WORKSHOP 5

ORGANIZATION CULTURE
Institutionalization: A Forerunner of Culture

Institutionalization
When an organization takes on a life of its own,
apart from any of its members, becomes valued for
itself, and acquires immortality.
What Is Organizational Culture?
Organizational Culture
A common perception held by Characteristics:
the organization’s members; 1. Innovation and risk
a system of shared meaning. taking
2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability
Contrasting
Organization A Organizational Cultures
This organization is a manufacturing firm. Managers are expected to fully document all
decisions; and “good managers” are those who can provide detailed data to support their
recommendations. Creative decisions that incur significant change or risk are not encouraged.
Because managers of failed projects are openly criticized and penalized, managers try not to
implement ideas that deviate much from the status quo. One lower-level manager quoted an often
used phrase in the company: “If it ain’t broke, don’t fix it.”
There are extensive rules and regulations in this firm that employees are required to follow.
Managers supervise employees closely to ensure there are no deviations. Management is
concerned with high productivity, regardless of the impact on employee morale or turnover.
Work activities are designed around individuals. There are distinct departments and lines of
authority, and employees are expected to minimize formal contact with other employees outside
their functional area or line of command. Performance evaluations and rewards emphasize
individual effort, although seniority tends to be the primary factor in the determination of pay
raises and promotions.
Contrasting
Organization B Organizational Cultures (cont’d)
This organization is also a manufacturing firm. Here, however, management encourages and
rewards risk taking and change. Decisions based on intuition are valued as much as those that are
well rationalized. Management prides itself on its history of experimenting with new
technologies and its success in regularly introducing innovation products. Managers or
employees who have a good idea are encouraged to “run with it.” And failures are treated as
“learning experiences.” The company prides itself on being market-driven and rapidly responsive
to the changing needs of its customers.
There are few rules and regulations for employees to follow, and supervision is loose
because management believes that its employees are hardworking and trustworthy. Management
is concerned with high productivity, but believes that this comes through treating its people right.
The company is proud of its reputation as being a good place to work.
Job activities are designed around work teams, and team members are encouraged to
interact with people across functions and authority levels. Employees talk positively about the
competition between teams. Individuals and teams have goals, and bonuses are based on
achievement of these outcomes. Employees are given considerable autonomy in choosing the
means by which the goals are attained.
Do Organizations Have Uniform Cultures?

Dominant Culture
Expresses the core values that
are shared by a majority of
the organization’s members.

Subcultures
Minicultures within an
organization, typically defined
by department designations
and geographical separation.
Do Organizations Have Uniform Cultures?
(cont’d)

Core Values
The primary or dominant values that are accepted
throughout the organization.

Strong Culture
A culture in which the
core values are intensely
held and widely shared.
What Is Organizational
Culture
 Versus Formalization Culture? (cont’d)
 A strong culture increases behavioral consistency and can act as a substitute for
formalization.
 Organizational Culture Versus National Culture
 National culture has a greater impact on employees than does their organization’s
culture.
 Nationals selected to work for foreign companies may be atypical of the local/native
population.
WhatCulture’s
Do Cultures Do?
Functions:
1. Defines the boundary between one organization and others.
2. Conveys a sense of identity for its members.
3. Facilitates the generation of commitment to something larger
than self-interest.
4. Enhances the stability of the social system.
5. Serves as a sense-making and control mechanism for fitting
employees in the organization.
What Do Cultures Do?

Culture as a Liability:
1. Barrier to change
2. Barrier to diversity
3. Barrier to acquisitions & mergers
How Culture Begins
Founders hire and keep only employees who think and

feel the same way they do.
 Founders indoctrinate and socialize these employees
to their way of thinking and feeling.
 The founders’ own behavior acts as a role model that
encourages employees to identify with them and
thereby internalize their beliefs, values, and
assumptions.
Keeping
 Culture Alive
Selection
 Concern with how well the candidates will fit into the organization.
 Provides information to candidates about the organization.
 Top Management
 Senior executives help establish behavioral norms that are adopted by the
organization.
 Socialization
 The process that helps new employees adapt to the organization’s culture.
Stages in the Socialization Process
Prearrival Stage
The period of learning in the socialization process
that occurs before a new employee joins the
organization.

Encounter Stage
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.

Metamorphosis Stage
The stage in the socialization process in which a new employee
changes and adjusts to the work, work group, and
organization.
A Socialization Model
Entry Socialization Options

• Formal versus Informal

• Individual versus Collective
• Fixed versus Variable
• Serial versus Random
• Investiture versus Divestiture

Source: Based on J. Van Maanen, “People Processing: Strategies of Organizational

Socialization,” Organizational Dynamics, Summer 1978, pp. 19–36; and E. H. Schein,
Organizational Culture,” American Psychologist, February 1990, p. 116.
How Organization Cultures Form
How Employees Learn Culture
• Stories
• Rituals
• Material Symbols
• Language
Creating An Ethical Organ’al Culture

 Characteristics of Organizations that Develop High Ethical Standards

 High tolerance for risk
 Low to moderate in aggressiveness
 Focus on means as well as outcomes
 Managerial Practices Promoting an Ethical Culture
 Being a visible role model
 Communicating ethical expectations
 Providing ethical training
 Rewarding ethical acts and punishing unethical ones
 Providing protective mechanisms
Create a Customer-Responsive
Key Variables Culture
Shaping Customer-Responsive
Cultures
1. The types of employees hired by the
organization.
2. Low formalization: the freedom to meet
customer service requirements.
3. Empowering employees with decision-making
discretion to please the customer.
4. Good listening skills to understand customer
messages.
5. Role clarity that allows service employees to
act as “boundary spanners.”
6. Employees who engage in organizational
citizenship behaviors.
Create a Customer-Responsive Culture

Managerial Actions:
• Select new employees with personality and attitudes
consistent with high service orientation.
• Train and socialize current employees to be more
customer focused.
• Change organizational structure to give employees more
control.
• Empower employees to make decisions about their jobs.
Create a Customer-Responsive Culture
Managerial Actions (cont’d) :
• Lead by conveying a customer-focused vision and
demonstrating commitment to customers.
• Conduct performance appraisals based on customer-
focused employee behaviors.
• Provide ongoing recognition for employees who make
special efforts to please customers.
Spirituality and Organizational Culture
Workplace Spirituality
The recognition that people have an inner life that
nourishes and is nourished by meaningful work that
takes place in the context of the community.

Characteristics:
• Strong sense of purpose
• Focus on individual development
• Trust and openness
• Employee empowerment
• Toleration of employee expression
Reasons for the Growing Interest in Spirituality

 As a counterbalance to the pressures and stress of a turbulent

pace of life and the lack of community many people feel and
their increased need for involvement and connection.
 Formalized religion hasn’t worked for many people.
 Job demands have made the workplace dominant in many
people’s lives, yet they continue to question the meaning of
work.
 The desire to integrate personal life values with one’s
professional life.
 An increasing number of people are finding that the pursuit of
more material acquisitions leaves them unfulfilled.
How Organizational Cultures Have an Impact on
Performance and Satisfaction
Review: Org. Culture

If you walked into a bank and saw vibrant,

modern, abstract art on the walls and big
bright blue balls in the waiting area for
customers to sit on (or throw!), what would
you think about the culture? How would
you expect your transaction with the teller
to be different from other banks you’ve
been in?
Creation and Maintenance of
Organizational Cultures

Company Founder

Organizational Stories Organizational Heroes

5.1
Successful
Organizational Cultures

Adaptability

Consistency Involvement

Clear Vision

Sales Employee
Growth Satisfaction
Return on Profits
Quality
Assets

5.2 Adapted from Exhibit 3.7

D.R. Denison & A.K. Mishra, Organization Science 6 (1995): 204-223
Levels of
Organizational Culture
Exhibit 3.8

5.3
5.3
Changing
Organizational Cultures

 Behavioral addition
 is the process of having managers and employees perform a new behavior
 Behavioral substitution
 is having managers and employees perform a new behavior in place of
another behavior
 Change visible artifacts
 such as the office design and layout, company dress codes, etc.
Flexibility:New ways of working

Flexibility at work can be defined

as the ability of the organisation to
adapt the size, composition,
responsiveness and cost of people
inputs required to achieve
organisational objectives.
THE FLEXIBLE FIRM : ATKINSON MODEL
CORBRIDGE AND PILBEAM MODEL
PROBLEMS ASSOCIATED WITH FLEXI-TIME
ISSUES TO CONSIDER