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Chapter 16
Organizational Culture
LearningOutcomes
1. Identify the three levels of culture and the roles they play in an organization.
2. Evaluate the four functions of culture within an organization.
3. Explain the relationship between organizational culture and performance.
4. Describe five ways leaders reinforce organizational culture.
5. Describe the three stages of organizational socialization and the ways
culture is communicated in each step.
6. Discuss how managers assess their organization’s culture.
7. Explain actions managers can take to change organizational culture.
8. Identify the challenges organizations face developing positive, cohesive
cultures.

2. ORGANIZATIONAL
CULTURE
• a system of shared assumptions,
values, and beliefs, which governs
how people behave in organizations.
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Organizational (Corporate)
Culture
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

4. Learning Objective
Identify the three levels of culture
and the roles they play in an
organization.
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1

5. Levels of
Organizational
Culture
Artifacts – ssymbols of
culture in the physical
and social work environment
Values
Espoused: what members of
an organization say they value
Enacted: reflected in the way
individuals actually behave
Assumptions – deeply held
beliefs that guide behavior and tell
members of an organization how
to perceive and think about things
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All rights reserved.

6. Artifacts – ssymbols of
culture in the physical
and social work environment
Values
Espoused: what members of
an organization say they value
Enacted: reflected in the way
individuals actually behave
Assumptions – deeply held
beliefs that guide behavior and tell
members of an organization how
to perceive and think about things
© 2011 Cengage Learning.
All rights reserved.
Reprinted with permission from Edgar H. Schein,
Organizational Culture and Leadership: A Dynamic View.
Copyright © 1985 Jossey-Bass
Inc, a subsidiary of John Wiley & Sons, Inc.
Organizational
Culture
Visible, often not
decipherable
Greater level
of awareness
Taken for granted,
Invisible, Preconscious

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Beyond the Book:
Identifying Norms
This exercise asks you to identify campus norms at your university. Every
organization or group has a set of norms that help determine individuals’ behavior.
A norm is an unwritten rule for behavior in a group. When a norm is not followed,
negative feedback is given. It may include negative comments, stares,
harassment, and exclusion.
1. As a group, brainstorm all the norms you can think of in the following areas:
Dress Classroom behavior; Studying; Weekend activities; Living arrangements;
Campus activities; Dating; Relationships with faculty; Eating on campus versus off
campus; Transportation
2. How did you initially get this information?
3. What happens to students who don’t follow these norms?
4. What values can be inferred from these norms?

8. Learning Objective
Evaluate the four functions of
culture within an organization.
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2

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Functions of Organizational
Culture
• Culture provides a sense of identity to members
and increases their commitment to the
organization
• Culture is a sense-making device
for organization members
• Culture reinforces the values
of the organization
• Culture serves as a control
mechanism for shaping
behavior

10. Learning Objective
Explain the relationship between
organizational culture and
performance.
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3

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Theories on the relationship
between organizational culture
and performance
Strong Culture Perspective
Fit Perspective
Adaptive Perspective

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Strong Culture
an organizational culture with a
consensus on the values that drive
the company and with an intensity that
is recognizable even to outsiders

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BECAUSE
• They are characterized by goal
alignment
• They create a high level of motivation
because of shared values by the
members
• They provide control without the
oppressive effects of bureaucracy
Strong Cultures Facilitate Performance

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Fit Perspective
a culture is good only if it fits the
industry or the firm’s strategy

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Three particular industry
characteristics affect culture:
1.Competitive environment
2.Customer requirements
3.Societal expectations
Fit Perspective

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Adaptive Culture
an organizational culture that
encourages confidence and risk taking
among employees, has leadership that
produces change, and focuses on the
changing needs of customers

17. Learning Objective
Describe five ways leaders
reinforce organizational culture.
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4

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Most Important Elements
in Managing Culture
• What leaders pay attention to
• How leaders react to crises
• How leaders behave
• How leaders allocate rewards
• How leaders hire and fire individuals

19. Learning Objective
Describe the three stages of
organizational socialization and
the way culture is communicated
in each step.
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5

20. © 2011 Cengage Learning. All rights reserved.
Organizational
Socialization
the process by which newcomers are
transformed from outsiders to
participating, effective members of
the organization

21. Organizational Socialization
Process

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1. [Anticipatory Socialization] – all of
the learning that takes place prior to the
newcomer’s first day on the job
2. [Encounter] – newcomer learns the
tasks associated with the job, clarifies
roles, and establishes new relationships
at work
3. [Change and Acquisition] – newcomer
begins to master the demands of the job
[Socialization Process]

23. Outcomes of
Socialization
Newcomers who are successfully
socialized should exhibit:
– Good performance
– High job satisfaction
– Intention to stay with organization
– Low levels of distress symptoms
– High level of orgnaizational commitment
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Kilmann-Saxton Culture-Gap Survey
Focuses on what actually happens in the
organization and the expectations of others
Two underlying dimensions
– technical/human and
time.

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Triangulation
the use of multiple methods to
measure organizational culture

26. Learning Objective
Explain actions managers can take
to change organizational culture.
7

27. Cultural Changes
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With rapid environmental changes such as
globalization, workforce diversity and
technological innovation, the fundamental
assumptions and basic values that drive the
organization may need to be altered.

28. Why is Change Difficult?
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• Assumptions are often
unconscious
• Culture is deeply ingrained and
behavioral norms and rewards
are well learned

29. Interventions for Changing
Organizational Culture

30. Learning Objective
Identify the challenges
organizations face developing
positive, cohesive cultures.
8

31. • Merger or Acquisition
• Developing a global organizational culture
• Developing an ethical organizational culture
• Developing a culture of empowerment and
quality
Challenges to Developing Positive, Cohesive
Culture

32. Characteristics of
Organizational Culture
• Innovation (Risk Orientation) -
Companies with cultures that place a high
value on innovation encourage their
employees to take risks and innovate in
the performance of their jobs. Companies
with cultures that place a low value on
innovation expect their employees to do
their jobs the same way that they have
been trained to do them, without looking
for ways to improve their performance.
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33. • Attention to Detail (Precision
Orientation) - This characteristic of
organizational culture dictates the degree
to which employees are expected to be
accurate in their work. A culture that
places a high value on attention to detail
expects their employees to perform their
work with precision. A culture that places
a low value on this characteristic does
not.
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34. • Emphasis on Outcome (Achievement
Orientation) - Companies that focus on
results, but not on how the results are
achieved, place a high emphasis on this
value of organizational culture. A
company that instructs its sales force to
do whatever it takes to get sales orders
has a culture that places a high value on
the emphasis on outcome characteristic.

35. • Emphasis on People (Fairness
Orientation) - Companies that place a
high value on this characteristic of
organizational culture place a great deal
of importance on how their decisions will
affect the people in their organizations.
For these companies, it is important to
treat their employees with respect and
dignity.

36. • Teamwork (Collaboration
Orientation) - Companies that
organize work activities around
teams instead of individuals place a
high value on this characteristic of
organizational culture. People who
work for these types of companies
tend to have a positive relationship
with their coworkers and managers.

37. • Aggressiveness (Competitive
Orientation) - This characteristic of
organizational culture dictates whether
group members are expected to be
assertive or easygoing when dealing with
companies they compete with in the
marketplace. Companies with an
aggressive culture place a high value on
competitiveness and outperforming the
competition at all costs.

38. • Stability (Rule Orientation) - A
company whose culture places a
high value on stability are rule-
oriented, predictable, and
bureaucratic in nature. These types
of companies typically provide
consistent and predictable levels of
output and operate best in non-
changing market conditions.

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Rendition
Characteristics of Organizational Culture