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Organizational culture


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Organizational culture

  1. 1. Organizational CultureContent…  Define organizational culture  Characteristics.  Types of culture  Compare the functional and dysfunctional effects of organizational culture on people and the organization.  Culture Formation  Is culture is uniform?  Importance  Change  Show how culture is transmitted to employee  Creating an Ethical Organizational Culture Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  2. 2. MeaningOrganizational culture—―a system of shared meaning held by members thatdistinguishes the organization from other organizations.‖ An Organizational culture isthe basic pattern of shared assumptions, values, and beliefs considered to be thecorrect way of thinking about and acting on problems and opportunities facing theorganization. DefinitionThe deeper level of basic assumptions and beliefs that are: learned responses to thegroup’s problems of survival in its external environment and its problems of internalintegration:Culture is the social glue that helps hold an organization together by providingappropriate standards for what employees should say or do. According to Deal and Kennedy, a strong culture is. "a system of informal rules thatspells out how people have to behave most of the time".Schein defines organizational culture as the pattern of basic assumptions that a givengroup has invented, discovered and developed while learning to cope with its problemsof external adaptation and internal integration. BASIC ELEMENTS OF CULTURE 1) Artifacts: It is the first level of organizational culture. It is observable symbols and signs of the organizations. It includes visible parts of organization e.g., structures, processes etc. Artifacts are hard to decipher. 2) Values: These are the reasons (e.g., strategies, goals, philosophies) given by an organization for the way things are done. It is the second level of organizational culture. 3) Basic Assumptions: Basic assumptions are the beliefs that are taken for granted by the members of an organization. These are ultimate source of values and action that include: unconscious, perceptions, taken for-granted beliefs, thoughts, feelings etc. It is the third level of organizational culture. Characteristics 1. Innovation and risk taking- The degree of responsibility, freedom and independence that individuals have and employee are encouraged to be aggressive, innovative and risk seeking. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  3. 3. 2. Direction - The degree to which the organization create clear objectives and performance expectation. 3. Management support - The degree to which managers provide clear communication, assistant and support to there subordinates. 4. Control – The number of rules and regulations, and the amount of direct supervision that is used to oversee and control human behaviour. 5. Reward system- The degree to which rewards allocation are based on employee performance criteria in contrast to seniority, favoritism and so on. 6. Integration - The degree to which units within the organization are encouraged to operate in a coordinated manner. 7. Stability-. Job satisfaction seeks to measure affective responses to the work environment, such as how employees feel about the organization’s expectations, reward practices, etc. Types of cultureThere are different types of culture just like there are different types of personality.  Academy Culture (highly skilled and tend to stay in the organization) Eg :universités, hospitals, large corporations, etc.  Baseball Team Culture (Employees are "free agents" who have highly prized skills, high demands) Eg : Investment banking, advertising, etc.  Club Culture (Requirement for employees in this culture is to fit into the group) Eg : Military, some law firms, etc  Fortress Culture (Employees dont know if theyll be laid off or not. These organizations often undergo massive reorganization) Eg : savings and loans, large car companies, etc. Functional effect of culture 1) Controlling behavior - Culture serves as a sense-making and control mechanism that guides and shapes the attitudes and behavior of employees. This last function is of particular interest to us: Culture by definition is elusive, intangible, implicit, and taken for granted. Every organization develops a core set of assumptions, understandings, and implicit rules that govern day-to-day behavior in the workplace. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  4. 4. 2) Defining boundaries- It has a boundary-defining role. It creates distinctions between one organization and others. 3) Conveying identity- . It conveys a sense of identity for organization members. Who receives a job offer to join the organization, who is appraised as a high performer, and who gets the promotion is strongly influenced by the individual- organization ―fit.‖ 4) Promoting commitment - . Culture facilitates commitment to something larger than one’s individual self-interest. Culture as a Liability We are treating culture in a nonjudgmental manner. Culture enhances organizational commitment and increases the consistency of employee behavior, but there are potentially dysfunctional aspects of culture.1 Barrier to change: Culture is a liability when the shared values are not in agreement with those that will further the organization’s effectiveness. This is most likely to occur when an organization’s environment is dynamic. This helps to explain the challenges that executives at companies like Mitsubishi, General Motors, Eastman Kodak, Kellogg, and Boeing have had in recent years in adapting to upheavals in their environment.2. Barrier to diversity: Hiring new employees who, because of race, gender, disability, or other differences, are not like the majority of the organization’s members creates a paradox. Management wants new employees to accept the organization’s core cultural values but, at the same time, they want to support the differences that these employees bring to the workplace. Strong cultures put considerable pressure on employees to conform. They limit the range of values and styles that are acceptable. Organizations seek out and hire diverse individuals because of their alternative strengths, yet these diverse behaviors and strengths are likely to diminish in strong cultures. Strong cultures, therefore, can be liabilities when: Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  5. 5. b. They effectively eliminate the unique strengths that diverse people bring to the organization. b. They support institutional bias or become insensitive to people who are different.3. Barrier to acquisitions and mergers: Historically, the key factors that management looked at in making acquisition/merger decisions: a. Financial advantages b. Product synergy Cultural compatibility has become the primary concern. Whether the acquisition actually works seems to have more to do with how well the two organizations’ cultures match up. Culture Formation An organization’s culture comes from what it has done before and the degree of success it has had. The ultimate source of an organization’s culture is its founders. The founders of an organization traditionally have a major impact on that organization’s early culture: They had the vision; they are unconstrained by previous customs or ideologies. The small size of new organizations facilitates the founders’ imposition of the vision on all organizational members. Culture creation occurs in three ways: First, founders hire and keep only employees who think and feel the way the way they do. Second, they indoctrinate and socialize these employees to their way of thinking and feeling. The founders’ own behavior acts as a role model that encourages employees to identify with them and thereby internalize their beliefs, values, and assumptions. When the organization succeeds, the founders’ entire personality becomesembedded in the culture of the organization.1. There are practices within the organization that act to maintain it by giving employees a set of similar experiences.2. Three forces play a particularly important part in sustaining a culture: selection practices, the actions of top management, and socialization methods. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  6. 6. 3. Selection The explicit goal of the selection process is to identify and hire individuals who have the knowledge, skills, and abilities to perform the jobs within the organization successfully. The final decision as to who is hired will be significantly influenced by the decision maker’s judgment of how well the candidates will fit into the organization. This results in the hiring of people who have values consistent with those of the organization. Additionally, the selection process provides information to applicants about the organization. Selection, therefore, becomes a two-way street. Example—applicants for entry-level positions in brand management at Procter & Gamble (P&G). Each encounter seeks corroborating evidence of the traits that the firm believes correlate highly with ―what counts‖ for success at P&G.4. Top management The actions of top management, what they say and how they behave, establish norms that filter down through the organization as to: a. Risk taking. b. How much freedom managers should give their employees. c. What is appropriate dress. d. What actions will pay off in terms of pay raises, promotions, and other rewards.5. Socialization New employees are not fully indoctrinated in the organization’s culture. They are unfamiliar with the organization’s culture and are potentially likely to disturb the beliefs and customs that are in place. Socialization is the organization helping new employees adapt to its culture. Do Organizations Have Uniform Cultures?1 Individuals with different backgrounds or at different levels in the organization will tend to describe the organization’s culture in similar terms. There can be subcultures. Most large organizations have a dominant culture and numerous sets of subcultures. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  7. 7. An organization’s culture is its dominant culture. This macro view of culture that gives an organization its distinct personality. 4 Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences that members face: Defined by department designations and geographical separation It will include the core values plus additional values unique to members of the subculture. The core values are essentially retained but modified to reflect the subculture.5. If organizations had no dominant culture and were composed only of numerous subcultures, the value of organizational culture as an independent variable would be significantly lessened: It is the ―shared meaning‖ aspect of culture that makes it such a potent device for guiding and shaping behavior. We cannot ignore the reality that many organizations also have subcultures that can influence the behavior of members. ImportanceEffective Control – Culture serves as a control mechanism that shapes behaviors ofemployees. As strong culture seeps through the organization, people register do’s and don’t.When employees do not act in accordance with beliefs and values of the culture, managers andcolleagues are likely to intervene and initiate corrective actions.Promotions of innovation – Innovation and creativity are emerging issues in the domain oforganizational culture. The organizational culture contributes to creativity and innovation by thedevelopment of norms that support such a process.Strategy Formation and implementation – orgaqnisational culture has considerableinfluence on strategy formulation and implementation, particularly on the latter. Cultureprovides inputs to the company to adopt a particular strategy.E.g. Motorola’s culture is built around high investment in R&D, quality & customer care.This culture has bolstered the strategy of the company, providing the impetus for thedevelopment of new products- e.g. lightweight cellular phones and wristwatch pagers.Strong Commitment form Employees – culture provides a sense of identity tomembers and increase their commitment to the organization. When employeesinternalize the values of the company, they find their work intrinsically rewarding andidentify with their fellow workers. Motivation is enhanced , morale boosts.Commitment is said to go through three phases- 1) Compliance- people conform in order to obtain same material benefit. 2) Identification- the demand of culture are accepted in order to maintain the good relationships with colleagues. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  8. 8. 3) Internalization- people find the adoption of the culture values of the organization produces intrinsic satisfaction.Performance & Satisfaction- culture has a performance – enhancement quality for atleast 4 reasons- 1) Strategy implementation is made easy through culture 2) Strong culture is characterized by goal alignment that is employment share common goal. 3) Strong culture creates a high level of motivation 4) Strong culture provides control mechanism without the oppressive effect of bureaucracy. Cultural ChangeFor cultural chance there is Lewin’s Three-Step Change Model. Its include 3 steps.Those are following- Lewin’s Three-Step Change Model 1- Unfreezing: means getting ready for change. Its include following activities-  Arouse dissatisfaction with the current state  Activate and strengthen top management support  Use participation in decision making  Build in rewards 2- Moving: means making the change. Its include following activities-  Establish goals  Institute smaller, acceptable changes that reinforce and support change  Develop management structures for change  Maintain open, two-way communication 3- Refreezing: means stabilizing the change. Its include following steps-  Build success experiences.  Reward desired behaviour  Develop structures to institutionalize the change  Make change work Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  9. 9. Overcoming Resistance to Change- following ways are helpful to overcomingresistance to change-  Education and communication  Participation and involvement  Facilitation and support  Negotiation and agreement How Employees Learn CultureA- Stories1. During the days when Henry Ford II was chairman of the Ford Motor Co., themessage was Henry Ford II ran the company.2. Nordstrom employees are fond of the story when Mr. Nordstrom instructed the clerkto take the tires back and provide a full cash refund. After the customer had received hisrefund and left, the perplexed clerk looked at the boss. ―But, Mr. Nordstrom, we don’tsell tires!,‖ ―I know,‖ replied the boss, ―but we do whatever we need to do to make thecustomer happy.3. Stories such as these typically contain a narrative of events about the organization’s founders, rule breaking, rags-to-riches successes, reductions in the workforce, relocation of employees, reactions to past mistakes, and organizational coping.4. They anchor the present in the past and provide explanations and legitimacy for current practices.- For the most part, these stories develop spontaneously. Some organizations actually try to manage this element of culture learningB- Rituals1. Rituals are repetitive sequences of activities that express and reinforce the key values of the organization, what goals are most important, which people are important, and which are expendable.2. College faculty members undergo a lengthy ritual in their quest for permanent employment—tenure. The astute faculty member will assess early on in the probationary period what attitudes and behaviors his or her colleagues want and will then proceed to give them what they want. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  10. 10. 3. One of the best-known corporate rituals is Wal-Mart’s company chant. W-A-L squiggle M-A- R-T! was Sam Walton’s way to motivate his workforce.C- Material Symbols 1. The headquarters of Alcoa does not look like your typical head office operation:  There are few individual offices.  The informal corporate headquarters conveys to employees that Alcoa values openness, equality, creativity, and flexibility. 2. Some corporations provide their top executives with a variety of expensive perks. Others provide fewer and less elaborate perks.3. The layout of corporate headquarters, the types of automobiles top executives that are given, and the presence or absence of corporate aircraft are a few examples of material symbols.4. These material symbols convey to employees who is important, the degree ofegalitarianism desired by top management, and the kinds of behavior that areappropriate. D- Language1. Many organizations and units use language as a way to identify members of a culture or subculture. By learning this language, members attest to their acceptance of the culture and help to preserve it.2. Organizations, over time, often develop unique terms to describe equipment, offices, key personnel, suppliers, customers, or products that relate to its business.3. New employees are frequently overwhelmed with acronyms and jargon that, after six months on the job, have become fully part of their language.4. Once assimilated, this terminology acts as a common denominator that unitesmembers of a given culture or subculture E- Ceremonies- ceremonies are more formal artifacts than rituals elaborate sets of activities that are enacted time and again on important occasions are known as organizational ceremonies. Ceremonies send a message that individuals who both espouse and exhibit corporate values are heroes to be admired. E.g. publically rewarding employees F- Statement of principles- yet another artifact of culture is the direct statement of principles. Some organizations have explicitly written principles for all to see. Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  11. 11. some companies make explicit the moral aspect of their culture by publishing codes of ethics- specific statement of a company’s ethical values. This enable the newly hired employees to understand the organizational culture. Creating an Ethical Organizational CultureThe content and strength of a culture influences an organization’s ethical climate andthe ethical behavior of its members. An organizational culture most likely to shape highethical standards is one that’s high in risk tolerance, low to moderate in aggressiveness,and focuses on means as well as outcomes. If the culture is strong and supports highethical standards, it should have a very powerful and positive influence on employeebehavior.  Managerial Practices Promoting an Ethical Culture  Being a visible role model- Employees will look to top-management behavior as a benchmark for defining appropriate behavior.  Communicating ethical expectations- Ethical ambiguities can be minimized by creating and disseminating an organizational code of ethics.  Providing ethical training- Use training sessions to reinforce the organization’s standards of conduct; to clarify what practices are and are not permissible; and to address possible ethical dilemmas.  Rewarding ethical acts and punishing unethical ones-. Performance appraisals of managers should include a point-by-point evaluation of how his or her decisions measure against the organization’s code of ethics  Providing protective mechanisms- The organization needs to provide formal mechanisms so that employees can discuss ethical dilemmas and report unethical behavior without fear of reprimand. This might include creation of ethical counselors, ombudsmen, or ethical officers. Text question- 1- Explain the concept of culture? Enumerate the advantages and disadvantages of culture at organizational levels? 2- What is culture? Explain the functions of culture and why it is so important in an organization? 3- What do you mean by Organisational Culture ? Discuss the main characteristics of organizational culture? 4- How does organizational culture create its impact on work place? Suggest measures for developing organizational culture? Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1
  12. 12. 5- Describe the basic elements and levels of organizational culture? Do organization have uniform culture?6- What is cultural change? Process of culture change and how can we effectively change the culture?7- what is the process of creating culture? Prepared by Mrs. Neha Rathi Faculty of KKPIMS 1