ORGANIZATIONAL CULTURE

I.

INTRODUCTION AND HISTORY

Organizational culture as a concept has a fairly

recent origin. Though the concepts of "group norms" and "climate" have been used by
psychologists for a long time, the concept of culture has been explicitly used only in the
last decade or two (Lewin,Lippitt, & White, 1939). Katz & Kahn in their second edition
of "The Social Psychology of Organizations" (1978) refer to roles, norms, and values, but
neither climate nor culture is presented as explicit concepts. One may speculate that
culture as a concept was difficult for psychometrically oriented investigators to deal with,
and it was not sufficiently powerful as an explanatory variable to warrant the effort to
develop measures.
Organizational "climate," on the other hand, lent itself directly to
observation and measurement and thus has had a longer research tradition. In the late
1940's social psychologists interested in lewinian "action research" and leadership
training used the concept of "cultural island" freely to indicate that the training setting
was in some fundamental way different from the "back home" setting from which
trainees came. We knew from the leadership training studies of the 1940's that foremen
who changed significantly during training would revert in their attitudes once they were
back at work . But the concept of group norms, heavily documented in the Hawthorne
studies of the 1920's, seemed sufficient to explain these phenomena. In the 1950's and
60's, the field of organizational psychology began to differentiate itself out of industrial
psychology bringing with it a greater emphasis on concepts that dealt with larger units
than work groups.
And with that emphasis came a greater need for concepts such as
"system" that could describe what could be thought of as a pattern of norms and attitudes
that cut across a whole social unit.
The field of organizational psychology grew with the growth of business and
management schools, thus both freeing itself from the limiting influence of
psychometrically oriented psychology departments and allowing itself to become
increasingly influenced by sociological and anthropological concepts and methods. Cross
cultural psychology had, of course, existed for a long time, but the concept of culture was
only applied to organizations within a given society more recently as more investigators
interested in organizational phenomena found themselves needing the concept to explain
different patterns of behavior and levels of stability in groups and organizations.
In fact, it may well be that the concept of culture will ultimately prove more
useful for the analysis of groups and organizations than total societies because of the
relatively greater homogeneity of the smaller units, and because it will be possible to
reconstruct the entire history of an organization in a manner not possible for total
societies. hat has really thrust the concept into the forefront is the recent emphasis on
trying to explain why U. S. companies do not perform as well as some of their
counterpart companies in other societies, notably Japan. In observing the differences, it

has been noted that national culture is not a sufficient explanation. One needs concepts
that permit one to differentiate between organizations within a society, especially in
relation to different levels of effectiveness, and, for this purpose, organizational culture
has served well .As more investigators and theoreticians have begun to examine
organizational culture, the normative thrust has been balanced by more descriptive
research and clinical inquiry to find out what is actually going on in organizations before
we rush in to tell managers what to do about them .We have also seen in the last few
years both a popularization of the concept and increasing skepticism about the clarity and
value of the concept.
Most managers today use "culture" freely to refer to anything having to do with
beliefs, values, norms, ideology, and managerial style. If a change program is tobe given
emphasis and importance, or if resistance to change is encountered, managers speak of
"cultural changes" that they are making or contemplating. Mergers and acquisitions are
freely talked about as problems of cultural congruence or blending. The effect of all this
is to confuse the field and to lead to the suspicion that culture research is just a fad that
will pass in a few years. At the same time, as culture literature has piled up from various
fields, serious and valid questions are beginning to be raised about the possibility of
really understanding and measuring a concept that deals with the context in which we as
researchers are embedded.
In other words, our very approaches to studying culture and even our
concepts of what is scientific and practical vis-a-vis culture are themselves culturally
determined constructs, causing some observers of the contemporary scene to question
whether any one approach to this subject can claim to be a better representation of reality
than any other . The only valid stance may be one of questioning based on the recognition
that how we study abstract concepts like culture and how we represent it in our writings
is itself cultural and constrained by our own stage of historical and cultural evolution as a
society .
We can summarize this quick overview by identifying several
different conceptual origins or research streams that today influence how we perceive the
concept of organizational culture:
Social psychology and survey research: From this point of view culture has been
viewed as a property of groups that can be measured by questionnaires leading to
Likert type profiles. The problem with this approach is that we do not as yet
know what the right dimensions are for measuring culture, nor do we know
whether questionnaires are capable of measuring something as abstract as culture.
Empirical descriptive: Culture is viewed as a concept for which empirical
measures must be developed, even if that means breaking down the concept to
smaller units so that it can be analyzed and measured. The problem with this
approach is that the wholistic nature of culture may be lost.
Ethnographic: Concepts and methods developed in sociology and anthropology
are applied to the study of organizations in order to illuminate descriptively
aspects of organizational functioning that had previously not been observed. This
approach has been necessary to bring real understanding of what is involved, but
is time consuming and expensive. Its weakness and limitation is that only a small
number of cases can be studied and these may not be representative for purposes
that other investigators may regard as crucial.

Historical: Though historians have rarely applied the concept of culture to their
cases, it is clearly viewed as a legitimate aspect of an organization to be analyzed
along with other factors. The weaknesses of the historical method are similar to
those pointed out for the ethnographic, but those are often offset by theinsights
that historical and longitudinal analyses can provide.
Clinical descriptive. With the growth of organizational consulting has come the
opportunity to observe what is going on in organizations in areas from which
researchers have traditionally been barred, such as the executive suite. The
distillation of empirical knowledge from such clinical experiences provides a
much needed balance to the other methods because cultural origins and dynamics
can sometimes only be observed in the power centers where culture is created
and changed by leaders and powerful managers. The blem with this method is
that it does not provide the descriptive breadth of an ethnography nor the
methodological rigor of controlled empirical work.

DEFINITION:
Culture is a property of groups, and can be thought of as the accumulated learning that a
given group has acquired during its history. The definition
emphasizes this learning aspect and also notes that culture applies only to that portion of
the accumulated learning that is passed on to newcomers.
Thus, culture can be thought of as:
A pattern of basic assumptions, 2) invented, discovered, or developed by a given
group, 3) as it learns to cope with its problems of external adaptation and internal
integration, 4) that has worked well enough to be considered valid and, therefore
5) is to be taught to new members as the 6) correct way to perceive, think, and
feel in relation to those problems.

The strength and degree of integration of a culture is, therefore, a function of the
stability of the group, the length of time the group has existed, the intensity of the
group's experiencesof learning, the mechanisms by which the learning has taken
place, i.e. positive reinforcement or avoidance conditioning, and the strength and
clarity of the assumptions held by the founders and leaders of the group. Notice
also that the learning occurs both with respect to external survival issues and
internal integration issues, and that it covers perceptual, cognitive, and emotional
responses.
Culture is thus powerful and ubiquitous, especially so because
much of what we learn in groups is "over learned," and, therefore, drops out of
awareness until someone calls our attention to it. Thus the patterns of assumptions
that I am calling the culture are largely unconscious in day to day activity, but can
be called up into consciousness if someone raises the right set of questions. Once
a group has learned some shared assumptions, the resulting automatic patterns of
perceiving, thinking, and behaving provide meaning, stability, and comfort in that
the anxiety that would result from the inability to understand or predict events
around one is reduced by the shared learning. The strength and tenacity of culture
derives in part from this anxiety reduction function, and, indeed, one can think of
some aspects of culture as being for the group what defense mechanisms are for
the individual.
Culture is a property of a group. By definition, therefore, a total
organization can have a culture if it has been a stable group for some
period of time, and every sub-group within that organization can have a
culture of its own if it has its own stable history. Whether or not one will
find a culture in any given group, therefore, depends upon the stability of
that group and the number of significant learning experiences it has had.

WHAT ORGANIZATIONAL CULTURE IS?

ARTIFACTS

VISIBLE
ORGANISATIONAL
STEUCTURES AND
PROCESSES
STRATEGIES,
GOALS,
PHILOSOPHIES

VALUES

UNCONSCIOUS,
TAKEN FOR
GRANTED BELIFS,
HABITS OF PERCEPTION,
THOUGHT AND FEELING

UNDERLYING
ASSUMPTIONS

The level of artifacts deals with what one feels, observes, and notes with all of one's
senses as one enters a new culture. But as clear and palpable as those ues are, they are
difficult to decipher unless one asks insiders what they mean.
When we get explanations we usually elicit what I call the level of values, usually the
espoused goals, ideals, norms, standards, moral principles, and other untestable premises.
This is the level that is often tapped when we construct questionnaire surveys of culture.
It is only if we dig beneath the surface of values by observing behavior carefully, noting
anomalies, inconsistencies, or phenomena that remain unexplained that we elicit from the
insiders their underlying assumptions. Such assumptions often start out historically as
values, but, as they stand the test of time, they gradually become assumptions and come
to be taken for granted.
The level of culture.
Culture is ubiquitous. Different approaches to organisational culture indicate that the
achievement of organisational objectives efficiently is the out come of contribution from
the individual employees, groups and the total organization.

Individual effectiveness depends upon the employees positive attitude,

commitment to and involvement in organizational activities. Individuals
contributions to organizational effectiveness depands on individual skills,

abilities, aptitude, emotion, knowledge, attitude motivation and stress.

Employees today prefer to work along with others in order to satisfy their
individual needs and achieve organizational goals through the impact of
synergy. Groups and employees in a group contribute much to organization
success.
Effective contribution of individual employees and groups in addition to
environmental technology strategic choice, organizational structure process and
organizational culture results in organisational effectiveness.
THREE LEVELS OF ORGANISATION CULTURE

INDIVIDUAL
GROUP
ORGANISATIONAL
Ability
Aptitude
Skills
Knowledge
Attitude
Emotions
Stress
Motivation

Cohesiveness
Leadership
Structure
Status
Roles
Norms

Environmental
Technology
Strategic choice
Processes
Culture
Structure

It covers all areas of group life. A content typology is always dangerous because one may
not have the right variables in it, but if one distills from the social psychology of groups
the dimensions that recur, one can identify a set of major external and internal tasks that
all groups.
The group's culture can then be seen as the learned response to each of these tasks,
and any others that may arise. Underlying these tasks is a set of even more fundamental
issues with which all groups must deal, derived from comparativestudies of societies.
The External and Internal Tasks Facing All levels of the organisation
External Adaptation Tasks Developing consensus on:

The Core Mission, Manifest and Latent Functions, and Primary Tasks of the
Organization Vis--Vis its Environments.
The Specific Goals to be pursued by the Organization.
The Basic Means to be used in accomplishing the Goals.
The Criteria to be used for Measuring Results.
The Remedial or Repair Strategies if Goals are not Achieved.

Internal Integration Tasks Developing Consensus on:

The Common Language and Conceptual System to be Used, Including Concepts

of Time and Space.
The Group Boundaries and Criteria for Inclusion.
The Criteria for the Allocation of Status, Power, Authority.
The Criteria for Intimacy, Friendship, and Love.
Criteria for the Allocation of Rewards and Punishments.
Concepts for Managing the Unmanageable--Ideology and Religion.

Some Underlying Dimensions of Organizational Culture

The Organization's Relationship to its Environment: Does the organization
perceive itself to be dominant, submissive, harmonizing, searching out a niche ?.
The Nature of Human Activity: Is the "correct" way for humans to behave to be
dominant pro-active, harmonizing, or passive fatalistic?

The Nature of Reality and Truth: How do we define what is true and what is not
true, and how is truth ultimately determined both in the physical and social
world, by pragmatic test or reliance on wisdom?.
The Nature of Time: What is our basic orientation in terms of past, present, and
future, and what kinds of time units are most relevant for the conduct of daily
affairs?
The Nature of Human Nature: Are humans basically good, neutral, or evil, and is
human nature perfectible or fixed?
The Nature of Human Relationships: What is the "correct" way for people to
relate to each other, to distribute power and affection? Is life competitive or
cooperative, is the best way to organize society on the basis of individualism or
groupism, is the best authority system autocratic/paternalistic or collegial/
participative?
Homogeneity vs. Diversity: Is the group best off if it is Highly diverse or if it is
highly homogeneous, and should individuals in a group be encouraged to
innovate or conform?

Factors determining organizational culture

Innovation and risk taking: The degree to which the employees are encouraged to
be innovative and take risks. Companies do encourage the employees to be
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innovative and risk taking at different degrees. Innovation is the way of life in
Microsoft .
Aggressiveness: Aggressiveness is the level to which the employees are expected
to competitive rather then easygoing (or) the degree to which people in the
organization are competitive.
Outcome orientation: The management focuses on results or outcomes rather than
on the techniques and process used to achieve those outcomes. Thus the
organization requires their employees to pay attention on the results.
Team orientation: The activities are designed around team but not individuals.
Thus we today, find lot of team jobs rather then individual jobs.
People orientation: The degree to which the management takes into consideration
the effect of out comes on people within the organization.
Attention to detail : Employees in group are expected to be precise, analytical
and pay attention to even minute details at different cases.
Stability: The organization activities emphasize maintaining the status quo in
contrast to growth.
Diversity (of members): in contrast to the stability strategy, most of the
organization have growth, diversification and conglomerate diversification
strategies.
Customer orientation: building up relationship with the customers and then adapt
aggressive marketing strategies. It is the degree to which the management
decisions take into consideration the effect of outcomes on customer of the
organization.

Cultural concepts
Organisation culture represents a common perception held by the organizations
members. This was made explicit when we defined culture system of shared meaning.
The different cultural concepts include:

Dominant culture: Most of the public sector employees believe that the business
strategies of the company are not aggressive to those of the private sector. This
core shared belief by most of the employees is called dominant culture. The core
values which are shared by most of the employees is called dominant culture.
Sub-cultures: culture with in a culture is called sub-culture i.e an office or unit of
the organization that is physically separated from the organizations main
operations may take on a different personality. Again, the core values are
essentially retained, but they are modified to reflect the separated units distinct
situation .Thus, sub-culture are denoted by units/departments /geographic
separations.
Core values: They are primary or dominant values that are accepted by the
majority of the organizational members.
Strong culture: The system of the public sector organization does not allow the
potential employees to be competitive. These values are intensely held and widely
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spread. Thus the organizations values which are intensively held and widely
spread are called strong cultures. As such, most of the competent employees in the
public sector are highly frustrated.
Weak culture: In a weak culture, the organizations core values are lightly held and
occasionally shared.
Mechanistic culture: The most important aspects of organization in public sector
companies include hierarchies, supervision, control, formalization, flow of
authority and communication from top to bottom rather then the results or out
come are the characters of the Mechanistic culture. They follow status quo
strategy and therefore resist innovation and aggressiveness on the part of
employees.
Organic culture: people with the ability to handle problems are d=given freedom
to assume and responsibility. Communication in the company is more multi
directional and they are more towards outcome-oriented rather than procedure or
hierarchy. The company is a continuous learning organization from the
environment and such companies are termed as organic culture.
Authoritarian culture: Authority to make the decisions is centralized at the top
management level, the CEO of the company makes the decision and informs them
to the lower levels in the organization .such culture of concentration of authority
and power at the central level is called authoritarian culture. Such culture kills the
innovativeness and initiative of the employees at different levels.
Participative culture: employees are involved in the decision making and
communication flows not only from the top to bottom but also from the bottom to
the top. Such type of culture is called participative culture, It encourages the
employees to be innovative, aggressive, and to take risk.

What do cultures do?

Culture performs a number of functions with in an organization.
It has a boundary- defining role ,that is ,it creates distinctions between one
organization and others.
It conveys a sene of identity for organization members.
Culture facilitates the generation of commitment to somethinglarger than ones
individual self-interest.
It enhances the stability of the social system .culture is the social glues that helps
hold the organization together by providing appropriate standards for what
employees should say and do.
Culture serves as a sense-making and control mechanism that guides and shapes
the attitudes and behavior of the employees.
Cultures Functions
The role of culture in influencing employee behavior appears to be increasingly
important in todays work place. As organizations have widened spans of control,
flattened structures, introduced teams, reduced formalization, and empowered employees

the shared meaning provided by a strong culture ensures that everyone is pointed in the
same direction.
Culture as a liability
We are treating culture in a nonjudgmental manner. We havent said that its good
or bad, only that it exists. Many of its functions, as outlined, are valuable for both the
organization and the employee. Culture enhances organizational commitment and
increases the consistency of employee behavior. These are clearly benefits to an
organization. Form an employees stand-point, culture is valuable because it reduces
ambiguity. It tells employees how things are done and whats important. But we
shouldnt ignore the potentially dysfunctional aspects of culture, especially a strong one,
on an organizations effectiveness.
Culture is a liability when the shared values are not in agreement with those that will
further the organizations effectiveness. This is most likely to occur when an
organizations environment is dynamic. When an environment is undergoing rapid
change, an organizations entrenched culture may no longer be appropriate. So
consistency of behavior is an asset to an organization when it faces a stable environment.
it may, however, burden the organization and make it difficult to respond to changes in
the environment. These organizations have strong cultures that worked well for them in
the past. But these strong cultures become barriers to change when business as usual is
no longer effective.
Barriers to Diversity Hiring new employees who, because of race, age, gender, disability,
or other differences, are not like the majority of the organizations members creates a
paradox. Management wants new employees to accept the organizations core cultural
values. Otherwise, these employees are unlikely to fit in or be accepted. But at the same
time, management wants to openly acknowledge and demonstrate support for the
differences that these employees bring to the workplace.
Organizations seek out and hire diverse individuals because of the alternative strengths
these people bring to the workplace. Yet these diverse behaviors and strengths are likely
to diminish in strong cultures as people attempt to fit in. Strong cultures, therefore, can be
liabilities when they effectively eliminate the unique strengths that people of different
backgrounds bring to the organization. Moreover, strong cultures can also be liabilities
when they support institutional bias or become insensitive to people who are different.
Barriers to Acquisitions and Mergers Historically, the key factors that management
looked at in making acquisition or merger decisions were related t financial advantages or
product synergy. In recent years, cultural compatibility has become the primary concern.
While a favorable financial statement or product line may be the initial attraction of an
acquisition candidate, whether the acquisition actually works seems to have more to do
with how well the two organizations cultures match up.
Barriers to Nationality- Asian Perspective
Great Britains falling birth rate and aging population make immigration a mater of
urgent concern. The post-World War II period has seen a marked rise in people
originating I countries of South Asia, once part of colonial Britain, who are now residents
in the major cities of the country.
Research findings in the field of acculturation, identity, and psychological well-being
among first and second-generation South Asians living in Britin focused mainly on Indian

10

(Punjabi,Sikh, and Gujarati Hindu) and Pakistani groups, with a brief overview of South
Asian immigration to Britain. These include: acculturation attitudes, language usage and
proficiency, family and social contacts, and religion. The discrimination and disadvantage
experienced by South Asian groups well influence their self-perceptions regarding ethnocultural identification and openness to integration with the host society.
Keeping a Culture Alive
Once a culture is in place, there are practices within the organization that act to
maintain it by giving employees asset of similar experiences.
The selection process, performance evaluation criteria, training and development
activities, and promotion procedures ensure that those hired fit in with the culture, reward
those who support it, and penalize (and 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.
Selection the explicit goal of the selection process is to identify and hire individuals who
have the knowledge, skills, and abilities to perform the jobs within the organization
successfully. Typically, more than one candidate will be indentified who meets any given
jobs requirements. When that point is reached, it would be nave to ignore the fact that
the final decision as to who is hired will be significantly influenced by the decisionmakers judgment of how well the candidates will fit into the organization. This attempt
toensure a proper match, whether purposely or inadvertently, results in the hiring of
people who have values essentially consistent with those of the organization, or at least a
good portion of those values. In addition, the selection process provides information to
applicants about the organization. Candidates learn about the organization and if they
perceive a conflict between their values and those of the organization, they can self-select
themselves out of the applicant pool. Selection, therefore, becomes a two-way street,
allowing employer or applicant to abrogate a marriage if there appears t be a mismatch.
In this way the selection process sustains an organizations culture by selecting out those
individuals who might attack or undermine it core values.
Top Management the actions of top management also have a major impact on the
organizations culture. Through what they say and how they behave, senior executives
establish norms that filter down through the organization as to whether risk taking is
desirable, how much freedom managers should give their employees, what is appropriate
dress, what actions will pay off in terms of pay raises, promotions, and other rewards, and
the like.
Socialization no matter how good a job the organization does in recruiting and selection,
new employees are not fully indoctrinated in the organizations culture. Because they are
unfamiliar with the organizations culture, new employees are potentially likely to disturb
the beliefs and customs that are in place. The organization will, therefore, want to help
new employees adapt to its culture. This adaptation process is called Socialization.
Socialization, keep in mind that the most critical socialization stage is at the time of entry
into the organization. This is when the organization seeks to mold the outsider into an
employee in good standing. Employees who fail to learn the essential or pivotal role
behaviors risk being labeled nonconformists or every employee, though maybe not as
explicitly, throughout his or her entire career in the organization. This further contributes
to sustaining the culture.

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Socialization can be conceptualized as a process made up of three stages: prearrival,

encounter, and metamorphosis. The first stage encompasses all the learning that occurs
before a new member joins the organization. In the second stage, the new employee sees
what the organization is really like and confronts the possibility that expectations and
reality may diverge. In the third stage, the relatively long-lasting changes take place. The
new employee masters the skills required for the job, successfully performs the new
roles, and makes the adjustments to the work groups values and norms. This three stage
process has an impact on the new employees work productivity, commitment to the
organizations objectives, and eventual decision to stay with the organization.
How Organization Cultures Form

Philosophy
of
organization
s founders

Top
management

Selection
criteria

Organization
culture
Socialization

How Cultures Form

The above diagram summarizes how and organizations culture is established and
sustained. The original culture is derived form the founders philosophy. This, inturn,
strongly influences the criteria used in hiring. The actions of the current top management
set the general climate of what is acceptable behavior and what is not. How employees
are to be socialized will depend both on the degree of success achieved in matching new
employees values to those of the organizations in the selection process and on top
managements preference for socialization methods.
How Employees Learn Culture
Stories
During the days when Henry Ford II was chairman of the Ford Motor Co. one would
have been hard pressed to find a manager who hadnt heard the story about Mr Ford
reminding his executives, when they got too arrogant, that its my name thats on the
building. The message was clear: Henry Ford II ran the company.
Nike has a number of senior executives who spend much of their time serving as
corporate storytellers. And the stories they tell are meant to convey what Nike is about.
When they tell the story of how cofounder (and Oregon track coach) Bill Bowerman went
to his workshop and poured rubber into his wifes waffle iron to create a better running
shoe, theyre talking about Nikes spirit of innovation. When new hires hear tales of
Oregon running star Steve Prefontaines battles to make running a professional sport and
to attain better performance equipment, they learn of Nikes commitment to helping
athletes.
Stories such as these circulate through many organizations. They typically contain
a narrative of evens about the organizations founders, rule breaking, rags-to-riches
successes, reductions in the workforce, relocation of employees, reactions to past

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mistakes, and organizational coping. These stories anchor the present in the past and
provide explanations and legitimacy for current practices.
Rituals
Rituals are respective sequences of activities that express and reinforce the key values of
the organization what goals are most important, which people are important and which
people are expendable.
Material Symbols
The headquarters of Alcoa doesnt look like your typical head office operation. There are
few individual office, even for senior executives. It is essentially made up of cubicles,
common areas, and meeting rooms. This informal corporate head quarters conveys to
employees that Alcoa values openness, equality, creativity, and flexibility.
Language
Many organizations and units within organizations use language as a way to identify
members of a culture or subculture. By learning this language, members attest to their
acceptance of the culture and, in so doing, help to preserve it.
Organizations, over time, often develop unique terms to describe equipment, offices, key
personnel, suppliers, customers, or products that relate to its business. New employees
are frequently overwhelmed with acronyms and jargon that, after 6 months on the job,
have become fully part of their language. Once assimilated, this terminology, acts as a
common denominator that unites members of a given culture or subculture.
Creating an Ethical Organizational Culture
The content and strength of a culture influence an organizations ethical climate and the
ethical behavior or its members. An organizational culture most likely to shape high
ethical standards is one thats high in risk tolerance, low to moderate in aggressiveness,
and focuses on means as well as outcomes. Managers in such a culture are supported for
taking risks and innovating, are discouraged from engaging in unbridled competition, and
will pay attention to how goals are achieved as well as to what goals are achieved.

Be a visible role model. Employees will look to top-management behavior as a

benchmark for defining appropriate behavior. When senior management is seen as
taking the ethical high road, it provides a positive message for al employees.

Communicate ethical expectations. Ethical ambiguities can be minimized b

creating and disseminating an organizational code of ethics. It should state the
organizations primary values and the ethical rules hat employees are expected to follow.

Provide ethical training. Set up seminars, workshops, and similar ethical training
programs. Use these training sessions to reinforce the organizations standards of
conduct, to clarify what practices are and are not permissible, and to address possible
ethical dilemmas.

Visibly reward ethical acts and punish unethical ones. Performance appraisals of
managers should include a point-evaluation of how his or her decisions measure up
against the organizations code of ethics. Appraisals must include the means taken to
achieve goals as well as the ends themselves. People who act ethically should be visibly
rewarded for their behavior. Just as importantly, unethical acts should be conspicuously
punished.

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Provide protective mechanisms. The organization needs to provide formal
mechanisms so that employees can discuss ethical dilemmas and report unethical
behavior without fear of reprimand. This might include creation of ethical counselors,
ombudsmen, or ethical officers.
Managerial Action
Based on the previously identified characteristics, we can suggest a number of actions
that management can take if it wants to make its culture more customer responsive.
These actions are designed to create employees with the competence, ability, and
willingness to solve customer problems as they arise.
Selection
The place to start in building a customer-responsive culture is hiring service-contact
people with the personality and attitudes consistent with a high service orientation.
Southwest Air is a shining example of a company that has focused its hiring process on
selecting out job candidates whose personalities arent people-friendly. Job applicants go
through an extensive interview process at Southwest in which company employees and
executives carefully assess whether candidates have the outgoing and fun-loving
personality that it wants in all its employees.
Training and Socialization
Organizations that are trying to become more customer-responsive dont always have the
option of hiring all new employees. More typically, management is faced with the
challenge of making its current employees more customer-focused. In such cases, the
emphasis will be on training rather than hiring.
The content of these training programs will vary widely but should focus o improving
product knowledge, active listening, showing patience, and displaying emotions.
In addition, even new employees who have a customer-friendly attitude may need to
understand managements expectations, so all new service-contact people should be
socialized into the organizations goals and values. Lastly, even the most customerfocused employees can lose direction every once in awhile. This should be addressed
with regular training updates in which the organizations customer-focused values are
restated and reinforced.
Structural Design
Organization structures need to give employees more control. This can be achieved by
reducing rules and regulations. Employees are better able to satisfy customers when they
have some control over the service encounter. So management needs to allow employees
to adjust their behavior to the changing needs and requests of customers. What
customers dont want to hear are responses such as I cant handle this. You need to talk
to someone else; or I m sorry but thats against our company policy. In addition, the
use of cross-functional reams can often improve customer service because service
because service delivery frequently requires a smooth, coordinated effort across different
functions.
Empowerment

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Consistent with low formalization is empowering employees with the discretion to make
day-to-day decisions about job-related activities. Its a necessary component of a
customer-responsive culture because it allows service employees to make on-the-spot
decisions to satisfy customers completely. The completely satisfied customer was one
who, when he or she had a problem, found that it was quickly and courteously resolved
by an employee. By empowering their employees to make decisions on the spot,
Enterprise improved its customer satisfaction ratings.
Leadership
Leaders convey the organizations culture through both what they say and what they do.
Effective leaders in customers-responsive culture deliver by conveying a customerfocused vision and demonstrating by their continual behavior that they are committed to
customers. In almost every organization that has successfully created and maintained a
strong customers-responsive culture, its chief executive officer has played a major role
in championing the message.
Performance Evaluation
There is an impressive amount of evidence demonstrating that behavior-based
performance evaluations are consistent with improved customer service. Behavior-based
evaluations appraise employees on the basis of how they behave or act-on criteria such
as effort, commitment, teamwork, friendliness, and the ability to solve customer
problems-rather than on the measurable outcomes they achieve. Why are behaviors
superior to outcomes for improving service? Because it gives employees the incentive to
engage in behaviors that are conducive to improved service quality and it gives
employees more control over the conditions that affect their performance evaluations.
Reward systems
Finally, if management wants employees to give good service, it has to reward
good service, it needs to provide ongoing recognition to employees who have
demonstrated extraordinary effort to please customers and who have been singled out by
customers for going the extra mile. And it needs to make pay and promotions
contingent on outstanding customer service.
Summary and Implications for Managers
Employees form an overall subjective perception of the organization based on factors
such as degree of risk tolerance, team emphases, and support of people. This overall
perception becomes, in effect, the organizations culture or personality. These favorable
or unfavorable perceptions then affect employee performance and satisfaction, with the
impact being greater for stronger cultures.
Just as peoples personalities tend to be stable over time, so too do strong cultures.
This makes strong cultures difficult for managers to change. When a culture becomes
mismatched to its environment, management will want to change it. But as the
Point/Counterpoint demonstrates, changing an organizations culture is a long and
difficult process. The result, at least in the short term, is that managers should treat their
organizations culture as relatively fixed.

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One of the more important managerial implications of organizational culture

relates to selection decisions. Hiring individuals whose values dont align with those of
the organization is likely to lead to employees who lack motivation and commitment and
who are dissatisfied with their jobs and the organization. Not surprisingly, employee
misfits have considerably higher turnover rates than individuals who perceive a good
fit.
We should also not overlook the influence socialization has on employee
performance. An employees performance depends to a considerable degree on knowing
what he should or should not do. Understanding the right way to do a job indicates
proper socialization. Furthermore, the appraisal of an individuals performance include
how well the person fits into the organization. Can he or she get along with coworkers?
Does he or she have acceptable work habits and demonstrate the right attitude? These
qualities differ between jobs and organizations. For instance, on some jobs, employees
will be evaluated more favorably if they are aggressive and outwardly indicate that they
are ambitious. On another job, or on the same job in another organization, such an
approach may be evaluated negatively. As a result, proper socialization becomes a
significant factor in influencing both actual job performance and how its perceived by
others.
Objective factors
Innovation and risk
taking
Attention to details
Outcome
orientation

High
Performance

Perceived as

Low
Organizational
culture
Satisfaction

People orientation

Organizational culture: Asset or Liability

some
managers
argue that culture performs a number of functions and therefore, it is an
Team
orientation
asset. For example:
Aggressiveness
Culture keeps the people together and increases the cohesiveness or bondage
among its members.
Stability
Culture performs boundary-defining role. In other words, it creates distinction
between one unit and another unit of the same organization and between one
organization and another organization.
It conveys a sense commonality among organizational members.
It conveys a sense of identity among the members.
It creates a social system of shared values. However, some view culture as
liability in view of the following factors:
When the organization is operating as a dynamic environment, culture does not
allow the organization to change in accordance with the environmental demands.

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New entrants bring diversified cultures into the organization. But the strong
cultures demand new employees to confirm to its values rather than modifying it
through their diversified culture, whatsoever their merits may be.
Many business alliances like mergers and acquisitions, today, are tending
towards divorce due to the strong cultures of the partners to the alliance.
Emerging Issues in Organizational Culture
Cultures change gradually, picking up new ideas and dropping old ones.
Therefore, new issues emerge in cultures. Now, we shall discuss these emerging
issues:
Innovation: according to Fortune Magazine, most innovative
organizations, which pickup new values continuously are the most
admired organizations. Innovation is the process of creating and doing
new things that are introduced into the market place as products,
processes or services. Types of innovations include radical innovation,
system innovation and incremental innovation.
Radical innovation is a major breakthrough that changes or creates
whole industries. For example, information technology industry.
System innovation creates a new functionality by assembling parts in
new ways. Combining information technology and process technology
and formation of new business process (Supply Chain Management) is
an example for system innovation.
Incremental Innovation: it continues technical improvement and extends
the application of radical systems innovation.
Entrepreneurship: Entrepreneur is the one who creates the total venture.
Intrapreneurship: intrapreneurship is an entrepreneurial activity that
takes place within the context of al large organization.
Empowerment: empowerment is the process of enabling workers to set
their own work goals, make decisions and solve problems within their
sphere of responsibility and authority.
Information Technology: Information technology brought significant
changes in the organizational culture through adding values like
teamwork, caring for the customer the most, downsizing, delaying, dejobbing, autonomous work groups and deleting culture values like
bureaucracy, authoritarian styles, treating efficient and inefficient
employees differently and the like.

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