Organizational Culture

Introduction
Organizational Culture
 A system of shared meanings and common beliefs held
by organizational members that determines, in a large
degree, how they act towards each other.
 It is important to consider culture while managing
change in the organization.

Key Characteristics of Corporate
Culture
 Innovation and Risk Taking
 Attention to Detail
 Outcome Orientation
 People Orientation
 Team Orientation
 Aggressiveness
 Stability

Types of Culture
 Authoritarian culture
 Participative culture
 Mechanistic culture
 Organic culture
 Sub-cultures and Dominant culture

Importance of Organizational
Culture
 Talent-attractor
 Talent-retainer
 Engages people
 Creates energy and momentum
 Changes the view of “work”
 Creates greater synergy
 Makes everyone more successful

Creating and Sustaining
Organizational Culture

Creating Corporate Culture
 The ultimate source of an organization’s culture is its
founders.
 Culture creation occurs in three ways:
 Employees hire and keep employees with same
thinking
 They indoctrinate and socialize the employees with
the organization’s thinking
 The founder’s behavior acts as a role model for the
employees
 With the organizational success, the founder’s
personality is embedded in the organizational culture.

How Organization Cultures
Form
Robbins,
1989

Sustaining Organizational
Culture
 Three forces play a particularly important part
in sustaining a culture:
• Selection practices
• Actions of top management
• Socialization methods

Selection
 Explicit goal – identifying and hiring individuals having
knowledge, skills and abilities to perform the jobs
successfully.
 Individuals having values consistent with those of the
organization are selected as per the decision maker’s
judgements.
 Selection becomes a ‘two-way street’ as it provides
information about the organization to the applicants.

Top Management
 The actions of top management establishes the norms
for the organization as to:
• Whether risk taking is desirable
• How much freedom managers should give to their
subordinates
• What actions will pay off in terms of pay rises,
promotions and other rewards, etc.

Socialization
 Socialization refers to the preparation of newcomers to
become members of an existing group and to think, feel, and
act in ways the group considers appropriate
 New employees are not familiar with the organizational
culture and are potentially likely to disturb the existing culture.
 The process through which the employees are proselytized
about the customs and traditions of the organization is known
as socialization.
 It is the process of adaptation by which new employees are to
understand the basic values and norms for becoming
‘accepted’ members of the organization.

Socialization Process
 Socialization is a process made up of three stages:
 Pre-arrival - All the learning occurring before a new
member joins.
 Encounter - The new employee sees what the
organization is really like and confronts the possibility
that expectations and reality may diverge.
 Metamorphosis - The relatively long-lasting changes take
place. The new employee masters the skills required for
the job, successfully performs the new roles, and makes
the adjustments to the work group’s values and norms.

Socialization Model
OutcomesSocialization Process
Pre-arrival Encounter Metamorphosis
Productivity
Commitment
Turnover

How Employees Learn Culture
 Stories – Depicting the past events of the organization.
Some organizations actually try to manage this element
of culture learning.
 Rituals – Repetitive sequential activities reinforcing the
values of the organization.
 Material Symbols – Conveying social equality, desired
organizational behavior, etc. by the top management.
 Language – Acceptance and preservation of culture.

Organizational Culture — Trends
You Need to Know
 It’s hard to believe that the term “corporate
culture” didn’t appear on the business
landscape in a meaningful way until the early
1980’s. By contrast, another business term,
“money”, developed almost 5,000 years ago!
While corporate culture may seem like a
newborn to the business world, important
trends are emerging.

The Katzenback Center at Booz and Company surveyed
2,219 executives to better understand current
perceptions of culture.
Key findings include:
 86% of C-suite respondents believe their
organization’s culture is critical to business success
 60% said culture is more important than the
company’s strategy or operating model
 96% said some form of culture change is needed
within their organization
 45% do not think their culture is being effectively
managed.

 The issue CEO’s face now is how to manage
culture. The opportunity exists to stop
promoting the business case and start
educating CEO’s on the assessments, tools
and processes available to help define,
promote, evolve and monitor organizational
culture.

Culture “fit” is becoming a major
recruitment factor
 In Milewalk’s 2014 Annual Employee Survey
respondents were asked to identify the top
ten elements that they consider when
looking to change jobs. While compensation
and employee benefits still rate number one,
culture was a close second.