HRM502 4 Organisational Culture

Module Code: HRM502
Module Title: Organisational Life Cycle Management

Module Leader: Dr. Sandhya Iya
E-mail: sandhyaiya.ms.mc.@msruas.ac.in
Session 4: Organisational Culture
1
Faculty of Management and Commerce
M. S. Ramaiah University of Applied Sciences
Session Objectives
At the end of this session, students will be able to:
Explain organisational effectiveness and its

measurement
Discuss meaning and types of culture
Describe the link between culture and strategy
2
Session Contents
Organisational effectiveness
Meaning and types of culture

Creating and sustaining culture
Link between culture and strategy
3
Organisational Effectiveness
(OE)
4
Definition of OE
Organisational effectiveness can be defined as the
efficiency with which an organisation is able to meet
its objectives. This means an organisation that
produces a desired effect or an organisation that is
productive without waste.
5
Evolution of the Concept

Frederick Taylor: Effectiveness is determined by
production maximisation, cost minimalisation,
technology etc.
Henri Fayol : a function of clear authority and
discipline in an organisation
Elton Mayo: A function of productivity resulting
from employee satisfaction
6
Criteria for OE
Time
Effectiveness
Criteria
Near Future
(Approx. 1 Yr)
Intermediate
Effective in
achieving goal
Adapt to new
opportunities
Efficient in use
of resources
Long term
(Approx. 5 Yrs)
Develop ability of
employees and
organisation
Able to survive in
an uncertain world
Source of
satisfaction to
stakeholders
7
Approaches to Measuring OE
Goal Approach: Effectiveness is the ability to excel at
one or more output goals
Internal Process Approach: The ability to excel at
internal efficiency, coordination, motivation, and
employee satisfaction
System Resource Approach: The ability to acquire
scarce and valued resources from the environment
8
Approaches to Measuring OE Contd.

Constituency Approach: The ability to satisfy
multiple strategic constituencies both within and
outside the organisation
Domain Approach: The ability to excel in one or
more among several domains as selected by senior
managers
9
Flow Chart of Goal Approach

to Organisational Effectiveness
INPUTS
TRANSFORMATION
OUTPUTS
GOAL APPROACH
10
Flow Chart of Internal Process Approach to

INPUTS
TRANSFORMATION
OUTPUTS
INTERNAL PROCESS APPROACH
11
M.
M.S.S.Ramaiah
RamaiahUniversity
UniversityofofApplied
AppliedSciences
Sciences
Flow Chart of System Resource Approach to

INPUTS
TRANSFORMATION
OUTPUTS
SYSTEM RESOURCE APPROACH
12
Flow Chart of Constituency Approach to

INPUTS
TRANSFORMATION
OUTPUTS
STRATEGIC CONSTITUENCIES APPROACH
13
M.
M.S.S.Ramaiah
RamaiahUniversity
AppliedSciences
Sciences
COMPARISON OF THE FOUR OE APPROACHES

Approach
Definition of OE
When Used
Goal Attainment
Attains stated goals
Goals are clear, timebound, measurable
System Resource
Acquires needed resources
Clear connection
between inputs and
outputs
Constituencies
All strategic constituencies at

least minimally satisfied
Internal Processes
Combines efficiency and
health
Must respond to
demands of powerful
constituencies
Easily measured costs,
outputs, satisfaction
14
OE Criteria for Selected Constituencies

Constituency
Typical Criteria
Owners
ROI, Growth in Earnings
Employees
C&B, Job Satisfaction
Customers
Satisfaction with Price, Quality, Service
Suppliers
Satisfaction with payments, future sales
Creditors
Satisfaction with debt payments
Unions
Satisfaction with competitive wages & benefits, working

conditions, fairness in bargaining
Community
CSR, Environmental consciousness
Govt. agencies
Compliance with laws, avoidance of penalty

15
Models of OE
Contradiction Model
Competing Value Model
16
The Contradictions Model of

Trying to characterize a whole organisation as
totally effective or ineffective is problematic
In any complex organisation
some parts may
function effectively while other parts may not be as
effective
17
M.
M.S.S.Ramaiah
RamaiahUniversity
AppliedSciences
Sciences
Four Central Assumptions of

the Contradictions Model
1. Organisations may fail to meet the multiple and
conflicting demands placed by their complex environments
2. They be unable to achieve their multiple and conflicting
goals
3. They may fail to satisfy the competing or conflicting
demands they face from their multiple internal and external
stakeholders
4. Organisations must manage multiple and conflicting time
demands. Satisfying short- or long-term demands at the
expense of the other may
result in sub-optimal
performance
18
M.
M.S.S.Ramaiah
RamaiahUniversity
AppliedSciences
Sciences
Competing Values Model

Organisational goals and performance are defined
by top and middle management
The model compared the diverse effectiveness
indicators used by managers and researchers
Similar dimensions of effectiveness criteria were

found
19
M.
M.S.S.Ramaiah
RamaiahUniversity
AppliedSciences
Sciences
Competing Values Dimensions I

Focus: whether dominant values concern issues that are
internal to the organisation or external to it
Internal focus reflects management concern for wellbeing and efficiency of employees
External focus reflects an emphasis on the well-being

of the organisation itself and its fit with its
environment
20
Competing Values Dimensions II

Structure: whether stability versus flexibility is the
dominant structural consideration
Stability reflects a management value for efficiency
and top-down control, while flexibility represents
a management value for learning and change
21
Dimensions of Effectiveness
Structure
Flexibility
I
Focus
II
Internal
External
III
IV
Control
22
Four Models of Effectiveness

Quadrant I :
Human Relations Model internal focus and
flexible structure
Management concern is on the development
of human resources
Employees are given opportunities

autonomy and development
for
Management works toward sub-goals of

cohesion, morale, and training opportunities
23
Four Models of Effectiveness Contd.

Quadrant II:
Open Systems Model Combination of external
focus and flexible structure
Managements goals are primarily growth and
resource acquisition
Sub-goals are flexibility, readiness, and positive
evaluation by the external environment
Dominant value is establishing a good relationship
with the external environment to grow and acquire
resources
Similar to the Systems Resource Model
24
Four Models of Effectiveness Contd.

Quadrant III:
Internal Process Model reflects the values of
internal focus and structural control
Seeks a stable organisational setting that maintains
itself in an orderly way
Well established in environment and just wish to

keep their current position
Sub-goals include mechanisms for efficient
communication, information management, and
decision-making
25
Four Models of Effectiveness IV

Quadrant IV:
Rational Goal Model reflects Management values
of structural control and external focus
Primary goals are productivity, efficiency, and profit
Organisation wants to achieve output goals in a
controlled way
Sub-goals include internal planning and goalsetting, which are rational management tools
Similar to the Goal Approach

26
Competing Values
Four different opposing value sets within the
organisation
Exist simultaneously
The right balance for the organisation is subject to
managerial discretion
Emphasis may change over time, especially as the
organisation evolves through its life cycle
e.g.hospitals,airlines
27
Understanding Culture
28
Importance of Culture
Guides and gives employees a sense of direction
Influences workplace interactions

Promotes healthy competition
Contributes to brand image of organisation

Brings employees on common platform
Maximises employee contribution

29
Types of Culture
Mechanistic vs. Organic
Authoritarian vs. Participative

Dominant vs. Sub-culture
Strong vs. Weak culture
30
Strong and Weak Cultures

Strong Cultures
Employees aligned
organisational values
Weak Cultures
to
Little alignment with

organisational values
Organisation functions like

a well-oiled machine
Need
for
exercising
control through extensive
procedures
and
bureaucracy
Results in high
performance
31
Benefits of a Strong Culture

Employees willingly embrace the culture as values
are clearly communicated
Better alignment to achieve vision, mission, goals
High employee loyalty
Increased team cohesion
Consistency and efficiency

32
Culture and Strategy

Culture
Strategy
Emotional container of
strategy
Drives focus and direction
Determines and
measures desire,
engagement, execution
Fuels the spirit for playing
the game
About vision, mission,

values, expectations
Lays down the rules for
playing the game
Gives clear competitive
advantage
Gives clear competitive

advantage
33
Creating and Sustaining Organisational Culture

(Video)
34
Summary
Organisational effectiveness can be defined as the
efficiency with which an organisation is able to meet
its objectives
Approaches to measuring OE are the goal, internal
process, system resource, constituency, and domain
approaches
Two main OE models are contradictions models and
competing value model
35
Summary
The culture of an organisation is vital to its
functioning and effectiveness
Building a strong culture yields many benefits to an

organisation
Culture and strategy have a strong link
36

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Module Code: HRM502

Module Title: Organisational Life Cycle Management

Session 4: Organisational Culture

M. S. Ramaiah University of Applied Sciences

Explain organisational effectiveness and its

M. S. Ramaiah University of Applied Sciences

Meaning and types of culture

Link between culture and strategy

M. S. Ramaiah University of Applied Sciences

M. S. Ramaiah University of Applied Sciences

M. S. Ramaiah University of Applied Sciences

Evolution of the Concept

M. S. Ramaiah University of Applied Sciences

M. S. Ramaiah University of Applied Sciences

M. S. Ramaiah University of Applied Sciences

Approaches to Measuring OE Contd.

M. S. Ramaiah University of Applied Sciences

Flow Chart of Goal Approach

M. S. Ramaiah University of Applied Sciences

Flow Chart of Internal Process Approach to

INTERNAL PROCESS APPROACH

Flow Chart of System Resource Approach to

SYSTEM RESOURCE APPROACH

M. S. Ramaiah University of Applied Sciences

Flow Chart of Constituency Approach to

STRATEGIC CONSTITUENCIES APPROACH

COMPARISON OF THE FOUR OE APPROACHES

Attains stated goals

Goals are clear, timebound, measurable

Acquires needed resources

All strategic constituencies at

M. S. Ramaiah University of Applied Sciences

OE Criteria for Selected Constituencies

ROI, Growth in Earnings

C&B, Job Satisfaction

Satisfaction with Price, Quality, Service

Satisfaction with payments, future sales

Satisfaction with debt payments

Satisfaction with competitive wages & benefits, working

CSR, Environmental consciousness

Compliance with laws, avoidance of penalty

Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

M. S. Ramaiah University of Applied Sciences

The Contradictions Model of

Four Central Assumptions of

Competing Values Model

Similar dimensions of effectiveness criteria were

Competing Values Dimensions I

External focus reflects an emphasis on the well-being

M. S. Ramaiah University of Applied Sciences

Competing Values Dimensions II

M. S. Ramaiah University of Applied Sciences

Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Four Models of Effectiveness

Employees are given opportunities

Management works toward sub-goals of

M. S. Ramaiah University of Applied Sciences

Four Models of Effectiveness Contd.

M. S. Ramaiah University of Applied Sciences

Four Models of Effectiveness Contd.

Well established in environment and just wish to

M. S. Ramaiah University of Applied Sciences