Professional and Enterprise Development

PED CE00312-2

Organizational Culture
Level 2
 Learning Outcomes

• Define types of organizations

• Understand organizational culture

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 Organization

Organization
1. A group of people who form a business, club, etc,
together in order to achieve a particular aim
2. Social entities that are goal-directed
3. Linked to the external environment
Things Organizations Do
• Spend money to:
1. make profit
2. run the organization
3. publicise a cause
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 Organization Chart

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 Organization Types

1. Public Sector
• Make the most of the money given by the
government to provide goods and services to people
who are not paying for them directly
2. Private Sector
• Make profit from their funds by selling things or
services directly to people who pay for them directly
3. Charity
• Use money given by donors to provide goods and
services to people not paying for them directly

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 Organization Size

• Micro
o One (or) two persons
o Includes self employed people
• SMEs
o Up to 200 employees
• Large
o 200 and more employees
o Can be very big indeed
o Air Asia
o Shell
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 The Organization is an Open System

• Open Systems are adaptive and interact with the

environment

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 Importance of Organizations

1. Organizations are a means to an end

2. Played a significant role in the last 100 years
3. Produce goods and services efficiently
4. Facilitate innovation
5. Adapt to and influence a changing environment
6. Create value for owners, customers, and employees
7. Accommodate ongoing challenges of diversity,
ethics, motivation and coordination of employees

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 Importance of Organizations

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 Organizational Culture

• Organization Culture - set of shared,

taken-for-granted implicit assumptions that a group
holds and that determines how it perceives, thinks
about and reacts to its various environment
• Most apparent through shared objects, sayings,
doings (behaviour) and feelings (emotions)
• Cultural information can be obtained by asking,
observing, reading and feeling
• A complex issue that essentially includes the shared
values, attitudes, beliefs, assumptions and behaviors

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 Organizational Culture

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 Culture and Performance

• Empirical research has established links between

organizational culture and its performance
• Example: Apple
By leveraging their culture of innovation toward
product and internal processes, Apple has been able
to survive, despite incredible
competition and venture into
new and profitable markets
• To use culture strategically,
companies need to
understand their culture

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 Purpose of Culture

• Provides a sense of organizational Identity

• Two critical functions in organizations:
1. To integrate employees so they know how to
relate to one another
2. To help organization’s adapt to external
environment
• Internal Integration – collective identity and know
how to work together
• External Adaption – how the organization meets
goals and deals with outsiders
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 Observable Aspects

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 Corporate Social Responsibility

• Corporate Social Responsibility

Management’s obligation to make choices and take
action so the organization contributes to the welfare
and interest of all organizational stakeholders -
employees, customers, shareholders, community, the
broader society
• Sustainability
Environmental efforts woven
into all organization’s decisions

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 Types of Culture

1. Clan Culture
•Internal focus and values flexibility rather than stability
and control
•Employee-focused, strives to instill cohesion through
consensus and job satisfaction through employee
involvement
•Devote resources to hiring,
developing employees and
views customers as partners
• Example: Southwest Airlines,
Nucor, AirASia
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 Types of Culture

2. Adhocracy Culture
•External focus and values flexibility
•Fosters innovative products and services by being
adaptable, creative and fast to respond to changes in
the market place
•Does not rely on centralized power and authority
•Encourages risk taking, thinks
out-of-the-box
•Suited for new start-ups
•Example: Apple, Intel,
Microsoft
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 Types of Culture

3. Market Culture
•Strong external focus and values stability, control
•Driven by competition and is goal oriented
•Customer and profits are priority due to focus on
external environment
•Employees expected to
react fast, work hard and
deliver work on time
•Example: Finance,
Banking and IT Industries

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 Types of Culture

4. Hierarchy Culture
•Internal focus and values stability, efficiency and control
over flexibility
•Reliable internal process, extensive measurement and
control mechanism
•Likely to use Total Quality
Management (TQM)
•Focused on Doing Things
Right
•Example: Exelon and Dell

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 Question and Answer

Q&A

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