Organizational Culture

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Information about Organizational Culture
Business & Mgmt

Published on March 7, 2014

Author: kaustubhbarve



Organizational Culture - A pattern of basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough 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


Group Members  Shubhangi Bhirud  Kaustubh Barve  Aditya Bhimanawar  Hasti Bhanushali  Jignesh Bhavsar  Yogita Bhadekar

What is Culture    Culture is the unique dominant pattern of shared beliefs, assumptions, values, and norms that shape the socialization, symbols, language and practices of a group of people. The attitudes and approaches that typify the way staff carry out their tasks. Culture is developed and transmitted by people, consciously and unconsciously, to subsequent generations.

ORGANIZATIONAL CULTURE “A pattern of basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough 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.”

Elements of Organizational Culture  Innovation and Risk Taking  Attention to Detail  Outcome Orientation  Team Orientation  Aggressiveness  Stability

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 of the organization Culture serves as a control mechanism for shaping behavior

Types of Organizational Culture  The basic types of organizational culture are: 1. Bureaucratic 2. Clan 3. Market 4. Entrepreneurial

Bureaucratic Culture    In this type of culture the behaviour of employees is governed by formal rules and standard operating procedures. Such a culture creates stability. Organizations with bureaucratic culture tend to produce standardized goods and services, examples:  Government ministries  Fast food establishments

Clan Culture      In a clan culture the behaviour of individuals is shaped by tradition, loyalty, personal commitment, extensive socialization and selfmanagement. A clan culture achieves unity through socialization. Long-term employees serve as mentors Members are aware of the organization’s history and have an understanding of the expected manner of conduct and organizational style. Members share feelings of pride in membership.

Market Culture  In a market culture, the values and norms reflect the significance of achieving measurable and demanding goals mainly concerning those that are financial and market based.  Companies with a market culture tend to focus on:  Sales growth  Profitability  Market share  In a market culture the relationship between individuals and the organization is contractual (previously agreed).  Individuals are responsible for their performance; whereas the organization promises specific rewards for levels of performance.  Managers are not judged on their effectiveness as role models

Entrepreneurial Culture   Organizations existing in the context of an entrepreneurial culture are characterized by high levels of risk taking and creativity. There is a commitment to experimentation, innovation, and being Steve Jobs – Apple

Stories Rituals How Employees Learn Culture/ How it is “reinforced” Language Material Symbols

Stories and Legends    Social prescriptions of desired (undesired) behavior Provides a realistic human side to expectations Most effective stories and legends:  Describe real people  Assumed to be true  Known throughout the organization  Are prescriptive

Rituals and Ceremonies  Rituals  programmed routines  (eg., how visitors are greeted)  Ceremonies  planned activities for an audience  (eg., award ceremonies)

Physical Structures/Symbols   Building structure -- may shape and reflect culture Office design conveys cultural meaning  Furniture, office size, wall hangings Courtesy of Microsoft Corp.

Artifacts  Artifacts are the physical things that are found that have particular symbolism for culture  The purpose of Artifacts are as reminders and triggers

Language  Language is a shared system of vocal sounds, written signs, and/or gestures used to convey meaning among members of a culture. The Nike swoosh was inspired by the Greek goddess Nike, the winged goddess of victory. The swoosh symbolizes her flight. It conveys the meaning of a brand of sports shoes

Socialization Socialization is the process by which people lean valves, norms, behaviours and social skills.  It is the means by which new members are brought into a culture. 

Dimensions of Socialization Programs Intense Programs      Formal – new workers separated for training Collective – group basis Fixed – planned activities Serial – role models used Divestiture – strip away characteristics to build up new ones Moderate Programs      Informal – new workers immediately put to work Individual – one-onone Variable – no timetables Random – on your own Investiture – accepts and confirms existing

Process of Socialization  Pre Arrival  Encounter  Metamorphosis

Outcomes of Socialization Process Successful socialization       Job satisfaction Role clarity High work performance Understanding of culture Commitment to organization Internal values Unsuccessful socialization       Job dissatisfaction Role ambiguity and conflict Misunderstanding, tension, and perceived lack of control Low job involvement Low performance Rejection of values

Organizational Culture Strength How widely and deeply employees hold the company’s dominant values and assumptions Strong cultures exist when:  most employees understand/embrace the dominant values  values and assumptions are institutionalized through well-established artifacts  culture is long lasting -- often traced back to founder

Building a strong organizational culture 1. 2. 3. 4. A common behavioural style must be shared by managers and employees. Have the same basic approaches to solving problems, meeting goals, and dealing with stakeholders. Have share common norms that guide rule governing rewards and punishment. A strong organizational culture assists in the creation of a stable organization, the consequence of which lead to the achievement of the company’s strategic goals.

Relationship between culture and organizational performance  Organizational culture has the potential to enhance organizational performance, individual satisfaction, the sense of certainty about how problems are to be handled.  Culture serves as a control mechanism to channel behaviour towards desired behaviours and to prevent undesired behaviours.

Creating an Ethical Organizational Culture A strong culture with high risk tolerance, low-tomoderate aggressiveness, and focuses on means as well as outcomes is most likely to shape high ethical standards Managers must be visible role models  Communicate ethical expectations  Provide ethical training  Visibly reward ethical acts and punish unethical ones  Provide protective mechanisms 

Global Implications National and Organizational Cultures:  Organizations exist in a global context  Must be aware of local and national cultures Suggestions and Observations: Organizations heavily dependent on foreign markets and labor   National culture does influence organizational culture  All managers must be culturally sensitive 15-26


Samsung – Cultural Change  In 1993, Samsung’s Chairman – Lee Kun Hee, went on a world tour to figure out how his company was doing internationally.  From 1987 to 1993, when Lee took over his business from his father, Samsung grew by two and a half times.  But Lee wanted it to be like G.E- an internationally regonized industrial powerhouse.

Speech by Lee Kun Hee    “ Top global companies are reeling and (I’m) not sure what will happen to Samsung. Most products and businesses that Samsung represents today will be gone in 10 years time. We should start again. There is no time to waste.” “CHANGE EVERYTHING BUT YOUR WIFE AND CHILDREN.” -most famous quote by Lee Kun Hee.

Change  Samsung focused on “innovation” .  Introduced outsiders who could not speak their language and were unfamiliar with the company’s culture.  Introduced merit pays and promotions.  Going against the traditional ways of meriting the elders, Samsung started putting the young in the position of authority.

Results      One of the world’s leading developers and producers of semi-conductors. Listed in Fortune Magazine’s list of the 100 largest corporations in the world in 2007. Today Samsung’s revenues are 39 times what they in 1987. It generates around 20 % of South Korea’s GDP Lee is South Korea’s richest man.

Conclusion  Understanding of work group subcultures, influences strategies for changing organizational culture and overcoming resistance to change programs.  Should clearly defined as it impacts on day-today decision-making.  Cultures create an environment and also adapt to diverse and changing circumstances.

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