Organizational Culture

Instructor: Prof. Luxmi Malodia

Submitted by:
Prachi | Preeti | Radhika
MBA HR

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 1

 Definition & Nature
Organizational culture refers
to a system of shared History Shared Culture
meaning held by members
that distinguishes the • Cultural norms of • Cultural ethos are
organization from other a society are shared among the
transgenerational. members of a
organizations.
society.

Culture is not one person-specific.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 2

 Characteristics of Organization’s Culture

1 Innovation and Risk Taking

Team Orientation 5
2 Attention To Detail

Characteristics Aggressiveness 6
3 Outcome Orientation
Stability 7
4 People Orientation

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 3

 Functions of Organizational Culture

Gives a Sense of Identity

Culture has a boundary-defining
role: it creates distinctions between
one organization and others. It
conveys a sense of identity for
organization members.
Generate Commitment
Among Employees
Culture facilitates commitment
to something larger than
individual self-interest.
05-11-2021
Clarify and Reinforce
Standards of Behaviour
It enhances the stability of
the social system. Culture
helps in developing sense-
making and control
mechanism that guides and
shapes employees’ attitudes
and behavior. Culture
defines the rules of the
game.
Organizational Behaviour/Organizational Culture/Group 07 4
 Five Dimensions of Corporate Culture

Levels of Culture
Mechanistic and Organic Cultures
Authoritarian and Participative Cultures
Dominant and Sub-Cultures
Strong and Weak Cultures

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 5

 Levels of Culture
• At the surface.
Observable • This manifests through symbols such as physical design, dress code,
Values logos, gadgets, and murals or stories, ceremonies and rituals.

• Shared values are applicable to all organisational members and no

deviation is tolerated.
Shared Values • Corporate vision and mission, common uniform and shared canteen
represent shared culture.

• Deepest/hidden level of culture.

Common • Taken-for-granted truths that organisational members share as a result of
their joint experience.
Assumptions
• For example, the way a senior executive, guilty of sexual harassment, is
handled or an employee caught indulging in an unethical act is dealt with.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 6

 Mechanistic and Organic Cultures

Mechanistic Organisational Culture Organic Culture

• Work is conceived as a system of • Emphasis on task
narrow specialism accomplishment, team work
• Authority tends to flow down • The persons with expertise may
from the top down to the lower wield far more influence than
levels the formal boss.
• Prescribed channels of • Free-flow of communication.
communication. • The culture stresses flexibility,
consultation, change and
• Change is resisted. innovation.
05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 7
 Example: Mechanistic Culture
General Motors is an organization
using this model because:
• Large size
• Many people and functions
• Order is needed
• Repetitive tasks

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 8

Facebook Inc. is an
organization using this
model because:
• Creative problem solving
and decision-making
• Continuous improvement
• Boldness
• Openness
• Speed

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 9

 Authoritarian and Participative Cultures

Authoritarian Culture Participative Culture

• Power is concentrated on the the • Employees actively participate in
top level management the decision making process.
• Authority demands obedience • Employees are perfectionist,
from the employee and any active and professional.
disobedience is punished to set an • Group problem-solving leads to
example to others. better decisions because of
• Rigid ideas and limited creativity. many ideas and creativity.
• This type of culture is followed by • Professional employees who see
military organization. themselves as equals.
10
05-11-2021 Organizational Behaviour/Organizational Culture/Group 07
 Subculture and Dominant Culture

Dominant Culture Subculture

• A culture that expresses core • Mini-cultures found in
values that are shared by a departments and divisions.
majority of the organization’s • Reflect the common problems or
members. experiences of employees who
reside in these areas.
• Dominant culture is a product of
what is called national culture. • Consist of the core values of the
dominant culture as well as
• Takes precedence over all other values unique to the department
cultures. to which it relates

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 11

 Example: Dominant and Subculture Clash
• Hewlett-Packard putting up operations in India in late 1980s.
• Chief of the Asia Pacific region and the person in charge of the Indian
operations, curious about the cubical and railing in the entrance of the
plant.
• Frisking of employees was to be carried out in order to detect any
smuggling of valuable components, he was told. The chief, a Singaporean
by nationality, was aghast at these answers.
• Everywhere, HP stood by its credo- “Respect and Trust People”.
• “You will not letter the wall with the credo unless you pull out the railings.
You will not frisk anyone over here”’ shouted the chief. Finally, he had his
say and way. The railing was removed and the credo was put up .

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 12

 Subculture
Strong and
andWeak
Dominant
Cultures
Culture

Strong Culture Weak Culture

• Organization’s core values are both • Values shared by only a few people,
intensely held and widely shared. mostly the top management.
• Clear objectives • No clarity in what is important.
• High behavioral control • Low behavioral control
• Reduced employee turnover • Higher Turnover Rate
• Unanimity of purpose builds • Employees have little identification
cohesiveness, loyalty, and with the culture. There are several
organizational commitment subcultures
• Less need for developing formal rules • High need for formal rules and
and regulations. regulations which are not as effective.
05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 13
 Example: Strong Culture
Taj Hotel ICICI Bank
11 Employees in Taj Hotel, During the merger with Bank of
Mumbai lost their lives to save the Madura (2400 employees) in
hotel’s guests in 2008. 2003, ICICI Bank (1600 employees)
was able to assimilate Bank of
Mudra.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 14

 Disadvantages of a Strong Culture

Groupthink
Resistance to Change
Collective Blind Spots
Shirking from Innovation
Discouraged Diversity
Organizational Behaviour/Organizational Culture/Group 07 15
05-11-2021
 Challenges that Evoke Organizational Culture

How the organization will

find a niche in and cope
with its constantly changing
external environment
Establishment and maintenance
of effective working relationships
among the members of an
organization.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 16

 Where does an OC Come From?

Culture
Formation Organizational
Property Rights Ethics
around Critical
Incidents

Characteristics
Identification Organizational
of People within
with Leaders Structure
the Organization

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 17

 Creating Culture
Founders’ own behavior
Founders hire and keep Founders indoctrinate encourages employees
only employees who and socialize these to identify with them
think and feel the same employees to their way and internalize their
way they do. of thinking and feeling. beliefs, values, and
assumptions.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 18

 Sustaining Organizational Culture

Culturally Consistent Rewards

Managing the Cultural Network
Maintaining a Stable Workforce
Actions of Leaders and Founders
Selecting and Socializing Employees

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 19

 Socialization Process

Individual comes with his own values > Encounter of expectations with reality > newcomers’
differences will be stripped away and replaced by standardized predictable behavior

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 20

 In a nut shell: How Cultures Form

The original culture derives from the founder’s philosophy and strongly influences hiring criteria as the firm
grows. Top managers’ actions set the general climate, including what is acceptable behavior and what is not.
The way employees are socialized will depend both on the degree of success achieved in matching new
employees’ values to those of the organization in the selection process, and on top management’s
preference for socialization methods.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 21

 Practices to Develop Culture
Hiring practices
• Conducting a cultural fit interview according to the vision and mission of the organization while
understanding the ideals of the applicant.
Orientation
• Employers must help newcomers become part of social network
Rewards and Recognition Programmes
• Put employees’ who personify company values in spotlight.
Performance Management Programmes
• Clearly outlining what is expected from employees as well as by providing a feedback tool that
informs employees about proper behavior
Communications

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 22

 Example

Google has created and communicated an exciting organizational culture.

The highly communicative work culture at Google offices worldwide fosters a
productivity and camaraderie fueled by the realization that millions of
people rely on Google results. Exciting and interesting celebrations such as
the Pajama Day, quarterly and annual off-sites, summer picnics give Googlers
a chance to get to know each other socially and have fun. The work
environment is laid back and gives google an edge over its competitors
because the employees are so committed.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 23

 Global Implications
All these dimensions are
different for different
countries. Most companies
conditions there managers
to be culturally sensitive.
For example: Individualism
is high in United States but
collectivism is high in china.
While, there is much higher
power distance in China as
compared to United States.

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 24

 Implications for Managers

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 25

 Effects of Organizational Culture

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 26

 Thank You

05-11-2021 Organizational Behaviour/Organizational Culture/Group 07 27