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Chapter 15: Organizational Culture

Organizational culture refers to a system of shared assumptions, values, and beliefs that define for a group of people who they are and how they do things. Organizational Socialization is the process by which organizations maintain and pass on values to new organizational members. Why does organizational culture matters? 1. Organizations that have a strong culture benefit from it as a competitive advantage. 2. Culture, shared values within organizations may be related to increased performance. 3. It is an effective control mechanism for dictating employee behavior than organizational rules and regulations.

Dimensions of Organizational culture profile


Innovative Cultures Innovative cultures are flexible and adaptable, and experiment with new ideas. Characterized by a flat hierarchy in which titles and other status distinction tend to be downplayed. Aggressive Cultures Companies with aggressive cultures value competitiveness and outperforming competitors, which they may fall short in area of corporate social responsibility. Outcome-Orientated Cultures Cultures that emphasize on achievement, results and action as important values. In these companies, it is common to see rewards tied to performance indicators as opposed to seniority or loyalty. Performance-orientated culture tends to outperform companies that are lacking such a culture. Stable Cultures Stable cultures are predictable, rule orientated and bureaucratic. These organizations aim to coordinate and align individual effort for greatest levels of efficiency. Examples are public sector institutions. People-Orientated Cultures Cultures that value fairness, supportiveness and respecting individual rights. In addition to fair procedures and management style, they have atmosphere where work is fun. Starbuck Corporation is an example of people-orientated culture. As a result, the turnover rate is lower than the industry average. Team-Orientated Cultures Cultures that emphasize on collaborative and cooperation among employees. In teamorientated organizations, they tend to have more positive relationships with their coworkers and managers. Detailed-Orientated Cultures Organizations with detail-orientated cultures are those that emphasize precision and paying attention to details. Such culture gives a competitive advantage to companies in the hospitality industry as they provide better service to their customers.

Creation of Organizational Cultures


Founders values Industry Demands

Maintaining of Organizational Cultures


Attraction-Selection-Attrition (ASA) - Attraction: employees are attracted to organizations where they will fit in. - Selection: Companies look for people who will fit into their current corporate culture. - Attrition: Natural process in which candidates who do not fit in will leave the company. Person-organization misfit is one of the important reasons for employee turnover. New employee Onboarding (organizational socialization process) - It is the process through which new employees learn the attitudes, skills and behaviors required to function effectively within an organization. - Employees: Seek feedback to gain better understanding if their behavior fits the companys culture. Also, they network and build relationship. - Organization: Formal orientation to help integration of new employees. Mentors to guide the new employees. Leadership - Motivate employees through inspiration, thus corporate culture tends to be more supportive. - Role modeling - Shape culture by their reactions to the actions of others around them Reward System - Whether the element of reward system rewards behaviors or results. - Companies that reward only results are outcome-orientated and competitive cultures - Companies that assess behaviors as well are generally more people or team orientated.

Signs of a companys culture


1. 2. 3. 4. 5. Mission statement Rituals and ceremonies Rules and policies Physical layout Stories and legends

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