Organizational Culture

Outline
What is organizational culture? Elements of culture: stories, symbols, myths, rites, values & more Dimensions of organizational culture Organizational culture & climate

Do you really know your Organizations Culture ?

* What

10 words would you use to describe your company?

* Around here what is really important? * Around here who gets promoted? * Around here what behaviours get rewarded?
* Around here who fits and who does not?

Why Do We Need to Understand Culture?

Cultural analysis illuminates sub cultural dynamics within organizations. Cultural analysis is necessary if we are to understand how new technologies influenced by organizations. Cultural analysis is necessary for management across national and ethnic boundaries. Organizational learning, development and planned change cannot be understood without considering culture as a primary source of resistance to change.

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

Defining Culture
A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. - Schein (1992)

Terminal and Instrumental Values in an Organizations Culture

Copyright 2007 Prentice Hall

Theories about the relationship between organizational culture and performance

Fit Perspective

Strong Culture Perspective

Adaptive Perspective

Characteristics of Culture
Learned

Adaptive

Shared

Culture
Patterned Transgenerational

Symbolic

Some of the factors contribute to Beh (Fontaine & Richardson, 2003)

CULTURE Indiv Personality Pressure from Peers Self-Efficacy Trust Envt Stimuli

GOALS

BEHAVIOUR

Vision Mission
Goals & Objectives Strategies

Structure
Culture Behaviour

Performance

Artifacts symbols of culture in the physical and social work environment

Values
Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave

Levels of Organizational Culture

Assumptions deeply held

beliefs that guide behavior and tell members of an organization how to perceive and think about things

Artifacts Personal enactment Ceremonies and rites Stories Ritual Symbols

Organizational Culture Levels

Visible, often not decipherable

Values Testable in the physical environment Testable only by social consensus

Greater level of awareness

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

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.

Examples
IBM means service GE: Progress is our most impt product DuPont: Better things for better living thru chemistry (Super ordinate Goal) The Tandem Corporation: Top mgt spend half of its time in trg & comm. the mgt philosophy & essence of the company PWC: Strive for techl perfection Dana Corporation: Productivity thru people Caterpillar: 24 hrs parts services anywhere in the world

Examples
P&G - The consumer is impt - Things dont happen, u have to make them happen - We want to make employee interests our own

Elements of Culture
Business Envt ( Each company faces a difft reality in the mkt place depending on its product, competitors, customers, technologies, govt influence & so on.) Values (Basic concepts & beliefs of an org; heart of the corporate culture; standard of achievement inside the org) Stories ( of success & failures) Rites & Rituals (systematic & programmed routines in day-to-day life in company; expected behv; what the company stand for)

Examples
Tandem & IBM provide play on company time thru workshops, exercise facilities, beer busts, retreats etc (corporate life releases tension & encourages innovations) Behind every ritual is a myth which symbolizes a belief central to that culture (IBM, Dana, Mary Kay Cosmetics, Holiday inn & P&G ritual is serious affair) Cultural extravaganza: Mary Kays convention; Polaroid's Annual Meetings) Comm. & Social rituals: (IBM- Mr/ Miss/ Mrs.; MIT graduate joined GE asked to sweep the floor & Hazing) Dee Hock of Visa Intl gave cufflinks inscribed The will to succeed & The Grace of Compromise reinforced the values of Visa culture.

Elements of Culture
Symbols (Prudential Life Insurance) Heroes (these people personify the cultures values; provide role models. Jim Treybig at Tandem) The Cultural Network ( Primary but informal means of communication within the org; carrier of corporate values & heroic mythology) Myths

Drawbacks of OC
Culture can be equally dysfunctional (trice, 1985) Making employee vulnerable to burnout from working too hard Making people unwilling to change what they do Colouring the interpretation of info & events Encouraging beh that few people do well Encouraging ego involvement that heighten the emotionality of events

Issues
Structural Stability Striving towards patterning & integration Group with stable membership/ shared assumption/ history The Problem of Socialization The Problem of Behaviour Can the large organization have one culture

Dimensions of OC
Managing External Adaptation specify the coping cycle that any sys must be able to maintain in relation to its changing Envt
Mission & strategy Goals Means Measurement Correction

Dimensions of OC
Managing Internal integration allow a group to internally integrate by
- Creating Common language & conceptual categories - Defining Group Boundaries - Distributing power & status - Developing norms of intimacy, friendship & Love - Defining & allocating rewards & punishments - Explaining the unexplainable ideology & religion

Dimensions of OC
Strength or amount of OC (Schein, 1984)
- The strength & amount of culture can be defined in terms of The homogeneity & stability of the group membership & The length & intensity of the shared experiences of the group

Dimensions of OC
Direction & Intensity (Cooke & Rousseau, 1983b) - Direction refers to the actual content/ substance of the culture, exemplified by the values, norms & thinking style. - Intensity is the strength of this emphasis and is function of * The degree of consensus among unit members regarding what the culture emphasizes, & * The strength of connection among expectations, rewards & behaviours

Dimensions of OC
Internal & External Fits ( Arogyaswamy & Byles, 1987) - Extent of internal fit obtained by The cohesion of the culture The cultural consistency - Extent of external fit depends on the synergy between Vision, mission, goals, objectives, Strategy, processes & results

Dimensions of OC
Robbins (1987)
Individual Initiative Risk tolerance Direction Management Contact Integration Control Identity Reward System Conflict Tolerance Communication Patterns

Organizational Culture
Based on enduring values embodied in organizational norms, rules, standard operating procedures, and goals People draw on these cultural values to guide their actions and decisions when faced with uncertainty and ambiguity Important influence on members behavior and response to situations

Strong Cultures
Can be disastrous when managers or owners behave unethically Can also be a source of competitive advantage
Facilitators of mutual adjustment in the organization Is also a form of informal organization that facilitates working of the organizational structure

How is an Organizations Culture Transmitted to its Members?

Socialization: the process by which members learn and internalize the values and norms of an organizations culture

1. Anticipatory Socialization

Realism

Congruence

2. Encounter

Job demands Task Role Interpersonal

3. Change and Acquisition Outcomes of Socialization

Mastery

Stages of Socialization
From 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 Association International. Reprinted by permission of American Management Association International, New York, N.Y. All rights reserved. Http://www.amanet. Org.

Performance Satisfaction Mutual influence Low levels of distress Intent to remain

How is an Organizations Culture Transmitted to its Members? (cont.)

Role orientation: the characteristic way in which newcomers respond to a situation
Institutionalized role orientation: results when individuals are taught to respond to a new context in the same way that existing organizational members respond to it Individualized role orientations: results when individuals are allowed and encouraged to be creative and to experiment with changing norms and values

How Socialization Tactics Shape Employees Role Orientation

How is an Organizations Culture Transmitted to its Members? (cont.)

Collective vs. individual
Collective tactics: provide newcomers with common learning experiences designed to produce a standardized response to a situation Individual tactics: each newcomers learning experiences are unique, and newcomers can learn new, appropriate responses for each situation

How is an Organizations Culture Transmitted to its Members? (cont.)

Formal vs. informal
Formal tactics: segregate newcomers from existing organizational members during the learning process Informal tactics: newcomers learn on the job, as members of a team

How is an Organizations Culture Transmitted to its Members? (cont.)

Sequential vs. random
Sequential tactics: provide newcomers with explicit information about the sequence in which they will perform new activities or occupy new roles as they advance in an organization Random tactics: training is based on the interests and needs of individual newcomers because there is no set sequence to the newcomers progress in the organization

How is an Organizations Culture Transmitted to its Members? (cont.)

Fixed vs. variable
Fixed tactics: give newcomers precise knowledge of the timetable associated with completing each stage in the learning process Variable tactics: provide no information about when newcomers will reach a certain stage in the learning process

How is an Organizations Culture Transmitted to its Members? (cont.)

Serial vs. disjunctive
Serial tactics: employed, existing organizational members act as role models and mentors for newcomers Disjunctive processes: require newcomers to figure out and develop their own way of behaving

How is an Organizations Culture Transmitted to its Members? (cont.)

Divestiture vs. investiture
Divestiture: newcomers receive negative social support and existing organizational members withhold support until newcomers learn the ropes and conform to established norms Investiture: newcomers immediately receive positive social support from other organizational members and are encouraged to be themselves

Stories, Ceremonies, and Organizational Language

Organization rites
Rites of passage: mark an individuals entry to, promotion in, and departure from the organization Rites of integration: shared announcements of organizational success, office parties and cookouts Rites of enhancement: public recognition and reward for employee contributions

Organizational Rites

Where Does Organizational Culture Come From?

Comes from interaction of four factors:

The personal and professional characteristics of people within the organization Organizational ethics The property rights that the organization gives to employees The structure of the organization

Where an Organizations Culture Comes From

Copyright 2007 Prentice Hall

Factors Influencing the Development of Organizational Ethics

Copyright 2007 Prentice Hall

Where Does Organizational Culture Come From? (cont.)

Property rights: rights that an organization gives to members to receive and use organizational resources The distribution of property rights to different stakeholders determines:

How effective an organization is The culture that emerges in the organization

Where Does Organizational Culture Come From? (cont.)

Property rights (cont.)
Top managers are in a strong position to establish the terms of their own employment and the property rights received by others Changing property rights changes the corporate culture by changing the instrumental values that motivate and coordinate employees Strong property rights may harm the organization

Where Does Organizational Culture Come From? (cont.)

Organizational structure
Mechanistic vs. Organic
Mechanistic - predictability and stability are desired goals Organic innovation and flexibility are desired end states

Centralized vs. Decentralized

Decentralized - encourages and rewards creativity and innovation Centralized reinforces obedience and accountability

Cultural Changes
Situations That May Require Cultural Change
Merger or acquisition Employment of people from different countries Is it really easy to change? Assumptions are often unconscious Culture is deeply ingrained and behavioral norms and rewards are well learned

Hiring and socializing members who fit in with the new culture

Culture

Removing members who reject the new culture

Cultural communication Examining justifications for changed behavior 2

Changing behavior

Interventions for Changing Organizational Culture

Reprinted with permission from Vijay Sathe How to Decipher & Change Corporate Culture, Copyright 1985 Jossey-Bass Inc, Reprinted by permission Of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc..

Can Organizational Culture be Managed?

Changing a culture can be very difficult

Hard to understand how the previous four factors interact Major alterations are sometimes needed
Redesign structure Revise property rights used to motivate people Change the people especially top management

Some ways culture can be changed:

Types of OC
Handy (1976)
Power Culture Powerful & dominant leaders, few rules & procedures, decision making fast, few committees, growth is problem b/c with increased size integration is difficult by centre Role Culture Steady state org, problem of integration to achieve the org goals, take minim risks, decisions by committees, procedures well developed, slow to perceive & react to new change

Types of OC
Handy (1976)
Task Culture emphasis is on getting things done, bring together the right resources & right people & let them get on with it, team culture with minim hierarchy & people are evaluated on their ability to contribute to teams output, flexible & sensitive, not effective where routine & stability is needed, fun to work in

Person culture academic org, members do their own things, structure & control are minim, exist for the benefit of the member first

Types of OC
Interpersonal Interaction Model # Power Culture: Strong leaders are needed to distribute resources; leaders are firm, but fair & generous to loyal followers; if badly managed there is rule by fear, abuse of power for personal gain & political intrigue # Ach Culture: Rewards results not unproductive efforts; work teams are self directed; rules & structure serve the sys; sustaining energy & enthusiasm over time is challenge

Types of OC
Interpersonal Interaction Model

# Support Culture: Employee is valued as person & worker; employee harmony impt # Role Culture: Rule of law with clear responsibility & reward sys; provides stability, justice & efficiency; weakness is impersonal operating procedures & a stifling of creativity & innovation

Understanding Culture
1. Who sets the style & pace? What kind of Role Model are they? Do as we do or Do as we say? 2. What beh is rewarded, condemned or ignored? Is feedback constant, intermittent, at job completion, or never? Are improper or unethical practices are condoned through silence? 3. What info is shared? (needed vs. desired); Is upward info flow constrained ( do u really know)

Understanding Culture
4. How is superior perf encouraged? What type of perf appraisal is used? How are the best qualified people recruited? Is T&D is offered to everyone? 5. Are values backed up by time & money? 6. What is the relative importance of - Bottom line results? - Saving face? - Power building?

Constituents of OC
Determinants - Societal Culture - Shared learning from shared history - Leadership - Consistent Mgt. practices - Structural Stability Consequences - Performance - Behaviour Dimensions -Visual Artifacts - Values

- Rituals - Stories & Myths - Assumptions