Organizational Culture

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Chapter 9

• Organizational Culture

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Chapter Outline

• Institutionalization A Forerunner of Culture
• What Is Organizational Culture?
• What Does Culture Do?
• Creating and Sustaining Culture
• How Employees Learn Culture
• Changing Organizational Culture

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Organizational Culture

• What is organizational culture?
• When is organizational culture functional?
  Dysfunctional?
• How do employees learn about the culture of their
  organization?

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Institutionalization

• The process whereby an organization takes on a
  life of its own, apart from any of its members,
  and acquires immortality.

5
Exhibit 9-1Contrasting Organizational Cultures
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Organizational Culture

• A common perception held by the organizations
  members a system of shared meaning.

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Characteristics of Organizational Culture

• Innovation and risk-taking. The degree to which
  employees are encouraged to be innovative and
  take risks.
• Attention to detail. The degree to which
  employees are expected to exhibit precision,
  analysis, and attention to detail.
• Outcome orientation. The degree to which
  management focuses on results or outcomes rather
  than on technique and process.
• People orientation. The degree to which
  management decisions take into consideration the
  effect of outcomes on people within the
  organization.
• Team orientation. The degree to which work
  activities are organized around teams rather than
  individuals.
• Aggressiveness. The degree to which people are
  aggressive and competitive rather than easygoing.
• Stability. The degree to which organizational
  activities emphasize maintaining the status quo
  in contrast to growth.

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Elements of Strong Culture

• Widely shared philosophy
• Concern for individuals
• Recognition of heroes
• Belief in ritual and ceremony
• Well-understood sense of the informal rules and
  expectations
• Belief that what employees do is important to
  others

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Do Organizations Have Uniform Cultures?

• Organizational culture represents a common
  perception held by the organization members.
• Dominant culture expresses the core values that
  are shared by a majority of the organizations
  members.
• Subcultures tend to develop in large
  organizations to reflect common problems,
  situations, or experiences.
• Core values or dominant (primary) values are
  accepted throughout the organization.

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Cultures Functions

• Culture is the social glue that helps hold an
  organization together by providing appropriate
  standards for what employees should say or do.
• It has a boundary-defining role.
• It conveys a sense of identity for organization
  members.
• It facilitates the generation of commitment to
  something larger than ones individual
  self-interest.
• It enhances social system stability.
• It serves as a sense-making and control
  mechanism that guides and shapes the attitudes
  and behaviour of employees.

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Culture as a Liability

• Culture can have dysfunctional aspects in some
  instances
• Barrier to Change When organization is
  undergoing change, culture may impede change
• Barrier to Diversity Strong culture put
  considerable pressure on employees to conform
• Barrier to Mergers and Acquisitions Merging the
  cultures of two organizations can be difficult,
  if not impossible

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Keeping a Culture Alive

• Selection Identify and hire individuals who will
  fit in with the culture
• Top Management Senior executives establish and
  communicate the norms of the organization
• Socialization Organizations need to teach the
  culture to new employees

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Exhibit 9-3A Socialization Model
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Exhibit 9-4 Entry Socialization Options

• Formal vs. Informal
• Individual vs. Collective
• Fixed vs. Variable
• Serial vs. Random
• Investiture vs. Divestiture

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Exhibit 9-5How Organizational Culture Forms
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How Employees Learn Culture

• Stories
• Rituals
• Material Symbols
• Language

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Exhibit 9-6 Culture Typology
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Changing Organizational Culture

• Culture is most likely to change when
• There is a dramatic crisis
• There is a turnover in leadership
• The organization is young and small
• There is a weak culture

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How to Change Culture

• Have top-management people become positive role
  models, setting the tone through their behaviour.
• Create new stories, symbols, and rituals to
  replace those currently in vogue.
• Select, promote, and support employees who
  espouse the new values that are sought.
• Redesign socialization processes to align with
  the new values.
• Change the reward system to encourage acceptance
  of a new set of values.
• Replace unwritten norms with formal rules and
  regulations that are tightly enforced.
• Shake up current subcultures through transfers,
  job rotation, and/or terminations.
• Work to get peer group consensus through
  utilization of employee participation and
  creation of a climate with a high level of trust.

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Types of Cultures

• Family-friendly workplaces
• e.g., Husky Injection Molding Systems Copper
  House, a childcare centre
• Diversity-valuing workplaces
• e.g., GM Canadas diversity initiatives,
  inlcuding flextime and telecommuting to help with
  family strains
• Cultures of innovation
• e.g., Nortel invested heavily in RD
• 3M, the master of innovation

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Summary and Implications

• Employees form an overall subjective perception
  of the organization based on such factors as
  degree of risk tolerance, team emphasis, and
  support of people.
• This overall perception becomes, in effect, the
  organizations culture or personality.
• These favourable or unfavourable perceptions then
  affect employee performance and satisfaction,
  with the impact being greater for stronger
  cultures.
• Just as peoples personalities tend to be stable
  over time, so too do strong cultures.
• This makes strong cultures difficult for managers
  to change.
• One of the more important managerial implications
  of organizational culture relates to selection
  decisions.
• Hiring individuals whose values don't align with
  those of the organization is not good.
• An employee's performance depends to a
  considerable degree on knowing what he should or
  should not do.