This document outlines the key learning objectives and content covered in a chapter on organizational culture. The chapter discusses the definition of organizational culture and how it establishes proper employee behavior. It explains that culture is created by shared beliefs and values communicated by leaders. The chapter also addresses how culture impacts employee perceptions and behavior, and how strong cultures can act as a substitute for formal policies. Additionally, it covers how organizational culture is maintained over time through socialization processes like selection, stories, and rewards. The role of HR in perpetuating culture is also summarized.

1. ORGANIZATIONAL BEHAVIOR

2. © 2003 Prentice Hall Inc. All rights reserved. 18–2
AFTER STUDYING THIS CHAPTER,
YOU SHOULD BE ABLE TO:
1. Describe institutionalization and its
relationship to organizational culture.
2. Define the common characteristics making up
organizational culture.
3. Contrast strong and weak cultures.
4. Identify the functional and dysfunctional
effects of organizational culture on people and
the organization.
5. Explain the factors determining an
organization’s culture.
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AFTER STUDYING THIS CHAPTER,
YOU SHOULD BE ABLE TO:
6. List the factors that maintain an organization’s
culture.
7. Clarify how culture is transmitted to
employees.
8. Outline the various socialization alternatives
available to management.
9. Describe a customer-responsive culture.
10. Identify characteristics of a spiritual culture.
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(cont’d)

4. © 2003 Prentice Hall Inc. All rights reserved. 18–4
Institutionalization: A Forerunner of Culture

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What Is Organizational Culture?
An organization's culture defines the proper way to behave
within the organization. This culture consists of shared beliefs
and values established by leaders and then communicated and
reinforced through various methods, ultimately shaping
employee perceptions, behaviors and understanding.
Organizational culture sets the context for everything an
enterprise does.
Because industries and situations vary significantly, there is not
a one-size-fits-all culture template that meets the needs of all
organizations.

6. © 2003 Prentice Hall Inc. All rights reserved. 18–6
What Is Organizational Culture? (cont’d)

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What Is Organizational Culture? (cont’d)

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What Is Organizational Culture? (cont’d)
 Culture Versus Formalization
– A strong culture increases behavioral consistency and
can act as a substitute for formalization.
 Organizational Culture Versus National Culture
– National culture has a greater impact on employees
than does their organization’s culture.
– Nationals selected to work for foreign companies may
be atypical of the local/native population.

9. Why Culture?
 Culture is the key to a successful organization. It
should be based on a strong and widely shared set of
beliefs that are supported by strategy and structure.
 When an organization has a strong culture, three
things happen:
 1. Employees know how top management wants
them to respond to any situation,
 2. employees believe that the expected response is
the proper one, and
 3. employees know that they will be rewarded for
demonstrating the organization's values.
© 2003 Prentice Hall Inc. All rights reserved. 18–9

10. Role of HR in maintaining culture.
 HR has a vital role in perpetuating a strong culture,
starting with recruiting and selecting applicants who
will share the organization's beliefs and thrive in that
culture.
 HR also develops orientation, training and
performance management programs that outline and
reinforce the organization's core values and ensures
that appropriate rewards and recognition go to
employees who truly embody the values.
© 2003 Prentice Hall Inc. All rights reserved. 18–10

11. Role of HR in maintaining culture continue…
 HR has been described as the "caretaker" of organizational
culture. In carrying out this essential role, all members of the HR
team should help build and manage a strong culture by:
 Being a role model for the organization's beliefs.
 Reinforcing organizational values.
 Ensuring that organizational ethics are defined, understood and
practiced.
 Enabling two-way communications and feedback channels.
 Defining roles, responsibilities and accountabilities.
 Providing continuous learning and training.
 Sustaining reward and recognition systems.
 Encouraging empowerment and teams.
 Promoting a customer-supplier work environment.
 Recognizing and solving individual and organizational problems
and issues.
© 2003 Prentice Hall Inc. All rights reserved. 18–11

12. Characteristics of cultural presence.
© 2003 Prentice Hall Inc. All rights reserved. 18–12
Characteristics:
1. Innovation and risk
taking
2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability
Example of great organizational culture:
https://www.entrepreneur.com/article/2
49174
1. Zappos hires according to cultural fit
first and foremost. This promotes the
culture and happy employees, which
ultimately leads to happy customers.
2. Warby Parker has made company
culture deliberate by creating a
dedicated team tasked with coming
up with events and programs to
promote community. Great company
culture doesn’t happen on its own.

13. Examples of Strong cultures
© 2003 Prentice Hall Inc. All rights reserved. 18–13
3. Southwest Airlines: has managed to communicate its goals and
vision to employees in a way that makes them a part of a unified
team. Southwest also gives employees “permission” to go that extra
mile to make customers happy, empowering them to do what they
need to do to meet that vision.
4. Twitter
Employees of Twitter boast about the company’s culture. Rooftop
meetings, friendly coworkers and a team-oriented environment in
which each person is motivated by the company’s goals have
inspired that praise.
5. Google has been synonymous with culture for years, and sets the
tone for many of the perks and benefits startups are now known for.
Free meals, employee trips and parties, financial bonuses, open
presentations by high-level executives, gyms, a dog-friendly
environment and so on. Googlers are known to be driven,
talented and among the best of the best.

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What Do Cultures Do?
Culture’s Functions:
1. Defines the boundary between one
organization and others.
2. Conveys a sense of identity for its members.
3. Facilitates the generation of commitment to
something larger than self-interest.
4. Enhances the stability of the social system.

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What Do Cultures Do?
Culture as a Liability:
1. Barrier to change
2. Barrier to diversity
3. Barrier to acquisitions and
mergers

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Keeping Culture Alive
 Selection
– Concerned with how well the candidates will fit into the
organization.
– Provides information to candidates about the
organization.
 Top Management
– Senior executives help establish behavioral norms that
are adopted by the organization.
 Socialization
– The process that helps new employees adapt to the
organization’s culture.

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Stages in the Socialization Process

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A Socialization Model
E X H I B I T 18-2

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Entry Socialization Options
• Formal versus Informal
• Individual versus Collective
• Fixed versus Variable
• Serial versus Random
• Investiture versus Divestiture
Read more about it on:
https://www.citeman.com/4543-entry-socialization-
options.html
E X H I B I T 18-3

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How Organization Cultures Form
E X H I B I T 18-4

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How Employees Learn Culture
• Stories
• Rituals
• Material Symbols
• Language

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Creating An Ethical Organizational Culture
 Characteristics of Organizations that Develop
High Ethical Standards
– High tolerance for risk
– Low to moderate in aggressiveness
– Focus on means as well as outcomes
 Managerial Practices Promoting an Ethical
Culture
– Being a visible role model.
– Communicating ethical expectations.
– Providing ethical training.
– Visibly rewarding ethical acts and punishing unethical
ones.

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Creating a Customer-Responsive Culture
 Key Variables Shaping Customer-Responsive
Cultures
1. The types of employees hired by the organization.
2. Low formalization: the freedom to meet customer
service requirements.
3. Empowering employees with decision-making
discretion to please the customer.
4. Good listening skills to understand customer
messages.
5. Role clarity that allows service employees to act as
“boundary spanners.”
6. Employees who engage in organizational citizenship
behaviors.

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Creating a Customer-Responsive Culture
Managerial Actions:
• Select new employees with personality and
attitudes consistent with high service
orientation.
• Train and socialize current employees to be
more customer focused.
• Change organizational structure to give
employees more control.
• Empower employees to make decision about
their jobs.

25. © 2003 Prentice Hall Inc. All rights reserved. 18–25
Creating a Customer-Responsive Culture
Managerial Actions (cont’d) :
• Lead by conveying a customer-focused vision
and demonstrating commitment to customers.
• Conduct performance appraisals based on
customer-focused employee behaviors.
• Provide ongoing recognition for employees who
make special efforts to please customers.

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Spirituality and Organizational Culture
Characteristics:
• Strong sense of
purpose
• Focus on individual
development
• Trust and openness
• Employee
empowerment
• Toleration of employee
expression

27. © 2003 Prentice Hall Inc. All rights reserved. 18–27
How Organizational Cultures Have an Impact
on Performance and Satisfaction
E X H I B I T 18-7