Organizational Culture

Organizational Culture
Organization culture refers to a
system of shared meaning held by
members that distinguishes from
other organizations.

Seven common elements/characteristics
1. Innovation & risk taking: the degree to which employees
are expected to be creative and take risks.
2. Stability: degree to which activities focus on the status quo
rather than change.
3. Attention to detail: degree to which there is concern for
precision and detail.
4. Outcome orientation: degree to which management
emphasizes results.
5. People orientation: degree to which management decisions
are sensitive to individual.
6. Team orientation: degree to which work activities are
organized around teams rather than individuals.
7. Aggressiveness: degree to which employees are expected to
be competitive than easy going.

Functions of Culture
• Defines the boundary between one organization and
others.
• Conveys a sense of identity for its members.
• Facilitates the generation of commitment to
something larger than self-interest.
• Acts as social glue that helps to hold the organization
together by providing appropriate standards for
employees to follow.
• Serves as a sense-making and control mechanism
for fitting employees in the organization

Culture as a liability
Dysfunctions of culture: especially applicable in strong
culture
 Barrier to change: occurs when organization’s
environment is dynamic & organization has strong
culture that worked well in past.
 Barrier to diversity: strong cultures put considerable
pressure on employees to conform. Diverse behaviors
are likely to diminish in strong cultures as people
attempt to fit in.
 Barrier to acquisition & merger: related to
financial advantage and product synergy but cultural
compatibility is the primary concern.

Creating culture
• Organization culture does not pop out of thin air.
• It takes time to develop and also difficult to fade away.
• Organization’s current customs, traditions, and general
way of doing things start with founders, success and
achievement.
Culture creation occurs in 3 ways:
1. Hiring and keeping employees who think and feel the way
founders do.
2. Socialize employees to the founder’s way of thinking and
feeling.
3. Founder’s own behavior acts as a role model.

Sustaining culture
Organization culture is kept alive by:
Selection: the main theme behind selection is to identify and hire a
person of knowledge, skill and abilities who could perform job one
after matching the need of the organization with that of an
individual well without creating any problem. It is a two way street.
Applicants also learn about organization.
Top Management: Top manager’s behavior reflect on organization
culture. Well behaved, dress, right judgment on performance by
the managers, filter down to organization as to whether risk taking
is desirable. So as others do.
Socialization: It is a process which help the employees to adapt to the
culture of the organization. It is a process of adaptation. New
employees are to be fully indoctrinated in the culture of
organization through socialization.

Stages of socialization
Pre-arrival stage: It is the period of learning in the socialization
process that occurs before the new employee joins the organization.
Employees come with different value and norms. Requirements to
be fulfilled for the job along with other behavior leaves tremendous
impression on the new comers.
Encounter stage: New comers confronts expectation and reality
diverge. Proper attention by means of induction program, social get-
together etc helps to get them adapt to new culture.
Metamorphosis stage: It is the time for the new employees to be
changed and get adjusted to the job, work group and organization.

Sources of Organisational Culture
Organisational
culture
Characteristics of
people within the
organisation
Organisational
structure
Property right
system
Organisational
ethics
For details, refer
to seminar slides

Typologies of Culture
Power culture
– Leadership in few, entrepreneurial in nature
Role culture
– Clearly defined roles and rules, power balanced
between the leadership and structure
Achievement culture
– Stress on motivation, commitment and action
Support culture
– Mutuality, trust, relationships, solidarity
Person culture
– Individual as the central point

Generic Corporate Culture
Source of values
Charismatic
leadership
Organisational
traditions
Focus of
values
Functional
Elitist
Entrepreneurial
(external, short
term)
Strategic
(external, long
term)
Chauvinistic
(internal, short
term)
Exclusive
(internal, long
term)

The Entrepreneurial Culture
• Source - a charismatic leader
• Basis for strong corporate culture
• Initial value orientation of the founder:
functional and externally oriented (to create
value for customers)
• Good chance for success because of
commitment to satisfying the changing needs
of the environment
• Unstable, risky and chance of turning elitist

The Strategic Culture
• Institutionalisation of functional values
• Source – organisational traditions and multiple
role models
• External and long run focus
• Relatively rational culture without excessive
dependence on charismatic leadership
• Focus on preserving corporate identity while
still adapting to changes

The Chauvinistic Culture
• More internally focused, blind loyalty to
corporate leadership and an overriding concern
for institutional superiority
• We – they orientation
• Susceptible to the development of
“groupthink”, illusion of invulnerability, self-
righteousness and stereotyping

The Exclusive Culture
• Institutionalisation of elitist value orientation
• Elitist but club like orientation independent of
charismatic leadership
• Elitist orientation anchored in well entrenched
organisational traditions

Organisational Subcultures
• Values shared by a group rather than an
organisation as a whole
• Exist in large organisations without a
dominant central corporate culture
• May be divisive in the absence of a
unifying corporate culture

Positive Culture
People-centred (value on professional and personal
development)
Performance driven (value on performance based
rewards)
Goal oriented (promotion of a clear sense of
direction)
Innovation inclined (stimulation of creative
behaviours)
Client committed (value on serving the needs of the
customers)
Quality obsessed (striving to do better all the time)

Cultural Transformation
• Not easy –but possible
• Identify the “culture now” – culture
analysis
• Articulate “culture alternative” – culture
visioning
• Identify “culture gaps” – culture planning
• Introduce “culture change” - culture
support and reinforcement

Cultural Change Strategies
• Develop self awareness by leadership
– Avoid equating personal identity with that of the
organisation
– Avoid elitist trap
• Steps to be followed:
– Discourage the development of personality cult or
hero worshipping
– Practice delegation and participation to encourage
the development of enduring management
structures independent of the influence of an
individual leader

Cultural Change Strategies
• Steps to be followed:
– Encourage constructive dissent to take decision
makers away from the influence of charismatic
leader
– Promote functional values (cooperation ,
discipline, fairness, initiatives)
– Be willing to step aside or move on if the staying
involved inhibits the transition to a more stable
and strategic culture
– Recruit and select people with values congruent
with functional organizational values

Cultural Change Strategies
• Steps to be followed:
– Institutionalise the proper functional values by
extensive socialisation
– Prevent the development of counter-cultures by
a strong central culture
– Remove the charismatic leader if he/ she is
blocking the effective transformation of the
entrepreneurial organization into a strategic
culture

Cultural Change Strategies
• Deliberate role modelling, teaching and
coaching by leaders
• Criteria for allocation of rewards and status
• Criteria for recruitment, selection,
promotion and commitment
• Promotion of functional values
• Socialisation programmes

Creating an Ethical Organizational Culture
• Characteristics of organizations that develop high
ethical standards
– High tolerance for risk
– Low to moderate in aggressiveness
– Focus on means as well as outcomes
• Managerial practices promoting an ethical culture
– Being a visible role model.
– Communicating ethical expectations.
– Providing ethical training.
– Rewarding ethical acts and punishing unethical ones.
– Providing protective mechanisms.

Creating a Customer-Responsive Culture
• Key variables shaping customer-responsive cultures
– The types of employees hired by the organization.
– Low formalization: the freedom to meet customer service
requirements.
– Empowering employees with decision-making discretion to
please the customer.
– Good listening skills to understand customer
– Role clarity that allows service employees to act as
“boundary spanners.”
– Employees who engage in organizational citizenship
behaviors.

Creating a Customer-Responsive Culture
Managerial Actions :
– Select new employees with personality and
attitudes consistent with high service
orientation.
– Train and socialize current employees to be
more customer focused.
– Change organizational structure to give
employees more control.
– Empower employees to make decision about
their jobs.