1. Organizational Culture
Chapter 16 Organizational Behavior: Foundations, Realities, & Challenges Nelson & Quick, 5th edition
Organizational Culture

2. 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

3. Levels of Organizational Culture
Artifacts – symbols 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
Levels of Organizational Culture
Assumptions – deeply held
beliefs that guide behavior and tell
members of an organization how
to perceive and think about things
Copyright ©2006
by South-Western, a division of Thomson Learning.
All rights reserved

4. Organizational Culture Levels Visible, often not decipherable
Artifacts
Personal enactment
Ceremonies and rites
Stories
Ritual
Symbols
Visible, often not
decipherable
Values
Testable in the physical
environment
Testable only by social consensus
Greater level
of awareness
Basic Assumptions
Relationship to environment
Nature of reality, time, and space
Nature of human nature
Nature of human activity
Nature of human relationships
Taken for granted
Invisible Preconscious
Copyright ©2006
by South-Western, a division of Thomson Learning.
All rights reserved
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. 3

5. Functions 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

6. organizational culture and performance
Theories about the
relationship between
organizational culture
and performance
Strong
Culture
Perspective
Fit
Perspective
Adaptive
Perspective

7. Strong Culture Perspective
An organizational culture with a consensus on the values that drive the company and with an intensity that is recognizable even to outsiders
Strong
Culture
Perspective
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

8. Argument that a culture is good only if it fits the industry’s or the firm’s strategy.
Perspective
Organizational characteristics that
may affect culture
Customer requirements
Competitive environment
Societal expectations

9. 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
Perspective
Adaptive
Nonadaptive
Most managers care
about customers,
stockholders, and
employees
Most managers care
about themselves,
their work group, or
an associated product
Core
Values
Managers pay close
attention to all
their constituencies,
esp. customers
Managers tend to
behave somewhat
insularly, politically,
and bureaucratically
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.

10. Five Most Important Elements in 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

11. Organizational Socialization
The process by which newcomers are transformed from outsiders to participating, effective members of the organization

12. Socialization as Cultural Communication
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

13. Situations That May Require Cultural Changes
Merger or acquisition
Employment of people from different countries
Reasons That Change Is Difficult
Assumptions are often unconscious
Culture is deeply ingrained and behavioral norms and rewards are well learned

14. Cultural Modifications in the Current Business Environment
Empowerment of
employees to excel
in product and
service quality
Support for a global
view of business
Reinforcement of
ethical behavior

15. Support for a global view of business
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

16. Reinforcement of ethical behavior
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

17. Empowerment of employees to excel in product and service quality
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