ORGANIZATION CULTURE &

FUNCTIONS OF
ORGANIZATION CULTURE
Submitted To:- Submitted By:-

Sushma Ma’am Nikhil Peshawaria

University Business School Mohit Watts

Panjab University, Chandigarh

CONTENTS
 What is organisation culture
 Importance
 Characteristics of organisation culture
 Classification based on organisation culture
 Dominant culture & subculture
 Strong vs weak culture
 Creation of culture
 Ethical, positive & spiritual organization culture
 Functions of organization culture
WHAT IS ORGANISATION
CULTURE ?
 Organizational culture refers to a system of shared
meaning held by members that distinguishes the
organization from other organizations.
 This system of shared meaning includes

 Values
 Beliefs
 And Assumptions

that characterize the organization.

WHY IS THIS TOPIC
IMPORTANT?
 Helps you assess career opportunities
 and how you might fit into an organization
 Helps you assess how to succeed within an
organization
 or whether it is even possible
CHARACTERISTICS OF
ORGANISATION CULTURE
 Six primary characteristics seem to capture the
essence of an organization’s culture:
 Adaptability
 Detail Orientation
 Results/Outcome Orientation
 People/Customer Orientation
 Collaboration/Team Orientation
 Integrity
ADAPTABILITY
 The degree to which employees are encouraged to be:-
 Innovative
 Flexible
 Take risks
 Be experimental
 Example:
 Management prides itself on its history of experimenting with new
technologies and its success in regularly introducing innovative
products.
 Managers or employees who have a good idea are encouraged to “run
with it.”
 Failures are treated as “learning experiences.”
 The company prides itself on being market driven and rapidly
responsive to the changing needs of its customers
DETAIL ORIENTATION
 The degree to which employees are expected to exhibit:-
 precision
 Analysis
 and attention to detail.
 Example:
 Four Seasons Hotels Ltd. and the Ritz-Carlton Company LLC are
among hotels who keep records of all customer requests, such as
which newspaper the guest prefers or what type of pillow the
customer uses.
 This information is put into a computer system and used to provide
better service to returning customers.
RESULTS/OUTCOME
ORIENTATION
 The degree to which management focuses on results or outcomes
rather than on the techniques and processes used to achieve them.
 Example:
 A good example of an outcome-oriented culture may be Best
Buy Co. Inc.
 Having a culture emphasizing sales performance, Best Buy
tallies revenues and other relevant figures daily by
department.
 Employees are trained and mentored to sell company products
effectively, and they learn how much money their department
made every day.
PEOPLE ORIENTATION
 The degree to which management decisions take into consideration
the effect of outcomes on people within the organization.
 Example:
 Starbucks Corporation is an example of a people-oriented
culture.
 The company pays employees above minimum wage, offers
health care and tuition reimbursement benefits to its part-
time as well as full-time employees, and has creative perks
such as weekly free coffee for all associates.
 As a result of these policies, the company benefits from a
turnover rate lower than the industry average.
COLLABORATION/TEAM
ORIENTATION
 The degree to which work activities are
organized around teams rather than
individuals.
 Example:
 Southwest Airlines Company facilitates a
team-oriented culture by cross-training
its employees so that they are capable of
helping each other when needed.
INTEGRITY
 The degree to which people exhibit integrity and high
ethical standards in their work.
 Traits of Integrity:
 Show up ready to work
 Set a positive example
 Be respectful during conflict
 Practice accountability
 Follow and enforce company policies
 Improve your work ethic
 Respect property
CLASSIFICATION OF ORGANIZATION ON
THE BASIS OF CULTURE
DOMINANT CULTURE
 A dominant culture expresses the core values
a majority of members share and that give
the organization its distinct personality.
 Core Values:
 The primary or dominant values that are
accepted throughout the organization
SUBCULTURES
 Subcultures tend to develop in large organizations to
reflect common problems or experiences
members face in the same department or location.
 Example:
 The purchasing department can have a subculture
that includes the core values of the dominant
culture plus additional values unique to members
of that department.
CULTURE AND IT’S IMPACT ON
BEHAVIOUR OF EMPLOYEES
 Organizational culture represents a common perception the
organization’s members hold.
 It is the “shared meaning” aspect of culture that makes it such
a potent device for guiding and shaping behavior.
 Example:
 Indigo Airline’s culture values speed and efficiency over
customer care which explains the behavior of Indigo
employees.
 Recent incident at Mumbai airport where passengers were
stuck on the runway for 6 hours without letting them de-
plane.
STRONG VS WEAK CULTURE
STRONG CULTURE WEAK CULTURE

• If most employees (responding to • If opinions vary widely, the culture is

management surveys) have the same weak.
opinions about the organization’s
mission and values, the culture is
strong
• Greater influence on member • Lesser influence on member behavior
behavior

• Builds cohesiveness, loyalty and • Lesser degree of agreement about what

organizational commitment organization represents leads to
dissent, dissatisfaction and lack of
cohesiveness.
CREATION OF CULTURE
 The ultimate source of an organization’s culture:
ITS FOUNDERS.
 Free of previous customs or ideologies, founders
have a vision of what the organization should be.
 The firm’s small size makes it easy to impose that
vision on all members.
CREATION OF CULTURE
CREATION OF CULTURE
 When the organization succeeds, the founders’
personality becomes embedded in the culture.
 Example:
 The fierce, competitive style and disciplined,
authoritarian nature of Hyundai, the giant
Korean conglomerate, exhibits the same
characteristics often used to describe founder
Chung Ju-Yung.
ETHICAL ORGANIZATION
CULTURE
 The organizational culture most likely to shape high ethical standards
among its members is:
 high in risk tolerance
 low to moderate in aggressiveness,
 and focused on means as well as outcomes.
 Steps to create an ethical culture:
 Be a visible role model
 Communicate ethical expectations.
 Provide ethical training.
 Visibly reward ethical acts and punish unethical ones.
 Provide protective mechanisms.
POSITIVE ORGANIZATIONAL
CULTURE
 A positive organizational culture emphasizes
building on:
 Employee strengths,
 Rewards more than it punishes,
 Emphasizes individual vitality and growth
SPIRITUALITY AND
ORGANIZATIONAL CULTURE
 The recognition that people:
 Have an inner life that nourishes and
 Is nourished by meaningful work

that takes place in the context of community.

 Organizations that promote a spiritual culture recognize that
people:
 Seek to find meaning and purpose in their work
 Desire to connect with other human beings as part of a
community.
 Example: CSR activities of an organization.
CHARACTERISTICS OF A
SPIRITUAL ORGANIZATION
Functions of
Organization
al Culture

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THE 5 FUNCTIONS OF ORGANISATION
CULTURE
 Boundary Defining Role – Create Distinction between
the organisations.
 Conveying sense of Identity to members of
Organisation
 Facilitate Commitment to something larger than
individual self interest
 Enhances the Stability of Social System
 Serves as a sense-making and control mechanism that
guides and shapes employees’ attitude and behaviour.
FUNCTIONS CONTD.
 A Strong Culture supported by formal rules and regulations ensures that
employees act in a relatively uniform and predictable way.
 When formal authority and control systems are reduced through
decentralisation, culture’s shared meaning can point everyone to the
same direction.
 The organisations nowadays try to find employees who can fit into the
organisation culture.
 EXAMPLE:
 Disney theme park employees appear almost universally attractive,
clean, and wholesome with bright smiles.
 The company selects only those employees who will maintain that
image.
 All the rewards, promotions, job offers, etc. are strongly influenced by
the organisational culture.
CULTURE CREATES CLIMATE
 Organisation Climate refers to the shared perceptions that
member of the organisation have about the organisation and
the work environment.
 These perceptions are directed at the policies, practices, and
procedures experienced by the employees.
 The organisation climate may either:
 Inspire the member or
 May even demotivate that person.
 Example:
 Someone who encounters a positive climate for diversity will
feel more comfortable collaborating with co-workers
regardless of their demographic background.
CULTURE CREATES CLIMATE

 It effects the level of job satisfaction, involvement,

commitment, and all such factors of an employee.
 It also influence the habits that a new member of
an organisation adopt.
 Example:
 If the climate for safety is positive, everyone
wears safety gear and follows safety
procedures even if individually they wouldn’t
normally think very often about being safe.
CULTURE AND INNOVATION
 Developing the right culture can help an organisation to drive innovations.
 It is found that start-ups have an innovative culture because they are usually
small, agile, and focussed on solving problems to survive and grow.
 However, large companies like 3M or Intuit, do have a culture of Innovation.
 Each company has different method to foster innovation.
 Example:
 Some companies like 3M or Google allow their employees take time out
from the work and work on something innovative even though that
might fail
 Some other company like a Pune Based Start-up named Druva has a
system of no hierarchy, and dedicates the Friday of every week for
knowledge sharing, having fun, and bonding with each other.
CULTURE AS AN ASSET
 The Culture of an Organisation can also contribute
significantly to its bottom line in many ways:
1. Lower Employee Absenteeism
2. Less Costly Turnover
3. Less Management Required
4. Higher Motivation and productivity
 For example, in case of automobile dealerships, it is found
that a positive work culture improved sales performance
because it increased customer satisfaction.
CULTURE AS A LIABILITY
 Similar to how a good Organisation Culture is a an asset, a bad
Organisation Culture is a Liability.
 Major Factors that signal a negative organisational culture are as
follows:
 Institutionalisation

 Barrier to Change

 Barrier to Diversity

 Toxicity and Dysfunctions

 Dominating Cultures
 Avoidance Cultures
 Barrier to Acquisitions and Merger
Thank
You

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