Learning Objective 14.1: Define organizational culture, and describe the seven characteristics.
Organizational culture is “the pattern of basic assumptions, that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.” (Schein, 1984) This definition is rather complex; however, culture can be thought of as a set of shared meanings that people in organizations have with respect to how to adapt to the environments and cope with change.
Organizational culture norms have three distinct dimensions:
The content or what is deemed important (e.g., teamwork, accountability, innovation)
The consensus or how widely shared norms are held across people in the organization
The intensity of feelings about the importance of the norm (e.g., are people willing to sanction others for violating culture norms?)
Learning Objective 14.1: Define organizational culture, and describe the seven characteristics.
Learning Objective 14.1: Define organizational culture, and describe the seven characteristics.
Figure 14.1. Schein’s Levels of Culture.
Culture operates at different levels (see Figure 14.1 above)
Artifacts and creations--for example, the architecture of the buildings, the office decoration including artwork, and the way that people dress reflect the organization’s culture. This can also include organization charts and new employee orientation materials.
Values--the reasons people give for their behavior. These values can be stated (or espoused), or they may be unconscious and people act them out (enacted). For example, a person may state that they believe in treating customers with respect (an espoused value). Treating customers with respect is an example of an enacted value.
Assumptions--underlie values and are often unconscious to people in organizations because they don’t question them. For example, an assumption might be the view of the organization’s relationship to the environment. Some view the environment as something to be exploited for financial gain, while others may view the environment as something that must be protected. Another example is the nature of human nature. Some may view employees as fundamentally lazy, and others may view employees as hard working and well-intentioned. To really understand an organization’s culture, a person must go beyond what they can see and hear (artifacts and creations) and gain a deeper awareness of values first and then assumptions. What we can observe is an expression of values that are typically rooted in fundamental assumptions.
Learning Objective 14.1: Define organizational culture, and describe the seven characteristics.
A research study compared the organizational cultures of 15 organizations in four industries in the service sector (public accounting, consulting, the U.S. Postal Service, and transportation of household goods). Cultural values differed across these sectors and were related to the levels of industry technology and growth. The seven characteristics and examples from this research follow.
Innovation and risk taking. Most cultures in the service industries studied were average on this dimension with transportation showing the highest score.
Attention to detail. Consulting and accounting firms were highest on this dimension.
Outcome orientation. All companies studied in the service industry were high on this dimension.
People orientation. All companies studied in the four industries were average on this dimension.
Team orientation. All companies studied were average, but consulting firms were slightly higher on working in teams as part of their culture.
Aggressiveness (easygoingness reversed). All industries were average; however, consulting firms were less easygoing than other companies.
Stability. Most industries were average on stability; however, the U.S. Postal Service was higher than other organizations on the need for stability as part of the organization’s culture.
Learning Objective 14.3: Explain the relationship between national culture and organizational culture.
Results of the Global Leadership and Organizational Behavior Effectiveness (GLOBE) studies of leadership across cultures suggest that national culture has a strong influence on organizational culture.
A study of 10 European cultures found national culture values (power distance and collectivism) influence the development of organizational culture. However, the values of the founders of companies and key leaders also have an influence on organizational culture. National culture constrains organizational culture, but only partially.
A large-scale research program learned that four organizational culture values appear to be important in most cultures: adaptability, involvement, mission, and consistency.
Learning Objective 14.3: Explain the relationship between national culture and organizational culture.
Figure 14.2. The Denison Model of Organizational Culture.
A large-scale research program learned that four organizational culture values appear to be important in most cultures: adaptability, involvement, mission, and consistency. Adaptability is the ability to transfer the demands of the market into organizational actions. Involvement is building human capability, ownership, and responsibility. Mission is defining the meaningful long-term direction for the organization. Consistency is defining values and subsystems that are the basis of a strong culture. This model of organizational culture is shown in Figure 14.2 above.
Mission and consistency are most related to profitability. Adaptability and mission are the best predictors of sales growth. Adaptability and involvement best predict innovation. These organizational culture values appear relevant to all cultures; however, they are expressed differently in each culture.
Learning Objective 14.4: Demonstrate understanding of the two characteristics of strong cultures by providing examples.
Strong cultures are based on two characteristics, high levels of agreement among employees about what they value and high intensity toward these values. If both are high, a strong culture exists.
Some organizations are characterized by high levels of intensity but low agreement. In this case, employees and/or groups are at war with one another over what is important for the organization to value. For example, salespeople focus on customer-driven product features while accountants focus on cost containment.
Thus, while both groups intensely value what they do, they disagree on priorities.
Strong-culture firms excelled at incremental change but encountered difficulties in more volatile economic environments. In other words, in relatively stable economic environments, strong-culture firms have more reliable performance.
Example: You have probably heard of Zappos, the online seller of shoes and clothing. The CEO, Tony Hsieh (pronounced “Shay”), has developed a strong culture where employees very much agree on and are passionate about customer service. The Zappos experience indicates that to build a culture that results in a great place to work, exceptional customer service, and impressive organizational performance requires specific drivers. The five Drivers that Zappos uses to shape its culture are committed leaders, core values, customer-focused strategies, human resource practices, and management practices that align with core values.
Learning Objective 14.4: Demonstrate understanding of the two characteristics of strong cultures by providing examples.
Three general subcultures exist in most organizations:
Operators are the line managers and employees who are involved in making products, delivering services, and interacting with customers directly. The operators value teamwork and desire engagement with the work they do.
Engineers represent the second type of organizational subculture, and this group focuses on designing systems to support the work of operations such as employees who design a manufacturing facility. This may also include employees who design and implement information technology (IT) systems, financial analysis systems, and marketing research.
The third group, executives, has worked their way up organizational career ladders and they are financially responsible to their board of directors and shareholders. This group often has to “make the tough financial decisions based on imperfect information.” Executives manage large numbers of people and divisions and rely on policies and reward systems to maintain control. They may lose touch with their customers and employees at lower levels in the organizational hierarchy.
Learning Objective 14.2: Compare and contrast market, bureaucracy, and clan cultures.
Another approach to describing organizational cultures is by examining the mechanisms used for control when organizations are faced with goal incongruence and performance ambiguity. Goal incongruence exists when organizational members don’t agree on what the goals of the organization are or should be. Performance ambiguity occurs when revenues streams are unpredictable or uneven. These factors give rise to the need for organizational control, and organizations address the challenge of control in different ways.
Learning Objective 14.2: Compare and contrast market, bureaucracy, and clan cultures.
Table 14.1. Comparison of Market, Bureaucracy, and Clan Cultures.
Table 14.1 above shows the three ways that organizations address control, according to a classic theory at the organizational level of analysis.
Market control exists when prices determine how social interactions between people are formed. For example, you and your friends go for beverages and you choose the bar that has the best happy hour prices.
Bureaucratic control is when legitimate authority governs social interactions. An example of this is when you organize an end of the semester happy hour on campus, purchase food and beverages for a large group, and then charge them for attending; provide a wristband and only those with a wristband are served. There is a specific location predetermined as well as the hours for the event. The event must follow the rules and regulations of the university, and the rules must be followed by participants.
Clan control occurs when shared values and beliefs govern how people interact socially. An example of clan control is when a group of friends just get together at one person’s house, and everyone chips in money for beverages and pizza. The group has this tradition at the end of every semester, and they know they can depend upon one another to share the costs and have a good time.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
Organizational socialization is defined as the process an organization utilizes to ensure that new members acquire necessary attitudes, behaviors, knowledge, and skills to become productive organizational members.
When a new hire joins a company, the first 6 months on the job is characterized as a series of reality “shocks” as they are exposed to the unwritten rules defining the organizational culture in the organization. For example, the job may be considered an 8-hr workday, but the new hire notices that everyone works at least 10 hr a day. Schein (2003). Organizational socialization and the profession of management.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
The process of socialization follows the following steps: organizational anticipatory socialization, organizational entry and assimilation, and metamorphosis.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
Figure 14.3. The Socialization Process.
The process of socialization follows the following steps: organizational anticipatory socialization, organizational entry and assimilation, and metamorphosis. This process is diagrammed in Figure 14.3 above.
Organizational anticipatory socialization is the process an individual goes through as they attempt to find an organization to join. Organizational anticipatory socialization has two basic processes: recruiting and selection. For example, as a student nears graduation, they visit the placement center at the university to learn about job opportunities and meet recruiters. The student then determines which jobs are the best fit to their college major, skills, and the type of organization they want to work for.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
Organizational anticipatory socialization is the process an individual goes through as they attempt to find an organization to join.
Organizational anticipatory socialization has two basic processes: recruiting and selection.
For example, as a student nears graduation, they visit the placement center at the university to learn about job opportunities and meet recruiters. The student then determines which jobs are the best fit to their college major, skills, and the type of organization they want to work for.
For example, the student may want to work for a large organization as opposed to a small one. During the organizational anticipatory socialization stage, both the applicant and the organization are looking for evidence of a good person–organization fit.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
Table 14.2. Interview Questions to Determine an Employee’s Fit With a Strong Culture.
The recruitment process may involve psychological testing and interviews to determine how well a person will fit with the culture.
HR expert Andrew Greenberg suggests asking the interview questions in Table 14.2 above to assess an employee’s fit with organizational culture.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
Next, the entry phase occurs, which happens when the new member starts work. The new member begins to assimilate within the organizational culture.
During the entry period, new employees begin to understand the organization’s culture and work expectations. This may include a formal orientation program to help the new employee learn the rules and expectations of the organization--the explicit dictates that govern employee behavior within the organization.
For example, an orientation program may include a session on the ethical code of the organization.
Onboarding is the process of welcoming and orienting new organizational members to facilitate their adjustment to the organization, its culture, and its practices. It refers to the process of facilitating new members’ adjustment to the organization and its culture.
Learning Objective 14.5: Explain how employees learn organizational culture through the socialization process.
The final stage of organizational entry and assimilation is the metamorphosis stage.
During this stage, a person transforms from a new employee to an established contributor who is valued and trusted by other members of the organization.
Metamorphosis completes the socialization process--the new employee is comfortable with the organization, their boss, and their work group. They have internalized the organizational culture and understand their job, as well as the rules, procedures, and norms. Expectations are clear regarding what good performance means in the organization. Successful metamorphosis positively affects job performance, job satisfaction, and commitment to the organization. Also, there is a lower chance that the person will look for another job or quit.
Learning Objective 14.6: Discuss four ways that employees learn organizational culture.
Storytelling is now recognized as an important way to understand how employees make sense of what happens at work. Storytelling is the sharing of knowledge and experiences through narrative and anecdotes to communicate lessons, complex ideas, concepts, and causal connections. People try to understand complex events in ways that are integrated and make sense in the order they occurred. Stories are important because they aid comprehension and suggest a causal order for events. They convey shared meanings and values representing the organizational culture and guide behavior.
Rituals are defined as “a form of social action in which a group’s values and identity are publicly demonstrated or enacted in a stylized manner, within the context of a specific occasion or event.” An example of a ritual is a graduation ceremony at a university. Rituals reinforce the cultural values of the organization by providing a tangible way for employees to see the values espoused.
Symbols represent the sharing of knowledge through access and exposure to images, diagrams, or objects, which represent or illustrate a culture value or an idea. Examples include a map of a city, the alien emoji, or a corporate logo. Symbols are important to organizations--they are not accidental, they are planned to communicate what the organizational culture represents. Organizations make use of symbols in a variety of ways.
Employees may communicate using culture-specific language, jargon, or acronyms that can be confusing to a new employee. These terms and usage may be unique to the organization and represent the organizational culture and how it is transmitted to newcomers. The language used to refer to employees reflects underlying values. For example, some organizations have stopped using the term employees in favor of team members.
Learning Objective 14.7: Compare and contrast organizational culture and climate.
Organizational climate has been defined as “shared perceptions of the way things are around here.”
Organizational climate is the level of agreement in perceptions about the organization and work environment among employees. While the analysis of culture relies on understanding of an organization’s fundamental assumptions as discussed in the previous section, climate research is concerned with representing employees’ shared perceptions of values in a static way as states that they experience at a point in time.
Another key distinction between culture and climate is that culture is viewed as evolving over time and is studied from a sociology or anthropology viewpoint. Climate can be altered through management interventions. In sum, the difference between culture and climate is that culture is an evolved context and climate is a situation that employees are in.
Learning Objective 14.7: Compare and contrast organizational culture and climate.
Table 14.3. Dimensions of Organizational Climate.
Table 14.3 shows the dimensions of organizational climate.
Learning Objective 14.7: Compare and contrast organizational culture and climate.
Leaders influence an organization’s ethical climate and employee attitudes. Leader moral development (i.e., the capacity for ethical reasoning) influences ethical climate, employee job satisfaction, and turnover intentions. This effect is stronger for younger organizations. Research suggests the following five aspects of ethical climates:
Caring. “Our major concern is always what is best for the other person.”
Law and Code. “People are expected to comply with the law and professional standards over and above other considerations.”
Rules. “Everyone is expected to stick by company rules and procedures.”
Instrumental. “In this company, people are mostly out for themselves.”
Independence. “Each person in this company decides for themselves what is right and wrong.”
Learning Objective 14.7: Compare and contrast organizational culture and climate.
Diversity climate has been defined as “employees’ shared perceptions of the policies, practices, and procedures that implicitly and explicitly communicate the extent to which fostering and maintaining diversity and eliminating discrimination is a priority in the organization.”
The influence of diversity climate on turnover intentions was studied in a sample of managerial employees in a national retail organization. Positive diversity climates were associated most negatively with turnover intentions among Blacks, followed in order of strength by Hispanics and then Whites.
Leaders need to understand how cultures develop because research has suggested that leaders can influence culture. Leaders can change organization culture through the following processes:
Make strategy and culture important leadership priorities
Develop a clear understanding of the present culture
Identify, communicate, educate, and engage employees in the cultural ideals
Role model desired behaviors
Recruit and develop for culture
Align for consistency between strategy and culture
Recognize and reward desired behaviors and practices
Use symbols, ceremonies, socialization, and stories to reinforce culture
Appoint a culture team
Monitor and manage the culture
