Organizational

Culture
Chapter 16
Organizational
Behavior
Nelson & Quick
6th edition

Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
Organizational (Corporate)
Culture
Organizational (Corporate) Culture - a
pattern of basic assumptions that are
considered valid and that are taught to
new members as the way to perceive,
think, and feel in the organization.
A system of shared meaning held by
members that distinguishes the organization
from other organization.
Cultures are difficult to change, yet change is
necessary in some instances for survival
&hence need an adaptive culture for
performance.
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 A set of Seven key characteristics that the
organization values
1. Innovation and risk taking-degree of innovation and risk
taking
2. Attention to detail- precision ,analysis, attention
3. Outcome orientation-results rather techniques used.
4. People orientation-people centric decision
5. Team orientation-work activities around teams
6. Aggressiveness-competitive not easy going
7. Stability-status-quo vs growth
Each characteristic exists on a continuum from low to high
& has strong impact on the morale & motivation of
employees.
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 1.Artifacts - symbols of
culture in the physical
and social work environment

2.Values
Espoused: what members of
Levels of
an organization say they value Organizational
Enacted: reflected in the way
individuals actually behave Culture

3.Assumptions - deeply held

beliefs that guide behavior and tell
members of an organization how
to perceive and think about things Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
Artifacts Organizational
•Personal enactment Culture Levels
•Ceremonies and rites-DC/Thurs
•Stories- E-news/promotion/fired Visible, often not
•Ritual-daily unwritten practices decipherable
•Symbols- logo, mental images

Values-espoused/enacted
•Testable in the physical Greater level
environment of awareness
•Testable only by social consensus

Basic Assumptions-deeply held

Beliefs that guide behavior
•Relationship to environment
•Nature of reality, time, and space
•Nature of human nature
•Nature of human activity
•Nature of human relationships
Taken for granted
Invisible Preconscious
Reprinted with permission from Edgar H. Schein,
Organizational Culture and Leadership: A Dynamic View.
Copyright © 1985 Jossey-Bass
Copyright ©2009
South-Western, a division
Inc, a subsidiary of John Wiley & Sons, Inc. of Cengage Learning
Functions of Organizational Culture
1. Culture provides a sense of identity to
members and increases their
commitment to the organization.
2. Culture is a sense-making device
for organization members
3. Culture reinforces the values
in the organization
4. Culture serves as a control mechanism
for shaping behavior-3500+ students of
NIST controlled by 467 staff that
includes 277 faculties.
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Strong
Theories about the Culture
relationship between Perspective-+ or-
organizational culture
and performance

Fit
Adaptive Perspective-
Perspective- fit or match
long term
performance Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
An organizational culture with a
consensus on the values that Strong
drive the company and with an Culture
intensity that is recognizable
Perspective
even to outsiders

Strong cultures facilitate performance because

• They are characterized by goal alignment
• They create a high level of motivation because
of shared values by the members
• They provide control without the oppressive
effects of bureaucracy
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Argument that a culture is
good only if it fits the industry’s Fit
or the firm’s strategy.
Perspective

Organizational characteristics that may affect culture

• Customer requirements
• Competitive environment
• Societal expectations

Useful to explain short term but not long term performance

Indicates the difficulty of changing culture quickly but doesn’t
explain how firms can adapt to environmental change.

Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 An organizational culture that
encourages confidence and Adaptive
risk taking among employees,
has leadership that produces Perspective
change, and focuses on the
changing needs of customers
Adaptive Nonadaptive
Most managers care Most managers care
Core about customers, about themselves,
stockholders, and their work group, or
Values
employees an associated product

Managers pay close Managers tend to

Common attention to all behave somewhat
Behavior their constituencies, insularly, politically,
esp. customers and bureaucratically
Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Corporate Culture and Performance by Copyright ©2009
John P. Kotter and James L Heskett. Copyright © 1992 by Kotter Associates, Inc. and James L. Heskett. South-Western, a division
of Cengage Learning
All rights reserved
Five Most Important Elements
in Managing Culture

1. What leaders pay attention to

2. How leaders react to crises
3. How leaders behave
4. How leaders allocate rewards
5. How leaders hire and fire individuals

Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
Organizational Socialization

Organizational socialization - the

process by which newcomers are
transformed from outsiders to
participating, effective members
of the organization

Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 1. Anticipatory Realism-E Congruence-S
Socialization

Job demands
•Task
2. Encounter-may clash
•Role
•Interpersonal

3. Change and
Mastery
Acquisition- org. insider

Outcomes of Socialization Performance

Satisfaction
Stages of Mutual influence
Low levels of distress
Socialization Intent to remain
Copyright ©2009
South-Western, a division
From “An Ethical Weather Repart: Assessing the Organization's Ethical Climate” by John B. Cullen, et al. In Organizational Dynamics, Autumn 1989. Copyright ©
of Cengage Learning
1989 American Management Association International. Reprinted by permission of American Management Association International, New York, N.Y. All rights
reserved. Http://www.amanet. Org. All rights reserved
The Three Stages of Socialization

1. Anticipatory Socialization – encompasses all

of the learning that takes place prior to the
newcomer’s first day on the job-accurate expectation
and match of job skills, value.
2. Encounter - the newcomer learns the tasks
associated with the job, clarifies roles, and
establishes new relationships at work-Clash
3. Change & Acquisition - the newcomer
begins to master the demands of the job-
enjoyment ,performance, retention and
success of socialisation.
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Socialization as
Cultural Communication
Core values are transmitted to new organization
members through

– the role models they interact with

– the training they receive
– the behavior they observe being rewarded
and punished
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Assessing Organizational Culture
• Organizational Culture Inventory focuses on
behaviors that help employees fit into the
organization & meet coworker expectations
• Kilman-Saxton Culture-Gap Survey focuses on
the expectations of others in the organization
• Triangulation - the use of multiple methods to
measure organizational culture more accurately.

Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Situations That May Require
Cultural Changes
• Merger or acquisition
• Employment of people from different
countries

Reasons That Change Is Difficult

• Assumptions are often unconscious
• Culture is deeply ingrained and
behavioral norms and rewards are well
learned
Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Hiring and Removing
socializing members who
members who Culture
reject the
fit in with the new culture
4 new culture 5

Cultural Changing
3 communication behavior 1

Examining
justifications
Interventions for for changed
Changing behavior
Organizational
Culture 2
Copyright ©2009
Managers seeking to create change must intervene at these points South-Western, a division
Reprinted with permission from Vijay Sathe “How to Decipher & Change Corporate Culture,” Copyright © of Cengage Learning
1985 Jossey-Bass Inc, Reprinted by permission Of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc.. All rights reserved
 Cultural Modifications in the Current Business
Environment due to Globalisation,Work force
diversity and Technological up gradation

Support for a global

view of business due to M&A
Reinforcement of
ethical behavior by all-trust
Empowerment of
employees to excel in product and
service quality by deflated pyramid

Photos courtesy of Clips Online, © 2008 Microsoft Corporation Copyright ©2009

South-Western, a division
of Cengage Learning
All rights reserved
 Support for a Global
View of Business
• Create a clear and simple
mission statement
• Create systems that ensure
effective information flow
• Create “matrix minds” among managers
• Develop global career paths
• Use cultural differences as major assets
• Implement worldwide management
education and team development programs
Photos courtesy of Clips Online, © 2008 Microsoft Corporation Copyright ©2009
South-Western, a division
of Cengage Learning
All rights reserved
 Reinforcement of
Ethical Behavior
• Clear communication of the
boundaries of ethical conduct
• Selection of employees who support the
ethical culture
• Reward of ethical behavior
• Conspicuous punishment of members
who engage in unethical behavior

Photos courtesy of Clips Online, © 2008 Microsoft Corporation Copyright ©2009

South-Western, a division
of Cengage Learning
All rights reserved
 Empowerment of Employees
to Excel in Product and
Service Quality
• Empowerment unleashes
employees’ creativity
• Empowerment requires eliminating
traditional hierarchical notions of power
– Involve employees in decision making
– Remove obstacles to their performance
– Communicate the value of product and
service quality

Photos courtesy of Clips Online, © 2008 Microsoft Corporation Copyright ©2009

South-Western, a division
of Cengage Learning
All rights reserved