Chapter 16
Organizational Culture
By Ricky Ampil and Heidi Reid
Overview
• Describe the elements of organizational culture
• Discuss the importance of organizational subcultures
• List 4 categories of artifacts through which corporate culture is
deciphered
• Identify 3 functions of organizational subcultures
• Discuss the conditions under which cultural strength improves corporate
performance
• Compare and contrast 4 strategies for merging organizational cultures
• Identify 4 strategies to strengthen an organization’s culture
• Describe the stages of organizational socialization
Introduction
• Organizational Culture
• Values and assumptions shared within an organization
• 3 Elements of Organizational Culture
• Visible Element – Artifacts
• Invisible Elements – Shared Values and Shared
Assumptions
Organizational Subcultures
• Organizational Culture refers to the “dominant culture”
• Beneath the surface exists Subcultures
• Classified by division, geographic, and occupational groups
• Enhance dominant culture
• Includes countercultures which go against the grain
• 2 Functions of Subcultures
• Maintain standards of performance and ethical behavior
• Spawning ground for emerging values that ensure a
company adapts to growing trends in the marketplace
Artifacts
• Observable symbols and signs of existing culture
• Example: Pixar
• 4 Types of Artifacts
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Organizational Stories and Legends
Rituals and Ceremonies
Organizational Language
Physical Structures and Symbols
The Importance of Organizational Culture
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3 Functions
• Control System
• Social Glue
• Sense-making
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Strong cultures must be aligned with the
company’s environment to succeed
Contingencies and Performance
• Strong cultures are potentially good… but:
• Overall weak relationship between cultural strength
and success
• Cultural strength equates to strong individual identity
which causes conflict in decision making
• Strength also forms decision makers into a strict mold
with no room for adapting to new/different methods
• Dissenting subcultural values are smothered rather
than promoted
Adaptive Culture
• Focus on the changing needs of customers, stakeholders, and
support initiatives to keep pace with those changes
• Possesses an external focus as opposed to internal
• Within an adaptive culture, employees pay equal attention to
organizational processes and organizational goals
• Strong sense of ownership (Example: New Belgium Brewery)
• Organizations are more likely to succeed when they utilize an
adaptive culture
Merging Organizational Cultures
• Bicultural Audit
• A diagnosis of cultural relations between
companies prior to a merger and a determination
of the extent to which cultural clashes are likely to
occur
• In some cases a bicultural audit will result in a
decision to end merger talks because the two
cultures are too different to merge effectively
Strategies to Merge Different Cultures
Assimilation
• Occurs when employees at the acquired company willingly
embrace the cultural values of the acquiring organization
Deculturation
• The acquiring company imposes their culture and business
practices on the acquired company
Integration
• Combine cultures into a new composite culture that preserves
the best features of the previous cultures
Separation
• Occurs if the merging companies agree to remain distinct entities
with minimal exchange of culture or organizational practices
Strategies to Change and Strengthen Org Culture
Actions of Founders and Leaders
• Symbolize the new culture through memorable
events
• Model the new culture through subtle decisions
and actions
Culturally Consistent Rewards
• Reward employees for culturally consistent
behaviors
• Reward managers who help employees
understand the culture
Strategies to Change and Strengthen Culture-cont’d
Selecting and Socializing Employees
• Hire people whose values are consistent with the
culture
• Inform and indoctrinate new staff about what the
culture means
Aligning Artifacts
• Share stories supporting the culture
• Celebrate goals and milestones to support the culture
• Inhabit buildings that reflect the culture
Organization Socialization
Organization Socialization
• The process by which individuals learn the values,
expected behaviors, and social knowledge
necessary to assume their roles in the
organization
• The process of adjustment because the individuals
need to adapt to their new work environment
Stages of Socialization
Pre-employment Socialization
• Learn about the organization and job
• Form employment relationship expectations
Encounter
• Test expectations against perceived realities
• Reality Shock-perceived discrepancies between preemployment expectations and on-the-job reality
Role Management
• Strengthen work relationships
• Practice new role behaviors
• Resolve work and non-work conflicts
Socialization Outcomes
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Higher motivations
Higher loyalty
Higher satisfaction
Lower stress
Lower turnover
Q&A
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1) How many elements make up Organizational Culture?
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A) 2
B) 3
C) 4
D) 5
2) What are the groups that exist beneath the dominant culture referred to as?
3) T/F – A bicultural audit always integrates two dominant cultures.
4) T/F – Culturally consistent rewards help to strengthen an organizational
culture
5) Which of the following is not a positive outcome of organizational
socialization?
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A) Higher Motivation
B) Higher Loyalty
C) Lower Stress
D) Higher Turnover