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Bm 09 organizational_culture

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OrganizationalCulture 
Prof.dr.dr.dr.h.c. Constantin Bratianu 
Faculty of Business Administration 
Academy of Economic Studies
Learning objectives 
To understandthe concept of organizationalcultureand its implications in management 
To explain the correlation between organizational culture and business excellence 
To explain the correlation between organizational culture and cultural values of people 
To understand the main dimensions of organizational culture
Definition 
Organizational culture (OC)is an integrated set of values, beliefs, norms, symbols and traditions specific to a given organization. 
OC is a system of shared meanings and values within an organization that determines, to a large degree, how employees act and work. 
OC is a historical and sociological result of living and working together of many people, for a longer period of time. 
They had to accept one each other and to share together same company cultural values.
Key aspect 
Perhaps the most intriguing aspect of culture as a concept is that it points us to phenomena that are below the surface, that are powerful in their impact but invisible and to a considerable degree unconscious. 
Culture is to a group what personality or character is to an individual 
(Edgar Schein, Organizational culture and leadership)
Components of OC 
Values.Deeply held ideas of members about what is right or wrong, fair or unfair –anything that has personal worth or meaning. They operate through written regulations and unwritten norms. 
Beliefs.The assumptions that employees hold about the organization and life within it. 
Practices. These represent the surface level of culture-the visible elements such as language, etiquette, form of greeting and clothing. 
Customs.These are the accepted modes or norms of behaviour within the organization, reflecting its values, beliefs and traditions.
Corporate Values 
Since organizational values can powerfully influence what people actually do, we think that values ought to be a matter of great concern to managers. 
Shaping and enhancing values can become the most important job a manager can do. 
(Deal & Kennedy, Corporate cultures)

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Bm 09 organizational_culture

  • 1. OrganizationalCulture Prof.dr.dr.dr.h.c. Constantin Bratianu Faculty of Business Administration Academy of Economic Studies
  • 2. Learning objectives To understandthe concept of organizationalcultureand its implications in management To explain the correlation between organizational culture and business excellence To explain the correlation between organizational culture and cultural values of people To understand the main dimensions of organizational culture
  • 3. Definition Organizational culture (OC)is an integrated set of values, beliefs, norms, symbols and traditions specific to a given organization. OC is a system of shared meanings and values within an organization that determines, to a large degree, how employees act and work. OC is a historical and sociological result of living and working together of many people, for a longer period of time. They had to accept one each other and to share together same company cultural values.
  • 4. Key aspect Perhaps the most intriguing aspect of culture as a concept is that it points us to phenomena that are below the surface, that are powerful in their impact but invisible and to a considerable degree unconscious. Culture is to a group what personality or character is to an individual (Edgar Schein, Organizational culture and leadership)
  • 5. Components of OC Values.Deeply held ideas of members about what is right or wrong, fair or unfair –anything that has personal worth or meaning. They operate through written regulations and unwritten norms. Beliefs.The assumptions that employees hold about the organization and life within it. Practices. These represent the surface level of culture-the visible elements such as language, etiquette, form of greeting and clothing. Customs.These are the accepted modes or norms of behaviour within the organization, reflecting its values, beliefs and traditions.
  • 6. Corporate Values Since organizational values can powerfully influence what people actually do, we think that values ought to be a matter of great concern to managers. Shaping and enhancing values can become the most important job a manager can do. (Deal & Kennedy, Corporate cultures)
  • 7. Roots of OC OC usually reflects the vision or mission of the organization’s founders. The founders establish the early culture by projecting an image of what the organization should be. The small size of almost all new firms helps founders to impose their vision and will on all employees. IBM founder Thomas Watson established a culture based on pursuing excellence, providing the best customer service and respect for all employees.
  • 8. Role of founders Bill Gates and Paul Allen –founders of Microsoft (1976). Bill Gates had the vision and set the expectations for Microsoft to be a winning company. Its core values include an “us-vs.-them” mentality, a fierce competitiveness, an ethic of hard work, and a strong bonding of co-workers. One former employee: “By the time I was in my 20s, Microsoft was my whole identity”
  • 9. Coca-Cola Company (I) Everything we do is inspired by our enduring mission: To refresh the world…in body, mind, and spirit. To inspire moments of optimism…through our brands and our actions. To create value and make a difference…everywhere we engage.
  • 10. Coca-Cola Company (II) Values: Leadership: The courage to shape a better future. Passion: Committed in heart and mind. Integrity: Be real. Accountability: If it is to be, it’s up to me. Collaboration: Leverage collective genius. Innovation: Seek, imagine, create, delight. Quality: What we do, we do well.
  • 11. Organizational culture vs. Organizational climate Organizational cultureand Organizational climateare two similar concepts with overlapping meanings Both reflect the overall work atmosphere of an organization. Organization cultureresearch is based on anthropology and sociology (values, beliefs, traditions) Organizational climateresearch is based on psychology. It refers to current situations in the organization and the linkages among work groups. It is correlated to work performances.
  • 12. Characteristicsof organization culture (I) 1.Member identity. The degree to which employees identify with the organization as a whole rather than with their type of job or field of professional expertise. 2.Group emphasis. The degree to which work activities are organized around groups rather than individuals. 3.People focus. The degree to which management decisions take into consideration the effect of outcomes on people within the organization. 4.Unit integration. The degree to which units within the organization are encouraged to operate in coordinated or interdependent manner.
  • 13. Characteristicsof organization culture (II) 5.Control. The degree to which rules, regulations, and direct supervision are encouraged to operate in a coordinated or interdependent manner. 6.Risk tolerance. The degree to which employees are encouraged to be aggressive, innovative, and risk taking. 7.Reward criteria. The degree to which rewards are allocated on employee performance criteria 8.Conflict tolerance. The degree to which employees are encouraged to accept conflicts and criticisms openly. 9.Means-end orientation. The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes.
  • 14. Creating OC Step 1-Formulate strategic values Strategic values are the basic beliefs about an organization’s environment that shape its strategy Step 2-Develop cultural values Cultural values are those values that employees need to have and act on for the organization to implement its strategic values.
  • 15. Creating OC Step 3-Create vision The organization must establish a vision at its direction. This vision is a picture of what the organization will be like at some point in the future Step 4-Initiate implementation strategies The strategies cover many aspects, from developing the organization design to recruiting and training employees who share the same values Step 5-Reinforce cultural behaviour Reinforcement through the motivation (rewarding and punishment)
  • 16. Types of OC(Quinn et al. 2003) Internal External Control Flexibility Open systems Human relations Internal process Rational goal
  • 17. Types of OC(Charles Handy 1993) Power culture.People’s activities are strongly influenced by a dominant central figure. Role culture.People’s activities are strongly influenced by clear and detailed job descriptions. Task culture.The focus of activity is towards completing a task or project using whatever means are appropriate. Person culture.Activities are strongly influenced by the wishes of the individuals who are part of the organization.
  • 18. In search of excellencePeters and waterman (1982) “Our strong belief was that the excellent companies had gotten to be the way they are because of a unique set of cultural attributes that distinguish them from the rest”
  • 19. Attributes of an excellent firmPeters and Waterman 1.Oriented toward action 2.Stay close to the customer 3.Autonomy and entrepreneurship 4.Productivity through people 5.Hands-on management 6.Stick to the knitting 7.Simple form, lean staff 8.Simultaneously loose and tight organization
  • 20. ConclusionsPeters and Waterman 1. The excellent companies seem to have develop cultures that have incorporated the values and practicesof the great leaders and thus those shared values can be seen to survive for decades after the passing of the original guru. 2. It appears that the real role of the chief executive is to manage the valuesof the organization.