CHAPTER 14

Organisational culture

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-1
Organisational culture

• The values and assumptions

shared within the organisation
• Defines what is important and
unimportant
• A company’s DNA: an invisible yet
powerful template that shapes
employee behaviour

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-2
Organisational culture, assumptions,
values and artefacts

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-3
Espoused vs enacted values
• Espoused values:
– values that are desired to guide
employee behaviour
– socially desirable
• Enacted values:
– values most staff truly rely on to guide
decisions and behaviours

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-4
Content of organisational
culture
• The relative ordering of values:
– a few dominant values
• Problems measuring organisational culture:
– oversimplifies diversity of possible values
– ignores shared assumptions
– adopts an ‘integration’ perspective
• An organisation’s culture is ill-defined:
– diverse subcultures (‘fragmentation’)
– values exist within individuals, not work units

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-5
Organisational culture profile

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-6
Organisational subcultures
• Dominant culture: most widely shared
values and assumptions
• Subcultures:
– located throughout the organisation
– can enhance or oppose (countercultures)
firm’s dominant culture
• Two functions of countercultures:
– provide surveillance and critique, ethics
– source of emerging values

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-7
Deciphering organisational
culture through artefacts
• Observable symbols and signs of
culture
• Stories, language, ceremonies and
physical structures
• Maintain and transmit organisation’s
culture
• Need many artefacts to accurately
decipher a company’s culture
© 2019 McGraw-Hill Education (Australia) Pty Ltd
McShane, Organisational Behaviour, 6e 14-8
Artefacts: organisational stories
and legends
• Social prescriptions of desired (or
dysfunctional) behaviour
• Provide a realistic human side to
expectations
• Most effective stories and legends:
– describe real people
– are assumed to be true
– are known throughout the organisation
– are prescriptive
© 2019 McGraw-Hill Education (Australia) Pty Ltd
McShane, Organisational Behaviour, 6e 14-9
Artefacts: organisational language
• Words used to address people,
describe customers, etc.
• Leaders use phrases and special
vocabulary as cultural symbols
• Language also found in subcultures

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-10
Artefacts: rituals and ceremonies
• Rituals:
– programmed routines
(e.g. how visitors are greeted)
• Ceremonies:
– planned activities for an audience
(e.g. award ceremonies)

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-11
Artefacts: physical structures and
symbols
• Building structure may reflect
culture:
– size, shape, location, age of building
• Office design conveys cultural
meaning:
– furniture, office size, wall hangings

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-12
Organisational culture
strength
• How widely and deeply employees hold the
company’s dominant values and assumptions
• Increases effectiveness
• Strong cultures exist when:
– most employees understand/embrace the
dominant values
– values and assumptions are institutionalised
through well-established artefacts
– culture is long-lasting: often traced back to founder

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-13
Potential benefits and
contingencies of culture strength

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-14
Organisational culture and
business ethics
• Ethical values become embedded
in an organisation’s dominant
culture.
• To create a more ethical
organisation, leaders need to work
on the embedded culture that steers
employee behaviour.

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-15
Merging organisational
cultures: bicultural audit
• Part of due diligence in merger
• Determines the extent to which cultural
clashes will occur
• Three steps in bicultural audit:
1. identify cultural differences
2. analyse data for cultural conflict or
compatibility
3. identify strategies and action plans to
bridge cultures
© 2019 McGraw-Hill Education (Australia) Pty Ltd
McShane, Organisational Behaviour, 6e 14-16
Strategies for merging
organisational cultures

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-17
Strategies for changing and
strengthening organisational culture
• Actions of founders and leaders:
– organisational culture sometimes reflects the
founder’s personality
– transformational leaders can reshape culture:
organisational change practices
• Align artefacts with desired culture:
– artefacts keep culture in place
– e.g. create memorable events, communicating
stories, transferring culture carriers

Continued

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-18
Strategies for changing and
strengthening organisational culture (cont.)
• Introduce culturally-consistent rewards and
recognition:
– rewards are powerful artefacts: reinforce
culturally-consistent behaviour
• Support workforce stability and
communication
– through the development of shared stories,
language and artefacts

Continued

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-19
Strategies for changing and
strengthening organisational culture (cont.)
• Attracting, selecting, socialising for cultural
‘fit’:
– recruit and select those whose values are
culturally compatible:
 attraction-selection-attrition theory
 socialisation practices

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-20
Attraction-selection-attrition
theory
• Organisations become more
homogeneous (stronger culture)
through:
– attraction: applicants self-select and weed
out companies based on compatible values
– selection: applicants selected based on
values congruent with organisation’s culture
– attrition: employees quit or are forced out
when their values oppose company values

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-21
Organisational socialisation

The process by which individuals

learn the values, expected behaviours
and social knowledge necessary to
assume their roles in the organisation:
• can align employee values with
company culture
• helps newcomers adjustment

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-22
Learning and adjustment
process
• Learning process:
– newcomers make sense of the organisation’s
physical, social and strategic/cultural
dynamics
• Adjustment process:
– newcomers need to adapt to their new work
environment:
 new work roles
 new team norms
 newcomers with diverse experience adjust better

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-23
Psychological contracts
• Individual’s beliefs about the terms and
conditions of a reciprocal exchange
agreement between the person and another
(e.g. employer)
– Transactional
– Relational

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-24
Stages of socialisation

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-25
Improving the socialisation
process
• Realistic job preview (RJP):
– a balance of positive and negative
information about the job and work context
• Socialisation agents:
– supervisors: technical information,
performance feedback, job duties
– co-workers: ideal when accessible, role
models, tolerant and supportive

© 2019 McGraw-Hill Education (Australia) Pty Ltd

McShane, Organisational Behaviour, 6e 14-26