Organizational Culture

Organizational (Corporate) Culture

A pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization

Levels of Organizational

Culture

Artifacts – s symbols ofculture in the physical

and social work environment

ValuesEspoused: what members of an organization say they valueEnacted: reflected in the way individuals actually behave

Assumptions – deeply held beliefs that guide behavior and tell

members of an organization how to perceive and think about things

OrganizationalCulture Levels

Visible, often not decipherable

Greater levelof awareness

Taken for granted Invisible Preconscious

Reprinted with permission from Edgar H. Schein, Organizational Culture and Leadership: A Dynamic View. Copyright © 1985 Jossey-Bass Inc, a subsidiary of John Wiley & Sons, Inc.

Artifacts • Personal enactment• Ceremonies and rites• Stories• Ritual• Symbols

Values• Testable in the physical environment• Testable only by social consensus

Basic Assumptions • Relationship to environment• Nature of reality, time, and space• Nature of human nature• Nature of human activity• Nature of human relationships

Functions of Organizational Culture

• Culture provides a sense of identity to members and increases their commitment to the organization

• Culture is a sense-making device for organization members

• Culture reinforces the values in the organization

• Culture serves as a control mechanism for shaping behavior

AdaptivePerspective

Theories about the relationship between organizational culture and performance

Strong Culture

Perspective

FitPerspective

An organizational culture with a consensus on the values that drive the company and with an intensity that is recognizable even to outsiders

Strong cultures facilitate performance because • They are characterized by goal alignment• They create a high level of motivation because

of shared values by the members• They provide control without the oppressive

effects of bureaucracy

Strong Culture

Perspective

Argument that a culture is good only if it fits the industry’s or the firm’s strategy.

Organizational characteristics that may affect culture

Customer requirements Competitive environment Societal expectations

FitPerspective

An organizational culture that encourages confidence and risk taking among employees, has leadership that produces change, and focuses on the changing needs of customers

Adaptive Nonadaptive Most managers care

about themselves,their work group, oran associated product

Most managers care about customers,stockholders, and employees

Managers tend tobehave somewhat insularly, politically,and bureaucratically

Managers pay close attention to alltheir constituencies,esp. customers

Core Values

CommonBehavior

Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Corporate Culture and Performance by John P. Kotter and James L Heskett. Copyright © 1992 by Kotter Associates, Inc. and James L. Heskett.

AdaptivePerspective

Five Most Important Elements in Managing Culture

• What leaders pay attention to

• How leaders react to crises

• How leaders behave

• How leaders allocate rewards

• How leaders hire and fire individuals

Organizational Socialization

The process by which newcomers are transformed from outsiders to participating, effective members of the organization

Stages of Socialization

Realism Congruence 1. Anticipatory Socialization

2. Encounter Job demands

• Task • Role • Interpersonal

3. Change andAcquisition Mastery

PerformanceSatisfactionMutual influenceLow levels of distressIntent to remainFrom “An Ethical Weather Repart: Assessing the Organization's Ethical Climate” by John B. Cullen, et

al. In Organizational Dynamics, Autumn 1989. Copyright © 1989 American Management AssociationInternational. Reprinted by permission of American Management Association International, New York, N.Y.All rights reserved. Http://www.amanet. Org.

Outcomes of Socialization

2. Encounter – the second socialization stage—the newcomer learns the tasks associated with the job, clarifies roles, and establishes new relationships at work

3. Change and Acquisition – the third socialization stage—the newcomer begins to master the demands of the job

1. Anticipatory Socialization – first socialization stage—encompasses all of the learning that takes place prior to the newcomer’s first day on the job

Socialization asCultural Communication

Core values are transmitted to new organization members through

– the role models they interact with

– the training they receive

– the behavior they observe being

rewarded and punished

Assessing Organizational Culture

• Organizational Culture Inventory focuses on behaviors that help employees fit into the organization and meet coworker expectations

• Kilman-Saxton Culture-Gap Survey focuses on the expectations of others in the organization

• Triangulation – the use of multiple methods to measure organizational culture

Situations That May Require Cultural Changes

Reasons That Change Is Difficult

• Assumptions are often unconscious• Culture is deeply ingrained and behavioral

norms and rewards are well learned

Merger or acquisition Employment of people from different

countries

Hiring andsocializing

members whofit in with thenew culture

Removingmembers who

reject the new culture

Culture

Culturalcommunication

Changing behavior

Examiningjustificationsfor changed

behavior

2

1

5

3

4

Interventions forChanging

OrganizationalCulture Reprinted with permission from

Vijay Sathe “How to Decipher & Change Corporate Culture,” Copyright © 1985 Jossey-Bass Inc, Reprinted by permissionOf Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc..

Cultural Modifications in the Current Business

EnvironmentSupport for a globalview of business

Reinforcement ofethical behavior

Empowerment of employees to excelin product and service quality

Support for a globalview of business

• Create a clear and simple mission statement

• Create systems that ensure effective information flow

• Create “matrix minds” among managers• Develop global career paths• Use cultural differences as major assets• Implement worldwide management

education and team development programs

• Clear communication of the boundaries of ethical conduct

• Selection of employees who support the ethical culture

• Reward of ethical behavior• Conspicuous punishment of members

who engage in unethical behavior

Reinforcement of ethical behavior

• Empowerment unleashes employees’ creativity

• Empowerment requires eliminating traditional hierarchical notions of power– Involve employees in decision making– Remove obstacles to their performance– Communicate the value of product and

service quality

Empowerment of employees to excel in product and service quality

Group Activity

• How would you go about changing the culture of a public sector bank that has been taken over by a private sector bank