Organization culture refers to a system of shared meaning held by members that distinguishes from other organizations .
Seven common elements/characteristics
Innovation & risk taking : the degree to which employees are expected to be creative and take risks.
Stability : degree to which activities focus on the status quo rather than change.
Attention to detail : degree to which there is concern for precision and detail.
Outcome orientation : degree to which management emphasizes results.
People orientation : degree to which management decisions are sensitive to individual.
Team orientation : degree to which work activities are organized around teams rather than individuals.
Aggressiveness : degree to which employees are expected to be competitive than easy going.
Functions of Culture
Defines the boundary between one organization and others.
Conveys a sense of identity for its members.
Facilitates the generation of commitment to something larger than self-interest.
Acts as social glue that helps to hold the organization together by providing appropriate standards for employees to follow.
Serves as a sense-making and control mechanism for fitting employees in the organization
Culture as a liability
Dysfunctions of culture: especially applicable in strong culture
Barrier to change : occurs when organization’s environment is dynamic & organization has strong culture that worked well in past.
Barrier to diversity: strong cultures put considerable pressure on employees to conform. Diverse behaviors are likely to diminish in strong cultures as people attempt to fit in.
Barrier to acquisition & merger: related to financial advantage and product synergy but cultural compatibility is the primary concern.
Organization culture does not pop out of thin air.
It takes time to develop and also difficult to fade away.
Organization’s current customs, traditions, and general way of doing things start with founders, success and achievement.
Culture creation occurs in 3 ways:
Hiring and keeping employees who think and feel the way founders do.
Socialize employees to the founder’s way of thinking and feeling.
Founder’s own behavior acts as a role model.
Organization culture is kept alive by:
Selection : the main theme behind selection is to identify and hire a person of knowledge, skill and abilities who could perform job one after matching the need of the organization with that of an individual well without creating any problem. It is a two way street. Applicants also learn about organization.
Top Management : Top manager’s behavior reflect on organization culture. Well behaved, dress, right judgment on performance by the managers, filter down to organization as to whether risk taking is desirable. So as others do.
Socialization : It is a process which help the employees to adapt to the culture of the organization. It is a process of adaptation. New employees are to be fully indoctrinated in the culture of organization through socialization.
Stages of socialization
Pre-arrival stage : It is the period of learning in the socialization process that occurs before the new employee joins the organization. Employees come with different value and norms. Requirements to be fulfilled for the job along with other behavior leaves tremendous impression on the new comers.
Encounter stage : New comers confronts expectation and reality diverge. Proper attention by means of induction program, social get-together etc helps to get them adapt to new culture.
Metamorphosis stage : It is the time for the new employees to be changed and get adjusted to the job, work group and organization.
Sources of Organisational Culture Organisational culture Characteristics of people within the organisation Organisational structure Property right system Organisational ethics For details, refer to seminar slides
Typologies of Culture
Leadership in few, entrepreneurial in nature
Clearly defined roles and rules, power balanced between the leadership and structure
Stress on motivation, commitment and action
Mutuality, trust, relationships, solidarity
Individual as the central point
Generic Corporate Culture Source of values Charismatic leadership Organisational traditions Focus of values Functional Elitist Entrepreneurial (external, short term) Strategic (external, long term) Chauvinistic (internal, short term) Exclusive (internal, long term)
The Entrepreneurial Culture
Source - a charismatic leader
Basis for strong corporate culture
Initial value orientation of the founder: functional and externally oriented (to create value for customers)
Good chance for success because of commitment to satisfying the changing needs of the environment
Unstable, risky and chance of turning elitist
The Strategic Culture
Institutionalisation of functional values
Source – organisational traditions and multiple role models
External and long run focus
Relatively rational culture without excessive dependence on charismatic leadership
Focus on preserving corporate identity while still adapting to changes
The Chauvinistic Culture
More internally focused, blind loyalty to corporate leadership and an overriding concern for institutional superiority
We – they orientation
Susceptible to the development of “groupthink”, illusion of invulnerability, self- righteousness and stereotyping
The Exclusive Culture
Institutionalisation of elitist value orientation
Elitist but club like orientation independent of charismatic leadership
Elitist orientation anchored in well entrenched organisational traditions
Values shared by a group rather than an organisation as a whole
Exist in large organisations without a dominant central corporate culture
May be divisive in the absence of a unifying corporate culture
People-centred (value on professional and personal development)
Performance driven (value on performance based rewards)
Goal oriented (promotion of a clear sense of direction)
Innovation inclined (stimulation of creative behaviours)
Client committed (value on serving the needs of the customers)
Quality obsessed (striving to do better all the time)