BUS 272 – E100

Week 10: Organizational Culture

Melissa McCrae, EdD

Learning Outcomes
1. Describe the common characteristics of organizational culture
2. Compare the functional and dysfunctional effects of organizational
culture on people and the organization
3. Identify the factors that create and sustain an organization’s culture
4. Show how culture is transmitted to employees
5. Demonstrate how an ethical organizational culture can be created
6. Describe a positive organizational culture
Corporate Culture
• Corporate culture is made up
of the values, norms, and
behaviours either espoused
or enacted in organizations
• Corporate culture can be
framed by managers to
provide employees with a
sense of overarching values
within the organizational
context
Organization Culture
• Shared
• Pervasive
• Enduring
• Implicit

• Tacit social order of an organization: it shapes attitudes and

behaviours in wide-ranging and durable ways: Cultural norms define
what is encouraged, discouraged, accepted, or rejected
• Culture is an elusive lever, because much of it is anchored in
unspoken behaviours, mindsets, and social patterns.
Culture and Structure
“Culture is the soul of the organization – the beliefs and values, and
how they are manifested. I think of structure as the skeleton, and as
the flesh and blood. And culture is the soul that holds the thing
together and gives it life force”
- Mintzberg, 1997

Organization Culture = a system of shared meaning held by members

that distinguishes the organization from other organizations.
Artifacts

Dimensions
Characteristics of Organizational Culture
Innovation and risk-taking: employees are encouraged to be innovative and take risks
Attention to detail: employees are expected to exhibit precision, analysis, and attention
to detail
Outcome orientation: management focuses on results or outcomes rather than on
technique and process
People orientation: management decisions take into consideration the effect of
outcomes on people within the organization
Team orientation: work activities are organized around teams rather than individuals
Aggressiveness: people are aggressive and competitive rather than easygoing
Stability: organizational activities emphasize maintaining the status quo in contrast to growth
Culture
• The dominant culture is a system of shared meaning that expresses
the core values shared by a majority of the organization’s members
• Core values are the primary or dominant values that are accepted
throughout the organization
• Subcultures are mini-cultures within an organization, typically
defined by department designations and geographical separation
Strong vs Weak Cultures
• If most employees (responding to surveys) have the same opinions
about the organization’s mission and values, the culture is strong; if
opinions vary widely, the culture is weak
• A strong culture is a culture in which the core values are intensely
held and widely shared
• Strong cultures greatly influence employee behaviour
• Builds cohesiveness, loyalty, and organizational commitment;
reduces turnover
• Lessens the need for high formalization, rules, policies
Culture’s Functions
• Boundary-defining, creates distinctions between organizations
• Conveys a sense of identity for organization members
• Facilitates commitment to something larger than one’s individual self-interest
• Enhances stability; it is the social glue that helps hold the organization together by
providing standards for what employees should say and do
• Serves as a control mechanism that guides and shapes the attitudes and behaviour
of employees and helps them make sense of the organization
• Current trend toward decentralized organizations makes culture more important
than ever, but it also makes establishing a strong culture more difficult
• Strong leadership that communicates frequently about common goals and priorities
is especially important in innovative organizations
Culture creates Climate
• Organizational climate is the shared perceptions organizational
members have about their organization and work environment
• This aspect of culture is like team spirit
• When everyone has the same general feelings about what is
important or how well things are working, the effect of these
attitudes will be more than the sum of the individual parts
• E.g. WestJet
Climate vs Culture
• “Organizational climate reflects the current emotional state or feeling
of your workplace. It concerns how employees experience and
perceive the company. Your climate is influenced by leadership styles,
communication practices, workload pressure and employee
recognition. A positive climate fosters a sense of belonging,
motivation, and higher performance, whereas a negative climate can
lead to disengagement and hinder business goals.”
• “Organizational culture is the deep-rooted set of values, attitudes,
and behaviors that define your company’s DNA. It’s the implicit or
explicit codes that shape how employees interact with each other,
interact with your clients, and make decisions.”
• [Link]
Climate vs Culture
Culture Climate
Focus Longer-term, foundational Shorter-term indicator of current
aspects feelings/perceptions
Analogy Personality of an organization Mood of an organization
Stability Stable and enduring, resistant Changeable and fluid (leadership
to change changes, new policies, workload)
Visibility Less visible, abstract, unspoken More visible, observable (env, comm)
Measure Difficult to quantify Can be measured (surveys, exit int)
Time frame Long-term phenomenon, Short-to-medium term concept, can
evolves slowly change rapidly (ldr change, events)
[Link]
Culture
• Lego
Ethical Dimensions of Culture
• Organizational cultures are not ethically neutral
• Ethical work climate (EWC) is the shared concept of right and wrong
behaviour in the workplace that reflects the true values of the
organization and shapes the ethical decision making of its members
• Ethical climate theory (E C T) and Ethical climate index (E C I):
Categorize and measure the ethical dimensions of organizational
cultures; Ethical climate reflects the true values of the organization
and shapes the ethical decision-making of its members
• Five climate categories that are most prevalent: Instrumental; Caring;
Independence; Law and code; Rules
Culture & Sustainability
• Sustainability refers to an organization’s practices that can be
sustained over a long period of time because the tools or structures
that support them are not damaged by the processes
• Sustainable management does not need to be purely altruistic
Culture & Innovation
• The most innovative companies are often characterized by their
open, unconventional, collaborative, vision-driven, accelerating
cultures
• Start-up firms often have innovative cultures by definition because
they are usually small, agile, and focused on solving problems in
order to survive and grow
Culture as a Liability
• There are potentially dysfunctional aspects of culture on its effectiveness
Some of the major factors that signal a negative organizational culture:
• Institutionalization is a condition that occurs when an organization takes on
a life of its own, apart from any of its members, and acquires immortality
• Barriers to change
• Barriers to diversity
• Strengthening dysfunction
• Barriers to acquisitions and mergers
How a Culture Begins
• An organization’s customs, traditions, and general way of doing things are
largely due to what it has done before and how successful it was in doing
it
• The ultimate source of an organization’s culture is its founders
Culture creation occurs in the following ways:
• Hire and keep employees who think and feel the way the founders do
• Indoctrinate and socialize employees to their way of thinking & feeling
• Founders’ own behaviour encourages employees to identify with the
founders and thereby internalize those beliefs, values, and assumptions
Keeping a Culture Alive
Once a culture is in place, practices within the organization maintain it
by giving employees a set of similar experiences:
• Selection
• Top Management
• Socialization is the process that adapts new employees to an
organization’s culture
Keeping a Culture Alive
• The prearrival stage is the period of learning in the socialization process
that occurs before a new employee joins the organization
• The encounter stage is 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
• The metamorphosis stage is the stage in the socialization process in
which a new employee adjusts to the values and norms of the job, work
group, & organization
Keeping a Culture Alive
• The three-part entry socialization is complete when the following
occurs when new employees:
• become comfortable
• have internalized, understand and accept the norms of the
organization and the work group
• feel accepted by their peers
• are self-confident
• understand how they will be evaluated and know what criteria
will be used to measure and appraise their work
• know what is expected and what constitutes a job “well done”
How
Employees
Stories

Learn Material
Culture Symbols

Rituals

Language
Changing Organizational Culture
• Trying to change the culture of an organization is quite difficult and
requires that many aspects of the organization change at the same time,
especially the reward structure
• Culture is such a challenge to change because it often represents the
established mindset of employees and managers, often not visible

Change is most likely when most or all of the following conditions exist:
• A dramatic crisis
• Turnover in leadership
• Young and small organization
• Weak culture
Creating an Ethical Culture
• Be a visible role model
• Communicate ethical expectations
• Provide ethics training
• Visibly reward ethical acts and punish unethical ones
• Provide protective mechanisms
Creating a Positive Culture
• A positive organizational culture is a culture that emphasizes building
on employee strengths, rewards more than it punishes, and
emphasizes individual vitality and growth
• Limits of a positive culture – is it the answer to all organizational
problems?
• It is a new enough area that there is some uncertainty about how
and when it works best
• Organizational cultures often reflect national culture
Changing Organizational Culture
1. Have top-management people become positive role models, setting the
tone through their behaviour
2. Create new stories, symbols, and rituals to replace those currently in
vogue
3. Select, promote, and support employees who espouse the new values
that are sought
4. Redesign socialization processes to align with the new values
Changing Organizational Culture
5. Change the reward system to encourage acceptance of a new set of
values
6. Replace unwritten norms with formal rules and regulations that are
tightly enforced
7. Shake up current subcultures through transfers, job rotation, and/or
terminations
8. Work to get peer group consensus through utilization of employee
participation and creation of a climate with a high level of trust
Summary and Implications
1. What is the purpose of organizational culture?
• Organizational culture provides stability and gives employees a clear
understanding of “the way things are done around here.”
2. How do you read an organization’s culture?
• Artifacts, such as stories, rituals, material symbols, and language, can be used
to help read an organization’s culture.
Summary and Implications
3. How do you create and maintain culture?
• An organization’s culture is derived from the philosophy of its founders. It is
communicated by managers and employees are socialized into it.
4. Can organizational culture have a downside?
• A strong culture can have a negative effect, including “pressure-cooker”
cultures, barriers to change, difficulty in creating an inclusive environment, and
hindering mergers and acquisitions.
5. How do you change culture?
• It is important to change the reward structure and to work carefully to change
employee beliefs.