Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Graduate School
Master of Science in Industrial Engineering and Management Society

IEM 631: Organization and Strategy

Organizational Culture

Prepared by:

Elbenson P. Rescober

Submitted to:
Dr. Adrean Manalo, MSIE, DBA

1st Semester, A.Y. 2018-2018

Learning Objectives:
 Define organizational culture and describe its common characteristics.
 Explain the factors that create and sustain an organization’s culture
 Show how culture is transmitted to employees
 Demonstrate how an ethical culture can be created
 Describe a positive organizational culture
 Show how national culture may affect the way organizational culture is transported to
a different country

A strong organizational culture provides stability to an organization. And every

organization has a culture that, depending on its strength, can have a significant influence
on the attitudes and behaviors or organization members.

How do we define Organizational Culture and its Characteristics?

Organizational Culture has been defined as the unique social and psychological
manifestation of a system of shared values, beliefs, principles and behaviors. It represents
the collective experience of a group and embodies the core of employee experience. It is
the values and behaviors that contribute to the unique social and psychological environment
of an organization.
Organizational culture includes an organization’s expectations, experiences, philosophy,
and values that hold it together, and is expressed in its self-image, inner workings,
interactions with the outside world, and future expectations. It is based on shared attitudes,
beliefs, customs, and written and unwritten rules that have been developed overtime and
are considered valid.
It affects the organization’s productivity and performance and provides guidelines on
customer care and service, product quality and safety, attendance and punctuality and
concern for the environment.

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Also called corporate culture, it’s shown in
a. The ways the organization conducts its business, treats its employees, customer, and
the wider community,
b. The extent to which freedom is allowed in decision making, developing new ideas,
and personal expression,
c. How power and information flow through its hierarchy, and how committed
employees are towards collective objectives

Seven (7) primary characteristics seem to 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 processes used to achieve them.
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.
Organizational culture is concerned with employees’ perception of the characteristics of the
culture—not whether they like them. Research has sought to measure how employees see
their organization/ It asks such questions as, “Does it encourage teamwork?”, “Does it
reward innovation?”, and “Does it stifle initiative?” Organizational culture differs from job
satisfaction in that job satisfaction is evaluative while organizational culture is descriptive.

Strong versus Weak Cultures

If most employees have the same opinions about organization’s mission and values, the
culture is strong; if opinions vary widely, the culture is weak.

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In strong culture, the organization’s core values are both intensely held and widely shared.
The more members who accept the core values and the greater their commitment, the
stronger the culture and the greater its influence on member behavior because the high
degree of sharedness and intensity creates a climate of high behavioral control.

A strong culture,
1. Reduce employee turnover
2. Builds cohesiveness, loyalty, and organizational commitment
3. Lessen employees’ tendency to leave

The Functions of Culture

a) Boundary-defining role
b) Conveys a sense of identity for members
c) Facilitates the generation of commitment
d) Enhances the stability of the social system
e) Serves as a sense-making and control mechanism
f) Guides and shapes attitudes and behavior of employees

Today’s trend toward decentralized organizations makes culture more important than ever,
but ironically it also makes establishing a strong culture more difficult.

Individual-organization “fit”—that is, whether the applicant’s or employee’s attitudes and

behavior are compatible with the culture—strongly influences who gets a job offer, a
favorable performance review, or a promotion.

Culture Creates Climate

Organizational climate refers to the shared perceptions organizational members have

about their organization and work environment. This aspect of culture is like team spirit at
the organizational level. When everyone has the same general feelings about what’s
important or how well things are working, the effect of these attitudes will be more than the
sum of the individual parts. The same appears true for organizations.

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Culture as a Liability

Culture can enhance organizational commitment and increase the consistency of employee
behavior, clearly benefits to an organization.

Barrier to change - culture is a liability when the shared values don’t agree with those that
further the organization’s effectiveness.

Barriers to diversity - hiring new employees differ from the majority in race, age, gender,
disability, or other characteristics creates a paradox; management wants to demonstrate
support for the difference these employees bring to the workplace, but newcomers who wish
to fit in must accept the organization’s core cultural values and current mix.

Barriers to acquisitions and mergers – cultural compatibility has become the primary
concern whether acquisition works seem to have more to do with how well the two
organizations’ cultures match up.

How Culture Begins

Culture creation occurs in three ways:

1. Founders hire and keep only employees who think and feel the same way they do.
2. Founders indoctrinate and socialize these employees to their way of thinking and
feeling.
3. The founders’ own behavior acts as a role model that encourages employees to
identify with them and thereby internalize their beliefs, values, and assumptions.

Keeping Culture Alive

Selection -the goal is to identify and hire individuals with the knowledge, skills and
abilities to perform successfully.

Top Management – through words and behavior, senior executives establish norms
that filter through the organization about.

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Socialization – new employees need to adapt the prevailing culture of the
organization.

A Socialization Model:

The prearrival stage recognizes that each individual arrives with a set of values, attitudes,
and expectations about both the work and the organization. Then encounter stage is where
new members confront the possibility that expectations may differ from reality. And finally
the metamorphosis stage, is when the new employee changes and adjusts to the work, work
group and organization.

Summary: How Cultures Form

How Employees Learn Culture

Stories - anchor the present into the past and provide explanations and legitimacy
for current practices

Rituals - repetitive sequences of activities that express and reinforce the key values
of the organization

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Material Symbols - acceptable attire, office size, opulence of the office furnishings,
and executive perks that convey to employees who is important in the organization

Language - Jargon and special ways of expressing one’s self to indicate membership
in the organization

Creating an Ethical Organizational Culture

If the culture is strong and supports high ethical standards, it should have a very
powerful and positive influence on employee behavior.

Characteristics of Organizations that Develop High Ethical Standards

 High tolerance for risk

 Low to moderate in aggressiveness
 Focus on means as well as outcomes

Managerial Practices Promoting an Ethical Culture

 Being a visible role model

 Communicating ethical expectations
 Providing ethical training
 Rewarding ethical acts and punishing unethical ones
 Providing protective mechanisms

Creating a Positive Organizational Culture

Positive Organizational Culture

A culture that:
 Builds on employee strengths
o Focus is on discovering, sharing, and building on the strengths of individual
employees
 Rewards more than it punishes
o Articulating praise and “catching employees doing something right”

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 Emphasizes individual vitality and growth
o Helping employees learn and grow in their jobs and careers
Limits of Positive Culture:
May not work for all organizations or everyone within them

Global Implications

Organizational culture is so powerful it often transcends national boundaries. But that

doesn’t mean organizations should, or could, ignore local culture. All organizations need to
be more culturally sensitive

Managers should be more culturally sensitive by:

 Speaking slowly and in a low tone

 Listening more
 Avoiding discussions of religion or politics

Summary and Implications for Managers

Employees form an overall subjective perception of the organization based on factors such
as degree of risk tolerance, team emphasis, and support of people.

This overall perception becomes, in effect, the organization’s culture or personality and
affects employee performance and satisfaction, with stronger cultures having greater
impact.

 Strong cultures are difficult for managers to change

In the short run, strong cultures should be considered fixed

 Selecting new hires that fit well in the organizational culture is critical for motivation,
job satisfaction, commitment, and turnover
 Socialization into the corporate culture is important
 As a manager, your actions as a role model help create the cultural values of ethics,
spirituality, and a positive culture

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Reference

Robbins, S. P., & Judge, T. A. (2014). Essentials of Organizational Behavior. New Jersey:
Pearson Education Inc.