1. MANAGING ORGANIZATIONS
Session 9: Organization Culture
Sourav Mukherji
PGP 2012-14 Section C & E
Associate Professor of Organization & Strategy
Term 1:June-September 2012 Indian Institute of Management Bangalore, India

2. 2
REFLECTIONS AFTER READING THE CASE ON GOOGLE
 What was Google trying to achieve through its culture?
 What were some of the positive impacts of its unique culture?
 What were the key problems? Why do you think these problems
were arising?
 Should Google change its culture ? In what way ?
© S Mukherji

3. 3
DEFINING AND UNDERSTANDING CULTURE
A pattern of basic assumptions, invented, discovered and developed by a
group as it learns to cope with its problems of external adaptation and
internal integration – that has worked well enough in the past 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
Implicit rules of engagement and interaction that are not formalized.
Has a distinct social as well as an instrumental dimension.
Inspires employees to perform beyond what can be controlled or monitored.
Commitment beyond compliance.
Promotes collaboration by creating a collective identity and belongingness.
Controls thoughts and actions in order to align individual efforts towards collective goal.
© S Mukherji

4. ORGANIZATION CULTURE NEEDS TO BE VIEWED 4
AT MULTIPLE LEVELS
Artifacts & Creations Physical & social environment
Technology Visible but often not decipherable
Art V
Visible & audible Easy to obtain, difficult to interpret
Behavioral patterns
Values V Greater level of awareness
• espoused values
Basic Assumptions
Relationship to environment Taken for granted
V • invisible
Nature of reality
Time & Space
• preconscious
Nature of human beings
Nature of human activities
Nature of human relationships
© S Mukherji

5. 5
BASIC ASSUMPTION: ILLUSTRATIONS
Cultural Approaches A B C
What is the character Human beings Mixture of good Human beings are good
of human nature ? are evil and evil by nature
What is the relationship of Human beings are In harmony with Human beings
human beings to nature ? subject to nature nature dominate nature
What is the temporal focus To the past To the present To the future
of life ?
What is the modality of A spontaneous Emphasizes Emphasizes
human activities? expression in impulse development of all measurability of all
and desires aspects of self accomplishments
What is the relationship of Lineal – group goals Collateral – group Individual – individual
human beings with one are primary and an goals are primary. goals are most
another ? important goal is Continuity through important
continuity through time not critical
time
© S Mukherji

6. 6
MEANS OF SUSTAINING AND COMMUNICATING ORG. CULTURE
Three dominant methods of Other implicit ways of communicating
building and sustaining culture organizational culture
• Selection • Stories
- does the candidate ‘fit’ well - narrative of events about
into the organization founders, key decisions
- similarity in values - anchor the present in the past
- is there any need to change - explanations of current practices
• Action of senior management • Rituals
- establish norms of behaviour - recognition and award ceremonies
- what actions are appreciated - events that symbolically express
fetches payoff in the long run and reinforce key values of the
• Socialization organization
- orientation of new employees • Material symbols
- ‘boot camp’ - design and physical layout of space and
- continues right throughout building
the career - executive perquisites
• Language
- jargons as a mark of distinction
- members attest the culture by
acceptance
© S Mukherji

7. CULTURAL TRADEOFFS BETWEEN 7
SOCIALIBILITY AND SOLIDARITY
Employees have high corporate
Rituals, ceremonies. identity. Equitable sharing of risk
Informal dominates and rewards. Cultural and market
Concern for consensus based controls.
Cliques, groupthink Ideal state, difficult to attain in
commercial organizations
Sociability :
Friendliness,
Non-instrumental NETWORKED COMMUNAL
Common attitudes,
interests
Builds over time
Focus on business objectives
FRAGMENTED MERCENARY Demarcation between private
and professional
Low tolerance of failure
Low identification with Cooperation and sharing
organization, colleagues. does not happen easily
Task is individualistic, Bureaucratic controls
Low interdependence
Market based controls Solidarity :Common objective, instrumental
© S Mukherji

8. 8
CULTURE IN MULTINATIONAL ENTERPRISE
Multinationality as a State of Mind
Ethnocentric
Home Country /
Parent Focus
Geocentric
Polycentric
Host Country /
Subsidiary Focus
Source: The Tortuous Evolution of the Multinational Corporation, H V Perlmutter © S Mukherji

9. 9
CULTURE IN MULTINATIONAL ENTERPRISE
Multinationality as a State of Mind
• Assume inherent superiority
Ethnocentric of the parent organization
Home Country / • Simple products to be manufactured
Parent Focus abroad, complex products can only
be made in home country
• Home country processes ,
measurement criteria are applied to
Geocentric all subsidiaries under the assumption
that home country has ‘best
practices’
• Employees from home country
Polycentric occupy key positions
Host Country /
Subsidiary Focus
Source: The Tortuous Evolution of the Multinational Corporation, H V Perlmutter © S Mukherji

10. 10
CULTURE IN MULTINATIONAL ENTERPRISE
Multinationality as a State of Mind
Ethnocentric • Local country conditions are different
and foreigners are difficult to
Home Country /
understand
Parent Focus • Loosely connected group with quasi
independent subsidiaries controlled
by financial control systems
Geocentric • Practices, performance standards,
incentives, training methods vary
according to local needs
• Employees of local nationality for key
local positions - local ethnocentricism
Polycentric
Host Country /
Subsidiary Focus
Source: The Tortuous Evolution of the Multinational Corporation, H V Perlmutter © S Mukherji

11. 11
CULTURE IN MULTINATIONAL ENTERPRISE
Multinationality as a State of Mind
• Seek the best employees to solve
Ethnocentric organizational problems, irrespective
Home Country / of their nationality
Parent Focus • Balance between global and local
objectives – neither a satellite, nor an
independent national entity
• Which place in the world is the best
Geocentric place to do a particular activity, such
as raising capital, manufacturing or
doing research ?
• Reward system that motivates
Polycentric employees to work for global objectives
Host Country /
Subsidiary Focus
Source: The Tortuous Evolution of the Multinational Corporation, H V Perlmutter © S Mukherji