Organizational culture refers to the shared values, assumptions, and behaviors that define an organization. There are three levels of organizational culture - artifacts, espoused values, and basic underlying assumptions. A strong organizational culture provides members with identity and commitment, helps the organization make sense of things, and shapes member behavior through control and reinforcement of values. Managing organizational culture involves paying attention to what leaders emphasize, how they react to crises, how they behave, how they allocate rewards, and how they hire and fire people. Socializing new members is important for transmitting an organization's core values through role models, training, and rewarding certain behaviors.

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Organizational (Corporate)Organizational (Corporate)
CultureCulture
Organizational (Corporate) Culture -Organizational (Corporate) Culture -
a pattern of basic assumptions that
are considered valid and that are
taught to new members as
the way to perceive,
think, and feel in
the organization

2. Levels ofLevels of
OrganizationalOrganizational
CultureCulture
Artifacts - ssymbols of
culture in the physical
and social work environment
Values
Espoused: what members of
an organization say they value
Enacted: reflected in the way
individuals actually behave
Assumptions - deeply held
beliefs that guide behavior and tell
members of an organization how
to perceive and think about things Copyright ©2009
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3. Organizational
Culture Levels
Visible, often not
decipherable
Greater level
of awareness
Taken for granted
Invisible Preconscious
Reprinted with permission from Edgar H. Schein,
Organizational Culture and Leadership: A Dynamic View.
Copyright © 1985 Jossey-Bass
Inc, a subsidiary of John Wiley & Sons, Inc.
Artifacts
•Personal enactment
•Ceremonies and rites
•Stories
•Ritual
•Symbols
Values
•Testable in the physical
environment
•Testable only by social consensus
Basic Assumptions
•Relationship to environment
•Nature of reality, time, and space
•Nature of human nature
•Nature of human activity
•Nature of human relationships
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Functions of Organizational CultureFunctions of Organizational Culture
• Culture provides a sense of identity to
members and increases their
commitment to the organization
• Culture is a sense-making device
for organization members
• Culture reinforces the values
in the organization
• Culture serves as a control
mechanism for shaping
behavior

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AdaptiveAdaptive
PerspectivePerspective
StrongStrong
CultureCulture
PerspectivePerspective
FitFit
PerspectivePerspective
Theories about theTheories about the
relationship betweenrelationship between
organizational cultureorganizational culture
and performanceand performance

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An organizational culture with a
consensus on the values that
drive the company and with an
intensity that is recognizable
even to outsiders
Strong cultures facilitate performance because
• They are characterized by goal alignment
• They create a high level of motivation because
of shared values by the members
• They provide control without the oppressive
effects of bureaucracy
StrongStrong
CultureCulture
PerspectivePerspective

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Argument that a culture is
good only if it fits the industry’s
or the firm’s strategy.
Organizational characteristics that may affect culture
• Customer requirements
• Competitive environment
• Societal expectations
FitFit
PerspectivePerspective
Useful to explain short term but not long term performance
Indicates the difficulty of changing culture quickly but doesn’t
explain how firms can adapt to environmental change.

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An organizational culture that
encourages confidence and
risk taking among employees,
has leadership that produces
change, and focuses on the
changing needs of customers
Adaptive Nonadaptive
Most managers care
about themselves,
their work group, or
an associated product
Most managers care
about customers,
stockholders, and
employees
Managers tend to
behave somewhat
politically, and
bureaucratically
Managers pay close
attention to all
their constituencies,
esp. customers
Core
Values
Common
Behavior
Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Corporate Culture and Performance by
John P. Kotter and James L Heskett. Copyright © 1992 by Kotter Associates, Inc. and James L. Heskett.
AdaptiveAdaptive
PerspectivePerspective

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Five Most Important ElementsFive Most Important Elements
in Managing Culturein Managing Culture
• What leaders pay attention to
• How leaders react to crises
• How leaders behave
• How leaders allocate rewards
• How leaders hire and fire individuals

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Organizational SocializationOrganizational Socialization
Organizational socialization -Organizational socialization - the
process by which newcomers
are transformed from outsiders
to participating, effective
members of the organization

11. StagesStages ofof
SocializationSocialization
Realism Congruence1. Anticipatory
Socialization
2. Encounter
Job demands
•Task
•Role
•Interpersonal
3. Change and
Acquisition
Mastery
Performance
Satisfaction
Mutual influence
Low levels of distress
Intent to remain
From “An Ethical Weather Repart: Assessing the Organization's Ethical Climate” by John B. Cullen, et al. In Organizational Dynamics, Autumn 1989. Copyright
© 1989 American Management Association International. Reprinted by permission of American Management Association International, New York, N.Y. All rights
reserved. Http://www.amanet. Org.
Outcomes of Socialization
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2. Encounter -2. Encounter - the newcomer learns the tasks
associated with the job, clarifies roles, and
establishes new relationships at work
3. Change & Acquisition -3. Change & Acquisition - the newcomer
begins to master the demands of the job
1. Anticipatory Socialization –1. Anticipatory Socialization – encompasses
all of the learning that takes place prior to the
newcomer’s first day on the job
The Three Stages of SocializationThe Three Stages of Socialization

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SocializationSocialization asas
CulturalCultural CommunicationCommunication
Core values are transmitted to new organization
members through
– the role models they interact with
– the training they receive
– the behavior they observe being rewarded
and punished

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AssessingAssessing OrganizationalOrganizational CultureCulture
• Organizational Culture Inventory focuses on
behaviors that help employees fit into the
organization & meet coworker expectations
• Kilman-Saxton Culture-Gap Survey focuses on
the expectations of others in the organization
• Triangulation -Triangulation - the use of multiple methods to
measure organizational culture

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SituationsSituations ThatThat MayMay RequireRequire
CulturalCultural ChangesChanges
ReasonsReasons ThatThat ChangeChange IsIs DifficultDifficult
• Assumptions are often unconscious
• Culture is deeply ingrained and
behavioral norms and rewards are well
learned
• Merger or acquisition
• Employment of people from different
countries

16. Reprinted with permission from Vijay Sathe “How to Decipher & Change Corporate Culture,” Copyright ©
1985 Jossey-Bass Inc, Reprinted by permission Of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc..
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Culture
Cultural
communication
2
1
5
3
4
Interventions for
Changing
Organizational
Culture
Removing
members who
reject the
new culture
Hiring and
socializing
members who
fit in with the
new culture
Changing
behavior
Examining
justifications
for changed
behavior
Managers seeking to create change must intervene at these points

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CulturalCultural ModificationsModifications inin thethe
CurrentCurrent BusinessBusiness EnvironmentEnvironment
Support for a global
view of business
Reinforcement of
ethical behavior
Empowerment of
employees to excel
in product and
service quality
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SupportSupport forfor aa GlobalGlobal
ViewView ofof BusinessBusiness
• Create a clear and simple
mission statement
• Create systems that ensure
effective information flow
• Create “matrix minds” among managers
• Develop global career paths
• Use cultural differences as major assets
• Implement worldwide management
education and team development programs
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• Clear communication of the
boundaries of ethical conduct
• Selection of employees who support the
ethical culture
• Reward of ethical behavior
• Conspicuous punishment of members
who engage in unethical behavior
ReinforcementReinforcement ofof
EthicalEthical BehaviorBehavior
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• Empowerment unleashes
employees’ creativity
• Empowerment requires eliminating
traditional hierarchical notions of power
– Involve employees in decision making
– Remove obstacles to their performance
– Communicate the value of product and
service quality
EmpowermentEmpowerment ofof EmployeesEmployees
to Excel in Product andto Excel in Product and
Service QualityService Quality
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