Chapter 5

Organizational Culture
1.Overview= premise of this chapter – Every organization has CULTURE!
2.Experiential exercise - what kind of culture do you have in your organization?
3.Meaning of Organizational Culture
4. Seven characteristics explaining meaning/essence of organizational culture
5. Culture versus Formalization (What is formalization? What does culture has to
do with formalization? )
6. Culture as a Liability – do you think culture may tend to be a liability? How?
7. Culture Creation - What is the ultimate source of an organization’s culture?
8. Keeping a Culture Alive –How do you think organizations can keep their
culture alive, once created?
Lecture highlights and reflections

4. Seven characteristics explaining meaning/essence of

organizational culture
5. Culture versus Formalization (What is formalization?
What does culture has to do with formalization? )
6. Culture as a Liability – do you think culture may tend to
be a liability? How?
Lecture highlights and reflections
7. Culture Creation - What is the ultimate source of an organization’s
culture?

Steve Jobs – Apple - culture of innovativeness and courage

Richard Branson - the Virgin Group – culture of innovativeness and
courage
Chung Ju-Yung – Hyundai – Competitive and disciplined culture
Lecture highlights and reflections
8. Keeping a Culture Alive –How do you think organizations can keep their
culture alive, once created?

• Ensure those hired fit in with the culture – through employment practices
of recruitment and selection, promotion, performance evaluation, training
and development etc….
Lecture highlights and reflections
9. How do employees learn culture? - How do you think employees learn culture?
• Stories - executives telling stories of founders and how te company started – corporate
story tellers e.g @Nike executives spend a lot of time telling stories how the company
launched its business many years ago
•  Rituals – chants/certain repeated activities (e.g. Walmart)
• Material Symbols (e.g a CEO driving the car himself/herself, simple dressing as
opposed to CEOs with bodyguards etc - - Openness, friendly and approachable
culture)
• Language – e.g. Yes Sir! Thank you Sir! Ok Sir!
Lecture highlights and reflections
10. Creating a positive organizational culture - What does it mean?

• Focusing on employees strengths and trying to use their strength as

opposed to being obsessed with their weakness and talk only about it.
Lecture highlights and reflections

11. Reading assignment from the slides -

Workplace Spirituality?
Overview

• Every organization has a culture that, depending on its

strength, can have a significant influence on the
attitudes and behaviors of organization members.
• Allow students to share the kind of culture that exists in
the organization that they work in
Organizational Culture - meaning

• Organizational culture refers to a system of shared

meaning held by members that distinguishes the
organization from other organizations.
• Organizational culture = A system of shared
meaning/values/beliefs held by members of an
organization
Organizational Culture – seven characteristics
explaining meaning of organizational culture

• Seven primary characteristics seem to capture the

essence of an organization’s culture!
Organizational Culture - meaning
1) Innovation and risk taking. The degree to which employees are
encouraged to be innovative and take risks.
2) Attention to detail. The degree to which employees are expected to
exhibit precision, analysis, and attention to detail.
3) Outcome orientation. The degree to which management focuses on
results or outcomes rather than on the techniques and processes used to
achieve them.
Organizational Culture - meaning
4) People orientation. The degree to which management decisions take into
consideration the effect of outcomes on people within the organization.
5) Team orientation. The degree to which work activities are organized around
teams rather than individuals.
6) Aggressiveness. The degree to which people are aggressive and competitive
rather than easygoing.
7) Stability. The degree to which organizational activities emphasize
maintaining the status quo in contrast to growth.
Culture versus Formalization

• High formalization creates predictability, orderliness, and consistency. A strong

culture achieves the same end without the need for written documentation.
• Therefore, we should view formalization and culture as two dominant different
roads to a common destination.
• The stronger an organization’s culture, the less management need be concerned
with developing formal rules and regulations to guide employee behavior.
• Those guides will be internalized in employees when they accept the
organization’s culture.
Culture as a Liability

• Culture can enhance organizational commitment and increase the consistency

of employee behavior, clearly benefits to an organization.
• Culture is valuable to employees too, because it spells out how things are done
and what’s important.
• But we shouldn’t ignore the potentially dysfunctional aspects of culture,
especially a strong one, on an organization’s effectiveness.
Example – an archaic/too conservative organizational culture stifles
change.
Culture Creation

• An organization’s culture doesn’t pop out of thin air, and once established
it rarely fades away.
• An organization’s current 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. This leads us to the ultimate source of an organization’s
culture: its founders.
Culture Creation
• Culture creation occurs in three ways.
First, founders hire and keep only employees who think and feel the same way
they do.
Second, they indoctrinate and socialize these employees to their way of thinking
and feeling.
And finally, the founders’ own behavior encourages employees to identify with
them and internalize their beliefs, values, and assumptions. When the organization
succeeds, the founders’ personality becomes embedded in the culture.
Culture Creation
• 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. Other founders with
immeasurable impact on their organization’s culture include Bill Gates at
Microsoft, Ingvar Kamprad at IKEA, Herb Kelleher at Southwest Airlines,
Fred Smith at FedEx, and Richard Branson at the Virgin Group.
• If you are interested in details please read about the persons from internet
sources.
Keeping a Culture Alive

• How do you think organizations can keep their culture alive, once
created?
Keeping a Culture Alive

• Once a culture is in place, practices within the organization maintain it by

giving employees a set of similar experiences. The selection process,
performance evaluation criteria, training and development activities,
and promotion procedures ensure those hired fit in with the culture,
reward those who support it, and penalize (or even expel) those who
challenge it. Three forces play a particularly important part in sustaining a
culture: selection practices, the actions of top management, and
socialization methods.
How employees learn culture

• How do you think employees learn culture?

How employees learn culture
• Stories
• Rituals (rituals, chants or certain repeated activities e.g at Walmart, check on internet
gimme a W etc… or Maru C)
see https://www.youtube.com/watch?v=dKd2unIg5Rk
• Material Symbols (e.g a CEO driving the car himself/herself, simple dressing as opposed
to CEOs with bodyguards etc)
• Language – (e.g all what you here is “ Yes, Sir! Here and there in the new company you
are hired ---- this signals the culture of Discipline and respect in the company)
etc…….
Creating a more ethical culture

• What can managers do to create a more ethical culture?

Creating a more ethical culture
What can managers do to create a more ethical culture?
• Be a visible role model.
• Communicate ethical expectations.
• Provide ethical training.
• Visibly reward ethical acts and punish unethical ones.
• Provide protective mechanisms.
Creating a positive organizational culture

• At first blush, creating a positive culture may sound hopelessly naïve,

however, are signs that management practice and OB research are
converging.
Creating a positive organizational culture

• What is a positive organizational culture?

Creating a positive organizational culture

• A positive organizational culture emphasizes building on employee strengths,

rewards more than it punishes, and emphasizes individual vitality and growth.
1. building on employee strengths - emphasize showing workers how they can
capitalize on their strengths.
2. rewards more than it punishes- managers forget to use the cheapest reward –
praise!
3. emphasizes individual vitality and growth – supporting employees personally and
professionally (support employees’ physical wellness and staying psychologically fit)
Workplace Spirituality
• Workplace spirituality is not about organized religious practices.

• It is an attempt to provide meaning and inner sense of satisfaction to

employees through the jobs that they do.
Workplace Spirituality
• When a company emphasizes its commitment to paying Third World
suppliers a fair (above-market) price for their coffee to facilitate
community development—as did Starbucks—or encourages employees
to share prayers or inspirational messages through e-mail—as did
Interstate Batteries—it is encouraging a more spiritual culture.
Workplace Spirituality
• Workplace spirituality recognizes that people have an inner life that
nourishes and is nourished by meaningful work in the context of
community.

• Organizations that promote a spiritual culture recognize that people seek

to find meaning and purpose in their work and desire to connect with other
human beings as part of a community.
Characteristics of a Spiritual Organization

• Although research remains preliminary, several cultural characteristics tend to be evident in

spiritual organizations:

• Benevolence. Spiritual organizations value showing kindness toward others and promoting the
happiness of employees and other organizational stakeholders.
• Strong sense of purpose. Spiritual organizations build their cultures around a meaningful
purpose. Although profits may be important, they’re not the primary value of the organization.
• Trust and respect. Spiritual organizations are characterized by mutual trust, honesty, and
openness. Employees are treated with esteem and value, consistent with the dignity of each
individual.
• Open-mindedness. Spiritual organizations value flexible thinking and creativity among
employees.
Reasons for the Growing interest in spirituality

• Spirituality can counterbalance the pressures and stress of a turbulent pace of life.

• Contemporary lifestyles—single-parent families, geographic mobility, the temporary

nature of jobs, new technologies that create distance between people—underscore the lack
of community (involvement) that many people feel and increase the need for involvement
and connection.
• Job demands have made the workplace dominant in many people’s lives, yet they
continue to question the meaning of work.
• People want to integrate personal life values with their professional life.
• An increasing number of people are finding that the pursuit of more material acquisitions
leaves them unfulfilled.
Global Implications – Organizational Culture
• Here the focus is to briefly highlight how is organizational culture affected by a global
context? Organizational culture is so powerful it often transcends national boundaries.
But that doesn’t mean organizations should, or could, ignore local culture.
Organizational cultures often reflect national culture. The culture at AirAsia, a
Malaysian-based airline, emphasizes informal dress so as not to create status
differences. The carrier has lots of parties/festivities, participative management, and no
private offices, reflecting Malaysia’s relatively collectivistic culture. The culture of US
Airways does not reflect the same degree of informality. If US Airways were to set up
operations in Malaysia or merge with AirAsia, it would need to take these cultural
differences into account.
• Thank you