Organizational

Culture
Organizational Culture
“The set of shared, taken-for-
granted implicit assumptions
that a group holds and that
determines how it perceives,
thinks about, and reacts to its
various environments.”
- Edgar Schein
 Organizational Culture
Organizational culture refers to the
shared pattern of beliefs,
assumptions, and expectations held
by organizational members and
their characteristic way of
perceiving the organization’s
artifacts and environment, and its
norms, roles, and values as they
exist outside the individual.
 Organizational Culture

Organizational culture affects

virtually all aspects of
organizational life from the ways in
which people interact with each
other, perform their work, and
dress, to the types of decisions
made in a firm, its organizational
policies and procedures, and
strategy considerations.
Characteristics of Organizational
Culture
Philosophy
Observed
on treatment
behavioral
of employees/
regularities
customers

Rules of
Organizational
Norms employee
Culture
behavior

Dominant
values Organizational
climate
There are 3 basic factors that
make a significant difference in
how influential a culture will be
in shaping the attitudes and
behaviors of its members.
1.Cultural strength is based on the
extent of shared beliefs and
values that exist in an
organization. The greater the
degree of shared beliefs and
values, the stronger the culture’s
influence since there are more
assumptions that guide behavior
2. Organizational cultures whose
beliefs and values are more widely
shared across organizational
members tend to have a more
powerful effect because a greater
number of personnel are guided by
them
3. In cultures where beliefs and
values are clearly ordered, the
effect on member behavior will
be more pervasive since there is
less ambiguity about which
beliefs and values should prevail
in conflict situations
Contributions to a firm’s culture

- the ways in which people act and

interact with each other.
- how top management deals with
various situations
- how people actually spend their time
- what the company says about itself
in annual reports
- organization’s physical setting
Culture’s Overall Function

Culture is the social glue that helps

hold an organization together by
providing appropriate standards for
what employees should say or do.
 What Is Organizational
Culture?

• Innovation and risk taking (3M)

• Outcome orientation (Bausch &
Lomb)
• People orientation (SWA)
• Aggressiveness (Microsoft)
• Family-friendly (SAS Institute)
Four Functions of Organizational Culture
Organizational
identity

Sense-making Organizational Collective

device culture commitment

Social system
stability
Functions of Organizational
Culture
• Culture provides a sense of identity
to members and increases their
commitment to the organization
• Culture is a sense-making device
for organization members
• Culture reinforces the values
in the organization
• Culture serves as a control
mechanism for shaping
behavior
 Organizational Culture

Liabilities

 Impeding change

 Inhibiting diversity

 Blocking mergers

 Blocking acquisitions
Five Most Important Elements in
Managing Culture

• What leaders pay attention to

• How leaders react to crises
• How leaders behave
• How leaders allocate rewards
• How leaders hire and fire
individuals
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 is the use of multiple
methods to measure organizational
culture
 How Organizational
Cultures Form
Top
Management
Management

Philosophy
Philosophy
of
of the
the Organizational
Organizational
Selection
Organization’s
Organization’s Culture
Culture
Founders

Socialization
 Stories
Stories Rituals
Rituals

How
How Employees
Employees
Learn
Learn Culture
Culture

Material
Material
Language
Language
Symbols
Symbols
 Artifacts - Symbols of
culture in the physical Visible, often not
and social work environment decipherable

Values
Espoused: what members of
an organization say they value
Greater level
Enacted: reflected in the way of awareness
individuals actually behave

Assumptions - Deeply held Taken for granted

beliefs that guide behavior and tell Invisible
members of an organization how Preconscious
to perceive and think about things
 Artifacts - Symbols of
culture in the physical
and social work environment

• Personal enactment
• Ceremonies and rites (rites of passage,
enhancement, renewal, integration, conflict
reduction, degradation)
• Stories (about the boss, getting fired,
company handling of relocating employees,
whether lower-level employees can rise to
the top, how the company deals with
crises, how status considerations work
when rules are broken)
• Ritual
• Symbols
 • Testable in the
Values physical
Espoused: what members of
an organization say they value
environment
Enacted: reflected in the way
individuals actually behave
• Testable only by
social consensus
 • Relationship to environment
• Nature of reality, time, and space
• Nature of human nature
• Nature of human activity
• Nature of human relationships

Assumptions - Deeply held

beliefs that guide behavior and tell
members of an organization how
to perceive and think about things
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
 Hiring and Culture Removing
socializing members who
members who reject the
fit in with the new culture
4 new culture 5

Cultural Changing
1
3 communication behavior

Examining
Interventions for justifications
Changing for changed
Organizational behavior
Culture 2
 Cultural Modifications in the
Current Business
Environment

Support for a global

Empowerment of
view of business
employees to excel
in product and
Reinforcement of service quality
ethical behavior
 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
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
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
Do Organizations Have Uniform
Cultures?

Dominant Subcultures
Culture
Core
Values
Open House
THANK YOU