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Part 2—ESSENTIAL MANAGEMENT FUNCTIONS

CHAPTER V. ORGANIZING BUSINESS ACTIVITIES

“Organizing is something you do before you do something, so that when you do it, it is not all mixed up”.
–A.A. Milne

For instance, you and your family plan to go on vacation. What are the preparations that you usually
do? Do you plan a month ahead, a week or just days before the trip? What do you consider in choosing
a place to go on holiday? Do you check the accessibility of the location? Budget? Time availability of
everyone? The features of different locations? Other things that you can enjoy while in the area? Once
you decided where you want to go, now it is time to make it happen.

The first major decision, which is the location or the place is what we can consider the destination or
the goal. The next set of decisions is more detailed and accurate. Because these answers the “how”.
“How do you plan to get to the destination?” Is it by plane, bus or private car? What are the things
that you intend to take with you? So many decisions to be made!

OVERVIEW

After the objectives of an organization are identified and a plan is drafted, the next step in the managerial
process is organizing. Effective organizing is essential to determine how the plan is to be performed toward
the attainment of company objectives. The study of organizing revolves around the concept of the
organization which sets the foundation upon which the whole structure of management is built.
Organization deals with a lot of things such as developing the working relationships that exist within the
company, the determination and assignment of duties to people, concepts of authority and responsibility,
and how to coordinate the collective efforts and resources of the organization to achieve organizational
goals. It is therefore important to study the concepts that relate to organization to appreciate how the
process of management works.

5.1 THE NATURE OF ORGANIZATIONS

Managerial functions are said to be relevant processes that organizations need to carry out to achieve its
goals. It is important, therefore, that we study what organizations are and what relevant issues govern
them in the study of management.

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DEFINITION OF ORGANIZATION

1. Organization as a group of people.

2. Organization as a system.
3. Organization as a process.

Organization as a Group of People

The goals of any company cannot be achieved without people who serve as the working and driving force
behind it. Therefore, we say that an organization can be characterized as a group or collection of people
contributing their efforts and working together to achieve a common goal. These people recognize the
importance of achieving organizational goals that will be of mutual benefit not only to them but to the
organization as a whole, including its various stakeholders. This is the reason why they work closely with
each other in the attainment of the organization’s relevant objectives. In any company or a firm, the
human element is considered of vital importance to the success of an organization.

Organization as a System

A system may be defined as a structured mechanism composed of interrelated parts that work together
to undertake a stated function. An organization is considered a system because it is composed of people
with cooperative activities and interrelated functions designed to achieve goals or objectives set by the
company. Specifically, it is an open system that interacts with its environments by continuously obtaining
resource inputs (e.g., raw materials) and processes and transforming them into outputs (e.g., finished
goods and services) for use by their customers. These customers in turn provide feedback to the
organization, enabling it to determine whether it has been effective or not in carrying out its functions
and achieving its objectives.

Organization as a Process

Lastly, an organization may be viewed as a process of combining work and tasks which individuals or
groups have to perform. It involves grouping activities necessary to accomplish goals and plans as well as
allocating the resources to different work units. It also involves assigning activities to appropriate persons
to ensure that the work is carried out as planned.

IMPORTANCE OF ORGANIZATIONS

An organization, in its simplest sense, is a form of human association designed for the attainment of
common objectives. Without organizations and the people who compose it, management will not be able
to manage the various operations of the company. Some of the various advantages of organization are as
follows:

1. Organizations facilitate administration. A properly designed and balanced organization facilitates

both the management and operation of the enterprise, thereby contributing to organizational
effectiveness and efficiency.
2. Organizations facilitate growth and diversification. Enabling persons to work as a group and to
be able to contribute significantly to the attainment of an organization’s goals encourages and
motivates workers to participate effectively, grow on their jobs, and determine new avenues and
opportunities at discovering their potential.

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3. Organizations provide optimum use of technology. By dividing tasks into groups, workflows
become clearer, specific, concrete. Therefore, the process of allocating resources as well as the
needed technology becomes efficient.
4. Organizations promote the development of human capital. An effective organization provides
for efficient selection, training, and development of staff. Proper organization therefore promotes
the intensive use of human capital in a company.
5. Organizations stimulate creativity. By providing well-defined areas of work, an organization
provides sufficient freedom for workers to apply their creativity in accomplishing their tasks and
encourages initiative and independent thinking.
6. Organizations facilitate organizational stability. By ensuring open communication and
cooperation among the members who compose the firm, an effective organization facilitates the
stability of an organization.
7. Organizations help reduce employee turnover. When employees are treated well and are
considered valuable assets and members of the company, an effective organization increases
employee satisfaction and promotes better relations between management and workers.

5.2 ORGANIZATIONS IN THE MODERN WORKPLACE

The influx of technological advancements and social media nowadays continue to change the society in
which we live in. With this, an organization needs to adapt to changing circumstances to be effective and
better achieve its goals. Some of the trends and transitions affecting organizations nowadays include, but
are not limited to, the following:

1. Focus on productivity. One way to determine an organization’s overall performance is its

productivity. Productivity is a measurement of both the quality and quantity of outputs in relation
to inputs in terms of operations. Performance effectiveness is an output measure in that to be
effective, an organization must be able to achieve the goals it has set. Performance efficiency, on
the other hand, is an input measure of resource costs in the attainment of a particular objective.
To be efficient, an organization must be able to achieve its objectives by using inputs at the lowest
or most economic cost.
2. Invest in human capital. Organizations in this modern age and time are always on the lookout for
talented individuals who can contribute something of value to their company. This is the reason
why organizational settings focusing on high employee involvement as well as participatory
planning and management are set up in various organizations—to bank on the ideas and creativity
of their workforce.
3. Increased employee participation. Command-and-control mindsets inherent in traditional
hierarchical organizations are no longer prevalent in most organizations nowadays. The concept
of “do as I say” has already been replaced with increased employee involvement as well as
employee delegation and empowerment.
4. Emphasis on teamwork. Today’s organizations are more focused on teamwork and building
effective teams that would be more helpful in creatively solving problems in the organization.
5. Advancement if technology and social media. Developments in technology continuously affect
the way we live in, and it also affects the way organizations deal with their operations.
6. Increased networking. Organizations are always seeking for partnerships and building larger
networks to reach more stakeholders, expand their operations, and source out inputs and
resources with others.
7. Prevalence of a “millennial” workforce. Organizations nowadays prioritize the hiring of “young
blood” professionals whose youth and innovative potentials are considered valuable to
companies. These “millennial” employees of the modern generation are more driven and less
tolerant hierarchy, and value performance merit rather than seniority.
8. Focus on “work-life balance”. Employees nowadays realize that they have a life after they go out
of the office. They value the fact that they have social lives and have life priorities other than
work. Because of this, organizations are getting more concerned with the welfare of their

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employees and how to help them balance the demands of their work as well as their personal
affairs.
9. Focus on speed. Organizations nowadays recognize the value of the “first mover advantage” in
the industry. This is why they make it a point to deliver fast results, emphasize timelines in their
operations, and get their operations, and get their products and services offered in the market
first as opposed to those of their rivals.

5.3 ORGANIZING AS A MANAGEMENT FUNCTION

Organizing, being the second function of management, is the process of arranging people and other
resources to work together to accomplish predetermined goals. It involves dividing work to be performed
and coordinating resources to achieve a common purpose.

Objectives of Organizing

Organizing is important to organizations for the following reasons:

1. It structures and allocates resources and activities to accomplish objectives in an effective and
efficient manner.
2. It facilitates the implementation of plans.
3. It facilitates the division of labor.
4. It involves assignments of tasks, authority, responsibility, and accountability to key individuals.
5. It coordinates tasks and resources and enables them to work together to achieve a common
purpose.

5.4 ORGANIZATIONAL STRUCTURES

As a management function, organizing deals with the process of arranging people and other resources to
work together to accomplish a goal. It involves coordinating the efforts of those involved, dividing up the
work to be done, and coordinating results to achieve a common purpose.

The way in which the various parts of an organization are formally arranged is called the organizational
structure. It shows the authority and responsibility relationships between the various positions in the
organization and also shows who reports to whom and who has authority over and responsibility for
whom. It is an established pattern of formalizing the relationships that exist among those who compose
the organization.

In the study of management, there are various types of organizational structures, the most usual of which
are as follows:

1. Functional structures
2. Divisional structures
3. Matrix structures
4. Team structures
5. Network structures
6. Boundaryless structures

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The first three forms of organizational structures are examples of traditional structures that rely on
hierarchy and departmentalization, whereas the latter three forms are examples of newer organizational
structures that focus on the improvement of communication and flexibility by decreasing hierarchy,
increasing empowerment, and mobilizing human talents and capital.

FUNCTIONAL STRUCTURES

In a functional structure, people with similar skills and performing similar tasks are grouped together into
formal units. These structures involve departmentalization and specialization which refer to the processes
of individualizing specialized functions in the organizations. Some of these functions include purchasing,
manufacturing, marketing, accounting, human resources, and the like. Members of each function (or
department) work within their areas of specialization. This type of organizational structure works well for
small organizations that produce only one or a few products or services. A usual disadvantage of this
structure, however, is the phenomenon called functional chimneys problem, which refers to the ack of
communication, coordination, and problem-solving across functions because departments have their own
distinct jobs to do that tend to separate one function from the others. Figure 4.1 illustrates an example of
a functional structure.

Figure 5.1 Example of a functional structure

DIVISIONAL STRUCTURES

Divisional structures group together people who work on the same process or product, serve similar
customers, or are located in the same area or geographical location. In other words, these structures have
a locational similarity in organizing tasks and people. These types of structures are common in
organizations that are complex and have diverse operations, numerous products, territories or
geographical regions, customers, and work processes. A disadvantage, however, is that these structures
tend to increase organizational costs because of duplication of resources and efforts across various
divisions or locations.

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Figure 5.2 Example of a divisional structure

MATRIX STRUCTURES

Matrix structures combine the features of both the functional and divisional structures in an attempt to
gain the advantages and minimize the disadvantages of each. An organization formed this way is
composed of dual-reporting relationships where some managers report to two superiors—a functional
manager (e.g., head of a specific department) and a divisional manager (e.g., head of a particular
geographical location). These organizations are often found in multinational corporations who have very
diverse operations and geographical locations and tend to organize their workers as specialized “project
teams” performing a specialized function and are part of a specific location, market segment, or division.
One main disadvantage of this structure though is that teams may develop “groupitis” which is a
phenomenon characterized by strong team loyalties that cause a loss of focus on larger organizational
goals.

Figure 5.3 Example of a matrix structure.

TEAM STRUCTURES

One of the newer types of organizational structures is the team structure. Under this structure,
permanent and temporary teams are extensively used to solve problems, complete special projects, and

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accomplish day-to-day tasks. These teams are also called project teams, task force, or committees and are
usually formed on an ad hoc or “as necessary” basis to solve distinct problem or accomplish a specialized
task. These are usually cross-functional teams that are composed of members from different work areas
or responsibilities who are especially or specifically handpicked to be part of the identified specialized
group. These teams are then usually disbanded once the tasks are completed.

Figure 5.4 Example of team structure.

NETWORK STRUCTURES

Network structures consist of a central organization that links itself with others through networks of
relationships with outside contractors and suppliers of essential services. They own only the essential
components or functions of the business and procure the other components or functions through
strategic alliances or outsourcing. A strategic alliance is a cooperative strategy between firms through
which partners share resources for mutual benefit and attainment of a common goal. Outsourcing, on the
other hand, is the process of contracting business functions from outside suppliers or service providers to
reduce organizational costs of putting up a separate department or unit that will perform the said
functions.

Figure 5.5 Example of a network structure

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BOUNDARYLESS STRUCTURES

Boundaryless structures eliminate internal boundaries among subsystems and external boundaries with
the external environment. They can be viewed as a combination of team and network structures and are
formed based on the changing needs or demands of the company or circumstances.

5.5 ORGANIZATIONAL CHARTS

Although organizational structures establish the pattern of authority, responsibility, and work
relationships within the company, an organizational chart formally illustrates these established patterns.
It is a diagrammatical or pictographic representation of the important aspects of the organization by
showing the principal lines of authority, the interplay of various functions and relationships, the channels
of communication, and the chain of command and span of control within the company.

Some of the advantage of having an organizational chart are as follows:

1. An organizational chart gives a clear picture of the organizational structure and the relationships
that exist in an organization.
2. It shows briefly the lines of authority and responsibility.
3. It helps avoid misunderstanding of jurisdictional problems by showing a detailed and clear picture
of who has authority and responsibility over whom in the organization.
4. With the help of an organizational chart, outsiders can easily know the persons who they have to
approach in connection with their queries and concerns.
5. By providing a clear picture of lines of authority and responsibility, organizational chart helps
avoid overlapping and duplication of authority and secure unity of command.
6. It serves as a valuable guide for new personnel in understanding the organization and who the
key persons are in the organization purposes of their training.

Disadvantages:

1. An organizational chart shows only the formal relationships within the organization and may fail
to show the informal relationships or groups that exist in an organization.
2. It shows the lines of authority but sometimes do not specify the extent or scope of authority
vested in different managerial decisions.
3. It cannot possibly include all information needed that may affect the organization.
4. It shows a static state of affairs and does not present flexibility, which is usually a requirement for
dynamic organizations.
5. When there is an organizational chart, employees in the organization tend to be too conscious of
their responsibilities and boundary lines.
6. It may give rise to a feeling of superiority and inferiority which might cause conflicts in the
organization and affect team spirit within the company.
7. It displays only the organizational structure. It does not guarantee good organizational structure
or good management.

5.6 ORGANIZATIONAL MANUALS

To supplement information that organizational charts cannot provide, an organization may prepare an
organizational manual or management guide. An organizational manual is a guide that sets down in the
form of a book or booklet all the details of the organization, its objectives and policies, authorities,
functions, duties, responsibilities, and job descriptions of each unit and all information relating thereto.
These are usually the ones being read by new employees for purposes of training and familiarization of
the company they are affiliated with.

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Different Types of organizational manuals:

1. Policy manuals. These describe the overall rules and regulations set by the company as well as
the overall limitations within which activities are to take place. It also reveals broad courses of
managerial actions likely to take place under certain conditions.
2. Operations manual. This is prepared to inform employees of established methods, procedures,
instructions, and standards of doing various kinds of work.
3. Organizational manual. It explains what the organization is entirely about, the duties and
responsibilities of each department, and their respective subunits these may also be used to
promote the organization to outsiders and other stakeholders.
4. Departmental practice manual. It deals in detail with the internal policies and organizational
procedures of a specific department.
5. Rules and regulations manual. It gives information about the operating rules and employment
regulations of the company.

Advantages:

1. An organization manual contains and details in writing all important information relating to the
organization.
2. Each person can determine the responsibilities the job entails and the proper relationship of the
job with other jobs in the organization.
3. Jurisdictional conflicts and overlapping of authority can be avoided.
4. It relieves the manager of repeating the same information over and over again especially to new
employees.
5. It provides uniformity and consistency in procedures and practices.
6. It enables new employees to know the various procedures and practices in the shortest possible
time.
7. It enables quick decisions.
8. It contains rules and regulations that employees must follow.

Disadvantages:

1. The preparation of manuals is sometimes costly and time-consuming.

2. Manuals leave little scope to an individual’s initiative, direction, and creativity.
3. Manuals may bring rigidity and inflexibility to the organization.

5.7 ORGANIZATION CONCEPTS AND THEIR APPLICATIONS

As a management function, the process of organizing is considered as crucial to an organization’s

attainment of its objectives through proper division of work, allocation of resources, and coordination of
efforts. Thus, it is important for us to be familiar with the various concepts, principles, and key issues that
affect the process of organizing in the study of management, as well as to learn how they work and how
to apply them in an organizational setting.

Some of the salient organizing concepts, principles, and key issues include the following:

1. Unity of objectives. The objectives of an organization give direction and purpose to the
organization and therefore influence its entire structure as a whole. There must be unity of
objectives so that all the efforts of those who compose the organization are concentrated toward
achieving the identified objectives.
2. Differentiation. This concept recognizes that the organization is composed of many different
units and members that work on different kinds of tasks and work methods. However, although
these units are different, they work together in achieving the common goals of the organization.
3. Departmentalization or specialization. This is a process in which different units and individuals
perform different or “specialized” tasks in the organization, which reflect the important core
functions of the organization.

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4. Coordination. This concept refers to the orderly arrangement of group effort to provide unity of
action in the pursuit of common purpose. Organizing involves effective division of work among
people whose efforts must be coordinated to achieve common goals.
5. Division of labor. This is the process of assigning different tasks to different people or groups to
facilitate effective coordination of functions within the organization.
6. Authority. This is the legitimate right to make decisions and tell other people what to do.
7. Lines of authority. This represents a clear unbroken line that points out the legitimate rights and
powers that flow from the highest executive to the lowest managerial level.
8. Responsibility. When a manager is given authority, he also bears responsibility for that legitimate
right or power. This also refers to the assignment of a task that an employee is supposed to carry
out.
9. Accountability. This refers to the expectation that employees will perform a specific job, take
corrective action when necessary, and report upward on the status and quality of their
performance. This also refers to the responsibility to answer to someone who has higher
authority in the organization.
10. Hierarchy. This refers to the authority levels that exist within the organization brought about by
its lines of authority.
11. Efficiency. This refers to the concept that the organization should be able to attain its objectives
with the lowest possible cost.
12. Corporate governance. This concept ensures that the organization’s activities are directed
toward meeting the goals and the needs of its stakeholders.
13. Delegation. This refers to the assignment of new or additional responsibilities to a subordinate.
14. Centralization. This is an organizational concept in which high-level executives make most of the
decisions and pass them down to lower levels for implementation.
15. Decentralization. An organizational concept in which lower-level managers are empowered to
make decisions within their jurisdiction.
16. Unity of command. Each person should be accountable to a single superior to have a sense of
personal responsibility to one person for results.
17. Chain of command. This is the line of authority that vertically links each position with successively
higher levels of management. This also shows how authority flows from the highest level of
authority toward the lower levels.
18. Span of control. This refers to the number of subordinates directly reporting to a manager or
superior.
19. Communication. An organization should have an effective system of communication so that
information can flow smoothly and be understood effectively for effective performance.
20. Flexibility. The organization should be able to provide mechanisms to facilitate growth and
expansion and adjust to changing circumstances.
21. Downsizing. This is the slimming down of operations to focus resources and boost profits or
decrease expenses. This is done by companies who wish to reduce levels of bureaucracy or
redundant functions in the organization. This, however, has some disadvantages, one of which is
employee layoffs.
22. Tall vs. flat organizations. Tall organizations involve numerous bureaucratic levels, flat
organizations to combine similar or redundant functions to lessen bureaucracy and restructure
organizational functions more effectively.
23. Outsourcing. This is the process of hiring an individual or another company outside the
organization to perform the work.
24. Homeshoring. This is the process of moving customer service into workers’ homes as a form of
telecommuting.
25. Employee empowerment. This is providing opportunities for employees or subordinates to grow
on their jobs, exercise freedom over their actions, and participate toward the achievement of
organizational objectives.

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4.8 DELEGATION

Delegation is the process of assigning formal authority and responsibility for accomplishing a specific task
to another person, it also includes entrusting work to others by giving them the right to make decisions
and take action on behalf of their manager or superior. If managers do not delegate some of their tasks,
they can be seen as exercising “too much control” and shows weakness in their managerial abilities.
Furthermore, the manager may be burdened with a lot of tasks—even some unimportant ones—that even
nonmanager can handle, thereby wasting the manager’s time and effort instead of exerting it on more
important issues.

However, one important reminder should be remembered about delegation: a delegated authority can
never be re-delegated. Delegation is a right and privilege exercised only by a manager in reference to his
or her subordinate. By delegating tasks to his or her subordinates, the manager temporarily “lends” his
authority to others. This “borrowed authority”, therefore, cannot be lent by a subordinate to another.
Therefore, if the subordinate to whom the task was delegated fails or is unable to perform the task, the
manager must accept the blame by virtue of command responsibility and because he was the one who
chose the person who failed. Placing the blame on others for faults attributable to your own managerial
authority is a sign of weak managerial ability.

The Delegation Process:

1. Assign responsibility. In this step, the manager or superior explains to his or her subordinate what
the tasks to be delegated are and what expectations are required. The manager carefully explains
the work or duties that someone else has to do and gives instructions on how these are to be
done. The manager usually assigns responsibility by creating an expectation that the subordinate
to whom the tasks are delegated will perform the assigned tasks.
2. Grant authority. After assigning responsibility, the manager now grants to the subordinate
temporary authority to act and make decisions on his behalf. Along with the assigned task, the
right to take necessary actions to ensure that the job gets done is given to another person.
3. Create accountability. In this final step, the manager now requires the subordinates to whom the
task, authority, and responsibility are delegated to report back on the results. This also reminds
the person delegated that he or she has a direct obligation to the manager to complete the job as
agreed.

Advantages:

Aside from saving time and effort and being able to focus on more important tasks, delegation brings forth
a lot of advantages to the managers.

1. It leverages managers’ energy and talent by allowing them to focus on more important tasks that
need to be done.
2. It allows managers to accomplish more as compared to what they can accomplish if they were
working alone.
3. It helps develop effective and productive subordinates.
4. It promotes a sense of being an important and contributing member to the organization on the
part of the subordinates.
5. Subordinates feel that their superiors trust them by assigning tasks for them to do.
6. It creates a feeling on the part of subordinates that their superiors believe in their abilities to
accomplish certain jobs.
7. It transfers responsibility to others as a means of promoting one’s own productivity.
8. It allows subordinates to develop and grow on their jobs by learning how to handle responsibility
and become more productive.
9. It increases commitment to decisions and work goals on the part of the subordinates.
10. Delegation leads to empowerment by giving subordinates the freedom to contribute ideas and
do their jobs in the best possible way, as well as giving them opportunities to discover new skills
and things that they can be good at.

Effects When Managers Do Not Delegate

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1. It may be a sign that the manager wants to exercise “too much control” over tasks.
2. It might show that the manager does not trust his or her subordinates.
3. It might overload the manager of work that can be done by others.
4. It denies others many opportunities to utilize their talents on the job and discover their full
potentials at work.

Useful Tips for Effective Delegation

1. Select the right people. The manager must be aware of the strengths and weaknesses of his
subordinates when choosing the person to whom the task is to be delegated.
2. Delegate the whole task and step back from details. This would allow the subordinate to think on
his or her own and identify ways to perform the task to the best of his or her ability. This promotes
job enrichment, motivation, independence, creativity, and initiative.
3. Give clear instructions and provide as much as needed. To enable subordinates meet
expectations, managers must provide clear, specific, and enough instructions on how tasks are
expected to be done to provide subordinates sufficient information on which to base the
execution of tasks. Managers should also avoid dumping, which is the process of dropping a task
to a subordinate without instructions.
4. Retain some important tasks for yourself. Managers should reserve acting on essential and
sensitive tasks to themselves.
5. Obtain and require feedback on the delegated task. Managers should continuously follow-up and
check on progress of the delegated work being done by the subordinate.

4.9 FORMAL AND INFORMAL ORGANIZATIONS

Formal organization—a system of continuously coordinated activities or forces of two or more persons.
It refers to the structure of well-defined jobs, each bearing a definite measure of authority, responsibility,
and accountability.

Informal organization—refers to the relationship between people in the organization based on personal
attitudes, emotions, prejudices, likes, dislikes.

FORMAL ORGANIZATION INFORMAL ORGANIZATION

established with the explicit aim of achieving its goals are personal and intangible
organizational goals
bound together by hierarchical authority characterized by social relationships
relationships among members
recognizes certain tasks and activities which are does not have well-defined tasks
to be carried out to achieve its goals
the roles and responsibilities of people are roles and relationships among people are
impersonally defined and stem from the interpersonal
authority coming from the managerial positions
much emphasis is placed on efficiency, characterized by relative freedom, spontaneity,
discipline, conformity, consistency, and control and warmth
social and psychological needs and interests of socio-psychological needs, interests, and
members of the organization get little attention aspirations of members are given priority
communication system is bound by protocols the communication system is open and free
and predetermined patterns and paths flowing
relatively slow to respond and adapt to changing dynamic and sensitive to its surroundings
situations
Table 5.1 Differences between formal and informal organizations.

5.10 ORGANIZATIONAL CULTURE

For an organization to be competitive, it has to be unique and have its own sense of identity that
distinguishes it from others. This is where the concept of organizational culture comes in. Organizational

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culture refers to the system of shared beliefs and values that shapes and guides the behavior of the
members of the organization and gives the organization its identity. It is also sometimes called the
corporate culture. According to Larry Senn, it consists of norms, values, and unwritten rules of conduct of
an organization as well as management styles, priorities, beliefs, and interpersonal behavior that prevail
in an organization. All of these factors that compose the organizational culture create a climate that
influences relationships among employees, work setting, quality of work experience, and organizational
identity.

ELEMENTS OF ORGANIZATIONAL CULTURE

1. Core values. These are underlying assumptions and beliefs that shape and guide people’s
behaviors. These are the things that the organization believes to be worth doing or the reasons
for doing what the organization does. These shared values give answers to the many “why”
questions in the organization. It also provides the organization with a basis on why it exists and
why it sets to do what it does.
2. Artifacts. These are the things that come together to define a culture and reveal what the culture
is about to those who pay attention to them. These are the things that one sees, hears, feels, or
observes when one encounters a new group with an unfamiliar culture, or things that an outsider
would observe when walking around an organization. These include products, services, behavior
patterns of members, and the like.
3. Heroes. These include founders, role models, and people singled out for special attention and
whose accomplishments are recognized with praise and admiration. They are the personified
embodiment of the values and beliefs that define the organization and are intended to provide
inspiration or motivation for other employees to do or become the same.
4. Ceremonies, rites, and rituals. These are unique gatherings, ceremonies, meetings, or
occasions—either planed or spontaneous—that celebrate important occasions and performance
accomplishments. These also refer to events that are uniquely attributable to the organization.
5. Legends and stories. These refer to oral histories and tales told and retold among its members
about historic and crucial events in the life of the organization that helped shape and bring the
organization into what it is and where it is now.
6. Metaphors and symbols. These are the special use of language and other nonverbal expressions
that communicate and associate important themes, values, and beliefs of the organization.

IMPORTANCE OF ORGANIZATIONAL CULTURE

1. It distinguishes one organization from others.

2. It enables the organization to notice, respond, and adapt to changes in its environments.
3. It provides a basis of conduct and behavior for employees.
4. It makes employees feel a great sense of ownership, responsibility, and belongingness.
5. It strengthens the company’s purpose or reason for existing.
6. It provides meaning to the things done by the company.
7. It conveys a sense of identity not just to the organization but to its members as well.
8. It facilitates on employees a sense of commitment to something larger and higher than their own
self-interests.
9. It enhances the stability of the organization as well as the social relationships that prevail within
it.
10. It guides and shapes the behavior and attitude of the employees.

BA 41.Business and Management Integrals.2020

College of Business and Management CENTRAL MINDANAO UNIVERSITY