Organizational Culture

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Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Defining organizational culture

a collective understanding, a shared and integrated set or perceptions, memories, values and attitudes that have been learned over time and which determine the expectations of behavior that are taught to new members in their socialization into the organization.

Impact of culture
Culture gives identity, provides collective commitment, builds social system stability and allows people to make sense of the organization (Sannwald, 2000)

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Culture is
Concrete We can observe cultural practices that
define human experience.

Abstract It is a way of thinking, feeling, believing,

and behaving.

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Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Reinventing Hewlett-Packards Culture

Carly Fiorina wants to reinvent Hewlett-Packards legendary culture, known as The H-P Way. She documented a new set of values, called The Rules of the Garage and is merging H-P with Compaq to create a more performanceoriented culture.

Reuters/New media, Inc./ CORBIS

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Organizational Culture Defined

The basic pattern of shared assumptions, values, and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing the organization.
Reuters/New media, Inc./ CORBIS

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Elements of Organizational Culture

Physical Structures

Artifacts of Organizational Culture

Rituals/ Ceremonies Stories

Language

Organizational Culture
Beliefs Values Assumptions
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Brown & Browns Cultural Content

Brown & Brown, Inc. in Daytona Beach has an aggressive culture that helps it succeed in the highly competitive insurance business. At its annual sales meeting, managers of poorly performing divisions are led to the podium by medieval executioners while a funeral dirge plays.

E. M. Samelson/Orlando Sentinel

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Meaning of Cultural Content

Cultural content refers to the relative ordering of beliefs, values, and assumptions.
Example: Brown & Brown values aggressiveness; SAS Institute values work-life balance

An organization emphasizes only a handful of the hundreds of cultural values.

E. M. Samelson/Orlando Sentinel

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Organizational Subcultures
Located throughout the organization Can support or oppose (countercultures) firms dominant culture Two functions of countercultures: provide surveillance and
evaluation source of emerging values
E. M. Samelson/Orlando Sentinel

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Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Dominant Culture
The dominant culture is the most powerful group in society. It receives the most support from major institutions and constitutes the major belief system. Social institutions in the society perpetuate the dominant culture and give it a degree of legitimacy that is not shared by other cultures.

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Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Subcultures
The cultures of groups whose values and norms of behavior differ from the dominant culture. Members of subcultures interact frequently and share a common world view. Subcultures share some elements of the dominant culture and coexist within it.

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Countercultures
Subcultures created as a reaction against the values of the dominant culture. Members of the counterculture reject the dominant cultural values and develop cultural practices that defy the norms and values of the dominant group. Nonconformity to the dominant culture is often the mark of a counterculture.

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Popular Culture
The beliefs, practices, and objects that are part of everyday traditions. It is mass-produced and mass-consumed. Has enormous significance in the formation of public attitudes and values, and plays a significant role in shaping the patterns of consumption in contemporary society.

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Benefits of Strong Corporate Cultures

Social Control Strong Organizational Culture

Social Glue

Aids Sense-Making

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Problems with Strong Cultures

Culture content might be incompatible with the organizations environment.
Strong cultures focus attention on one mental model. Strong cultures suppress dissenting values from subcultures.

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Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Adaptive Organizational Cultures

External focus -- firms success depends on continuous change
Focus on processes more than goals Strong sense of ownership Proactive --seek out opportunities
AP/Wide World

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Bicultural Audit
Part of due diligence in merger
Minimizes risk of cultural collision by diagnosing companies before merger Three steps in bicultural audit:
1. Collect artifacts 2. Analyze data for cultural conflict/compatibility 3. Recommend solutions

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Merging Organizational Cultures

Assimilation
Acquired company embraces acquiring firms culture Acquiring firm imposes its culture on unwilling acquired firm Both cultures combined into a new composite culture

Deculturation

Integration

Separation

Merging companies remain separate with their own culture

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Strengthening Organizational Culture

Founders and leaders
Selection and socialization Culturally consistent rewards

Strengthening Organizational Culture

Managing the cultural network

Stable workforce

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STRONG CULTURE
A strong organizational culture could be one were the majority of the the participants hold the same basic beliefs and values as applies to the organization. The people in this group may follow the perceived rules and ethical procedures that are basic to the organization, even if those values are not publicly stated by the organization.

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WEAK CULTURE
A weak organizational culture could be one that is loosely knit. It may encourage individual thought and contributions and in a company that needs to grow through innovation, it could be a valuable asset.

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