Organizational Behavior:
An Introduction to
Your Life in Organizations
Chapter 17
Organizational Culture
©2007 Prentice Hall
Preview
• Why is organizational culture so important to
companies?
• How do you discover an organization’s culture?
• How do managers use organizational culture to
improve organizational effectiveness?
• What happens when organizations with different
cultures merge?
• How do you change an existing organizational
culture?
• How can you find an organizational culture in
which you will thrive?
©2007 Prentice Hall
Why is organizational culture so
important to companies?
• An organization’s culture is its system of shared
values and norms, along with related behaviors
• Dominant culture: the system of values and
norms held by most members
• Subcultures: formal and informal groups and
networks that may subscribe to some of these
values and norms, but also have their own
• Counter-cultures: those subcultures whose
values and norms oppose those of the dominant
culture of the company
©2007 Prentice Hall
Where do organizational cultures
originate?
• Three historical design factors: the personality
and values of the founder, the historic period in
which the company was founded, and the
historic size of the company
• The norms and values that typify organizations
of different sizes
• The business the company is in and the national
and regional cultures in which the company is
embedded
©2007 Prentice Hall
What is the difference between
culture and climate?
• Climate refers to organizational members’
perceptions of an organization’s policies,
practices and procedures
• Researchers are still figuring out precisely
how organizational climate differs from
organizational culture
• Perhaps the two concepts cannot really be
differentiated
©2007 Prentice Hall
How does national culture affect
organizational culture?
• Organizations reflect what the society they
operate in emphasizes, for example,
conformity or individualism
• National cultures whose members prefer
to avoid uncertainties tend to have
companies with closed-system,
bureaucratic cultures
©2007 Prentice Hall
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What companies have built a
reputation around their corporate
cultures?
Lincoln Electric
Southwest Airlines
IBM
Hewlett Packard
Goldman Sachs
Starbucks
Infamous cultures: Enron and Arthur
Anderson
©2007 Prentice Hall
What do you need to know to
discover an organization’s culture?
• A company’s culture exists on four levels:
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Level 1: Behaviors and artifacts
Level 2: Shared perspectives
Level 3: Awareness
Level 4: Unconscious assumptions
©2007 Prentice Hall
How do new employees learn an
organization’s culture?
• Organizational socialization: the process by which new
members’ values, norms and behaviors align with those
of the organization and permit them to participate as
members of the organization
• Three stages:
 Anticipatory socialization: impressions formed from company’s
literature and interaction with interviewers, current employees,
and other applicants
 Encounter: the newcomer confronts the realities of your new
organization
 Metamorphosis: the newcomer attempts to become an accepted
member of the culture by learning new attitudes and behaviors
or modifying existing ones to conform
©2007 Prentice Hall
How does culture motivate
performance?
• Strong cultures, where the shared values
and norms are clear, consistent and
comprehensive and values are intensely
held and widely shared have a modest
positive relationship to performance
• Cultural fit as a bureaucracy, market
culture or clan can positively affect
performance if it matches the situation
©2007 Prentice Hall
How does culture create
commitment?
• Organizational commitment, as you will
recall, is being involved with, identifying
with, and having an emotional attachment
to one’s organization
• Strong cultures enhance commitment
• There is a strong relationship between
worker commitment and higher returns for
shareholders
©2007 Prentice Hall
How does culture integrate
organizational units?
• Creating a sense of community reduces
competition and increases cooperation
among organizational subunits (popular,
but not accepted by all researchers)
• Create a superordinate culture, which is a
strong organizational culture with which all
nationalities can identify (hard to do
because of differences in national
cultures)
©2007 Prentice Hall
How does culture motivate ethical
behavior?
• Reconciling professional and personal
value systems: being able to fulfill
personal values on the job improves job
satisfaction
• Designing organizational cultures to
encourage moral expression
• Designing cultures to value diversity
©2007 Prentice Hall
How does organizational culture
enhance corporate branding?
• Corporate branding: the process by which
a distinct identity is created for a company
• Employer branding: creating the same
experience for employees that a company
promises to its customers
• Cause branding: a company is associated
with supporting particular social causes
©2007 Prentice Hall
How does culture enhance service?
• The emotions displayed by employees are
related to how customers feel and how
they evaluate the quality of the service
they receive
• Employees believing they are supported
by their organization is important for job
satisfaction and organizational
commitment
©2007 Prentice Hall
How can managers foster
acculturation?
• Acculturation is “the process by which two
or more cultures come into contact and
resolve the conflict that arises as a result
of this contact”
• Four modes for merging cultures:
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Assimilation
Integration
Separation
Deculturation
©2007 Prentice Hall
What is the effect of merging
business systems on merging
organizational cultures?
• Business systems are the company’s
particular methods and technologies for
doing business
• It is believed that cultural integration can
only be accomplished when a moderate or
full level of business systems integration is
also part of the plan
©2007 Prentice Hall
How do you change an existing
organizational culture?
• Target:
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organizational values and norms
the managerial culture
organizational heroes
organizational myths and stories
organizational rites, rituals, and taboos
cultural symbols and other aspects of
objective culture
©2007 Prentice Hall
What kind of culture do you prefer?
• Individuals differ on whether they prefer
cultures that have a concern for people or
cultures that have a concern for goal
accomplishment
• Finding a cultural fit is a straightforward
matter if you know your own personality
and get an accurate, complete overview of
a company’s culture
©2007 Prentice Hall
Will you face a glass ceiling?
• The glass ceiling is the invisible barrier
between middle and top management
positions that is said to exist for women
and other minorities
• Companies that are seriously interested in
developing women & minorities as top
managers should make several cultural
interventions
©2007 Prentice Hall
Apply what you have learned
• A Once World Class Company: Arthur
Andersen
• Advice from the Pro’s
• Gain Experience
• Can you solve this manager’s problem?
©2007 Prentice Hall
Summary – Why is organizational
culture so important to companies?
• An organization’s culture may affect a
company’s profitability, and it acts as a subtle
control mechanism on employee behavior
• Subcultures and counter-cultures create both
productive and counterproductive conflict in an
organization
• Cultures originate in the historical foundations of
the company, the business the company is in,
and the company’s national and regional origins
• Some companies have built their reputations, in
part, around their organizational cultures
©2007 Prentice Hall
Summary – How do you discover an
organization’s culture?
• A company’s culture exists on four levels:
 behaviors and artifacts
 shared perspectives on rules and norms
 general awareness of ideals, standards and
goals
 unconscious assumptions
• Employees learn a company’s culture
through the process of organizational
socialization
©2007 Prentice Hall
Summary – How do managers use
organizational culture to improve
organizational effectiveness?
• Strong organizational cultures are where the
norms and values of the company are clear and
comprehensive, and values are intensely held
and widely shared
• Strong organizational cultures may enhance
individual and company performance; they can
also lead a company energetically in the wrong
direction
• They may enhance corporate branding through
the processes of employer branding and cause
branding
©2007 Prentice Hall
Summary – What happens when
organizations with different cultures
merge?
• Companies that merge go through one of
these processes for acculturation:
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Assimilation
Integration
Separation
Deculturation
• Performing a bicultural audit before the
merger can help avoid acculturative stress
and merger failure.
©2007 Prentice Hall
Summary – How do you change an
existing organizational culture?
• Once established, cultures are hard to
change
• Companies that do try to change their
cultures emphasize new policies, new
rituals, and new ways of leading
• Typically they hire people who fit into the
new culture
©2007 Prentice Hall
Summary – How can you find an
organizational culture in which you
will thrive?
• Individuals have cultural preferences
• Sometimes you do not fit into your
company’s corporate culture or subculture,
a fact that may create serious career
consequences
©2007 Prentice Hall