ORGANISATIONAL CULTURE

Organization Culture Defined

• Organizational culture is defined as the values and assumptions shared

within an organization. It defines what is important and unimportant in
the company and, consequently, directs everyone in the organization
toward the “right way” of doing things.

Put more simply, culture is ‘the way we do things around

here’(Furnham and Gunter, 1993)
Content of Organizational Culture
• Organizations differ in their cultural content, that is, the relative
ordering of values and varying types of assumptions.

• Dell’s culture places efficiency and competitiveness far above innovation

and aesthetics, whereas the culture at Apple, Inc., prioritizes innovation
and style as equal to or higher than cost efficiency.
• Burning the midnight oil is a way of life at many high-technology
• companies, but SAS Institute has a completely different culture. The
company closes employees by 6 p.m. and locks the doors to be sure they
practice work–life balance.
Organizational culture Characteristics of the dimension
dimension
Innovation Experimenting, opportunity seeking, risk taking, few rules,
low
cautiousness
Respect for people Fairness, Tolerance
Attention to details Precise, analytic
Outcome orientation High expectations, action-oriented, results -oriented
Team Orientation Collaboration, people- oriented
CHARATERISTICS OF CULTURE

It is difficult to define

It is multidimensional, with many different components at different levels

It takes time to establish and therefore time to change

Deciphering Organizational Culture through
Artifacts
• We can’t directly see an organization’s cultural assumptions and
values. Instead, as we decipher organizational culture indirectly
through artifacts.

• Artifacts: are the observable symbols and signs of an

organization’s culture, such as the way visitors are greeted, the
organization’s physical layout, and how employees are rewarded.
Deciphering Organizational Culture through
Artifacts
• Artifacts provide valuable evidence about a company’s culture. An
organization’s culture is usually too ambiguous and complex,
• thus one needs to observe workplace behavior, listen to everyday
conversations among staff and with customers, study written
documents and e-mails, note physical structures and settings, and
interview staff about corporate stories.

• In other words, we need to sample information from a range of

organizational artifacts
CATEGORIES OF ARTIFACTS
The four broad categories of artifacts:
• organizational stories and legends,
• rituals and ceremonies,
• language,
• and physical structures and symbols.
CATEGORIES OF ARTIFACTS

• Organizational stories and legends serve as powerful social prescriptions

of the way things should (or should not) be done. They add human realism
to corporate expectations, individual performance standards, and the
criteria for getting fired. Stories also produce emotions in listeners, and
this tends to improve listeners’ memory of the lesson within the story.

• Stories have the greatest effect on communicating corporate culture when

they describe real people, are assumed to be true, and are known by
employees throughout the organization.

• Stories are also prescriptive—they advise people what to do or not to do.

CATEGORIES OF ARTIFACTS

• Rituals are the programmed routines of daily organizational life

that dramatize an organization’s culture.
• They include how visitors are greeted, how often senior executives
visit subordinates, how people communicate with each other, how
much time employees take for lunch, and so on.

• For instance, BMW’s fast-paced culture is quite literally apparent

in the way employees walk around the German carmaker’s offices.

• “When you move through the corridors and hallways of other companies’
buildings, people kind of crawl, they walk slowly,” observes a BMW executive.
“But BMW people tend to move faster.”
CATEGORIES OF ARTIFACTS
• Ceremonies are more formal artifacts than rituals. Ceremonies are
planned activities conducted specifically for the benefit of an
audience. This would include publicly rewarding (or punishing)
employees or celebrating the launch of a new product or newly
won contract.
CATEGORIES OF ARTIFACTS
• The language of the workplace speaks volumes about the
company’s culture. How employees address co-workers, describe
customers, express anger, and greet stakeholders are all verbal
symbols of cultural values.

• For instance, consultants

• working at Whirlpool kept hearing employees talk about the
appliance company’s.

• “PowerPoint culture.” This phrase, which names Microsoft’s

presentation software, is a critique of Whirlpool’s hierarchical
culture in which communication is one-way (from executives to
employees).
CATEGORIES OF ARTIFACTS
• Physical Structures and Symbols: Winston Churchill once said, “We
shape our buildings; thereafter, they shape us.” The former British
prime minister was reminding us that buildings both reflect and
influence an organization’s culture.

• The size, shape, location, and age of buildings might suggest a

company’s emphasis on teamwork, environmental friendliness,
flexibility, or any other set of values.
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CATEGORIES OF ARTIFACTS
• Oakley, Inc’s “interplanetary headquarters” in Foothills Ranch,
California, on the other hand, is a vaultlike structure complete with
towering metallic walls studded with oversize bolts, representing
its secretive and protective culture. “We’ve always had a fortress
mentality,” says an executive at the eyewear and clothing company.
• “What we make is gold, and people will do anything to get it, so we
protect it.” Even if the building doesn’t make much of a statement,
there is a treasure trove of physical artifacts inside. Desks, chairs,
office space, and wall hangings (or lack of them) are just a few of
the items that might convey cultural meaning
Changing and Strengthening Organizational
Culture
• Is it possible to change an organization’s culture? Yes, but doing so
isn’t easy, the change rarely occurs quickly, and often the culture
ends up changing (or replacing) corporate leaders.

• This view is more extreme than most, but organizational culture

experts generally agree that changing an organization’s culture is a
considerable challenge.

• Over the next few pages, we will highlight some strategies that have
had some success at altering corporate cultures.
Changing and Strengthening Organizational
Culture
• Actions of Founders and Leaders: An organization’s culture begins
with its founders. The company’s culture sometimes reflects the
founder’s personality, and this cultural imprint can remain with
the organization for decades.

• Thus founders and subsequent leaders are sometimes able to

reshape that culture by applying transformational leadership and
organizational change practices.
Changing and Strengthening Organizational
Culture
• Aligning Artifacts: By altering artifacts—or creating new ones—
leaders can potentially adjust shared values and assumptions.
Changing and Strengthening Organizational
Culture
• Introducing Culturally Consistent Rewards: Reward systems are
artifacts that often have a powerful effect on strengthening or
reshaping an organization’s culture.
• Robert Nardelli also used the rewards lever to change Home
Depot’s freewheeling culture. A two-hour weekly conference call
became a ritual in which Home Depot’s top executives were held
accountable for the previous week’s goals. These actions
reinforced a more disciplined (and centralized) performance-
oriented culture.

• Payments of large commissions in front of customers and other

staff(Action Orientation)
Changing and Strengthening Organizational
Culture
• Attracting, Selecting, and Socializing Employees: Organizational
culture is strengthened by attracting and hiring people who
already embrace the cultural values.
IMPORTANCE OF ORG. CULTURE
• Culture and work ethic: Culture can influence people’s attitudes
and behaviour at work. For example an org. with a culture of not
taking time off for sickness , some employees felt they would not
be treated sympathetically if they took sick leave and this
influences their choice of how hard they work.

• Culture and organisational performance: Culture is clearly an

important ingredient of effective organisational performance. it
appears that a key characteristic of high performing companies is
a challenge culture
IMPORTANCE OF ORG. CULTURE
• Culture and organisation control: Culture impacts most aspects of
organizational life, such as how decisions are made, who makes
them, how rewards are distributed, who is promoted, how people
are treated, how the organization responds to its environment,
and so on.
IMPORTANCE OF ORG. CULTURE
• Sense Making Process: Corporate culture also makes it easier for
employees to understand what is expected of them. For instance,
one recent study reported that organizational culture strength
increases role clarity, which reduces stress among sales staff.
Culture as a Liability
• Although culture could be very beneficial ; there are potentially
dysfunctional aspects of culture, especially a strong one, on an
organization’s effectiveness:

• Barriers to Change: Culture is a liability when the shared values

don’t agree with those that further the organization’s
effectiveness.
• This is most likely when an organization’s environment is
undergoing rapid change, and its entrenched culture burden the
organization and make it difficult to respond to changes
• Barriers to Acquisitions and Mergers : In recent years, cultural
compatibility has become the primary concern for Acquisitions.

• All things being equal, whether the acquisition actually works

seems to have more to do with how well the two organizations’
cultures match up. Organization’s culture becomes a liability if it
could not allow for the match up.
• Barriers to Diversity: Strong cultures can become liabilities when
they effectively eliminate the advantages of diversity.

• A strong culture that condones prejudice, supports bias, or

becomes insensitive to people who are different can even
undermine formal corporate diversity policies.
The Impact of National Culture On
Organisational Behaviour
• Issues of globalization and internationalization provides a clear
evidence that an increasing number of organisations have to deal
with cultural issues and that the success or otherwise of their
efforts may have a significant impact on the organisation’s overall
effectiveness.

• However, before an organisation can deal with issues arising from

national cultural differences, it must first be able to identify what
these differences are likely to be and also consider specific issues
of significance.
Hofstede’s Model of National Culture
• Hofstede (1984) defines culture as ‘the collective programming of
the mind, which distinguishes the members of one human group
from another.

• In many ways Geert Hofstede is seen as the major writer on cross-

cultural analysis because the model he developed (Hofstede, 1980,
1984, 1991) has survived the test of time, is relatively easy to use
and is comprehensive.
Hofstede’s Model of National Culture
• Power distance: Power distance represents the social distance
between people of different rank or position. In a country with
high power distance, subordinates would be unwilling to question
superiors, and would look to them for direction.

• Thus they may well accept an unequal distribution of power and

autocratic leadership styles. Low power distance suggests less
dependence between superiors and subordinates. A leader may
have to earn respect in a low power-distance country.
• the higher the power distance (PDI), the greater will be the gap
between managers and subordinates.
Hofstede’s Model of National Culture
• Individualism
• Individualism reflects the extent to which an individual relies on a
group (a collectivist approach) or takes individual initiative in
making decisions, solving problems and engaging in productive
activity.
• We have already noted that the American culture has a tendency to
be very individualistic, whereas Asian cultures tend to be much
more collective.
Uncertainty avoidance
• Uncertainty avoidance essentially reflects people’s attitudes to
ambiguity in a society or country. Hofstede found that in some
cultures there was unhappiness or uncertainty with ambiguous
situations and that people wanted more direction and were less
comfortable with change, especially when it was not explained to
them.
• People who are not comfortable with ambiguous situations may
develop anxiety or stress and, thus, work less effectively in an
organisation where there is little direction and considerable
uncertainty. They may be happier with written rules to cover every
situation.
• If a company want to make changes in its corporate culture in a
country with Uncertainty avoidance it must be done carefully as its
likely to be met with resistance.
Hofstede’s Model of National Culture
Masculinity
• Masculinity is one of the more complex variables introduced by
Hofstede. It reflects values which are widely considered to be more
‘masculine’, such as assertiveness, competitiveness and results
orientation,

• whereas ‘feminine’ values can be seen to be cooperative and to show

greater awareness of feelings. This value also relates to the degree of
discrimination against (usually) women in the organisation.
• Japan has the highest masculinity (MAS) score and Norway one of
the lowest,
Hofstede’s Model of National Culture
• Long term Orientation: Knowing where a country fits is important
in helping managers to appreciate the time needed to build
relationships, to be accepted and to be trusted.
• Eastern countries scored high on this dimension, western nations
score low and developing nations score very low.

• The Japanese may be much more influenced by long-term market

share than immediate short-term factors, such as dividends. It may
also explain why Asian companies are keen to build long-term
relationships with Western companies rather than attempt
takeovers or other short-term activities.