Organizational Culture and
Development
How Individuals Work,
Live, and Achieve
Together
Questions
• What is organizational culture?
• How do you understand an organizational
culture?
• How can the organizational culture be
managed?
• How can you use organizational
development to improve the firm?
What is organizational culture?
• Organizational culture
– The system of shared actions, values, and
beliefs that develops within an organization and
guides the behavior of its members
What is organizational culture?
• IF YOU DO NOT KNOW AN
ORGANIZATION’S CULTURE
YOU WILL NEVER KNOW THE
ORGANIZATION’S BEHAVIOR
Institutionalization: A
Forerunner of Culture
Institutionalization
When an organization takes on a life of its own,
apart from any of its founders or any of its
members, becomes valued for itself, and acquires
immortality.
How Organizational Culture
Forms
Philosophy
of
organization's
founders
Top
management
Organization's
culture
Selection
criteria
Socialization
Layers of Culture(Iceberg
Model)
Artifacts of
Organizational
Culture
Organizational
Culture
Material Symbols
Language
Rituals
Stories
Beliefs
Values
Assumptions
Organizational Culture Assumptions,values and
Artifacts
Artifacts
•Stories/Legends
•Ritual/ceremonies
•Organizational language
•Physical structures/decor
Shared Values
•Conscious beliefs
•Evaluate what is good or bad
•Right or wrong
Shared Assumptions
Unconscious ,taken-for –granted
perception and beliefs
Mental models of ideals
Visible
Invisible
What Is Organizational
Culture?
Organizational Culture refers
to a system of shared
meaning held by members
that distinguishes the
organization from other
organizations
Characteristics:
1. Innovation and risk
taking
2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability
Contrasting Organization
Cultures
Organization A
• Managers must fully document
all decisions.
• Creative decisions, change, and risks
are not encouraged.
• Extensive rules and regulations exist
for all employees.
• Productivity is valued over employee
morale.
• Employees are encouraged to stay
within their own department.
• Individual effort is encouraged.
Organization B
• Management encourages and
rewards risk-taking and change.
• Employees are encouraged to
“ run with ” ideas, and failures are
treated as “ learning experiences. ”
• Employees have few rules and
regulations to follow.
• Productivity is balanced with treating
its people right.
• Team members are encouraged to interact
with people at all levels and functions.
• Many rewards are team based.
Dimensions of Organisational Culture
Research suggests that the following dimensions of organisational culture separate companies
from one another:

Routine ways of communicating, such as organisational rituals and ceremonies and
language commonly used.

The norms shared by individuals and teams throughout the organisation; like ‘do not do too
much; do not do too little’.

The dominant values help by the organisation such as high product quality, low
absenteeism, high efficiency, etc.

The philosophy that guides management’s policies and decision-making.

The rules of the game for getting along in the organisation; or the ropes that a new recruit
must learn in order to be accepted as a full-fledged member of the group.

The feeling or climate conveyed in an organisation by the physical layout and the way in
which managers and employees interact with customers, suppliers and other outsiders.
(J. Martin, Culture in Organizations, New York, Oxford University Press, 1996)
Dimensions of culture :Cross
Cultural Researches
Values across Cultures
• The world has become a new global villagemanagers have to become capable of
working with people from different cultures
• Values differ across cultures-understanding
these differences helpful in predicting
behavior of employees from different
countries
National and Global Culture
• National Culture –National culture like
organizational culture provides basic
assumptions that legitimate and guide
behavior
• Global Culture
Dimensions of culture :Cross
Cultural Researches
• Hall has highlighted difference between
high –context cultures and low context
cultures
• High context cultures depend on external
situation and environment-use of non verbal
clues exchanging and interpreting
communications-Arabic , Chinese,
Japanese
• Low Context-Direct and blunt
communication
Dimensions of culture :Cross
Cultural Researches
Panda and Gupta identified seven pan –
Indian cultural preferences
(a)Collectivist orientation
(b)Respect for status and power
(c)Primacy of personalized relationship
(d) Desire to be embedded in an in-group
(e)Familism
(f)context-sensitive(situational behavior)
Dimensions of culture :Cross
Cultural Researches
(g)Cynical view about others which are similar
to individualism, power distance,
uncertainty avoidance and masculinity
dimensions of Hofstede
1. Individualism
2. Power distance Orientation
3. Uncertainty avoidance
4. Masculinity
Organizational Culture
• The pattern of shared values, beliefs and
assumptions considered to be the
appropriate way to think and act within an
organization.
– Culture is shared
– Culture helps members solve problems
– Culture is taught to newcomers
– Culture strongly influences behaviour
Do Organizations Have
Uniform Cultures?
• Core values or dominant (primary) values
are accepted throughout the organization.
– Dominant culture
– Subcultures
Do Organizations Have
Uniform
Cultures?
Dominant Culture
Expresses the core values that
are shared by a majority of
the organization’s members.
Subcultures
Minicultures within an
organization, typically defined
by department designations
and geographical separation.
Do Organizations Have
Uniform Cultures? (cont’d)
Core Values
The primary or dominant values that are accepted
throughout the organization.
Strong Culture
A culture in which the
core values are intensely
held and widely shared.
Strong vs. Weak Organisation Cultures
Elements of strong cultures
Elements of weak cultures
1.
Values widely shared
1.
Values shared by a few, usually top
management
2.
Members know what is important
2.
Members not very clear about what is
important
3.
Most employees can tell stories about
company history/heroes
3.
Employees possess little knowledge of
company history or heroes
4.
Employees strongly identify with culture
4.
Employees have little identification with
culture
5.
Strong linkage between shared values and
behaviour
5.
Little connection between shared values and
behaviours
(Source : S.P.Robbins and M.Coulter, Management, New Delhi, Pearson, 2008)
The Basic Functions of Organizational Culture
Organizational
Culture/basic functions
Provides a
sense of
identity for
members
Enhances
commitment
to the
organization’s
mission
Clairifies
and
reinforces
standards
of behavior
What Do Cultures Do?
• The Function of Culture
• Organizational culture produces functional
behavior that contribute to organizational goal
achievement
• It also is a source if dysfunctional behaviors
Culture’s Functions
• Social glue that helps hold an organization
together
• Boundary-defining
• Conveys a sense of identity for organization
members
Culture’s Functions
• Facilitates commitment to something larger
than one’s individual self-interest
• Enhances social system stability
• Serves as a “sense-making” and control
mechanism
Culture as a Liability
• Culture can have dysfunctional aspects in
some instances
– Culture as a Barrier to:
• Change
• Diversity
• Mergers and Acquisitions
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
What Do Cultures Do?
Organizations solve two important survival issues
(1)External adaption-what needs to be
accomplished and how it can be done
(2)Internal integration-
• External adaptation
– Involves reaching goals and dealing with
outsiders regarding tasks to be accomplished
– methods used to achieve the goals
– methods of coping with success and failure.
What is organizational culture?
• Important aspects of external adaptation
– Separating external forces based on
importance
– Developing ways to measure accomplishments
– Creating explanations for not meeting goals
What is organizational culture?
External adaptation involves answering important
goal-related questions regarding coping with
reality
–
–
–
–
–
–
–
–
–
What is the real mission?
How do we contribute?
What are our goals?
How do we reach our goals?
What external forces are important?
How do we measure results?
What do we do if specific targets are not met?
How do we tell others how good we are?
When do we quit?
What is organizational culture?
• Internal integration
– Deals with the creation of a collective identity
and with finding ways of matching methods of
working and living together
What is organizational culture?
• Important aspects of working together
– Deciding who is a member and who is not
– Developing an informal understanding of
acceptable and unacceptable behavior
– Separating friends from enemies
What is organizational culture?
Internal integration involves answering
important questions associated with living
together
– What is our unique identity?
– How do we view the world?
– Who is a member?
– How do we allocate power, status, and
authority?
– How do we communicate?
– What is the basis for friendship?
What is organizational culture?
• Subculture
– A group of individuals with a unique pattern of
values and philosophy that are not inconsistent
with the organization’s dominant values and
philosophy (strong subcultures are often found
in high performance task forces, teams and
special project groups in organization )
What is organizational culture?
• Counterculture
– A groups where the pattern of values and
philosophies outwardly reject those of the
larger organization or social system(Stephen
jobs reentered Apple computer as its CEO
formed a counterculture within Apple –clashes
occurred as followers of the old CEO (Gil
Amelio) fought to maintain their place and old
culture-Jobs won and Apple won –his
counterculture became dominant
What is organizational culture?
• Problems associated with subcultural
divisions within the larger culture
– Subordinate groups are likely to form into a
counterculture pursuing self-interests
– The firm may encounter extreme difficulty in
coping with broader cultural changes
– Embracing natural divisions from the larger
culture may lead to difficulty in international
operations
What is organizational culture?
• Developing the multicultural organization
Step 1: The organization should develop pluralism
Step 2: The organization should fully integrate its
structure
Step 3: The organization must integrate the
informal networks
Step 4: The organization should break the linkage
between naturally occurring group identity and
organizational identity
Step 5: The organization must actively work to
eliminate identity-based interpersonal conflict
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.
– Provide protective mechanisms
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 Actions:
• Select new employees with personality and attitudes consistent with
high service orientation.
• Train and socialize current employees to be more customer
focused.
• Change organizational structure to give employees more control.
• Empower employees to make decision about their jobs.
Creating a Customer-Responsive
Culture
Managerial Actions (cont’d) :
• Lead by conveying a customer-focused vision and demonstrating
commitment to customers.
• Conduct performance appraisals based on customer-focused
employee behaviors.
• Provide ongoing recognition for employees who make special efforts
to please customers.
Spirituality and
Organizational Culture
Characteristics:
• Strong sense of purpose
• Focus on individual
development
• Trust and Respect
• Humanistic work
practices
• Toleration of employee
expression
How do you understand an
organizational culture?
• Characteristics of strong corporate cultures
– A widely shared real understanding of what the
firm stands for, often embodied in slogans
– A concern for individuals over rules, policies,
procedures, and adherence to job duties
– A recognition of heroes whose actions illustrate
the company’s shared philosophy and concerns
How do you understand an
organizational culture?
• Characteristics of strong corporate cultures
– A belief in ritual and ceremony as important to
members and to building a common identity
– A well-understood sense of the informal rules
and expectations so that employees and
managers know what is expected of them
– A belief that what employees and managers do
is important and that it is essential to share
information and ideas
How can the organizational
culture be managed?
• Strategies for managing corporate culture
– Managers help modify observable culture,
shared values, and common assumptions
directly(external adaption)
– Use of organizational development techniques
to modify specific elements of the culture(both
external and internal adaption)
How can the organizational
culture be managed?
• Management philosophy
– links key goal-related strategic issues with key
collaboration issues and comes up with a
series of general ways by which the firm will
manage its affairs
How can the organizational
culture be managed?
Why a well-developed management philosophy is
important –links strategy to-understanding how a
firm will manage its affairs
– Establishes generally understood boundaries
on all members of the firm
– Provides a consistent way for approaching new
and novel situations
– Helps hold individuals together by showing
them a known path to success
How can the organizational
culture be managed?
• Strategies for building, reinforcing, and
changing organizational culture
– Directly modifying the visible aspects of
culture(language, stories, rites, rituals sagas)
– Changing the lessons to be drawn from
common stories
– Setting the tone for a culture and for cultural
change
– Fostering a culture that addresses questions of
external adaptation and internal integration
How can the organizational
culture be managed?
Mistakes that managers can make in
changing culture
– Trying to change people’s values from the top
down without also changing how the
organization operates
– Attempting to revitalize an organization by
dictating major changes and ignoring shared
values
How can you use organization
development to improve the firm?
• Organization development (OD)-is a
comprehensive approach to planned change that
is designed to improve the overall effectiveness of
organizations
– The application of behavioral science
knowledge in a long-range effort to improve an
organization’s ability to cope with change in its
external environment and to increase its
internal problem-solving capabilities
How can you use organization
development to improve the firm?
Underlying assumptions of OD
• Individual level
– guided by principles that reflect an underlying
respect for people and their capabilities
How can you use organization
development to improve the firm?
• Group level
– Guided by principles that reflect a belief that
groups can be good for both people and
organizations
How can you use organization
development to improve the firm?
• Organizational level
– Guided by principles that show a respect for the
complexity of an organization as a system of
interdependent parts.
How can you use organization
development to improve the firm?
OD Values and Principles
OD offers a systematic approach to planned
change in organizations that addresses two
main goals:• Outcome goals
– Mainly deal with issues of external adaptation
• Process goals
– Mainly deal with issues of internal integration
How can you use organization
development to improve the firm?
• OD helps organizations by:
– Creating an open problem solving climate
– Supplementing formal authority with knowledge and
competence
– Moving decision making where relevant information
is available
– Building trust and maximizing collaboration
– Increasing the sense of organizational ownership
– Allowing people to exercise self-direction and selfcontrol
How can you use organization
development to improve the firm?
• Action research Foundations of OD
OD practitioners refer to Action
Research as
– The process of systematically collecting data
on an organization, feeding it back to the
members for action planning, and evaluating
results by collecting and reflecting on more
data after the planned actions have been taken.
Copyright © 2008 John Wiley & Sons, Inc.
How can you use organization
development to improve the firm?
OD Interventions-consultants facilitate
change –help in developing problem solving
capabilities
• Survey feedback
– Collection of data via questionnaire response
from organization members or sample of such
responses
• Confrontation meetings
– Designed to help determine how an
organization may be improved and to take
initial actions to better the situation
How can you use organization
development to improve the firm?
• Structural redesign
– Realigning the structure of the organization or
major subsystems to improve performance
• Collateral organization
– Pulling a representative set of members out of
the formal organization structure to engage in
periodic small-group problem-solving sessions
How can you use organization
development to improve the firm?
Group and Intergroup Interventions
• Team building
– Activities designed to help examine how the
group functions and how it can function better
• Process consultation
– Activities that are facilitated by an OD
practitioner and designed to improve group
functioning
How can you use organization
development to improve the firm?
• Intergroup team building
• Designed to help groups improve working
relationships and experience improved group
effectiveness
• Appreciative Inquiry-Positive perspective
-Discovery-Dreaming-Design-Destiny
How can you use organization
development to improve the firm?
Individual Interventions
• Role negotiation
– Clarifying expectations in working relationships
• Job redesign
– Creating long-term congruence between
individual goals and organizational career
opportunities