Book SLides - Chapter 16 - Organisational Culture

Chapter 16
Organizational Culture
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Chapter 16 Learning Objectives
After studying this chapter you should be able to:

1. Define organizational culture and describe its common characteristics.
2. Compare the functional and dysfunctional effects of organizational
culture on people and the organization.
3. Identify the factors that create and sustain an organization’s culture.
4. Show how culture is transmitted to employees.
5. Demonstrate how an ethical culture can be created.
6. Describe a positive organizational culture.
7. Identify characteristics of a spiritual culture.
8. Show how national culture may affect the way organizational culture is
transported to a different country.
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Define organizational culture and
describe its common characteristics
• Organizational culture refers to a system of shared meaning held

by members that distinguishes the organization from other
organizations.
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• Research identifies seven primary characteristics that capture

the essence of an organization’s culture:
– Innovation and risk taking.
– Attention to detail.
– Outcome orientation.
– People orientation.
– Team orientation.
– Aggressiveness.
– Stability.
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• Other research has conceptualized culture into four different types
based on competing values.
– One is the collaborative and cohesive clan.
– Two is the innovative and adaptable adhocracy.
– Three is the controlled and consistent hierarchy.
– Four is the competitive and customer focused market.
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• Organizational culture refers to a system of shared meaning held by
members that distinguishes the organization from other organizations.
• Research questions:
– Does it encourage teamwork?
– Does it reward innovation?
– Does it stifle initiative?
• It differs from job satisfaction
– Job satisfaction is evaluative.
– Organizational culture is descriptive.
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• Most organizations have a dominant culture and numerous sets of
subcultures.
• Subcultures tend to develop in large organizations to reflect common
problems, situations, or experiences that members face.
• Strong culture: A culture in which the core values are intensely held and
widely shared.
• Core values: The primary or dominant values that are accepted
throughout the organization.
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• High formalization creates predictability, orderliness, and
consistency.
• Formalization and culture are two different roads to a common
destination.
• The stronger an organization’s culture, the less management needs
to develop formal rules and regulations.
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Compare the functional and
dysfunctional effects of organizational
culture on people and the organization
Culture’s Functions
– Boundary-defining role
– Conveys a sense of identity for members
– Facilitates the generation of commitment
– Enhances the stability of the social system
– Serves as a sense-making and control mechanism
– Guides and shapes attitudes and behavior of employees
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• Today’s trend toward decentralized organizations makes culture more

important than ever, but ironically it also makes establishing a strong
culture more difficult.
• Individual-organization “fit”—that is, whether the applicant’s or
employee’s attitudes and behavior are compatible with the culture—
strongly influences who gets a job offer, a favorable performance
review, or a promotion.
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• Organizational climate is shared perceptions about the organization

and work environment.
• Factors of climate has been studied, which include safety, justice,
diversity, and customer service.
• Climates can interact with one another to produce behavior.
• Climate also influences the habits people adopt.
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Culture as a Liability:
• Institutionalization
• Barriers to Change
• Barriers to Diversity
• Barriers to Acquisitions and Mergers
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Identify the factors that create
and sustain an organization’s culture
• How a Culture Begins

– Ultimate source of an organization’s culture is its founders.
– Founders have vision of what the organization should be.
– Unconstrained by previous ideologies or customs.
– New organizations are typically small; facilitates the founders’
imparting of their vision on all organizational members.
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• Culture creation occurs in three ways:

– Founders hire employees who feel the way they do.
– Employees are indoctrinated and socialized into the founders’ way
of thinking.
– Founders’ behaviors act as role models.
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• Sustain Through Selection

– The explicit goal of the selection process is to identify and hire
individuals with the knowledge, skills, and abilities to perform
successfully.
• Top Management
– The actions of top management also have a major impact on the
organization’s culture.
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Show how culture is
transmitted to employees
• Culture is transmitted to employees through

– Stories,
– Rituals,
– Material symbols, and
– Language.
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Demonstrate how an
ethical culture can be created
• Characteristics shaping high ethical standards:

– High in risk tolerance
– Low to moderate in aggressiveness
– Focuses on means as well as outcomes
• Managers are
– Supported for taking risks and innovating,
– Discouraged from unbridled competition, and
– Guided to not just what is achieved but also how.
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Demonstrate how an
• If the culture is strong and supports high ethical standards, it should

have a very powerful and positive influence on employee behavior.
• The negative consequences of a systematic culture of unethical
behavior can be severe and include customer boycotts, fines, lawsuits,
and government regulation of an organization’s practices.
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Demonstrate how an
• How can management create a more ethical culture?

– Be a visible role model.
– Communicate ethical expectations.
– Provide ethical training.
– Reward ethical acts and punish unethical ones.
– Provide protective mechanisms.
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Describe a positive
organizational culture
• There is a trend today for organizations to attempt to create a positive

organizational culture.
• A positive organizational culture emphasizes building on employee
strengths, rewards more than it punishes, and emphasizes individual
vitality growth.
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Identify characteristics
of a spiritual culture
• What Is Spirituality?
– Workplace spirituality is not about organized religious practices. It
is not about God or theology.
– Workplace spirituality recognizes that people have an inner life that
nourishes and is nourished by meaningful work that takes place in
the context of community.
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• The concept of workplace spirituality draws on our previous

discussions of values, ethics, motivation, and leadership.
• Spiritual organizations include:
– Benevolence.
– Strong sense of purpose.
– Trust and respect.
– Open-mindedness.
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Show how national culture may
affect the way organizational
culture is transported to a different country
• Organizational cultures often reflect national culture.

• One of the primary things U.S. managers can do is to be culturally
sensitive.
• The management of ethical behavior is one area where national culture
can rub up against corporate culture.
• U.S. employees are not the only ones who need to be culturally
sensitive.
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Summary and Implications for Managers
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Chapter 16

After studying this chapter you should be able to:

• Organizational culture refers to a system of shared meaning held

• Research identifies seven primary characteristics that capture

• Today’s trend toward decentralized organizations makes culture more

• Organizational climate is shared perceptions about the organization

• How a Culture Begins

• Culture creation occurs in three ways:

• Sustain Through Selection

• Culture is transmitted to employees through

• Characteristics shaping high ethical standards:

• If the culture is strong and supports high ethical standards, it should

• How can management create a more ethical culture?

• There is a trend today for organizations to attempt to create a positive

• The concept of workplace spirituality draws on our previous

• Organizational cultures often reflect national culture.

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