Chapter Fourteen:

Organizational
Culture

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 Organizational Culture Defined
• The values/assumptions
shared within an
organization.
• Provides direction toward
the “right way” of doing
things.
• Company’s DNA is
invisible, yet powerful
template for employee
behaviour.

© 2021 McGraw-Hill Limited. Slide 2 ©James D Morgan/Shutterstock

 Elements of
Organizational
Culture
Exhibit 14.1 Artifacts of
Organizational Culture

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 Content of Organizational Culture
The relative ordering of values.
Problems with org culture models and measures:
1. Oversimplify diversity of possible values.
2. Ignore shared assumptions.
3. Assume company cultures are clear and unified.
An organization’s culture is fuzzy:
• Diverse subcultures (“fragmentation”).
• Values exist within individuals, not work units.

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 Organizational Culture Profile
Exhibit 14.2:
Organization Organizational Culture Profile dimensions and
Culture Dimension Characteristics
Characteristics
Dimensions

Source:
InnovationBased on information
Experimenting,inopportunity
C.A. O’Reilly III,riskJ.taking,
seeking, Chatman,
few
rules, cautiousness.
and D.F. Caldwell, “People and Organizational Culture: A
Stability Predictability, security, rule-oriented.
Profile Comparison Approach to Assessing Person–
Respect for people Fairness, tolerance.
Organization Fit,” Academy of Management Journal 34, no.
3Outcome
(1991): 487–518. Action oriented, high expectations, results oriented.
orientation

Attention to detail Precise, analytic.

Team orientation Collaboration, people-oriented.

Aggressiveness Competitive, low emphasis on social responsibility.

Exhibit 14.2: Organizational Culture Profile dimensions and Characteristics

Source: Based on information in C.A. O’Reilly III, J. Chatman, and D.F. Caldwell, “People and Organizational Culture: A Profile
Comparison Approach to Assessing Person–Organization Fit,” Academy of Management Journal 34, no. 3 (1991): 487–518.

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 Organizational Subcultures
Dominant culture:
• Values/assumptions shared most consistently and widely.
Subcultures:
• Located throughout the organization.
• Countercultures are subcultures that oppose aspects of the
dominant culture.
Two functions of countercultures:
• Surveillance and critical review.
• Source of emerging values.

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 Organizational Culture Artifacts
Observable symbols and
signs of culture:
• Physical structures,
ceremonies, language, stories.
• Maintain and transmit
organization’s culture.
Need many artifacts to
accurately decipher a
company’s culture.

© 2021 McGraw-Hill Limited. Slide 7 ©Reven T.C. Wurman/Alamy

 Artifacts: Stories and Legends
Social prescriptions of desired (or dysfunctional)
behaviour.
Realistic human side to expectations.
Stories and legends are most effective when they:
• Describe real people.
• Are assumed to be true.
• Are known throughout the organization.
• Are prescriptive.

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 Artifacts: Language, Rituals, Ceremonies
Language:
• How employees address others, express emotions, describe
stakeholders, etc.
• May occur naturally by employees or deliberately reinforced
by leaders.

Rituals:
• Programmed routines (e.g., how visitors are greeted).

Ceremonies:
• Planned activities for an audience (e.g., award ceremonies).

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 Artifacts: Physical Structures/Symbols
Building structures may shape and
reflect culture.
Office design conveys cultural
meaning.
– Furniture, office size, wall
hangings, friezes.

© 2021 McGraw-Hill Limited. Slide 10 © Donna McClement

 Organizational Culture Strength
How widely and deeply employees hold the company’s
dominant values and assumptions.
• Most employees understand/embrace the culture.
• Institutionalized through artifacts.
• Long-lasting – possibly originate with founder(s).
Three functions of strong cultures:
• Control system.
• Social glue.
• Sense-making.

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 Organizational Culture and Effectiveness

Exhibit 14.4 Potential Benefits and Contingencies of Culture Strength

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 Contingencies of Culture Strength
Culture content is aligned with the environment.
• Misaligned culture guides wrong decisions and behaviours for
relations with stakeholders.
Culture strength is not the level of a cult.
• Cults lock people into mental models.
• Cults suppress subculture dissenting values.
Culture is an adaptive culture.
• External focus: need for continuous change.
• Support continuous improvement of internal work processes.
• Learning orientation.

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 Merging Cultures: Bicultural Audit
Audit is part of the merger’s
due diligence.
Minimizes cultural collision
by diagnosing companies.
Three steps in bicultural
audit:
1. Identify cultural artifacts.
2. Analyze data for cultural
conflict/compatibility.
3. Identify strategies and action
plans to bridge cultures.

© 2021 McGraw-Hill Limited. Slide 14 ©alexmillos/Shutterstock

 Merging Organizational Cultures
1. Assimilation: Acquired firm
staff embrace acquiring
culture.
2. Deculturation: Acquiring
firm imposes its culture and
practices.
3. Integration: Composite
culture preserves best of
past cultures.
4. Separation: Merged firms
keep their own corporate
cultures and practices.
© 2021 McGraw-Hill Limited. Slide 15 ©alexmillos/Shutterstock
 Changing/Strengthening Organizational Culture 1

Exhibit 14.6 Strategies for Changing and Strengthening Organizational Culture.

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 Changing/Strengthening Organizational Culture 2
1. Model desired culture through
actions of founders/leaders.
• Founder’s values/personality.
• Transformational leaders can
reshape culture and organizational
change practices.

2. Align artifacts with the desired

culture.
• Artifacts keep culture in place.

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 Changing/Strengthening Organizational Culture 3
3. Introduce culturally consistent
rewards and recognition.
• Rewards are powerful artifacts.

4. Support workforce stability and

communication.
• Takes time to understand culture.
• Strong culture depends on frequent,
open communication.
5. Use attraction, selection, and
socialization for cultural ‘fit.’
• Attraction-selection-attrition theory.
• Socialization practices.

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 Attraction-Selection-Attrition Theory
Culture strength increases through:
• Attraction:
- Applicants self-select based on compatible values.
• Selection:
- Firms select applicants with compatible values.
• Attrition:
- Employees with incompatible values quit/removed.

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 Organizational Socialization
The process by which individuals learn the values,
expected behaviours, and social knowledge necessary
to assume their roles in the organization.
Learning Process:
• Newcomers develop organizational comprehension.
• Learn about expectations, power dynamics, culture, jargon.
• Form social relationships.
Adjustment Process:
• Newcomers adapt to new work setting.
• Develop new work roles/social identity.
• Adopt new team norms/behaviours.
• Newcomers with diverse work experience adjust better.
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 Psychological Contracts
Individual’s beliefs about the terms and conditions of a
reciprocal exchange agreement between that person
and another party.
Transactional contracts:
• Short-term economic exchanges.
• Well-defined responsibilities.
Relational contracts:
• Long-term attachments.
• Broad range of mutual obligations.

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 Stages of Organizational Socialization

Exhibit 14.7 Stages of Organizational Socialization

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 Improving Organizational Socialization
Realistic job preview (RJP):
• A balance of positive and negative information about the job
and work context.
Socialization agents:
• Supervisors:
- Technical information, performance feedback, job duties.
• Co-workers:
- Ideal when accessible, role models, tolerant, and supportive.

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