.
 Eg myth- Female boss are bossy and fussy fact- it depends on
leadership style and personality. (gender bias)
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9.Success Factors in Culture
Change
Evaluate – at the evaluation stage, it is important to

determine the case for culture change. Eg the need to
change the culture of the organization
Envision- change team design the target culture which
is needed to drive the organizayion to achieve its vision.
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9.Success Factors in Culture
Change
Empower- change plan is implemented. Various

measures should be put in place to support and
encourage the development of new culture.
Excel- to make sure that the culture change is
sustained, it is important to ensure the continuos
commitment of senior management and sustained
change efforts.
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9.4.2 Organizational Culture and
Environment
Environmentally Adaptive vs Unadaptive Organizational Cultures

Adaptive Unadaptive
Managers pay close attention to all Managers typically behave somewhat

constituencies, especially customers. politically and bureaucratically. Thus, they do
Visible Changes are initiated when needed not change strategies quickly or take
behaviour for legitimate interests, even if it advantage of changes in their business
entails taking some risks. environments.
Managers care deeply about Managers care about themselves, their

customers, stakeholders and immediate work group or products, and
Expressed employees. They strongly value technology associated with the work group.
(invisible) people and processes that create They strongly value a systematic, risk-
values useful changes. reducing management process to leadership
initiatives.
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9.4.2 Organizational Culture and
Environment
 Adaptive cultures
– Innovative cultures that encourage and reward initiative taken
by middle and lower level managers
 Inert cultures
– Conservative cultures that caution and do not value middle
and lower level managers who take such initiative or actions
– Eg the implementation of Pareto system hierarchy in
organization discourage middle and lower involvement in
decision making.
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Titanic sank after colliding with an iceberg
In 1912 the Titanic was the largest ocean passenger liner of its time and was
significant for many reasons. It was built in Belfast for trans-Atlantic travel as well
as being sanctioned as a carrier of the Royal Mail Service. It was a great
innovation for the period it was built.
The Titanic was thought to be an unsinkable vessel. Yet it was not prepared for
the ill fate it met on April 15, 1912; this passenger vessel sank after colliding with
an iceberg.
Organizational culture is like an iceberg

An iceberg is a large piece of freshwater ice. It has broken off a glacier or an ice
shelf and floats freely in open waters. It can become stationary if it becomes
frozen into pack ice that came into contact with the seabed.
Because the density of pure ice is much less than that of sea water, it is typical
for only one-tenth of the iceberg to actually be above the water.
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 Illustrate the Cultural Iceberg with the element of
organizational culture.
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CHAPTER 9

Principles of Management Second Edition

All Rights Reserved

 Organizational culture is the specific collection of

All Rights Reserved

 The founder of an organization is usually the main

All Rights Reserved

 Organizational culture can either facilitate or hinder

All Rights Reserved

 Organization intending to create a fit between

All Rights Reserved

– Maintaining internal responsiveness and

All Rights Reserved

Organizational culture includes:

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All Rights Reserved

All Rights Reserved

All Rights Reserved

All Rights Reserved

All Rights Reserved

All Rights Reserved

Evaluate – at the evaluation stage, it is important to

All Rights Reserved

Empower- change plan is implemented. Various

All Rights Reserved

Environmentally Adaptive vs Unadaptive Organizational Cultures

Managers pay close attention to all Managers typically behave somewhat

Managers care deeply about Managers care about themselves, their

All Rights Reserved

All Rights Reserved

Organizational culture is like an iceberg

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