ORGANIZATIONAL

CULTURE

By
RESHMA RAVINDRAN
Learning objectives:
 Institutionalization
 What is an organizational culture?
 What do cultures do?
 Creating and sustaining culture.
 How culture form?
 How employees learn culture.
 Creating an ethical culture.
 Creating positive culture.
 Spirituality and organizational culture.
 Global implications.
OBJECTIVES
Besides the textbook concepts, you
will also learn to:

1. Understand the role of organizational culture

2. Vision, mission ,values
3. Dominant, culture/sub-cultures
LEARNING

4. Merging cultures
5. Creativity and innovation in workplace.
Institutionalization: A Forerunner of Culture
 Institutionalization operates to produce common
understanding among members about what is
appropriate and fundamentally meaningful
behavior.
 When an organization takes on institutional
permanence, acceptable modes of behavior
become largely self-evident to its members.
 Enhance the ability to explain and predict the
behavior of people at work.
Organizational Culture
What Is Organizational Culture?

Characteristics:
Characteristics:
1.1. Innovation
Innovationand
andrisk
risk
taking
taking
2.2. Attention
Attentionto
todetail
detail
3.3. Outcome
Outcomeorientation
orientation
4.4. People
Peopleorientation
orientation
5.5. Team
Teamorientation
orientation
6.6. Aggressiveness
Aggressiveness
7.7. Stability
Stability
What Is Organizational Culture? (cont’d)
What Is Organizational Culture? (cont’d)
 Culture Versus Formalization
– 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.
What Do Cultures Do?

Culture’s
Culture’sFunctions:
Functions:
1.1. Defines
Definesthe
theboundary
boundarybetween
betweenone
one
organization
organizationand
andothers.
others.
2.2. Conveys
Conveysaasense
senseof
ofidentity
identityfor
forits
itsmembers.
members.
3.3. Facilitates
Facilitatesthe
thegeneration
generationofofcommitment
commitmentto
to
something
somethinglarger
largerthan
thanself-interest.
self-interest.
4.4. Enhances
Enhancesthe
thestability
stabilityof
ofthe
thesocial
socialsystem.
system.
What Do Cultures Do?

Culture
Cultureas
asaaLiability:
Liability:
1.1. Barrier
Barrierto
tochange
change
2.2. Barrier
Barrierto
todiversity
diversity
3.3. Barrier
Barrierto
toacquisitions
acquisitionsand
and
mergers
mergers
Keeping Culture Alive
 Selection
– Concerned 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
A Socialization Model

EXHIBIT 18-2
Entry Socialization Options

•• Formal
Formalversus
versusInformal
Informal
•• Individual
Individualversus
versusCollective
Collective
•• Fixed
Fixedversus
versusVariable
Variable
•• Serial
Serialversus
versusRandom
Random
•• Investiture
Investitureversus
versusDivestiture
Divestiture

EXHIBIT 18-3
How Organization Cultures Form

EXHIBIT 18-4
How Employees Learn Culture

•• Stories
Stories
•• Rituals
Rituals
•• Material
MaterialSymbols
Symbols
•• Language
Language
Creating An Ethical Organizational 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.
– Visibly rewarding ethical acts and punishing
unethical ones.
Creating a positive organizational culture

 Culture that emphasizes on:

 Building on employee strengths.

 Rewarding more than punishing.
 Emphasizing vitality and growth.
Spirituality and Organizational Culture

Characteristics:
Characteristics:
• • Strong
Strongsense
senseofof
purpose
purpose
• • Focus
Focusononindividual
individual
development
development
• • Trust
Trustand
andopenness
openness
• • Employee
Employee
empowerment
empowerment
• • Toleration
Tolerationof
ofemployee
employee
expression
expression
Global implications
 Culture and nations
 Concepts.
 Attitudes and behavior.
 Social institutions.
 Public policy and legal framework.
 Societal culture values.
 Need for sensitivity.
How Organizational Cultures Have an Impact
on Performance and Satisfaction

EXHIBIT 18-7
 The Basic Functions of Organizational Culture

Organizational
Culture/basic functions

Provides a
Enhances Clairifies
sense of
commitment and
identity for
to the reinforces
members
organization’s standards
mission of behavior
 Core Organizational Values
Reflected in Culture

•Sensitivity to needs of customers and employees

•Freedom to initiate new ideas

•Willingness to tolerate taking risks

•Openness to communication options

Today’s Mergers and Acquisitions: Will They be Tomorrow’s Culture Clashes?

This bank… Merged with… To become…

Citicorp Travelers Citigroup

Bank America Nations Bank Bankamerica

Bank One First Chicago NBD Bank One

First Union Corestates First Union

 Components of Creativity

Skills in
the Task Skills in
Domain Creative
Thinking

Intrinsic
Greatest
Motivation
creativity
 Skills in Innovation Management: A Careful Balancing Act

Linked to Goals …but not

corporate overly
mission specific

Generously Reward Systems …but not so

and fairly specific as
reward one’s to connect
contributors everything to
money

Sense Time Pressure

of …but not
urgency too urgent
 The Process of Innovation

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Progress

Setting Setting Producing Testing and Outcome Success

the the the Implementing Assessment End
Agenda Stage Ideas the Ideas Failure
End

Individual
Motivation or Team
Productivity

Resources

Skills
Creating a Customer-Responsive Culture
 Key Variables 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.
Creating a Customer-Responsive Culture

Managerial
ManagerialActions:
Actions:
•• Select
Selectnew
newemployees
employeeswith
withpersonality
personalityand
and
attitudes
attitudesconsistent
consistentwith
withhigh
highservice
service
orientation.
orientation.
•• Train
Trainand
andsocialize
socializecurrent
currentemployees
employeestotobe
be
more
morecustomer
customerfocused.
focused.
•• Change
Changeorganizational
organizationalstructure
structureto
togive
give
employees
employeesmoremorecontrol.
control.
•• Empower
Empoweremployees
employeesto
tomake
makedecision
decisionabout
about
their
theirjobs.
jobs.
Creating a Customer-Responsive Culture

Managerial
ManagerialActions
Actions(cont’d)
(cont’d)::
•• Lead
Leadby
byconveying
conveyingaacustomer-focused
customer-focusedvision
vision
and
anddemonstrating
demonstratingcommitment
commitmenttotocustomers.
customers.
•• Conduct
Conductperformance
performanceappraisals
appraisalsbased
basedon
on
customer-focused
customer-focusedemployee
employeebehaviors.
behaviors.
•• Provide
Provideongoing
ongoingrecognition
recognitionfor
foremployees
employeeswho
who
make
makespecial
specialefforts
effortsto
toplease
pleasecustomers.
customers.
Changing an organization’s culture
 Extremely difficult, but can be changed.
 Change takes place due to following conditions.

 Dramatic conditions.
 Turnover in leadership.
 Young and small organizations.
 Weak culture.