Organizational

Culture
 Organizational Culture
OC reflects the values , beliefs and attitudes
of its members . It evolves slowly over
time .

Culture :- a culture is a collection of

unspoken rules & traditions that operate
24 hrs a day . It plays an imp role in
determining the quality of organizational
life .
What Is Organizational Culture?
Organizational Culture
Characteristics:
Characteristics:
A common perception
held by the 1.1. Innovation
Innovationand
andrisk
risk
taking
taking
organization’s
members; a system of 2.2. Attention
Attentionto
todetail
detail
shared meaning. 3.3. Outcome
Outcomeorientation
orientation
4.4. People
Peopleorientation
orientation
5.5. Team
Teamorientation
orientation
6.6. Aggressiveness
Aggressiveness
7.7. Stability
Stability
 Definition :-
The basic pattern of shared values &
assumptions governing the way
employees within an organization think
about and act on problems and
opportunities .

Ex:- egalitarianism , process efficiency etc .

The Basic Functions of Organizational
Culture

Organizational
Culture/basic functions

Provides a
Enhances Clairifies
sense of
commitment and
identity for
to the reinforces
members
organization’s standards
mission of behavior
 What Do Cultures Do?
(funct /imp)
Culture’s
Culture’sFunctions:
Functions:
1.1. Defines
Definesthe
theboundary
boundarybetween
betweenone
oneorganization
organization
and
andothers.
others.
2.2. Conveys
Conveysaasense
senseof
ofidentity
identityfor
forits
itsmembers.
members.
3.3. Facilitates
Facilitatesthe
thegeneration
generationofofcommitment
commitmentto
to
something
somethinglarger
largerthan
thanself-interest.
self-interest.
4.4. Enhances
Enhancesthe
thestability
stabilityof
ofthe
thesocial
socialsystem.
system.
5.5. Serves
Servesas asaasense-making
sense-makingand
andcontrol
controlmechanism
mechanism
for
forfitting
fittingemployees
employeesininthe
theorganization.
organization.
What Do Cultures Do?
(Limitations)

Culture
Cultureas
asaaLiability:
Liability:
1.1. Barrier
Barrierto
tochange.
change.
2.2. Barrier
Barrierto
todiversity
diversity
3.3. Barrier
Barrierto
toacquisitions
acquisitionsand
andmergers
mergers
 Formalization
Degree to which organizations standardize
behavior through rules , procedures ,
formal training & related mechanism .
Standardization as a coordinating
mechanism

Ex:- McDonald’s

McDonald’s burgers look & taste the same around the world . Because they have
Formalized structure as they rely heavily on standardization of work processes
-How much mustard be dispensed
-How many pickles to be applied
-How long to be cooked etc.
What Is Organizational Culture?
(cont’d)
What Is Organizational Culture?
(cont’d)
 Culture Versus Formalization
– A strong culture increases behavioral consistency
and can act as a substitute for formalization.
 Organizational Culture Versus National Culture
– National culture has a greater impact on employees
than does their organization’s culture.
– Nationals selected to work for foreign companies
may be atypical of the local/native population.
 Hofstede’s Model of
National Culture
• Dimensions
– Individualism vs Collectivism

– Power Distance
– Achievement vs Nurturing Orientation
– Uncertainty Avoidance
– Long-term vs Short-term Orientation
Individualism vs Collectivism
Individualism Collectivism
• Individual • Group harmony
achievement • Cohesiveness
• Freedom • Consensus
• Competition • Cooperation
• Example • Example
– United States – Japan
 Power Distance
High Low
• Inequalities exist • Social welfare
• Gap between rich programs reduce
and poor gaps
• Example • Example
– Guatemala – France
– Malaysia – Germany
 Achievement vs Nurturing
Orientation
Achievement Nurturing
• Assertiveness • Quality of life
• Performance • warm personal
• Success relationships
• Competition • Service
• Results-oriented • Caring
• Example • Example
– Japan – Denmark
– United States – Sweden
 Uncertainty Avoidance
Low High
• Easygoing • Rigid
• Value diversity • Intolerant
• Tolerant of • Conformity
differences • Structure
• Example • Example
– United States – Japan
– Hong Kong – France
 Long-Term vs Short-Term
Orientation
Long-term Short-term
• Thrift • Personal stability
• Persistence • Happiness
• High savings rate • Living in the present
• Patience • Example
• Example – United States
– Japan – France
– Hong Kong
 x:- Google’s culture is informal .

Googlers work in high –density clusters , with three or four staffers sharin
pace with couches and dogs . They have little corporate hierarchy and
emplyees wear different hats .Maintains a small-company feel .

Googleplex” :- google HQ in california have café .

Google keeps employees motivated & satisfied :-

They have a resident chef

Doctor on staff
Parental leaves with free home food delivery during 1st week .
Egalitarian culture
 Sustaining Org Culture
Methods of Maintaining Organizational Culture

• What managers & teams pay attention to

• Reaction to organization crisis
• Managerial Role model
• Criteria for Rewards
• Criteria for selection & promotion
• Organizational rites , ceremonies , stories

Removal of employees
•Recruitment of employees who fit
•The culture
OC Who deviate from
The culture
Dynamics , levels or elements or
layers of OC

Cultural
Symbols
More
visible
to Shared Behaviors
less
visible

Cultural Values

Shared assumptions
 ltural Symbols :- are words (jargon or slang ) , gestures and pictures or
ther Physical objects that carry a particular meaning within a culture .

hared Behaviors :- includes norms , which are more visible and somewha
asier To change than values

ultural Values :- represent collective beliefs , assumptions , and feelings

bout What things are good , normal , rational , and valuable .

ared Assumptions :- and philosophy , which represent basic beliefs abo

ality , Human nature and the way things should be done .
:- google employees focus more On technical features of
oduct then marketing .
 Framework of Types of Cultures

Flexible

Clan Culture Entrepreneurial

Formal Control Orientation

Culture

Bureaucratic Market
Culture Culture

Stable
Internal External
Forms of attention
BUREAUCRATIC CULTURE :-
An org that practices formality , rules , standard operating
procedures, and hierarchical coordination
PREDICTABILITY , EFFICIENCY , STABILITY
“ go by the book”
Eg:- Government departments

CLAN CULTURE :-
Tradition , loyalty , personal commitment , extensive
socialization , teamwork , self-management & social
influence are attributes of a clan culture . Its members
recognize an obligation beyond the simple exchange of
labor for a salary.
“ pride in membership”
Eg:- KFC , Pizza hut etc
ENTREPRENEURIAL CULTURE :-
High levels of risk taking and creativity characteristics .
Commitment of experimentation , innovation and being on a
leading edge .
Eg:- Amazon.com(by Jeff Bezos) , Apple

MARKET CULTURE :-
The achievement of measurable & demanding goals ,
especially those that are financial & market based ( eg:-
growth , profitability & market share )
ex:- Pepsico , AIG
 Developing or Forming or emergence of
OC
2 Major
challenges
1.External adaptation & survival
(addressing following issues )

• Mission & strategy :- identifying the primary

purpose of the org – selecting strategy to
pursue this mission .
• Goals :- setting specific targets to achieve
• Means :- determining how to pursue the goals
• Measurement :- establishing criteria to
determine how well ind & teams are
accomplishing their goals .
2.Internal Integration (addressing the
following issues)

• Language & concepts :

• Group and team boundaries
• Power and status
• Rewards and punishments
 Ways of Transmitting
Organizational Culture
(how employees learn culture)
Formal socialization
practices

Ceremonial
Employees The
Rites
learn organizational
and
through: language
Ceremonies

Signs, symbols, stories

Common Pattern in the Emergence of Corporate Cultures

TOP MANAGEMENT
A top manager or team develops and attempts to
implement
A shared vision and business strategy

ORGANIZATIONAL BEHAVIOR
Implementation is successful. Employees behave in
Ways that are in agreement with the shared
Values and business strategy

RESULTS
The organization is successfully based on standard
Financial and performance indicators

CULTURE
A culture emerges that reflects the vision , strategy
And experiences of people in the org . This culture
Describes the behavior that are acceptable &
unacceptable and the traditions that will be
Maintained
 Intensity of Commitment to
Core Values Core Values

Strong Versus
Weak Cultures
High Behavioral Low Employee
Control Turnover

Prentice Hall, 1999 Chapter 16 28

 Creating a Customer-
Responsive Culture
Managerial
ManagerialActions:
Actions:
•• Select
Selectnew
newemployees
employeeswith
withpersonality
personalityand
and
attitudes
attitudesconsistent
consistentwith
withhigh
highservice
service
orientation.
orientation.
•• Train
Trainand
andsocialize
socializecurrent
currentemployees
employeestotobe
be
more
morecustomer
customerfocused.
focused.
•• Change
Changeorganizational
organizationalstructure
structureto
togive
give
employees
employeesmoremorecontrol.
control.
•• Empower
Empoweremployees
employeesto
tomake
makedecision
decisionabout
about
their
theirjobs.
jobs.
Creating a Customer-Responsive
Culture (cont’d)

Managerial
ManagerialActions
Actions(cont’d)
(cont’d)::
•• Lead
Leadby
byconveying
conveyingaacustomer-focused
customer-focusedvision
vision
and
anddemonstrating
demonstratingcommitment
commitmenttotocustomers.
customers.
•• Conduct
Conductperformance
performanceappraisals
appraisalsbased
basedon
on
customer-focused
customer-focusedemployee
employeebehaviors.
behaviors.
•• Provide
Provideongoing
ongoingrecognition
recognitionfor
foremployees
employeeswho
who
make
makespecial
specialefforts
effortsto
toplease
pleasecustomers.
customers.
 Creating a Customer-Responsive
Culture
• Key Variables Shaping Customer-Responsive Cultures
1. The types of employees hired by the organization.
2. Low formalization: the freedom to meet customer service
requirements.
3. Empowering employees with decision-making discretion to
please the customer.
4. Good listening skills to understand customer messages.
5. Role clarity that allows service employees to act as “boundary
spanners.”
6. Employees who engage in organizational citizenship behaviors.
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:
Characteristics:
• • Strong
Strongsense
senseof
ofpurpose
purpose
• • Focus
Focuson
onindividual
individualdevelopment
development
• • Trust
Trustand
andopenness
openness
• • Employee
Employeeempowerment
empowerment
• • Toleration
Tolerationof
ofemployee
employeeexpression
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.
 Creating an Ethical Culture
• Establish rules and norms that outline
organization’s ethical position

• Demonstrate commitment to following

rules

• Reduce incentives for unethical behavior

 Creating an Ethical Culture
• Develop fair and equitable HR procedures

• Provide access to upper-level managers

• Encourage employees to voice concerns

• Create a strong board of directors

 Why Does Unethical Behavior
Occur?
• Lapses in Individual Ethics

• Ruthless Pursuit of Self-Interest

• Outside Pressure
STRATEGIES TO CHANGE & STRENGHTEN ORGANIZATIONAL CULTURE

Actions of Founders & Leaders

• Symbolize the new culture (or need for one) through
memorable events .
• Model the new culture through subtle decisions & actions

Selection & socializing employees

• Hire people whose values are consistent with the culture
• Inform & teach new staff about what the culture means .
 Culturally consistent rewards
• Reward employees for culturally consistent behaviors
• Reward managers who help employees understand
the culture

Aligning artifacts
• Share stories supporting the culture
• Celebrate goals / milestones to support the culture
• Inhabit building that reflect the culture .
Example of a culture change taken place in Harley –Davidson
Men behind Harley

Bill Harley & Arthur Davidson

 Richard Teerlink – took over as president of H-D
In 1987 .

Problems :-

- Striking differences between quality & competitors

Ex:- 5% of Honda’s motorcycles failed the inspection test
Whereas H-D ‘s more than 50% failed the same test

-Honda’s value added per employee was 3 times of H-D’s

- Relations with its dealers were poor
 So what did Teerlink do ?
He set out to change the CULTURE of
Harley –Davidson , which he
accomplished before retiring in 1999.

3 major things
 First
• Emphasized that they were in the
experience business
- Real product is not a machine
But
- A lifestyle
- An Attitude
- A of being
 Second
• Began organizational & individual learning
at all levels through a leadership Institute.
• This Institute was designed to introduce
new workers to Harley’s Goals & Culture &
current workers with better understanding
of competition effects on harley’s
performance .
 Implementation of cross training &
job responsibilites expansion
• job enrichment & workers empowerment

Teerlink eliminated positions of VP’s (as these jobs

didn’t add value to the product .
VP – marketing
VP – Operations

“create-demand team” “ product-support team”

• Quality Circles- bottom-up ideas for
improving quality .
• Peer review system – these evaluations
help determine employees pay .
 Third
Harley Mystique
• rallies
• Clubs
• sale of merchandise

Since Teerlink’s retirement CEO Jeff Bleustein has

worked hard to sustain Harley’s culture . With recent
sales exceeding $5 billion & more than 8,800
employees , it appears that his leadership has been
able to sustain the culture Teerlink created .