Organizational Culture


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Organizational Culture

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Organizational Culture

  1. 1. Organizational Culture Basically, organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors. Members of an organization soon come to sense the particular culture of an organization. Culture is one of those terms that are difficult to express distinctly, but everyone knows it when they sense it. For example, the culture of a large, for-profit corporation is quite different than that of a hospital which is quite different than that of a university. You can tell the culture of an organization by looking at the arrangement of furniture, what they brag about, what members wear, etc. -- similar to what you can use to get a feeling about someone's personality. Corporate culture can be looked at as a system. Inputs include feedback from, e.g., society, professions, laws, stories, heroes, values on competition or service, etc. The process is based on our assumptions, values and norms, e.g., our values on money, time, facilities, space and people. Outputs or effects of our culture are, e.g., organizational behaviors, technologies, strategies, image, products, services, appearance, etc. The concept of culture is particularly important when attempting to manage organization-wide change. Practitioners are coming to realize that, despite the best-laid plans, organizational change must include not only changing structures and processes, but also changing the corporate culture as well. There's been a great deal of literature generated over the past decade about the concept of organizational culture -- particularly in regard to learning how to change organizational culture. Organizational change efforts are rumored to fail the vast majority of the time. Usually, this failure is credited to lack of understanding about the strong role of culture and the role it plays in organizations. That's one of the reasons that many strategic planners now place as much emphasis on identifying strategic values as they do mission and vision. Some Types of Culture There are different types of culture just like there are different types of personality. Researcher Jeffrey Sonnenfeld identified the following four types of cultures. Academy Culture Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The organization provides a stable environment in which employees can development and exercises their skills. Examples are universities, hospitals, large corporations, etc. Baseball Team Culture Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as investment banking, advertising, etc.
  2. 2. Club Culture The most important requirement for employees in this culture is to fit into the group. Usually employees start at the bottom and stay with the organization. The organization promotes from within and highly values seniority. Examples are the military, some law firms, etc. Fortress Culture Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc. Organizational climate As per Moran and Volkwein (1992), Organizational Climate is defined as "a relatively enduring characteristic of an organization which distinguishes it from other organization, hence, (a) embodies members' collective perceptions about their organization with respect to such dimensions as autonomy, trust, cohesiveness, support, recognition, innovation and fairness; (b) produced by member interaction; (c) serves as a basis for interpreting the situation; (d) reflects the prevalent norms and attitudes of the organization's culture; and (e) acts as a source of influence for shaping behavior." The organizational climate facilitates the firm to identify the deficiencies in connection with different organizational factors, such as organizational structure, employee compensation system, communication level, physical atmosphere, organizational culture, etc. It is the apparent trait of a firm and its sub-systems as replicated in the mode in which an organization deals with its associates, team members and organizational problems. It is comparatively enduring excellence of the in-house atmosphere that is experienced by its employees which influences their performance and can be described in terms of the values of a specific set of behaviors in the firm. Comparison between culture and climate We can compare organizational culture and climate to personality and mood. The former is enduring; the latter is temporary. We acquire our basic personalities early in life, but our moods can shift several times in one day. Organizational culture is not quite as fixed as personality, however, so the analogy is not perfect. It is hard to change an organization's culture but not as difficult as changing your personality. Also, organizational climate can last so long it becomes indistinguishable from culture, like being in a bad mood for months on end. Generally, however, climate is easier to change. During an economic downturn, people are worried about their jobs, then suddenly a big order comes in and everyone breathes a sigh of relief, so the climate improves.
  3. 3. Understanding Organizational Climate Typical climates correspond to human feelings or moods: excitement, depression, anger, fear, optimism or anxiety. Like human mood, an organization's climate can be caused by internal and external factors. If the CEO or other prominent leaders are in a certain mood, they can infect the entire organization. Leaders whose moods are highly variable could lead teams with wildly fluctuating climates. Just as most people won't be in the same mood all the time, we can't expect an organization's climate to be unchanging. Shifting emotions are a good thing as it makes the organization seem more human. It would feel like being part of a machine if the climate of your workplace never altered. An emotionally variable climate is, like a similarly expressive person, more open, transparent and understandable. We feel comfortable when we can read another person's feeling. The same applies to our workplace. It's unhealthy to suppress emotion in organizations or people. Understanding Organizational Culture Just as top executives can influence climate, they can also set the tone for the culture. If the CEO is an entrepreneur, the culture will be one that makes fast decisions, takes risks and likes to innovate. Apple Computers would be a good example of an entrepreneurial culture. Insurance companies and banks tend to have very different cultures, dominated by avoidance of risk. Such processing cultures need elaborate rules to ensure consistency and efficiency. An engineering culture like aircraft manufacturers or phone companies, value technical competence and high quality. Then there are marketing cultures that are very sales oriented. They tend to be populated by dynamic, lively, outgoing people. Scientific cultures are common in medical or drug manufacturing companies where there is an insistence on pure research to back up new proposals. It is not this simple, of course. Cultures can vary a great deal within a particular industry. Organizations might have a culture of blame, fun, hard work, equality, career development, environmental consciousness or any other personality trait. Factors to achieve the desired organizational culture and climate: 1. A far-reaching reason that both excites and captures the imagination of individuals. A vision is the idealistic future of the organization that can renew or transform an organization. Individuals need to find meaning in their work. They need something to which they can commit a challenge worthy of their best effort. 2. A set of values in alignment with the vision that proclaim the organization beliefs. Values are the abstract ideas that influence the thinking and actions in the Organization and can also shape assumptions about the future and the range of choices to be considered. 3. Accountabilities for both performance and behaviors along with consequences when standards of performance and behaviors are not met. The most difficult decision a leader faces is firing individuals who achieve their performance objectives.
  4. 4. 4. High performing teams that work interdependently and put the needs of the organization before their personal needs. These teams have a common sense of purpose encourage out-of-the box thinking; build synergies; and work effectively across organizational boundaries. 5. Value-added communication to establish the tenor/tone/energy of the organization. Communication is timely, informative and widely shared with all stakeholders. 6. Rewards/Recognition- both extrinsic rewards and intrinsic acknowledgement for quality performance and behavioral integrity. 7. A “stake” in the organization – everyone gains or losses on the ability of the organization achieve its goals, internal competition among departments and functions is destructive and dysfunctional. The end result is duplication of efforts; distrust, and missed opportunities. 8. A new vocabulary in the organization helps support the climate. Key words, phrases, mottos, etc. are important. 9. Intellectual capital is vital. On-going talent development, retention and promoting from within are potent messages of the organization’s culture. 10. Chang management protocols in place for the next change(s) to support the organization’s abilities to anticipate and move quickly to take advantage of market conditions. 11. A “public relations” campaign specific to the change initiatives can contribute to building a critical mass of supporters to the change. Change needs to be a topic for discussion throughout the organization. There is no such thing as over- communication during any major change initiative. 12. Organizational alignment makes the difference in measuring the successful implementation of change. A change in any area of the organization shifts all other parts of the organization shifts all other parts of the organization. Misalignment can be costly in terms of duplication of efforts, lost customers, interdepartmental conflicts, etc. 13. Results-driven environments with everyone performing at their best. Goals are clear and individual’s talents are tapped. There is an atmosphere of energy, collaboration and joy. Submitted by:
  5. 5. Dewasish Ghoshal PGDM(A) NAARM, Hyderabad