CHAPTE

10
Organizational Culture

Copyright 2016 Pearson Canada

Inc.

Copyright 2016 Pearson Canada

Inc.

Chapter Outline
What Is Organizational Culture?

Definition of Organizational Culture

Levels of Culture
Cultures Functions
Culture Creates Climate
The Ethical Dimension of Culture
Do Organizations Have Uniform Cultures?
Strong vs. Weak Cultures

Copyright 2016 Pearson Canada

Inc.

Chapter Outline
Reading an Organizations Culture
Stories
Rituals
Material Symbols
Language
Creating and Sustaining Culture
How a Culture Begins
Keeping a Culture Alive
Copyright 2016 Pearson Canada
Inc.

Chapter Outline
Creating and Sustaining Culture
How a Culture Begins
Keeping a Culture Alive

The Liabilities of Organizational Culture

Barrier to Change
Barrier to Diversity
Barrier to Mergers and Acquisitions

Changing Organizational Culture

Creating an Ethical Organizational Culture
Creating a Positive Organizational Culture
Copyright 2016 Pearson Canada
Inc.

Learning Outcomes
1. Define the term "organizational culture".
2. Describe the characteristics of
organizational culture.
3. Identify various functions of
organizational culture.
4. List four categories of artifacts through
which corporate cultures is deciphered.
5. Identify three strategies to strengthen
an organization's culture.
Copyright 2016 Pearson Canada
Inc.

Learning Outcomes
6. Compare four strategies for merging
organizational cultures
7. Explain the effect of organizational
culture on business ethics.
8. Describe strategies to create a
positive organizational culture.
9. Explain how global factors influence
organizational culture.

Copyright 2016 Pearson Canada

Inc.

Henry Mintzberg on Culture

Culture is the soul of the
organization the beliefs and
values, and how they are manifested.
I think of the structure as the
skeleton, and as the flesh and blood.
And culture is the soul that holds the
thing together and gives it life force.

Copyright 2016 Pearson Canada

Inc.

Organizational Culture
Refers to a system of shared meaning
held by members that distinguishes the
organization from other organizations

Copyright 2016 Pearson Canada

Inc.

Organizational Culture
Seven primary characteristics of an
organizations culture:

Innovation and risk-taking.

Attention to detail.
Outcome orientation.
People orientation.
Team orientation.
Aggressiveness.
Stability.

Copyright 2016 Pearson Canada

Inc.

Characteristics of Organizational Culture

Innovation and risk-taking
The degree to which employees are encouraged to be
innovative and take risks.
Attention to detail
The degree to which employees are expected to
exhibit precision, analysis, and attention to detail.
Outcome orientation
The degree to which management focuses on results
or outcomes rather than on technique and process.
People orientation
The degree to which management decisions take into
consideration the effect of outcomes on people within
the organization.
Copyright 2016 Pearson Canada
Inc.

Characteristics of Organizational Culture

Team orientation
The degree to which work activities are organized
around teams rather than individuals.
Aggressiveness
The degree to which people are aggressive and
competitive rather than easygoing.
Stability
The degree to which organizational activities
emphasize maintaining the status quo in contrast
to growth.

Copyright 2016 Pearson Canada

Inc.

Levels of Culture
Artifacts
Aspects of an organizations culture that you see,
hear, and feel.
Beliefs
The understandings of how objects and ideas relate
to each other.
Values
The stable, long-lasting beliefs about what is
important.
Assumptions
The taken-for-granted notions of how something
should be in an organization.
Copyright 2016 Pearson Canada
Inc.

Exhibit 10-2 Layers of Culture

Copyright 2016 Pearson Canada

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Cultures Functions
Social glue that helps hold an organization
together.
Enhances social system stability and provides
appropriate standards for what employees should say or
do.
Boundary-defining.
Conveys a sense of identity for organization members.
Facilitates commitment to something larger than ones
individual self-interest.
Guides and shapes the attitudes and behaviour of
employees and serves as a sense-making and control
mechanism.
Copyright 2016 Pearson Canada
Inc.

Decentralized Organizations & Culture

Todays trend toward decentralized organizations
makes culture more important than ever, but it also
also makes establishing a strong culture more
difficult.
Employees organized in teams may show greater
allegiance to their team and its values than to
the values of the organization as a whole.
In virtual organizations, the lack of frequent faceto-face contact makes establishing a common
set of norms very difficult.
Strong leadership that communicates frequently
about common goals and priorities is especially
important in innovative organizations.
Copyright 2016 Pearson Canada
Inc.

Culture Creates Climate

Organizational climate
refers to the shared perceptions
organizational members have about their
organization and work environment.
team spirit at the organizational level

When everyone has the same general

feelings about what is important or how
well things are working, the effect of
these attitudes will be more than the sum
of the individual parts.
Copyright 2016 Pearson Canada
Inc.

Do Organizations Have Uniform Cultures?

Organizational culture represents a common
perception held by the organization members.
Core values or dominant (primary) values are
accepted throughout the organization.
Dominant culture
Expresses the core values that are shared by a
majority of the organizations members.

Subcultures
Tend to develop in large organizations to reflect
common problems, situations, or experiences.
Copyright 2016 Pearson Canada
Inc.

Strong vs. Weak Cultures

Strong Cultures
the organizations core values are both
intensely held and widely shared.
have a great influence on the behaviour
of its members
builds cohesiveness, loyalty, and
organizational commitment

Copyright 2016 Pearson Canada

Inc.

Reading an Organizations Culture

Stories
Rituals
Material Symbols
Language
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Inc.

Exhibit 10-3 How Organizational Cultures Form

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Keeping a Culture Alive

Selection
Identify and hire individuals who will fit in
with the culture.

Top Management
Senior executives establish and
communicate the norms of the organization.

Socialization
Organizations need to teach the culture to
new employees.
Copyright 2016 Pearson Canada
Inc.

The Liabilities of Organizational

Culture
Culture can have dysfunctional
aspects in some instances.
Barrier to Change
When organization is undergoing change, culture
may impede change.

Barrier to Diversity
Strong cultures put considerable pressure on
employees to conform.

Barrier to Mergers and Acquisitions

Merging the cultures of two organizations can be
difficult, if not impossible.
Copyright 2016 Pearson Canada
Inc.

Strategies For Merging Cultures

Assimilation
The entire new organization is
determined to take on the culture of one
of the merging organizations.

Separation
Organizations remain separate and
cultures are maintained.

Integration
A new hybrid culture is formed.
Copyright 2016 Pearson Canada
Inc.

Changing Organizational Culture

Trying to change the culture of an
organization is quite difficult and requires
that many aspects of the organization
change at the same time, especially the
reward structure.
Culture is such a challenge to change
because it often represents the
established mindset of employees and
managers.
Copyright 2016 Pearson Canada
Inc.

Changing Organizational Culture

Change is most likely when most or all of
the following conditions exist:

A dramatic crisis
Turnover in leadership
Young and small organizations
Weak culture

Copyright 2016 Pearson Canada

Inc.

Creating a Positive Organizational Culture

Building on employee strengths

Rewarding more than punishing.
Emphasizing vitality and growth.
Limits of positive culture.
Copyright 2016 Pearson Canada
Inc.

Global Implications
Organizational cultures often reflect national culture.
When an organization opens up operations in
another country, it ignores the local culture at its
own risk.
Management of ethical behaviour is one area where
national culture can rub up against corporate culture.
Many strategies for improving ethical behaviour
are based on the values and beliefs of the host
country.

Copyright 2016 Pearson Canada

Inc.

Summary
1. Reward systems generally signal the
parts of the organization that are
valued.
2. Culture can have both positive and
negative effects on organizations.
3. Organizational culture can make
change difficult, if not impossible.
Copyright 2016 Pearson Canada
Inc.

OB at Work: For Review

1. What is organizational culture, and what are its
common characteristics?
2. What are the functional effects of organizational
culture on people and the organization?
3. What factors create and sustain an
organizations culture?
4. How is culture transmitted to employees?
5. What are the liabilities of organizational culture?
6. How can an ethical organizational culture be
created?
7. What is a positive organizational culture?
Copyright 2016 Pearson Canada
Inc.

OB at Work: For Managers

Realize that an organizations culture is
relatively fixed in the short term. To
effect change, involve top management
and strategize a long-term plan.
Hire individuals whose values align with
those of the organization; these
employees will tend to remain
committed and satisfied. Not
surprisingly, misfits have
considerably higher turnover rates.
Copyright 2016 Pearson Canada
Inc.