Organizational Culture

ARD 201
Overview

+ The key to a successful organization is to have a culture based

on a strongly held and widely shared set of beliefs that are
supported by strategy and structure. When an organization
has a strong culture, three things happen: Employees know
how top management wants them to respond to any
situation, employees believe that the expected response is
the proper one, and employees know that they will be
rewarded for demonstrating the organization's values.
+ An organization's culture defines the proper way to
behave within the organization. This culture consists of
shared beliefs and values established by leaders and
then communicated and reinforced through various
methods, ultimately shaping employee perceptions,
behaviors and understanding. Organizational culture
sets the context for everything an enterprise does.
Because industries and situations vary significantly, there
is not a one-size-fits-all culture template that meets the
needs of all organizations.
+ A strong culture is a common denominator among the
most successful companies. All have consensus at the
top regarding cultural priorities, and those values focus
not on individuals but on the organization and its goals.
Leaders in successful companies live their cultures every
day and go out of their way to communicate their cultural
identities to employees as well as prospective new hires.
They are clear about their values and how those values
define their organizations and determine how the
organizations run.
+ Conversely, an ineffective culture can bring down the
organization and its leadership. Disengaged employees, high
turnover, poor customer relations and lower profits are
examples of how the wrong culture can negatively impact the
bottom line.
+ Mergers and acquisitions are fraught with culture issues. Even
organizational cultures that have worked well may develop
into a dysfunctional culture after a merger. Research has
shown that two out of three mergers fail because of cultural
problems. Blending and redefining the cultures, and
reconciling the differences between them, build a common
platform for the future.
+ In recent years, the fast pace of mergers and acquisitions
has changed the way businesses now meld. The focus
in mergers has shifted away from blending cultures and
has moved toward meeting specific business objectives.
Some experts believe that if the right business plan and
agenda are in place during a merger, a strong corporate
culture will develop naturally.
Origins

+ According to Jaques, "the culture of the

factory is its customary and traditional way of
thinking and doing of things, which is shared
to a greater or lesser degree by all its
members, and which new members must
learn, and at least partially accept, in order to
be accepted into service in the firm..." In
simple terms, to the extent that people can
share common wishes, desires and
aspirations, they can commit themselves to
work together. It is a matter of being able to
care about the same things, and it applies to
nations as well as to associations and
organizations within nations.
Definitions

+ Elliott Jaques first introduced the concept of culture in the

organizational context in his 1951 book The Changing Culture
of a Factory.
+ He defined "organizational culture" as comprising a number
of features, including a shared "pattern of basic assumptions"
which group members have acquired over time as they learn
to successfully cope with internal and external
organizationally relevant problems.
+ Ravasi and Schultz (2006) characterize organizational culture as a
set of shared assumptions that guide behaviors. It is also the
pattern of such collective behaviors and assumptions that are
taught to new organizational members as a way of perceiving and,
even thinking and feeling.
+ According to Edgar Schein, “Organizational culture can be defined
as a pattern of basic assumptions-invented, discovered or
developed by a given group as it learns to cope with its problems
of external adaptation and internal integration-that has worked well
enough to be considered valuable and, therefore, to be taught to
new members as the correct way to perceive, think and feel in
relation to those problems.”
Characteristics

+ All the above definitions of organisational culture stress

on the sharing of norms and values that guide the
organisational members’ behaviour. These norms and
values are clear guidelines as to how employees are to
behave within the organisation and their expected code
of conduct outside the organisation.
+ Individual Autonomy: The degree of responsibility, freedom and opportunities
of exercising initiative that individuals have in the organisation.
+ Structure: The degree to which the organisation creates clear objectives and
performance expectations. It also includes the degree of direct supervision that is
used to control employee behaviour.
+ Management Support: The degree to which, managers provide clear
communication, assistance; warmth and support to their subordinates.
+ Identity: The degree to which, members identify with the organisation as a whole
rather than with their particular work group or field of professional expertise.
+ Performance Reward System: The degree to which reward system in
the organisation like increase in salary, promotions etc. is based on employee
performance rather than on seniority, favouritism and so on.
+ Conflict Tolerance: The degree of conflict present in relationships between colleagues and
work groups as well as the degree to which employees are encouraged to air conflict
and criticisms openly.
+ Risk Tolerance: The degree to which, employees are encouraged to be innovative,
aggressive and risk taking.
+ Communication Patterns: The degree to which, organisational communications are
restricted to the formal hierarchy of authority.
+ Outcome Orientation: The degree to which, management focuses on results or outcomes
rather than on the techniques and processes used to achieve these outcomes.
+ People Orientation: The degree to which, management decisions take into consideration
the impact of outcomes on people within the organisation. When we appraise
the organisation on the basis of the above characteristics, we get a complete picture of the
organization’s culture. This picture becomes the basis of shared norms, beliefs and
understanding that members have about the organisation, how things are done in it and how
the members are supposed to behave.
Concept

+ An employer must begin with a thorough understanding

of what culture is in a general sense and what their
organization's specific culture is. At the deepest level, an
organization's culture is based on values derived from
basic assumptions about the following:
+ Human nature. Are people inherently good or bad, mutable or immutable,
proactive or reactive? These basic assumptions lead to beliefs about how
employees, customers and suppliers should interact and how they should
be managed.
+ The organization's relationship to its environment. How does the
organization define its business and its constituencies?
+ Appropriate emotions. Which emotions should people be encouraged to
express, and which ones should be suppressed?
+ Effectiveness. What metrics show whether the organization and its
individual components are doing well? An organization will be effective
only when the culture is supported by an appropriate business strategy and
a structure that is appropriate for both the business and the desired
culture.
+ Culture is a nebulous concept and is often an undefined aspect of an organization.
Although extensive academic literature exists relating to the topic of
organizational culture, there is no generally accepted definition of culture. Instead,
the literature expresses many different views as to what organizational culture is.
+ Organizational culture can manifest itself in a variety of ways, including leadership
behaviors, communication styles, internally distributed messages and corporate
celebrations. Given that culture comprises so many elements, it is not surprising
that terms for describing specific cultures vary widely. Some commonly used terms
for describing cultures include aggressive, customer-focused, innovative, fun,
ethical, research-driven, technology-driven, process-oriented, hierarchical, family-
friendly and risk-taking.
+ Because culture is difficult to define, organizations may have trouble maintaining
consistency in their messages about culture. Employees may also find it difficult to
identify and communicate about perceived cultural inconsistencies.
Factors That Shape an
Organization's Culture
+ Most company cultures are not that different from one another.
Even organizations in disparate industries such as manufacturing
and health care tend to share a common core of cultural values. For
example, most private-sector companies want to grow and increase
revenues. Most strive to be team-oriented and to demonstrate
concern for others. Most are driven, rather than relaxed, because
they are competing for dollars and market share. Some of the
cultural characteristics that distinguish most organizations include
the following.
 VALUES
At the heart of organizations' cultures are commonly shared values. None is right or
wrong, but organizations need to decide which values they will emphasize. These
common values include:
+ Outcome orientation. Emphasizing achievements and results.
+ People orientation. Insisting on fairness, tolerance and respect for the individual.
+ Team orientation. Emphasizing and rewarding collaboration.
+ Attention to detail. Valuing precision and approaching situations and problems
analytically.
+ Stability. Providing security and following a predictable course.
+ Innovation. Encouraging experimentation and risk-taking.
+ Aggressiveness. Stimulating a fiercely competitive spirit.
 DEGREE OF HIERARCHY
+ The degree of hierarchy is the extent to which the organization values
traditional channels of authority. The three distinct levels of hierarchy are
"high"— having a well-defined organizational structure and an expectation
that people will work through official channels; "moderate"— having a
defined structure but an acceptance that people often work outside
formal channels; and "low" — having loosely defined job descriptions and
accepting that people challenge authority.
+ An organization with a high level of hierarchy tends to be more formal and
moves more slowly than an organization with a low level of hierarchy.
 DEGREE OF URGENCY
+ The degree of urgency defines how quickly the organization wants or
needs to drive decision-making and innovation. Some organizations
choose their degree of urgency, but others have it thrust on them by the
marketplace.
+ A culture with high levels of urgency has a need to push projects through
quickly and a high need to respond to a changing marketplace. A
moderate level of urgency moves projects at a reasonable pace. A low
level of urgency means people work slowly and consistently, valuing
quality over efficiency. An organization with high urgency tends to be fast-
paced and supports a decisive management style. An organization with
low urgency tends to be more methodical and supports a more
considered management style.
 PEOPLE ORIENTATION OR TASK ORIENTATION
+ Organizations usually have a dominant way of valuing people and tasks.
An organization with a strong people orientation tends to put people first
when making decisions and believes that people drive the organization's
performance and productivity. An organization with a strong task
orientation tends to put tasks and processes first when making decisions
and believes that efficiency and quality drive organization performance
and productivity.
+ Some organizations may get to choose their people and task orientations.
But others may have to fit their orientation to the nature of their industry,
historical issues or operational processes.
 FUNCTIONAL ORIENTATION
+ Every organization puts an emphasis on certain functional areas. Examples
of functional orientations may include marketing, operations, research and
development, engineering or service. For example, an innovative
organization known for its research and development may have at its core
a functional orientation toward R&D. A hospitality company may focus on
operations or service, depending on its historical choices and its definition
in the marketplace.
+ Employees from different functions in the company may think that their
functional areas are the ones that drive the organization. Organizational
leaders must understand what most employees perceive to be the
company's functional orientation.
 ORGANIZATIONAL SUBCULTURES
Any organization can have a mix of subcultures in addition to the dominant
culture. Subcultures exist among groups or individuals who may have their
own rituals and traditions that, although not shared by the rest of the
organization, can deepen and underscore the organization's core values.
Subcultures can also cause serious problems.
For example, regional cultures often differ from the overall culture that top
leadership tries to instill. Perhaps aggressiveness that is common in one
area may not mesh with a culture emphasizing team building. Or an
organization with a culture built around equality may have trouble if the
national culture emphasizes hierarchy and expects people to bow to
authority. Employers must recognize those differences and address them
directly.
Typology

+ Goffee and Jones have identified four distinct cultural

types. They argue that these four culture types are based
on two dimensions which they call sociability and
solidarity. Sociability refers to high concerns for people
i.e. it is people oriented and focuses on processes rather
than on outcomes. The second dimension i.e. solidarity is
however task oriented.
 Networked Culture:
+ Networked culture is high on sociability and low on solidarity. Which
means that the organisation treats, its members in a quite friendly manner
and there is open sharing of information. However, this culture type may
lead to poor performance as the focus is on the people rather than on
tasks.
Mercenary Culture:
+ It is low on sociability and high on solidarity. The organisations with
mercenary culture are task oriented and believe in competition. The
people are highly focussed and goal oriented but, this type of culture may
at times lead to frustration and stress among poor performers.
 Fragmented Culture:
+ Fragmented culture is low on both sociability and solidarity. There
is little or no identification with the organisation. It is the individual
members’ commitment, productivity and quality of work which is of
utmost importance. This type of culture however suffers from lack
of collegiality.
Communal Culture:
+ It is high on both sociability and solidarity. The organisations with
communal culture value both people and tasks. Work
accomplishment is from committed people, and there is a
relationship of trust and respect.
 HIGH

NETWORKED COMMUNAL
SOLIDARITY

FRAGMENTED MERCENARY

SOLIDARITY
LOW HIGH
Qualities of a great organizational
culture
+ Alignment comes when the company’s objectives and its
employees’ motivations are all pulling in the same direction.
Exceptional organizations work to build continuous alignment
to their vision, purpose, and goals.
+ Appreciation can take many forms: a public kudos, a note of
thanks, or a promotion. A culture of appreciation is one in
which all team members frequently provide recognition and
thanks for the contributions of others.
+ Trust is vital to an organization. With a culture of trust, team members can
express themselves and rely on others to have their back when they try
something new.
+ Performance is key, as great companies create a culture that means
business. In these companies, talented employees motivate each other to
excel, and, as shown above, greater profitability and productivity are the
results.
+ Resilience is a key quality in highly dynamic environments where change
is continuous. A resilient culture will teach leaders to watch for and
respond to change with ease.
+ Teamwork encompasses collaboration, communication, and respect
between team members. When everyone on the team supports each
other, employees will get more done and feel happier while doing it.
+ Integrity, like trust, is vital to all teams when they rely on each other
to make decisions, interpret results, and form partnerships. Honesty
and transparency are critical components of this aspect of culture.
+ Innovation leads organizations to get the most out of available
technologies, resources, and markets. A culture of innovation
means that you apply creative thinking to all aspects of your
business, even your own cultural initiatives.
+ Psychological safety provides the support employees need to
take risks and provide honest feedback. Remember that
psychological safety starts at the team level, not the individual level,
so managers need to take the lead in creating a safe environment
where everyone feels comfortable contributing.
Robert A. Cooke
model
Robert A. Cooke defines culture as the behaviors that
members believe are required to fit in and meet
expectations within their organization. The
Organizational Culture Inventory measures twelve
behavioral norms that are grouped into three general
types of cultures:
+ Constructive cultures, in which members are
encouraged to interact with people and approach
tasks in ways that help them meet their higher-
order satisfaction needs.
+ Passive/defensive cultures, in which members
believe they must interact with people in ways that
will not threaten their own security.
+ Aggressive/defensive cultures, in which
members are expected to approach tasks in
forceful ways to protect their status and security.
 Constructive cultures
In constructive cultures, people are encouraged to be in communication with
their co-workers, and work as teams, rather than only as individuals. In
positions where people do a complex job, rather than something simple like
a mechanical task, this culture is efficient
+ Achievement: completing a task successfully, typically by effort, courage,
or skill (pursue a standard of excellence) (explore alternatives before
acting) – Based on the need to attain high-quality results on challenging
projects, the belief that outcomes are linked to one's effort rather than
chance and the tendency to personally set challenging yet realistic goals.
People high in this style think ahead and plan, explore alternatives before
acting and learn from their mistakes.
+ Self-actualizing: realization or fulfillment of one's talents and potentialities –
considered as a drive or need present in everyone (think in unique and
independent ways) (do even simple tasks well) – Based on needs for personal
growth, self-fulfillment and the realization of one's potential. People with this style
demonstrate a strong desire to learn and experience things, creative yet
realistic thinking and a balanced concern for people and tasks.
+ Humanistic-encouraging: help others to grow and develop (resolve conflicts
constructively) – Reflects an interest in the growth and development of people, a
high positive regard for them and sensitivity to their needs. People high in this
style devote energy to coaching and counselling others, are thoughtful and
considerate and provide people with support and encouragement.
+ Affiliative: treat people as more valuable than things (cooperate with others) –
Reflects an interest in developing and sustaining pleasant relationships. People
high in this style share their thoughts and feelings, are friendly and cooperative
and make others feel a part of things.
+ Organizations with constructive cultures encourage members to
work to their full potential, resulting in high levels of motivation,
satisfaction, teamwork, service quality, and sales growth.
Constructive norms are evident in environments where quality is
valued over quantity, creativity is valued over conformity,
cooperation is believed to lead to better results than competition,
and effectiveness is judged at the system level rather than the
component level. These types of cultural norms are consistent with
(and supportive of) the objectives behind empowerment, total
quality management, transformational leadership, continuous
improvement, re-engineering, and learning organizations
 Passive/defensive cultures
Norms that reflect expectations for members to interact with
people in ways that will not threaten their own security are in the
Passive/Defensive Cluster.
The four Passive/Defensive cultural norms are:
+ Approval
+ Conventional
+ Dependent
+ Avoidance
In organizations with Passive/Defensive cultures, members feel
pressured to think and behave in ways that are inconsistent with
the way they believe they should in order to be effective.
People are expected to please others (particularly superiors) and
avoid interpersonal conflict. Rules, procedures, and orders are
more important than personal beliefs, ideas, and
judgment. Passive/Defensive cultures experience a lot of
unresolved conflict and turnover, and organizational members
report lower levels of motivation and satisfaction.
 Aggressive/defensive cultures
This style is characterized with more emphasis on task than people. Because
of the very nature of this style, people tend to focus on their own individual
needs at the expense of the success of the group. The aggressive/defensive
style is very stressful, and people using this style tend to make decisions
based on status as opposed to expertise.
+ Oppositional – This cultural norm is based on the idea that a need for
security that takes the form of being very critical and cynical at times.
People who use this style are more likely to question others work;
however, asking those tough question often leads to a better product.
Nonetheless, those who use this style may be overly-critical toward others,
using irrelevant or trivial flaws to put others down.
+ Power – This cultural norm is based on the idea that there is a need for prestige
and influence. Those who use this style often equate their own self-worth with
controlling others. Those who use this style have a tendency to dictate others
opposing to guiding others' actions.
+ Competitive – This cultural norm is based on the idea of a need to protect one's
status. Those who use this style protect their own status by comparing themselves
to other individuals and outperforming them. Those who use this style are seekers
of appraisal and recognition from others.
+ Perfectionistic – This cultural norm is based on the need to attain flawless results.
Those who often use this style equate their self-worth with the attainment of
extremely high standards. Those who often use this style are always focused on
details and place excessive demands on themselves and others.
Diagram of
Cooke's model
+ The results of these diagnostic tools provide a
more objective and sound base from which to
plan, develop and implement improvement
strategies that achieve real results
+ Life Styles Inventory (LSI 1 and LSI 2)
+ Management/Impact (M/I)
+ Leadership/Impact (L/I)
+ Group Styles Inventory (GSI)
+ Organisational Culture Inventory (OCI)
+ Organisational Effectiveness
Inventory (OEI)
Changing Organizational Culture

+ Sometimes an organisation determines that its culture is

unfavorable to the organisational effectiveness and it has
to be changed. For example, if there is a change in the
external environment, the organisation must adapt itself
to the changing conditions or it will not survive. Though it
is very difficult to change the old cultures, but it is
something which the management cannot do without.
The following conditions must be present only then a cultural change can take place:
1. Dramatic Crisis: Any dramatic crisis in the organisation like a major financial setback,
loss of a major customer, or a technological breakthrough by a competitor may
force the management to look into the relevance of the existing culture.
2. New Top Leadership: If some top executives leave the organisation and new
leadership takes over, they may provide an alternative set of key values or a new
culture. This new leadership may be more capable of responding to the crisis.
3. Young and Small Organisation: When the organisation is new and its size is small, it
will be easier for the management to change the culture.
4. Weak Culture: Weak cultures are more amenable to change than strong ones. The
higher the agreement among the members on the organisational values, the more
difficult it will be to change.