ORGANISATIONAL

CULTURE

by :
DR. T.K. JAIN
 Components of Organizational
Culture
 Routine ways of communicating
 Norms shared by individuals and teams
 Dominant values held by an organization
 Guiding philosophy for management’s
policies and decision making
 Rules of the game for getting along in the
organization
 Climate of the organization

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Layers of Organizational Culture

Cultural
Symbols

Shared
Behaviors

Cultural
Values

Shared
Assumptions

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 Issues Associated with
External Adaptation and Survival
 Identifying the organization's primary mission and

selecting strategies to pursue it

 Setting specific targets

 Determining how to pursue the goals, including selecting

an organizational structure and reward system

 Establishing criteria to measure how well individuals,

teams, and departments are accomplishing their goals

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 Issues Associated with
Internal Integration
 Identifying methods of communication and developing a

shared meaning for important concepts

 Establishing criteria for membership in groups and teams

 Determining rules for acquiring, maintaining, and losing

power and status

 Developing systems for encouraging desirable behaviors

and discouraging undesirable behaviors

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 How Cultures Emerge

Top
Management Behaviors Results Culture
• Agrees on • Employees • Financial • Strong culture
shared behave in ways performance emerges
assumptions of that are • Traditions are
• Market share
human behavior consistent with maintained
shared values • Employee
• Develops a • Socialization
and commitment
shared vision of practices for
assumptions
cultural values new employees

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 Methods of Maintaining
Organizational Culture
Methods of Maintaining Organizational Culture
•What managers and teams pay attention to
•Reactions to organizational crises
•Managerial role modeling
•Criteria for rewards
•Criteria for selection and promotion
•Organizational rites, ceremonies, stories

Recruitment of Removal of
employees who Organizational employees who
fit the culture Culture deviate from
the culture

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 Organizational Rites and
Ceremonies
POSSIBLE
TYPE EXAMPLE CONSEQUENCES

Rites of passage Basic training, U.S. Army Facilitate transition into new
roles; minimize differences in
way roles are carried out
Rites of degradation Firing a manager Reduce power and identity;
reaffirm proper behavior

Rites of Mary Kay Cosmetics Enhance power and identity;

enhancement Company ceremonies emphasize value of proper
behavior

Rites of integration Office party Encourage common feelings

that bind members together
Source: Adapted from Trice, H. M., and Beyer, J. M. The Cultures of Work Organizations.
Englewood Cliffs, N.J.: Prentice-Hall, 1993, 111.
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 Requirements for Successfully
Changing Organizational Culture
 Understand the old culture first

 Support employees and teams who have ideas for a better

culture and are willing to act on those ideas
 Find the most effective subculture in the organization and
use it as a model
 Help employees and teams do their jobs more effectively

 Use the vision of a new culture as a guide for change

 Recognize that significant cultural change takes time

 Live the new culture

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 Framework of Types of Cultures

Flexible Clan Entrepreneurial

Culture Culture
Formal
Control
Orientation Bureaucratic Market
Culture Culture
Stable
Internal External
Forms of
Attention
Source: Adapted from Hooijberg, R., and Petrock, F. On cultural change: Using the competing values framework to help
leaders execute a transformational strategy. Human Resource Management, 1993, 32, 29-50; Quinn, R. E. Beyond Rational
Management: Mastering the Paradoxes and Competing Demands of High Performance. San Francisco: Jossey-Bass, 1988.
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 Attributes of a Bureaucratic
Culture
Long-term concerns are predictability,
efficiency, and stability
Members value standardized goods and
services
Managers view their roles as being good
coordinators, organizers, and enforcers of
written rules and standards
Tasks, responsibilities, authority, rules, and
processes are clearly defined

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 Attributes of a Clan Culture

Members understand that contributions to the

organization exceed any contractual
agreements
A clan culture achieves unity with a long and
thorough socialization process
Members share feelings of pride in
membership, as well as feelings of personal
ownership of a business, a product, or an
idea
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 Attributes of a Clan Culture

Peer pressure to adhere to important

norms is strong
Success is assumed to depend
substantially on sensitivity to customers
and concern for people
Teamwork, participation, and
consensus decision making are
believed to lead to success

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 Attributes of an
Entrepreneurial Culture

There is a commitment to experimentation,

innovation, and being on the leading edge
This culture does not just quickly react to
changes in the environment—it creates
change
Effectiveness depends on providing new and
unique products and rapid growth
Individual initiative, flexibility, and freedom
foster growth and are encouraged and well
rewarded
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 Attributes of a Market Culture

 Contractual relationship between individual

and organization
 Independence and individuality are valued
and members are encouraged to pursue their
own financial goals
 Does not exert much social pressure on an
organization’s members, but when it does,
members are expected to conform

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 Attributes of a Market Culture

 Superiors’ interactions with subordinates

largely consist of negotiating performance–
reward agreements and/or evaluating
requests for resource allocations
 Has a weak socialization process
 Few economic incentives are tied directly to
cooperating with peers
 Often tied to monthly, quarterly, and annual
performance goals based on profits

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 Organizational Uses of Culture

 Organizational culture has the potential to

enhance organizational performance,
individual satisfaction, and a variety of
expectations, attitudes, and behaviors in
organizations
 If an organization’s culture is not aligned with
the changing expectations of internal and/or
external stakeholders, the organization’s
effectiveness can decline

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 Organizational Uses of Culture

 Organizational culture and performance are

related, although the evidence regarding the
exact nature of this relationship is mixed
 Organizational culture affects employee
behavior and performance
 Assessing which attributes of an
organization’s culture need to be preserved
and which ones need to be modified is a
constant organization need
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Relationship Between Culture
and Performance

Organizational culture can have a significant

impact on a firm’s long-term economic
performance
Organizational culture will probably be an
even more important factor in determining
success or failure of firms during the next
decade

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Relationship Between Culture
and Performance

Organizational cultures that inhibit strong

long-term financial performance are not rare;
they develop easily, even in firms that are
filled with reasonable and intelligent people
Although tough to change, organizational
cultures can be made more performance
enhancing if managers understand what
sustains a culture

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 Effects of Organizational Culture
on
Employee Behavior and
Performance
 Allows employees to understand the firm’s history
and current methods of operation
 Fosters commitment to corporate philosophy and
values
 Serves as a control mechanism for employee
behaviors
 Certain cultural types may produce greater
effectiveness and productivity

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Effects of Organizational Culture
on Ethical Behavior

A culture emphasizing ethical norms provides

support for ethical behavior
Top managers play a key role in fostering
ethical behavior by exhibiting correct behavior
The presence or absence of ethical behavior
in managerial actions both influences and
reflects the culture

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 How Employees Can Change
Unethical Behavior
 Secretly or publicly reporting unethical actions to
a higher level within the organization
 Secretly or publicly reporting unethical actions to
someone outside the organization
 Secretly or publicly threatening an offender or
responsible manager with reporting unethical
actions
 Quietly or publicly refusing to implement an
unethical order or policy

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 Actions for Creating a Culture
that Encourages Ethical behavior
Be realistic in setting values and goals regarding
employee relationships
Encourage input from organization members
regarding appropriate values and practices for
implementing the culture
Opt for a “strong” culture that encourages and
rewards diversity and principled dissent
Provide training on adopting and implementing
the organization’s values

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 Guidelines for Managing
Cultural Diversity
 Organization members must:
 Understand the nature of diversity and value a variety of opinions
and insights
 Recognize the learning opportunities and challenges presented by
the expression of different perspectives
 The organizational culture must:
 Foster expectations for high standards of performance and ethics for
everyone
 Stimulate personal development
 Encourage openness
 Make workers feel valued
The organization must have a well-articulated and widely
understood mission

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 Steps in Socialization

7. Role model to
sustain culture

6. Rituals, taboos,
rites, and stories to
reinforce culture
5. Adoption of Removal of employees
cultural value policies who deviate from culture

4. Rewards that
sustain the culture

3. Training to develop
capabilities consistent
with culture
2. Challenging early
work assignments

Removal of candidates
1. Careful selection who do not “fit” culture

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 Slide 15.23
Possible Outcomes of the
Socialization Process
Successful socialization is
reflected in:
 Job satisfaction
 Role clarity
 High work motivation
 Understanding of culture,
perceived control
 High job involvement
 Commitment to
organization
 Tenure
 High performance
 Internalized values
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Unsuccessful socialization is
reflected in:
 Job dissatisfaction
 Role ambiguity and conflict
 Low work motivation
 Misunderstanding, tension,
perceived lack of control
 Low job involvement
 Lack of commitment to
organization
 Absenteeism, turnover
 Low performance
 Rejection of values
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