Organizational Culture and

Values

KBL Srivastava
 What is Culture?
• Values, norms, guiding beliefs, and
understandings that are shared by members
of an organization
– Taught to new members as the correct way to
think, feel, and behave

• Organizational culture exists at two levels

– Observable symbols
– Underlying values

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 What is Organizational Culture?
• Organizational culture: the set of shared
values and norms that controls
organizational members’ interactions
with each other and with people outside
the organization
• Values: general criteria, standards, or
guiding principles that people use to
determine which types of behaviors,
events, situations, and outcomes are
desirable or undesirable
Contrasting Organizational Cultures
Organization A
This organization is a manufacturing firm. Managers are expected to fully document all
decisions; and “good managers” are those who can provide detailed data to support their
recommendations. Creative decisions that incur significant change or risk are not
encouraged. Because managers of failed projects are openly criticized and penalized,
managers try not to implement ideas that deviate much from the status quo. One lower-
level manager quoted an often used phrase in the company: “If it ain’t broke, don’t fix it.”
There are extensive rules and regulations in this firm that employees are required to
follow. Managers supervise employees closely to ensure there are no deviations.
Management is concerned with high productivity, regardless of the impact on employee
morale or turnover.
Work activities are designed around individuals. There are distinct departments and
lines of authority, and employees are expected to minimize formal contact with other
employees outside their functional area or line of command. Performance evaluations and
rewards emphasize individual effort, although seniority tends to be the primary factor in the
determination of pay raises and promotions.
 Contrasting Organizational Cultures (cont’d)
Organization B
This organization is also a manufacturing firm. Here, however, management encourages and
rewards risk taking and change. Decisions based on intuition are valued as much as those
that are well rationalized. Management prides itself on its history of experimenting with new
technologies and its success in regularly introducing innovation products. Managers or
employees who have a good idea are encouraged to “run with it.” And failures are treated as
“learning experiences.” The company prides itself on being market-driven and rapidly
responsive to the changing needs of its customers.
There are few rules and regulations for employees to follow, and supervision is loose
because management believes that its employees are hardworking and trustworthy.
Management is concerned with high productivity, but believes that this comes through
treating its people right. The company is proud of its reputation as being a good place to
work.
Job activities are designed around work teams, and team members are encouraged to
interact with people across functions and authority levels. Employees talk positively about
the competition between teams. Individuals and teams have goals, and bonuses are based
on achievement of these outcomes. Employees are given considerable autonomy in choosing
the means by which the goals are attained.
 Organizational Culture
• Terminal value: a desired end state or
outcome that people seek to achieve
• Instrumental value: a desired mode of pattern
behavior
• Norms: standards or styles of behavior that
are considered acceptable or typical for a
group of people
Figure: Values in an Organization’s Culture
 Elements of Organizational Culture
Artifacts
• Stories/legends
• Rituals/ceremonies Visible
• Organizational language
• Physical structures/décor

Shared values
• Conscious beliefs
• Evaluate what is good or bad, right or
wrong
Invisible
(below the surface)
Shared assumptions
• Unconscious, taken-for-granted
perceptions or beliefs
• Mental models of ideals
 Organizational Culture Profile
Org Culture
Dimensions Dimension Characteristics
Experimenting, opportunity seeking, risk taking, few
Innovation
rules, low cautiousness
Stability Predictability, security, rule-oriented
Respect for
Fairness, tolerance
people
Outcome
Action oriented, high expectations, results oriented
orientation
Attention to
Precise, analytic
detail
Team
Collaboration, people-oriented
orientation
Aggressiveness Competitive, low emphasis on social responsibility

Source: O’Reilly et al (1991)

 What Do Cultures Do?
Culture’s Functions
1. Defines the boundary between one organization and
others
2. Conveys a sense of identity for its members
3. Facilitates the generation of commitment to something
larger than self-interest
4. Enhances the stability of the social system
5. Serves as a sense-making and control mechanism for
fitting employees in the organization

© 2007 Prentice Hall Inc. All rights

reserved.
 Organizational Culture
• Based on enduring values embodied in
organizational norms, rules, standard
operating procedures, and goals
• People use these elements to guide their
actions and decisions when faced with
uncertainty and ambiguity.
• Important influence on members’ behavior
and response to situations
 Strong Cultures
• Can be disastrous when managers or owners
behave unethically
• Can also be a source of competitive advantage
– Facilitators of mutual adjustment in the
organization
– Is also a form of informal organization that
facilitates working of the organizational structure
 Benefits of Strong Corporate Cultures

Social
Control

Strong
Organizational Social
Glue
Culture

Improves
Sense-Making
Strengthening Organizational Culture
How is an Organization’s Culture Transmitted
to its Members?
• Socialization: the process by
which members learn and
internalize the values and norms
of an organization’s culture
Organizational Socialization Process
 Socialization Tactics
• Collective vs. Individual
– Collective tactics provide newcomers with
common learning experiences designed to
produce a standardized response to a situation.
– With individual tactics, each newcomer’s
learning experiences are unique, and
newcomers can learn new, appropriate
responses for each situation.
 Role Orientation
• Role orientation: the characteristic way
in which newcomers respond to a
situation
– Institutionalized role orientation: results when
individuals are taught to respond to a new context
in the same way that existing organizational
members respond to it
– Individualized role orientations: results when
individuals are allowed and encouraged to be
creative and to experiment with changing norms
and values
 Formal vs. Informal
• Formal tactics segregate newcomers
from existing organizational members
during the learning process.
• With informal tactics, newcomers learn
on the job, as members of a team.
 Sequential vs. Random
• Sequential tactics provide newcomers
with explicit information about the
sequence in which they will perform new
activities or occupy new roles as they
advance in an organization.
• With random tactics, training is based on
the interests and needs of individual
newcomers because there is no set
sequence to the newcomers’ progress in
the organization.
 Fixed vs.Variable
• Fixed tactics give newcomers precise
knowledge of the timetable associated with
completing each stage in the learning
process.
• Variable tactics provide no information
about when newcomers will reach a certain
stage in the learning process.
 Serial vs. Disjunctive
• When serial tactics are employed,
existing organizational members act as
role models and mentors for newcomers.
• Disjunctive processes require newcomers
to figure out and develop their own way
of behaving.
 Divestiture vs. Investiture
• With divestiture, newcomers receive negative social
support and existing organizational members
withhold support until newcomers learn the ropes
and conform to established norms.
• With investiture, newcomers immediately receive
positive social support from other organizational
members and are encouraged to be themselves.
Figure : Socialization Tactics
 Stories, Ceremonies, and Organizational
Language
• Organizations use several types of
ceremonial rites to communicate
cultural norms and values.
• Rites of passage - mark an individual’s
entry to, promotion in, and departure
from the organization
 Organizational Rites
• Rites of integration – shared
announcements of organizational
success, office parties and cookouts

• Rites of enhancement – award dinners,

newspaper releases, and employee
promotions
Table : Organizational Rites
Where Does Organizational Culture Come
From?
• Comes from interaction of four factors:
1. The personal and professional
characteristics of people within the
organization
2. Organizational ethics
3. The property rights that the organization
gives to employees
4. The structure of the organization
Figure : Where Culture Comes From
 Where Does Organizational Culture Come
From?
• Characteristics of people within the organization:
through a process of hiring people that match
existing culture and attrition, people become more
and more similar over time
• Organizational ethics: the moral values, beliefs, and
rules that establish the appropriate way for
organizational stakeholders to deal with one
another and with the environment
 Property Rights
• The rights that an organization gives to
members to receive and use
organizational resources
• The distribution of property rights to
different stakeholders determines:
1. How effective an organization is
2. The culture that emerges in the
organization
Table : Common Property Rights
Levels of Corporate Culture
Emergence and Purpose of Culture
Provides sense of organizational identity
Two critical functions in organizations:
1. To integrate members so they know how to relate to one another
2. To help organization 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 of
Organizational Culture

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Spirituality and Organizational Culture
Workplace Spirituality
The recognition that people have an inner life that nourishes and is
nourished by meaningful work that takes place in the context of the
community

Characteristics
• Strong sense of purpose
• Focus on individual development
• Trust and openness
• Employee empowerment
• Toleration of employee expression
 Reasons for the Growing Interest in Spirituality

• As a counterbalance to the pressures and stress of a turbulent pace

of life and the lack of community many people feel and their
increased need for involvement and connection.
• Formalized religion hasn’t worked for many people.
• Job demands have made the workplace dominant in many people’s
lives, yet they continue to question the meaning of work.
• The desire to integrate personal life values with one’s professional
life
• An increasing number of people are finding that the pursuit of more
material acquisitions leaves them unfulfilled.
Can Organizational Culture be Managed?

• Changing a culture can be very difficult as

it is hard to understand how the previous
four factors interact.
• Major alterations are sometimes needed.
• Some ways culture can be changed:
– Redesign structure
– Revise property rights used to motivate people
– Change the people – especially top management
 Organizational Chart for Nordstrom

Nordstrom’s structure reflects the emphasis the department store chain puts on empowering
and supporting lower-level employees.
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Organizational Design
and Culture
Managers want a
corporate culture
that reinforces the
strategy and
structural design
the organization
needs to be
effective within
environment.
 Culture Strength and
Organizational Subcultures
• Culture strength is the degree of agreement
among members of an organization about
specific values
• Subcultures reflect the common problems,
goals, and experiences of a team or
department
• Different departments may have their own
norms
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 Design Essentials
 Cultural and ethical values help determine the organization’s
social capital and can contribute to success
 Managers can use rites and ceremonies, stories, symbols,
structures, control systems, and power relationships to
influence culture
 Subcultures may emerge even in strong cultures
 Strong cultures can be constructive or non-constructive

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