Organizational Culture

Organizational culture, or corporate culture, comprises the attitudes, experiences,

beliefs and values of an organization. It has been defined as "the specific collection of
values and norms that are shared by people and groups in an organization and that control
the way they interact with each other and with stakeholders outside the organization.
Organizational values are beliefs and ideas about what kinds of goals members of an
organization should pursue and ideas about the appropriate kinds or standards of behavior
organizational members should use to achieve these goals. From organizational values
develop organizational norms, guidelines or expectations that prescribe appropriate kinds
of behavior by employees in particular situations and control the behavior of
organizational members towards one another"

Classification of organizational culture

There seems to be wide agreement that organization culture refers to a system of shared
meaning held by members that distinguishes the organization from other organizations.
The system of shared meaning is, on closer examination, a set of key characteristics that
the organization values. Research has suggested that seven primary characteristics, in
aggregate, capture the essence of an organization’s culture.

1. Innovation and risk taking- The degree to which employees are encouraged to be
innovative and take risks.
2. Attention to detail- The degree to which employees are expected to exhibit
precision, analysis, and attention to detail.
3. Outcome orientation- the degree to which management focuses on results or
outcomes rather than on the techniques and process used to achieve those
outcomes.
4. People orientation- The degree to which management decisions take into
consideration the effect of outcomes on people within the organization.
5. Team orientation- The degree to which work activities are organized around
teams rather than individuals.
6. Aggressiveness- The degree to which people are aggressive and competitive
rather than easygoing
7. Stability- The degree to which organizational activities emphasize maintaining the
status quo in contrast to growth.

Development of organizational culture

Culture performs several functions within an organization. First, it has a boundary

defining role; that is, it creates distinctions between one organization and others. Second,
it conveys a sense of identity for organization members. Third, culture facilitates the
generation of commitment to something larger than one’s individual self interest. Fourth,
it enhances social system stability. Culture is the social glue that helps hold the
organization together by providing appropriate standards for what employees should say
and do. Finally, culture serves as a sense-making and control mechanism that guides and
shapes the attitudes and behavior of employees. The last function is of particular interest
to us.

We are treating culture in a nonjudgmental manner. We haven’t said that it’s good or
bad, only that it exists. Many of its functions, as outlined, are valuable for both the
organization and the employee. Culture enhances organizational commitment and
increases the consistency of employee behavior. These clearly are benefits to an
organization.

Culture is a liability when the shared values do not agree with those that will further the
organization’s effectiveness. This situation is most likely to occur when the
organization’s environment is dynamic. When the environment is undergoing rapid
change, the organization’s entrenched culture may no longer be appropriate.

How a culture begins.

An organization’s current customs, traditions, and general way of doing things are largely
due to what it has done before and the degree of success it had with those endeavors. So
the ultimate source of an organization’s culture is it’s founders.

The founders of an organization traditionally have a major impact in establishing the

early culture. They have a vision of what the organization should be. They are
unconstrained by previous customs for doing things or ideologies. The small size that
typically characterizes any new organization further facilitates the founders imposing
their vision on all organizational member.

Once a culture is in place, practices within the organization act to maintain it by exposing
employees to a set of similar experiences. Three forces play a particularly important part
in sustaining a culture- selection practices, the actions of top management, and
socialization methods.

Selection: The explicit goal of the selection process is to identify and hire individuals,
who have the knowledge, skills, and abilities to perform the jobs within the organization
successfully,

Top Management: The action of top management also have major impact on an
organization’s culture. Through what they say and how they behave, senior executives
establish norms that filter down through the organization as to whether risk taking is
desirable, how much freedom managers should give their subordinates, what is
appropriate, dress, what actions will pay off in terms of pay raises, promotions, and other
rewards.

Socialization: No matter how good a job the organization does in recruiting and
selection, new employees are not fully in use to the organization’s culture. Because they
are least familiar with the organization’s culture, new employees are potentially the most
likely to disturb the beliefs and customs that are in place. The organization will,
therefore, want to help new employees adapt to its culture. This adaptation process is
called socialization.

Prearrival stage: occurs before the employee joins the organization, so that he or she
arrives with an established set of values, attitudes, and expectations. E.g. In many jobs,
new members will have undergone a considerable degree of prior socialization in training
and in school.

Entry into the organization begins the encounter stage. Now the individual confronts
between his expectations and the organizations reality. If expectations prove to have
been more or less accurate, the encounter stage merely provides a reaffirmation of the
perceptions gained earlier. But this is often not the case. Where expectations and reality
differ, new employees must undergo socialization that will detach them form previous
assumptions and replace those assumptions with another set that the organization deems
desirable.

Finally, new members must work out any problems discovered during the encounter
stage. To do so, they may have to go through changes; hence we call this the
metamorphasis stage.

At this stage they know what is expected of them and what constitutes a job well done.
Successful metamorphosis should have a positive impact on the new employees
productivity and their commitment to the organization and reduce their propensity to
leave.

How employees learn culture

Stories: Stories circulate through many organizations. They typically contain a narrative
events about the organization’s founder, rule breaking, rags-to-riches successes. These
stories anchor the present in the past and provide explanations and legitimacy for current
practices.

Rituals: Rituals are repetitive sequences of activities that express and reinforce the key
values of the organization, what goals are most important, which people are important,
and which are expendable,

Material Symbols: Message can also be conveyed by material symbols bestowed on

executives. Some corporation provide their top executives with chauffeur driven
limousines and unlimited use of the corporate jet. Other examples of material symbols
include the size of offices, executive perks, these material symbols convey to employees
who are important and the kind of behavior that are appropriate.

Languages. Many organizations and units within organizations use language as a way to
identify members of a culture or subculture. By learning this language, members attest to
their acceptance of the culture and in so doing, help to preserve it.
Value is a concept that describes the beliefs of an individual or culture

Values represent basic convictions that “ a specific mode of conduct or end-state of

existence is personally or socially preferable. They contain moral flavor in that they
carry an individual’s ideas as to what is right, good, or desirable. Value systems
represent a prioritizing of individual values. They’re identified by the relative
importance an individual assigns to values such as freedom, pleasure, self-respect,
honesty, obedience, and equality.

Values could be divided into 2 aspects. Terminal values, and Instrumental values

Terminal values, refers to desirable end-states of existence. These are the goals that a
person would like to achieve during his or her lifetime.

Instrumental values, refers to preferable modes of behavior, or means of achieving the

terminal values.

In the new global village managers have to become capable of working with people from
different cultures. Because values differ across culture, an understanding of these
differences should be helpful in explaining and predicting behavior of employees from
different countries.

Groups, societies, or cultures have values that are largely shared by its members.
Members share a culture even if each member's personal values do not entirely agree with
some normative values sanctioned in the culture. This reflects an individual's ability to
synthesize and extract aspects valuable to them from the multiple subcultures they belong
to.

If an individual expresses a value that is in serious conflict with their group's norms, the
group's authority may carry out various ways of stigmatizing or conforming the
individual. For example, imprisonment can result from conflict with social norms that
have been established as law.

Belief is the psychological state in which an individual is convinced of the truth of a

proposition. Like the related concepts truth, knowledge, and wisdom, there is no precise
definition of belief on which scholars agree, but rather numerous theories and continued
debate about the nature of belief.

Some Types of Culture

There are different types of culture just like there are different types of personality.
Researcher Jeffrey Sonnenfeld identified the following four types of cultures.
Academy Culture
Employees are highly skilled and tend to stay in the organization, while working their
way up the ranks. The organization provides a stable environment in which employees
can development and exercise their skills. Examples are universities, hospitals, large
corporations, etc.

Baseball Team Culture

Employees are "free agents" who have highly prized skills. They are in high demand and
can rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk
organizations, such as investment banking, advertising, etc.

Club Culture
The most important requirement for employees in this culture is to fit into the group.
Usually employees start at the bottom and stay with the organization. The organization
promotes from within and highly values seniority. Examples are the military, some law
firms, etc.

Fortress Culture
Employees don't know if they'll be laid off or not. These organizations often undergo
massive reorganization. There are many opportunities for those with timely, specialized
skills. Examples are savings and loans, large car companies, etc.