15
ORGANIZATIONAL CULTURE
CHAPTER SCAN
Corporate cultures provide identifying characteristics and values for organizational members
to appreciate and learn. Cultures are distinguished by artifacts, values, and basic
assumptions. The socialization process is the entry stage in an organization that provides the
clues about the culture. Cultures are difficult to change, yet change is necessary in some
instances for survival. Organizations need an adaptive culture in order to respond effectively
to the changing environment.
LEARNING OBJECTIVES
After reading this chapter, you should be able to do the following:
1.
2.
3.
4.
5.
6.
Define organizational culture and explain its three levels.
Identify the four functions of culture within an organization.
Explain the relationship between organizational culture and performance.
Contrast the characteristics of adaptive and nonadaptive cultures.
Describe five ways leaders reinforce organizational culture.
Describe the three stages of organizational socialization and the ways culture is
communicated in each step.
7. Identify ways of assessing organizational culture.
8. Explain actions managers can take to change organizational culture.
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KEY TERMS
The following key terms are introduced in Chapter 15
organizational (corporate) culture
artifacts
espoused values
enacted values
assumptions
strong culture
adaptive culture
organizational socialization
anticipatory socialization
encounter
change and acquisition
triangulation
THE CHAPTER SUMMARIZED
I.
THINKING AHEAD: A Culture of Family, Fun, and Luv
II.
THE KEY ROLE OF ORGANIZATIONAL CULTURE
Organizational cultures exist in all organizations, and have important effects on the morale
and motivation of the members of the organization. Cultures are communicated through
artifacts, values, and basic assumptions that are both visible and invisible. Stories are
considered by some as the most effective approach to reinforce values of an organization, and
are evident about organizational CEO most often. Values that organizations hold can be
either enacted or espoused. Espoused values may not be confirmed by actions, and
consequently, the organizational culture is weakened. Leaders have a responsibility to
monitor and alter the organizational culture when necessary. Much of our concept of
organizational cultures has been adapted from cultural anthropology. There appear to be
distinct cultures in organizations.
The subject has been studied closely since the 1970s, and particularly since the early 1980s
with the publication of the Deal and Kennedy publication, Corporate Culture.
A.
Culture and Its Levels
Organizational (corporate) culture is a pattern of basic assumptions that are
considered valid and that are taught to new members as the way to perceive, think,
and feel in the organization. One of the best known scholars in the area of corporate
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cultures is Edgar Schein. Schein became interested in organizational culture when he
discovered, while teaching in Mexico and Europe, that company cultures may be
stronger than country cultures. Schein suggested that culture could be divided into
artifacts, values, and basic assumptions.
B.
Artifacts
Symbols of culture in the physical and social work environment are called artifacts.
1.
Personal Enactment
Personal enactment is behavior that reflects the organization's values.
2.
Ceremonies and Rites
Ceremonies can be divided into organizational rites, including: rites of
passage, rites of enhancement, rites of renewal, rites of integration, rites of
conflict reduction and rites of degradation.
3.
Stories
Stories are rich carriers of organizational culture, particularly since they often
are about CEO behavior and are told to new organizational members. In
addition, there are stories about the boss, stories about getting fired, stories
about how the company deals with employees who have to relocate, stories
about whether lower-level employees can rise to the top, stories about how the
company deals with crisis situations, and stories about how status
considerations work when rules are broken.
4.
Rituals
Practices that are repeated frequently are rituals. They are different than
policies because they are not written, yet they send a clear message about how
we do things around here.
5.
Symbols
Symbols communicate the culture through unspoken messages, and include
company logo, company colors, and even mental images held by employees.
C.
Values
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Values are a deeper level of culture, and they reflect underlying beliefs. An espoused
value is what an organization says it values, like ethical practice. Unfortunately, the
enacted values are those that are actually being acted out.
D.
Assumptions
Assumptions are deeply held beliefs that guide behavior and tell members of an
organization how to perceive and think about things. They are held at a level below
consciousness and are difficult to measure.
III.
FUNCTIONS AND EFFECTS OF ORGANIZATIONAL CULTURE
Cultures serve four functions, including providing a sense of identity to members, and
consequently promoting a sense of commitment. Culture helps organizational members
attribute sense and meaning to organizational events. Culture reinforces the values in the
organization. Finally, culture serves as a control mechanism for shaping behavior.
A.
The Strong Culture Perspective
A strong culture exhibits a consensus on the values that drive the company and with
an intensity that is recognizable even to outsiders. Strong cultures can be positive or
negative. For example, street gangs have high visibility for strong cultures, yet they
also possess negative characteristics.
B.
The Fit Perspective
The concept of fit proposes that a culture should fit, or align itself with the industry's
strategy.
C.
The Adaptation Perspective
Adaptative cultures encourage confidence and risk taking among employees, have
leadership that produces change, and focus on the changing needs of customers. The
Kotter and Heskett study of adaptive versus nonadaptive cultures is provided in the
text. High performing cultures are those that are adaptive.
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IV.
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THE LEADER'S ROLE IN SHAPING AND REINFORCING CULTURE
A.
What Leaders Pay Attention To
Organizational members can get their clues to the priorities of leaders by what the
leaders spend their time on. Ray Kroc's attention to detail ensured McDonald's
quality.
B.
How Leaders React to Crises
Many believe that organizations show their real culture during times of crisis, and
consequently pay close attention to the leaders during the event.
C.
How Leaders Behave
Employees emulate the leader's behavior and look to leaders for cues for appropriate
behavior. For example, if a leader is physically fit, it would not be surprising to find
many organizational members involved in health activities.
D.
How Leaders Allocate Rewards
This correlates with espoused versus enacted values. If employees discover they are
rewarded differently than the espoused values of the company would suggest, there is
a corresponding drop in morale.
E.
How Leaders Hire and Fire Individuals
In connection with the messages that are sent regarding "humane" treatment in hiring
are the questions of internal versus external hiring. New leaders are often distrusted
for bringing their own staffs into the organization rather than promoting from within.
With the increase in reduction in force policies, there are increasing expectations in
how to humanly release employees from the organization.
V.
ORGANIZATIONAL SOCIALIZATION
Organizational socialization occurs when newcomers are transformed from
outsiders to participating, effective members of the organization.
A.
The Stages Of the Organizational Socialization Process
A good way to illustrate this concept is through the film, The Firm, where
socialization was particularly swift. The rules and perks were transferred to
individuals as quickly as possible to increase conformity and loyalty.
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1.
Anticipatory Socialization
Any understanding of the organization that occurs before the individual's first
day is referred to as anticipatory socialization. Realism is the degree to
which the new person holds accurate expectations about the job and the
organization. Secondarily, congruence is measured by the fit between
individual values and organizational values. There are obvious advantages for
individuals if their value systems match the organization closely. In fact,
many organizations attempt to recruit ONLY individuals that match the
organization.
2.
Encounter
The second socialization stage, the individual encounters the organizational
tasks connected with their job, roles and relationships. Normally, it spans the
first six to nine months of employment.
3.
Change and Acquisition
During the change and acquisition stage, newcomers begin to master the
demands of the job. The last stage will vary among individuals, but it is
completed when the employee considers himself or herself an insider in the
organization.
B.
Outcomes of Socialization
If individuals are successfully socialized they will have high job satisfaction, good
performance and intend to stay with the organization. The ultimate outcome is an
increased commitment to the organization.
C.
Socialization as Cultural Communication
Some organizations take the opportunity to use formal orientation to aid in the
socialization process. Newcomers are also exposed to the culture through role
models' behavior and the rewards they see being given.
VI.
ASSESSING ORGANIZATIONAL CULTURE
Quantitative and qualitative techniques are valuable approaches to measuring culture.
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A.
Organizational Culture Inventory
The OCI is based on Maslow's need hierarchy, and measures twelve cultural styles.
The two dimensions of the OCI are task/people and security/satisfaction. The OCI
has 120 questions and has been used in the military, industry, and nonprofit
organizations.
B.
Kilmann-Saxton Culture-Gap Survey
This survey’s focus is on what actually happens and on the expectations of others in
the organization. The dimensions are divided between short-term and long-term and
technical versus human. If there is a wide variance between the scores of the four
categories it suggests improvement needs to be made to alter performance, job
satisfaction, and morale.
C.
Triangulation
A technique devoted to the use of multiple methods to measure organizational culture is
triangulation. The three method approach includes (1) obtrusive observations, (2) selfadministered questionnaires, and (3) personal interviews. This approach provides a
complete picture that using any of the methods singularly would not uncover.
VII.
CHANGING ORGANIZATIONAL CULTURE
Organizations have the need to reassess their organizational cultures and respond to
conditions to change the culture. Changes can be proactive as well as reactive, to manage the
impression of the culture. In fact, a company that intentionally changes a culture may reap
the benefit of positive publicity. Fortune highlighted companies whose culture was
conducive to advancement for minorities. Also, many of the companies featured in Fortune's
list of top 100 companies to work for had cultures that are favorable for individuals trying to
balance work with family responsibilities. All of the themes of this text, diversity,
internationalization, technology, ethical issues, and quality, would require that an
organization alter its culture. The reason that cultural impressions, (or reputations) last so
long is that they are difficult to change.
A.
Developing a Global Organizational Culture
A primary pressure on all organizations is the need to accommodate a global
organizational culture. One of the difficulties in shaping the culture is the conflict
between centralization and decentralization that occurs when companies become
global organizations.
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B.
Developing an Ethical Organizational Culture
The ethical conduct of a company reflects the organizational culture. If ethical
practices are rewarded, then the organizational culture is affected positively. For
members to trust the organization, leaders must affirm their position through the
company code of ethics, and procedure for reporting problems. The questions are
included in Challenge 15.1 on organizational culture and ethics. Students may need
to use the university as their reference for organizational culture if they do not have
sufficient work experience.
C.
Developing a Culture of Empowerment and Quality
Empowerment enhances trust among organizational members, paving the way for
quality improvements in products and services. One of the attributes of
empowerment and the quality movement is the assessment of goals that accompany
these efforts. Teams are a significant vehicle for quality and empowerment efforts,
and team orientations can solidify and strengthen the culture of an organization.
VIII.
MANAGERIAL IMPLICATIONS: THE ORGANIZATIONAL CULTURE
CHALLENGE
IX.
LOOKING BACK: Culture and Performance at Southwest Airlines
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CHAPTER SUMMARY



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


Organizational (corporate) culture is a pattern of basic assumptions that are considered
valid and that are taught to new members as the way to perceive, think, and feel in the
organization.
The most visible and accessible level of culture is artifacts, which include personal
enactment, ceremonies and rites, stories, rituals, and symbols.
Organizational culture has four functions: giving members a sense of identity and
increasing their commitment, serving as a sense-making device for members, reinforcing
organizational values, and serving as a control mechanism for shaping behavior.
Three theories about the relationship between culture and performance are the strong
culture perspective, the fit perspective, and the adaptation perspective.
Leaders shape and reinforce culture by what they pay attention to, how they react to
crises, how they behave, how they allocate rewards, and how they hire and fire
individuals.
Organizational socialization is the process by which newcomers become participating,
effective members of the organization. Its three stages are anticipatory socialization,
encounter, and change and acquisition. Each stage plays a unique role in communicating
organizational culture.
The Organizational Culture Inventory and Kilmann-Saxton Culture-Gap Survey are two
quantitative instruments for assessing organizational culture. Triangulation, using
multiple methods for assessing culture, is an effective measurement strategy.
It is difficult but not impossible to change organizational culture. Managers can do so by
helping current members buy into a new set of values, by adding newcomers and
socializing them into the organization, and by removing current members as appropriate.
REVIEW QUESTIONS: SUGGESTED ANSWERS
1. Explain the three levels of organizational culture. How can each level of culture be
measured?
The three levels are artifacts, values, and basic assumptions. An artifact category would be a
story. Freshmen are often told stories at orientations by upper class students in an attempt to
expose them to the culture. Values are imparted to students by informal conversations regarding
honesty and tests. A basic assumption that has appeared on most campuses is reflected by the
recycling bin that exhibits a concern for the environment.
2. Describe five artifacts of culture, and give an example of each.
Personal enactment: President of the company volunteers at Habitat for Humanity.
Ceremonies and rites: Total quality teams award members certificates for reduction in errors at
an elaborate banquet.
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Stories: We often explain how difficult it was for us to obtain a position, as if the company had
higher expectations of us than peers in other companies.
Rituals: The tradition at Texas A&M for all students to stand and remain standing throughout
the football game is a ritual.
Symbols: Most universities have shields and emblems that they have for seals on transcripts,
diplomas and letterhead.
3. Explain three theories about the relationship between organizational culture and
performance. What does the research evidence say about each one?
The strong culture theory says that deeply held and widely shared cultures perform best.
Research evidence provides modest support. The fit perspective says the culture should fit the
industry's strategy. Research evidence indicates that fit predicts only short-term performance.
The adaptation perspective says that flexible, responsive cultures lead to long-term performance.
Research evidence supports this.
4. Contrast adaptive and nonadaptive cultures.
Adaptive cultures encourage risk taking and confidence among employees, while nonadaptive
cultures tend to reduce risks, are political and bureaucratic. They are inflexible to change as
needed in response to internal demands or changes in the environment.
5. How can leaders shape organizational culture?
Leaders are monitored in terms of their espoused statements, versus their enacted behavior. It is
particularly difficult for leaders during times of crisis, because organizational members watch
their behavior. Leaders leave impressions from the way they reward, hire and fire organizational
members.
6. Describe the three stages of organizational socialization. How is culture communicated in
each stage?
Anticipatory socialization is the set of impressions that are gathered before an individual actually
joins the organization. Culture is ascertained by hints in the interview process. The second
phase is the encounter phase where the newcomer learns his or her tasks and clarifies his or her
role. In this stage, culture is communicated by mentors, supervisors, and others who model
behavior. In the last stage, change and acquisition, an individual begins to think of the
organization as a part of his or her life, similar to being referred to as an insider. The individual
is rewarded for displaying behavior that reflects the values of the culture.
7. How can managers assess the organizational culture? What actions can they take to change
the organizational culture?
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There are sophisticated tools and techniques that have been developed to assess organizational
culture. A popular inventory is the Organizational Culture Inventory, which diagnoses the fit
between the organization and the individual. The Kilmann-Saxton Culture-Gap compares what
actually happens with the expectations of others in the organization. This instrument helps
pinpoint gaps in cultural change that affect performance, job satisfaction, and morale.
Triangulation is the combination of three techniques, used together to give the most
comprehensive view of the organization.
8. How does a manager know that cultural change has been successful?
Managers should use the interventions for changing organizational culture (Figure 16.3) and
assess the extent to which employees are buying into the new set of values, instead of merely
complying.
9. What can managers do to develop a global organizational culture?
Managers can create a clear mission statement and share it with all individuals. Next, they need
to ensure that the flow of information is effective. They can create "matrix minds" that broaden
managers' thinking. Global career paths ensure that a broad range of employees experience
various cultures. Tapping into the strengths of various cultures will enhance the product or
service that the manager needs to accent. Finally, be conscious that on-going, systematic training
for all organizational members is essential.
DISCUSSION AND COMMUNICATION QUESTIONS: SUGGESTED ANSWERS
1. Name a company with a visible organizational culture. What do you think are the
company's values? Has the culture contributed to the organization's performance? Explain.
If students have difficulty discussing a specific company, it is useful to highlight a type of
environment with which most can identify. The medical field provides very recognizable
cultures. The medical field is monitored by self-accreditation and maintenance. Peers
scrutinize the quality of their ranks, leading to a highly competitive, and highly independent
form of organization. Hospitals have little control over physicians, yet a great deal of joint
sponsorship of goals. This shared responsibility and lack of authority leads to a very
decentralized organization that lack commitment to the organization from the colleagues.
The loyalty is more readily seen to exist to the profession.
2. Name a leader you think manages organizational culture well. How does the leader do
this? Use Schein's description of ways leaders reinforce culture to analyze the leader's
behavior.
Most students will mention "famous individuals" initially. The problem with responding
with high visibility individuals is that they may not be able to discuss how, specifically, these
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individuals reinforce culture. The textbook examples are some of the better examples. It is
also interesting to discuss managers that may not manage the culture in a particularly adept
fashion.
3. Suppose you want to change your organization's culture. What sort of resistance would
you expect from employees? How would you deal with this resistance?
Change is inevitable in all organizations, yet so is resistance to change. It is worth
mentioning that even those individuals that are proponents of change will experience some
anxiety as the organization culture changes. Typically, individuals that have been with an
organization a while have some commitment and investment to the "way things are". They
must be centrally involved with any changes.
4. Given Schein's three levels, can we ever truly understand an organization's culture?
Explain.
Some of the components are obvious to us most of the time, for example, the artifact
categories of ceremonies and rituals. Others, such as values and assumptions, are not
obvious. Values and assumptions become very important when they are challenged or when
there is a crisis forcing their appearance. We take for granted basic assumptions. This makes
culture very complicated and not easily decipherable.
5. To what extent is culture manageable? Changeable?
Culture is very difficult to change, and it does not happen quickly. However, a culture can be
changed if there is a conscious approach to assessing the existing culture to determine what
needs to be altered. It might take hiring new members into the organization.
6. Select an organization that you might like to work for. Learn as much as you can about that
company’s culture, using library resources, online sources, contacts within the company, and as
many creative means as you can. Prepare a brief presentation to the class summarizing the
culture.
This exercise is excellent to assist in preparing students for the job search process. It gives them
practice at researching an organization and it also allows them to learn a about a variety of
companies through their classmates’ presentations.
ETHICS QUESTIONS: SUGGESTED ANSWERS
1. Are rites of degradation ethical?
No. Students' examples will have varying degrees of severity. Banned practices relating to
hazing are interesting conversations.
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2. Is it ethical to influence an individual's values through the organizational culture? If culture
shapes behavior, is managing culture a manipulative tactic? Explain.
If organizations suppress individuality or select and recruit based on a "fit" perspective they are at
the extremes of manipulation. Do students see the issue differently considering an all women's
college, a male barbershop quartet, or a Hispanic club?
3. How can leaders use organizational culture as a vehicle for encouraging ethical behavior?
If organizational leaders respond to ethical issues publicly, they reinforce ethical behavior. When
leaders reward risk taking, they send a message throughout the organization. Unfortunately in
most instances, codes of ethics are placed in the files, with naive beliefs that they are being
useful. The key is communicating that ethical behavior is valued and rewarding it.
4. Korean chaebols hire individuals to fit their cultures. To what extent might this practice be
considered unethical in the United States?
Because of the diversity of our workforce, this could seriously prohibit equal employment
opportunities for women and minorities.
5. One way of changing culture is to remove members who do not change with the culture. How
can this be done ethically?
When the culture is a dominant thread of the mission, performance standards can be utilized as a
measurement of adequate performance. Only if failure to change negatively affects job
performance should this be considered.
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CHALLENGES
15.1 ORGANIZATIONAL CULTURE AND ETHICS
This challenge integrates the material on ethics and that on organizational culture. Students
could also be asked to evaluate the ethical climate of the university. This would provide a
common experience to generate class discussion on the influence an organization’s culture has on
the ethical behavior of its members.
EXPERIENTIAL EXERCISES
15.1 IDENTIFYING BEHAVIORAL NORMS
Instructor's Notes:
Students enjoy this exercise. There are sometimes very different norms for the international
students than the dominant culture students. Some students will have a hard time remembering
the socialization process they lumbered through as freshmen. It is worth mentioning that transfer
students have a different socialization process than most students. Another interesting response
usually follows if you ask students how their campus culture differs from other universities.
15.2 CONTRASTING ORGANIZATIONAL CULTURES
Instructor's Notes:
Unless impression management issues are involved, it is usually better to have students get
factual information about the organizations that are on the list. It is also worthwhile to allow
students to select an organization that is not on the list, particularly if they are interested in
non-profit organizations.
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ALTERNATIVE EXPERIENTIAL EXERCISE
THE HEADBAND ACTIVITY
Advancement Strategies, Pfeiffer, 1992
1. In advance, write labels on headbands that reflect areas of difference relevance to the group.
Suggested labels include the following: Single parent, highly educated, gay, physically
handicapped, learning disabled, over sixty, under twenty-five, HIV positive, Native
American, African American, Jewish, Puerto Rican, Mexican American, Chicano, Chinese
American, African, and West Indian.
2. Ask students to form circles containing no more than ten members. Hand each participant a
headband and ask him or her to tie it across his or her forehead without reading what is
written on it. (Members can clearly see on another's labels but not their own.) If you prefer,
it works well with name tags.
3. Give the small groups this decision-making task to perform: "Role play an employee group
charged with the responsibility of determining merit increases for its members. The problem
is that all but three members can receive increases this year. The other members must wait
until next year and try again."
4. Tell the group they have only 20 minutes to decide and the decision must be unanimous.
Instruct participants not to share with another person what label he or she is wearing but to
treat one another as they would treat people of the labeled group.
5. Process the activity initially by asking each participant to guess what his or her headband said
and to discuss how he or she discerned the label.
6. Post on a flip chart the following discussion generators and invite the class to share responses
with one another:



How did it feel to wear a label? Would it have felt better if you had known what it said or if
you had been able to choose another label?
Did you treat others according to their labels? Why? Why not? Did you find your behavior
changed over the course of the activity? What factors influenced your behavior?
Did you feel empowered or dis-empowered by your role? Why?
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EXTRA EXPERIENTIAL EXERCISES
The following alternative exercises to supplement the material in the textbook can be obtained
from:
Marcic, Dorothy & Seltzer, Joe. Organizational Behavior: Experiences and Cases, 5th Ed.
South Western College Publishing Company, 1998.
Organizational Culture Assessment. p. 253-258. Time: 45 minutes.
Purpose: To identify organizational norms.
Caught Between Corporate Cultures. p. 262-267. Time: 30 minutes or more.
Purpose: To analyze organizational issues.
Fandt, Patricia M. Management Skills: Practice and Experience. West Publishing Company,
1994.
In-Basket Exercise2: Establishing Priorities. p. 281.
In-Basket Exercise 3: Developing Work Strategies. p. 283.