MGT 1213

Organizational Behaviour

Organizational Culture
Department of Business Management
Faculty of Management Studies
Intended Learning Outcomes

• Understand the role of organizational culture

• Understand the functions of culture
• Understand how employees learn cultures

16–2
The way we do things around here !!!
What Is Organizational Culture?
Organizational Culture
A common perception held by the Characteristics:
organization’s members; a system 1. Innovation and risk taking
of shared meaning. 2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability

16–4
Emphasis on Outcome (Achievement Orientation)

• Companies that focus on results, but not on how the results are achieved

• Outcome-oriented cultures hold employees as well as managers accountable for

success and utilize systems that reward employee and group output

• When performance pressures lead to a culture where unethical behaviours become

the norm, individuals see their peers as rivals and short-term results are rewarded;
the resulting unhealthy work environment serves as a liability.
Aggressiveness

• The degree to which people are aggressive and competitive rather

than easy-going.
• Companies with an aggressive culture place a high value on
competitiveness and outperforming the competition at all costs.
Teamwork (Collaboration Orientation)

• Companies that organize work activities around

teams instead of individuals place a high value on
this characteristic of the organizational culture.

• People who work for these types of companies

tend to have a positive relationship with their co-
workers and managers.
Stability (Rule Orientation)

• A company whose culture places a high value on stability is rule-

oriented, predictable, and bureaucratic in nature.
• These types of companies typically provide consistent and predictable
levels of output and operate best in non-changing market conditions.
Innovation (Risk Orientation)

• The degree to which employees are encouraged to be innovative and take risks.

• Companies that have innovative cultures are flexible and adaptable, and experiment
with new ideas
Attention to Detail (Precision Orientation)

• This characteristic of organizational culture dictates the degree to which

employees are expected to be accurate in their work

• A culture that places a low value on this characteristic does not.

• Gives a competitive advantage

People orientation.

The degree to which management decisions

take into consideration the effect of outcomes
on people within the organization.

Treat the employees with respect and dignity.

“people are their greatest asset.”

Do Organizations Have Uniform Cultures?
Dominant Culture
Expresses the core values that are shared by a majority of the
organization’s members.

Subcultures
Minicultures within an organization, typically defined by department
designations and geographical separation.

16–12
Do Organizations Have Uniform Cultures? (cont’d)

Core Values
The primary or dominant values that are accepted throughout the
organization.

Strong Culture
A culture in which the core values are intensely held and widely
shared.

16–13
What Is Organizational Culture? (cont’d)
• Culture Versus Formalization
– A strong culture increases behavioral consistency and can act as a substitute for
formalization.

• Organizational Culture Versus National Culture

– National culture has a greater impact on employees than does their organization’s
culture.
– Nationals selected to work for foreign companies may be atypical of the local/native
population.

16–14
Cultural Web

• Paradigm are the collective experience applied to a situation to make sense of it and inform a
likely course of action
– Eg: The paradigm of a charity may be about doing good works for the needy

• Routines are ‘the way we do things around here on a day-to-day basis’. Routings may have a
long history and may well be common across organisations
– Eg: Reporting procedure, apply a leave
Cultural Web

• Rituals are activities or events that emphasize what is especially important in the culture.
– Eg: Training programs, Interview panels, Promotion and Assessment procedures
– An extreme example, is the ritualistic training of army to prepare them for the discipline required in
conflict

• Stories told by members of an organisation to each other, to outsiders….

• It may tell its organizational history and also flag up important events and personalities
Cultural Web
• Symbols are objects, events, acts or people that convey, maintain or create meaning over
and above their functional purpose
– Eg: Cabin, Car, Chair,
• Power structures: the most powerful groupings within an organisation are likely to be
closely associated with the core assumptions and beliefs
• Organizational structure: reflects power and show important roles and relationships.
– Eg: Formal, hierarchical, mechanistic structures emphasizes that strategy is set by top managers and
everyone should work to orders
• Control system: measurements and reward systems emphasize what is important to monitor in the
organisation
Importance of Organizational Culture

• Culture unites (brings together) employees by providing a sense of identity with the
organization
• Facilitation of open communication.
• Culture enables organizations to differentiate themselves from one another.
• Culture often generates commitment, superseding personal interests.
• Culture sets organization norms, rules, and standards. Thereby, culture enables
employees to function in an organization, by teaching them how to behave.
• A shared understanding
• Fewer disagreements and more efficient decision-making processes.
• A strong sense of identification.
What Do Cultures Do?

Culture as a Liability:
1. Barrier to change.
2. Barrier to diversity
3. Barrier to acquisitions and mergers

16–20
Managing History and Culture

• History and culture make important influences on the strategy of organisations.

• Managing is needed?
• what managers can do about managing history and managing culture
• What is evident is that, if managers are to become path creators in strategy
development, they need to be able to challenge, question and potentially change
capabilities rooted in history and culture
How Culture Begins
• Founders hire and keep only employees who think and feel the same way they
do.
• Founders indoctrinate and socialize these employees to their way of thinking
and feeling.
• The founders’ own behavior acts as a role model that encourages employees to
identify with them and thereby internalize their beliefs, values, and
assumptions.

16–22
Culture Creation and Maintenance
Keeping Culture Alive

• Selection
– Concern with how well the candidates will fit into the organization.
– Provides information to candidates about the organization.
• Top Management
– Senior executives help establish behavioral norms that are adopted by the organization.
• Socialization
– The process that helps new employees adapt to the organization’s culture.

16–24
Stages in the Socialization Process
Prearrival Stage
The period of learning in the socialization process that occurs before a new
employee joins the organization.

Encounter Stage
The stage in the socialization process in which a new employee sees what the
organization is really like and confronts the possibility that expectations and reality
may diverge.

Metamorphosis Stage
The stage in the socialization process in which a new employee changes and adjusts
to the work, work group, and organization.

16–25
Entry socialization options
How Employees Learn Culture

• Stories
• Rituals
• Material Symbols
• Language

16–28
Creating An Ethical Organizational Culture

• 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.

16–29
Creating a Customer-Responsive Culture

• Key Variables Shaping Customer-Responsive Cultures

1. The types of employees hired by the organization.
2. Low formalization: the freedom to meet customer service requirements.
3. Empowering employees with decision-making discretion to please the customer.
4. Good listening skills to understand customer messages.
5. Role clarity that allows service employees to act as “boundary spanners.”
6. Employees who engage in organizational citizenship behaviors.

16–30
Creating a Customer-Responsive Culture (cont’d)

Managerial Actions :
• Select new employees with personality and attitudes consistent with
high service orientation.
• Train and socialize current employees to be more customer focused.
• Change organizational structure to give employees more control.
• Empower employees to make decision about their jobs.

16–31
Creating a Customer-Responsive Culture (cont’d)

Managerial Actions (cont’d) :

• Lead by conveying a customer-focused vision and demonstrating
commitment to customers.
• Conduct performance appraisals based on customer-focused
employee behaviors.
• Provide ongoing recognition for employees who make special efforts to
please customers.

16–32
Spirituality and Organizational Culture
Workplace Spirituality
The recognition that people have an inner life that nourishes and is
nourished by meaningful work that takes place in the context of the
community.

Characteristics:
• Strong sense of purpose
• Trust and respect
• Open-mindedness
• Benevolence

16–33
Creating a Positive Organizational Culture

16–34