1. Organizational Culture
Chapter 16
Organizational Culture

2. Learning Objectives
Define organizational culture and describe its common characteristics.
Compare the functional and dysfunctional effects of organizational culture on people and the organization.
Identify the factors that create and sustain an organization’s culture.
Show how culture is transmitted to employees.
Demonstrate how an ethical culture can be created.
Describe a positive organizational culture.
Identify characteristics of a spiritual culture.
Show how national culture may affect the way organizational culture is transported to a different country.

3. What is Organizational Culture?
A common perception held by the organization’s members; a system of shared meaning

4. What is Organizational Culture?
Organizational Culture Primary Characteristics
Innovation and risk taking
Attention to detail
Outcome orientation
People orientation
Team orientation
Aggressiveness
Stability

5. What is Organizational Culture?
Culture is A Descriptive Term
It may act as a substitute for formalization
Do Organizations Have Uniform Cultures?
Dominant Culture (Core Values)
Subcultures

6. What is Organizational Culture?
Strong versus Weak Cultures
What is strong culture?
What is weak culture?
Culture versus Formalization
What is culture?
What is Formalization?

7. What Do Cultures Do? Culture’s Functions
Defines the boundary between one organization and others
Conveys a sense of identity for its members
Facilitates the generation of commitment to something larger than self-interest
Enhances the stability of the social system
Serves as a sense-making and control mechanism for fitting employees in the organization

8. Culture Create Climate Organizational Climate
What Do Cultures Do?
Culture Create Climate
Organizational Climate
The shared perceptions organizational members have about their organization and work environment.

9. Institutionalization Barrier to acquisitions and mergers
What Do Cultures Do?
Culture as A Liability
Institutionalization
Barrier to change
Barrier to diversity
Barrier to acquisitions and mergers

10. Creating and Sustaining Culture
How Culture Begins?
Culture stems from the actions of the founders
Founders hire and keep only employees who think and feel the same way they do
Founders indoctrinate and socialize these employees to their way of thinking and feeling
The founders’ own behavior acts as a role model

11. Creating and Sustaining Culture
Keeping Culture Alive
Selection
Top Management
Socialization

12. Creating and Sustaining Culture
Choose the appropriate alternatives for socialization
Formal versus Informal
Individual versus Collective
Fixed versus Variable
Serial versus Random
Investiture versus Divestiture
Socialization outcomes
Higher productivity
Greater commitment
Lower turnover

13. Creating and Sustaining Culture
Summary: How Cultures Form?
Organizational cultures are derived from the founder
They are sustained through managerial action

14. How Employees Learn Culture
Stories
Rituals
Material Symbols
Language

15. 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
Rewarding ethical acts and punishing unethical ones
Providing protective mechanisms

16. Creating a Positive Organizational Culture
Builds on employee strengths
Rewards more than it punishes
Emphasizes individual vitality and growth
Limits of Positive Culture
May not work for all organizations or everyone within them

17. Spirituality and Organizational Culture
What is Spirituality?
The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of the community
People seek to find meaning and purpose in their work
Why Spirituality Now?

18. Spirituality and Organizational Culture
Characteristics of a Spiritual Organization
Benevolence
Strong sense of purpose
Trust and respect
Open-mindedness
Achieving a Spiritual Organization
Concerned with helping people develop and reach their full potential
Directly addresses problems created by work/life conflicts

19. Spirituality and Organizational Culture
Criticisms of Spirituality
What is the scientific foundation?
Need more research.
Are spiritual organizations legitimate: do they have the right to impose values on employees?
It is not about religion values
Are spirituality and profits compatible?
Yes they are, but not very strong evidence.
Greater productivity and lower turnover

20. Global Implications
Organization cultures, while strong, can’t ignore local culture
Managers should be more culturally sensitive by:
Speaking slowly and in a low tone
Listening more
Avoiding discussions of religion or politics
All global firms (not just U.S. firms) need to be more culturally sensitive

21. Global Implications Culture as an Intervening Variable
Employees form an overall subjective perception of the organization based on these objective factors:
The opinions formed affect employee performance and satisfaction.

22. Summary and Managerial Implications
Strong cultures are difficult for managers to change
Selecting new hires that fit well in the organizational culture is critical for motivation, job satisfaction, commitment, and turnover
Socialization into the corporate culture is important
As a manager, your actions as a role model help create the cultural values of ethics, spirituality, and a positive culture