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Organizational Culture

I. Definition of Organizational Culture

Some definitions include:
“the accepted way of thinking, feeling, and acting in an

“shared beliefs about what is important and how things are done”

“an interdependent set of values and ways of behaving that are

common in an organization”

“social forces through which people learn norms and values.

They are rewarded when they accept them and ostracized when
they do not.

“social glue that binds members of the organization together

through shared values, symbolic devices, and shared ideals”

“what goes on around here”

II. Function of culture – what does it do to
benefit the organization?
 A. Establishes Organizational Identity –
Timberland, Southwest, “Hey, I work for one of
the Big 5 Accounting firms.”
 B. Fosters Commitment – Sense of loyalty
especially if rewards support ownership
 C. Promotes Stability – Not inertia, but a
culture of expectations (norms and rules) and
what to anticipate and how to behave
 D. Allows sense making – existing cultural
practices allow for interpretation and
anticipation of consequences and behaviors.
 III. How do you develop culture? You can get a
competitive advantage by developing a strong culture.
 A. History – how it’s been in the past influences the future.

 B. Observation – people observe and consequently behave in a

manner similar to current members’ behaviors and practices.
Use modeling and communication to foster the environment
you want to create

 C. Membership – Staffing!!! MARINERS ARTICLE Internal

staffing improves positive expectations regarding future
relationships with the organization. “People first values” from
Fed Ex

 D. Interaction – socialization techniques and allowances

regarding decision making can lead to a culture which enhances
satisfaction consequently improving productivity

 E. Stories and rites – Hazing at SMU where student had to drink

water. MBWA? Heroes, stories, slogans, symbols, ceremonies.
IV. Levels of Culture
 A. Behavior – Observable, visible things done
by people as well as tangible artifacts. Heroes,
stories, slogans, symbols, and ceremonies are
part of behavior-level culture.
 B. Values and Beliefs – Provide the operating
principle for guiding behavior. The mission
statement is a slogan that conveys values and
 C. Assumptions – understanding based on
perception of, “That’s just the way it’s done
around here!”
V. Values – organization cultures include 2
kinds of values:
 1) terminal value – a desired goal the organization
seeks to achieve e.g. excellence, profitability,
quality, morality (NATD), economy (UPS),
innovation (3M, Apple);
 2) instrumental values – a desired mode of
behavior the organization wants members to
observe to achieve terminal values e.g. respecting
authority and tradition (military), being
conservative and cautious (Prudential), being
honest, taking risks (3M), etc.
 What might be some terminal/instrumental
values for SU and UW?
 VI. Strong versus Weak cultures
 Strong cultures have:
 A. cohesive sets of values and norms that binds
members together and fosters commitment from
employees to achieve organizational goals.
 B. employees who share assumptions, know values and
beliefs, and behave as expected.
 Weak cultures have:
 A. little guidance about how employees should behave.
 B. rigid organizational structures that may substitute
for a lack of implicit values and norms.
 One way to facilitate a strong culture is to obtain a good
match between individual employees and organizational
 VII.Types of cultures – An organization can
develop some kinds of cultural values to shape the
way its members behave.
 A. entrepreneurial culture (Fedex)
 B. conservative culture (BofA; Prudential)
 C. ethical culture (Guardsmark)
 D. professional culture – avoid layoffs, invest
in employees for future service to
the company
 E. production culture – (UPS) short term
employment, little investment, focus on costs
 F. personal wealth and little control
 VIII. Merging cultures? HP and Compaq
 IX. Measuring culture?
 - Employees could help develop it.
 - Is it static or dynamic?
 - Is there one best culture?
 - How can we measure it? Some instruments in
“Gaining Control of the Corporate Culture” book
 - Kilmann-Saxton Culture Gap Survey for $6.50.
 - Do “cultural audits” which Bonneville Power
Administration did with an OD consultant.
 - Sears did it; In 1992 they had worst financial
performance for some time. “We had lost sight of our
customers and employees” It was the revitalization of the
Sears culture that has played a major role in the return to

- standards of right and wrong that

influence behavior

1. The golden rule – Act in a way you would expect others to

act toward you.

2. The utilitarian principle – Act in a way that results in the

greatest good for the greatest number of people.

3. The professional ethic – Take actions that would be viewed

as proper by a disinterested panel of professional peers.
4. The TV test – Managers should always ask, “Would
I feel comfortable explaining to a national TV
audience why I took this action?”

5. The legal test – Is the proposed action or decision

legal? Established laws are generally considered
minimum standards for ethics.

6. The four- way test – Managers can feel confident that

a decision is ethical if they can answer “yes” to the
following questions: Is the decision truthful? Is it
fair to all concerned? Will it build goodwill and
friendship? Will it be beneficial to all concerned?
Social Responsibility

What’s social responsibility?

- Go beyond the law to act responsibly for
social concerns.
What’s the difference between social
obligations vs. social responsiveness?
- Responsiveness is guided by social norms
that can provide managers with a
meaningful guide for decision making.
How do managers become more
socially responsible?
- Ethics- understood set of rules or principles that
define right and wrong conduct.
- Use a code of ethics?
- Document of primary values and ethical rules
the organization expects managers and
employees to follow. In isolation, they do
little, but if management considers them important
and reaffirms their content, ethics can provide
foundation for effective program.