Organizational Culture

ORGANIZATIONAL CULTURE
Organizations, just like individuals, have their own personalities—more typically known as
organizational cultures. Understanding how culture is created, communicated, and changed
will help you to be a more effective manager. But first, let’s define organizational culture.
UNDERSTANDING ORGANIZATIONAL CULTURE

What is Organizational Culture?
Organizational culture refers to a system of shared assumptions, values, and beliefs that
show people what is appropriate and inappropriate behavior.
Why Does Organizational Culture Matter?

-An organization’s culture may be one of its strongest assets or its biggest liability. In fact, it
has been argued that organizations that have a rare and hard-to-imitate culture enjoy a
competitive advantage.
-Culture, or shared values within the organization, may be related to increased performance.
Levels of Organizational Culture

Deepest Level: Assumptions. These assumptions are taken for granted and reflect beliefs
about human nature and reality.
Second Level: Values. Values are shared principles, standards, and goals.
At the Surface: Artifacts. Visible, tangible aspects of organizational culture.
Figure 8.4 Three Levels of Organizational Culture
MEASURING ORGANIZATIONAL CULTURE
Dimensions of Culture
Even though culture may not be immediately observable, identifying a set of values that
might be used to describe an organization’s culture helps us identify, measure, and manage
culture more effectively. For this purpose, several researchers have proposed various
culture typologies.
Figure 8.5 Dimensions of Organizational Culture Profile (OCP)
● Innovative Culture
According to the OCP framework, companies that have innovative cultures are flexible,
adaptable, and experiment with new ideas.
● Aggressive Culture
Companies with aggressive cultures value competitiveness and outperforming competitors;
by emphasizing this, they often fall short in corporate social responsibility.
● Outcome-Oriented Culture
The OCP framework describes outcome-oriented cultures as those that emphasize
achievement, results, and action as important values.
● Stable Culture
Stable cultures are predictable, rule-oriented, and bureaucratic. When the environment is
stable and certain, these cultures may help the organization to be effective by providing
stable and constant levels of output.
● People-Oriented Culture
People-oriented cultures value fairness, supportiveness, and respecting individual rights.
● Team-Oriented Culture
Companies with a team-oriented culture are collaborative and emphasize cooperation
among employees.
● Detail-Oriented Culture
Organizations with a detail-oriented culture are characterized in the OCP framework as
emphasizing precision and paying attention to details.
● Strength of Culture
-A strong culture is one that is shared by organizational members.
-It is important to realize that a strong culture may act as an asset or a liability for the
organization, depending on the types of values that are shared.
Do Organizations Have A Single Culture?

-Subcultures are cultures that emerge within different departments, branches, or geographic
locations.
-Sometimes, a subculture may take the form of a counterculture. Counterculture defined as
shared values and beliefs that are in direct opposition to the values of the broader
organizational culture.
CREATING AND MAINTAINING ORGANIZATIONAL CULTURE

How are Cultures Created?
The factors that are most important in the creation of an organization’s culture include
founders’ values, preferences, and industry demands.
Figure 8.10 Model Describing How Cultures Are Created and Maintained
● Founder Values
A company’s culture, particularly during its early years, is inevitably tied to the personality,
background, and values of its founder or founders, as well as their vision for the future of the
organization.
● Industry Demands
While founders undoubtedly exert a powerful influence over corporate cultures, the industry
characteristics also play a role. Companies within the same industry can sometimes have
widely differing cultures.
How are Cultures Maintained?

As a company matures, its cultural values are refined and strengthened. The early values of
a company’s culture exert influence over its future values.
● Attraction-Selection- Attrition
Organizational culture is maintained through a process known as attraction-selection-attrition
(ASA).
● New Employee Onboarding
Onboarding refers to the process through which new employees learn the attitudes,
knowledge, skills, and behaviors required to function effectively within the organization.
*What can employees do during Onboarding?
-New employees who are proactive, seek feedback, and build strong relationships tend to be
more successful than those who do not.
*What can organizations do during Onboarding?
-A formal orientation program indoctrinates new employees to the company culture, as
well as introducing them to their new jobs and colleagues.
*What can organizational insiders do during Onboarding?
-One of the most important ways in which organizations can help new employees adjust to a
company and a new job is through organizational insiders—namely, supervisors, coworkers,
and mentors.
-Mentors can be crucial to helping new employees adjust by teaching them the ropes of their
jobs and how the company really operates.
● Leadership
Leaders are instrumental in creating and changing an organization’s culture. There is a
direct correspondence between the leader’s style and an organization’s culture.
● Reward Systems
The company culture is shaped by the type of reward systems used in the organization and
the kinds of behaviors and outcomes it chooses to reward and punish. One relevant element
of the reward system is whether the organization rewards behaviors or results.
Signs of Organizational Culture
Figure 8.12 Visual Elements of Culture
● Mission Statement
A mission statement is a statement of purpose, describing who the company is and what it
does.
● Rituals
Rituals refer to repetitive activities within an organization that have symbolic meaning.
● Rules and Policies
Another way in which an observer may find out about a company’s culture is to examine its
rules and policies. Companies create rules to determine acceptable and unacceptable
behavior and, thus, the rules that exist in a company will signal the type of values it has.
● Physical Layout
A company’s building, layout of employee offices, and other workspaces communicate
important messages about a company’s culture.
● Stories and Language
-Perhaps the most colorful and effective way in which organizations communicate their
culture to new employees and organizational members is through the skillful use of stories. -
A story can highlight a critical event an organization faced and the organization’s response
to it, or a heroic effort of a single employee illustrating the company’s values.
-Language is another way to identify an organization’s culture.
CREATING CULTURE CHANGE

How Do Cultures Change?
Achieving culture change is challenging, and there are many companies that ultimately fail in
this mission. Research and case studies of companies that successfully changed their
culture indicate that the following six steps increase the chances of success.
Figure 8.14 Process of Culture Change
● Creating a Sense of Urgency

For the change effort to be successful, it is important to communicate the need for change to
employees. One way of doing this is to create a sense of urgency on the part of employees,
explaining to them why changing the fundamental way in which business is done is so
important.
● Changing Leaders and Other Key Players
A leader’s vision is an important factor that influences how things are done in an
organization. Thus, culture change often follows changes at the highest levels of the
organization.
● Role Modeling
Role modeling is the process by which employees modify their own beliefs and behaviors to
reflect those of the leader.
● Training
Well-crafted training programs may be instrumental in bringing about culture change by
teaching employees the new norms and behavioral styles.
● Changing the Reward System
-The criteria with which employees are rewarded and punished have a powerful role in
determining the cultural values of an organization.
-Switching from a commission-based incentive structure to a straight salary system may be
instrumental in bringing about customer focus among sales employees.
● Creating New Symbols and Stories
The success of the culture change effort may be increased by developing new rituals,
symbols, and stories.

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ORGANIZATIONAL CULTURE

UNDERSTANDING ORGANIZATIONAL CULTURE

Why Does Organizational Culture Matter?

Levels of Organizational Culture

Figure 8.4 Three Levels of Organizational Culture

MEASURING ORGANIZATIONAL CULTURE

Do Organizations Have A Single Culture?

CREATING AND MAINTAINING ORGANIZATIONAL CULTURE

How are Cultures Maintained?

Signs of Organizational Culture

Figure 8.12 Visual Elements of Culture

CREATING CULTURE CHANGE

● Creating a Sense of Urgency

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