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Organizational Culture: Chapter No. 17

This document discusses organizational culture. It defines organizational culture as a system of shared meanings held by members of an organization that distinguishes it from other organizations. It notes that organizational culture serves several functions, including defining organizational boundaries, conveying identity, generating commitment, enhancing stability, and providing a control mechanism. The document contrasts the cultures of two hypothetical manufacturing companies and discusses characteristics of strong versus weak cultures. It also addresses how cultures can act as barriers to change, diversity, and mergers and acquisitions.

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79 views17 pages

Organizational Culture: Chapter No. 17

This document discusses organizational culture. It defines organizational culture as a system of shared meanings held by members of an organization that distinguishes it from other organizations. It notes that organizational culture serves several functions, including defining organizational boundaries, conveying identity, generating commitment, enhancing stability, and providing a control mechanism. The document contrasts the cultures of two hypothetical manufacturing companies and discusses characteristics of strong versus weak cultures. It also addresses how cultures can act as barriers to change, diversity, and mergers and acquisitions.

Uploaded by

logicbomb1
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter no.

17

ORGANIZATIONAL
CULTURE
TOPICS OF DISCUSSION
 Institutionalization: A Forerunner of Culture
 What Is Organizational Culture?

 What Do Cultures Do?


INSTITUTIONALIZATION: A FORERUNNER
OF CULTURE
INSTITUTIONALIZATION: A FORERUNNER OF
CULTURE

Institutionalization
When an organization takes on a life of its own, apart
from any of its members, becomes valued for itself, and
acquires immortality
WHAT IS ORGANIZATIONAL
CULTURE?
WHAT IS ORGANIZATIONAL
CULTURE?

A Definition of Organizational Culture


A system of shared meaning held by members that
distinguishes the organization from other organizations
WHAT IS ORGANIZATIONAL CULTURE?
CONTINUED….

Characteristics
there are seven characteristics that in aggregate capture
the essence of an organizational culture
1. Innovation and risk taking
2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability
CULTURE IS A DESCRIPTIVE TERM
 Organizational Culture is concerned with how
employees perceive the characteristics of an
organization’s culture, not with whether they like them.
CONTRASTING ORGANIZATIONAL
CULTURE
Organization A
This organization is a manufacturing firm. Managers are expected to fully document
all decisions; and “good managers” are those who can provide detailed data to support
their recommendations. Creative decisions that incur significant change or risk are not
encouraged. Because managers of failed projects are openly criticized and penalized,
managers try not to implement ideas that deviate much from the status quo. One
lower-level manager quoted an often used phrase in the company: “If it ain’t broke,
don’t fix it.”
There are extensive rules and regulations in this firm that employees are required to
follow. Managers supervise employees closely to ensure there are no deviations.
Management is concerned with high productivity, regardless of the impact on
employee morale or turnover.
Work activities are designed around individuals. There are distinct departments and
lines of authority, and employees are expected to minimize formal contact with other
employees outside their functional area or line of command. Performance evaluations
and rewards emphasize individual effort, although seniority tends to be the primary
factor in the determination of pay raises and promotions.
CONTRASTING ORGANIZATIONAL
CULTURE
Organization B
This organization is also a manufacturing firm. Here, however, management
encourages and rewards risk taking and change. Decisions based on intuition are
valued as much as those that are well rationalized. Management prides itself on its
history of experimenting with new technologies and its success in regularly
introducing innovation products. Managers or employees who have a good idea are
encouraged to “run with it.” And failures are treated as “learning experiences.” The
company prides itself on being market-driven and rapidly responsive to the changing
needs of its customers.
There are few rules and regulations for employees to follow, and supervision is loose
because management believes that its employees are hardworking and trustworthy.
Management is concerned with high productivity, but believes that this comes
through treating its people right. The company is proud of its reputation as being a
good place to work.
Job activities are designed around work teams, and team members are encouraged to
interact with people across functions and authority levels. Employees talk positively
about the competition between teams. Individuals and teams have goals, and bonuses
are based on achievement of these outcomes. Employees are given considerable
autonomy in choosing the means by which the goals are attained.
DO ORGANIZATIONS HAVE UNIFORM
CULTURES
Most large organizations have dominant culture and numerous sets
of subcultures.

Dominant Culture
Expresses the core values that are shared by a majority of the
organization’s members.

Subcultures
Minicultures within an organization, typically defined by
department designations and geographical separation.
Core Values The primary or dominant values that are accepted
throughout the organization
STRONG VS. WEAK CULTURES
 In a strong culture, the organization's core values are
both intensely held and widely shared.
 High behavioral control

 Lower employee turnover


CULTURE VS. FORMALIZATION
 Culture and Formalization are two different roads to
common destination
 A strong culture increases behavioral consistency and
can act as a substitute for formalization
 High formulation in an organization creates
predictability, orderliness and consistency
 A strong culture achieves the same end without need for
written documentation
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
5. Serves as a sense-making and control mechanism for
fitting employees in the organization
CULTURE AS A LIABILITY
From an employee’s standpoint, culture is valuable
because it reduces ambiguity. It tells employees how
things are done and what is important. But there are
dysfunctional aspects of culture, especially a strong one,
on an organization’s effectiveness.
1. Barrier to change
2. Barrier to diversity
3. Barrier to acquisitions and mergers
THE END

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