ORGANIZATIONAL

ORGANIZATIONAL CULTURE
CULTURE

Institutionalization:
Institutionalization: A
AForerunner
Forerunner of
of Culture
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
What Is
Is Organizational
Organizational Culture?
Culture?
Characteristics:
Characteristics:
Organizational Culture
A common perception
held
by
the
organizations
members; a system of
shared meaning.

1.1. Innovation
Innovationand
andrisk
risk
taking
taking
2.2. Attention
Attentionto
todetail
detail
3.3. Outcome
Outcomeorientation
orientation
4.4. People
Peopleorientation
orientation
5.5. Team
Teamorientation
orientation
6.6. Aggressiveness
Aggressiveness
7.7. Stability
Stability

Contrasting
Contrasting Organizational
Organizational Cultures
Cultures
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 lowerlevel manager quoted an often used phrase in the company: If it aint broke, dont 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
Contrasting Organizational
Organizational Cultures
Cultures
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
Do Organizations
Organizations Have
Have Uniform
Uniform Cultures?
Cultures?
Dominant Culture
Expresses the core values
that are shared by a
majority
of
the
organizations members.
Subcultures
Mini cultures within an
organization,
typically
defined
by
department
designations
and
geographical separation.

Do
Do Organizations
Organizations Have
Have Uniform
Uniform Cultures?
Cultures?
Core Values
The primary or dominant values that are
accepted throughout the organization.

Strong Culture
A culture in which the
core
values
are
intensely held and
widely shared.

What
What Is
Is Organizational
Organizational Culture?
Culture?
Culture Versus Formalization
A strong culture increases behavioral consistency
and can act as a substitute for formalization.

Organizational Culture Versus National Culture

National culture has a greater impact on
employees than does their organizations culture.
Nationals selected to work for foreign companies
may be atypical of the local/native population.

What
What Do
Do Cultures
Cultures Do?
Do?
Cultures
CulturesFunctions:
Functions:
1.1. Defines
Definesthe
theboundary
boundarybetween
betweenone
oneorganization
organization
and
andothers.
others.
2.2. Conveys
Conveysaasense
senseof
ofidentity
identityfor
forits
itsmembers.
members.
3.3. Facilitates
Facilitatesthe
thegeneration
generationof
ofcommitment
commitmentto
to
something
somethinglarger
largerthan
thanself-interest.
self-interest.
4.4. Enhances
Enhancesthe
thestability
stabilityof
ofthe
thesocial
socialsystem.
system.
5.5. Serves
Servesas
asaasense-making
sense-makingand
andcontrol
controlmechanism
mechanism
for
forfitting
fittingemployees
employeesin
inthe
theorganization.
organization.

What
What Do
Do Cultures
Cultures Do?
Do?

Culture
Cultureas
asaaLiability:
Liability:
1.1. Barrier
Barrierto
tochange.
change.
2.2. Barrier
Barrierto
todiversity
diversity
3.3. Barrier
Barrierto
toacquisitions
acquisitionsand
andmergers
mergers

How
How Culture
Culture Begins
Begins
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 that
encourages employees to identify with them and
thereby internalize their beliefs, values, and
assumptions.

Keeping
Keeping Culture
Culture Alive
Alive
Selection
Concern with how well the candidates will fit
into the organization.
Provides information to candidates about the
organization.

Top Management
Senior executives help establish behavioral
norms that are adopted by the organization.

Socialization
The process that helps new employees adapt to
the organizations culture.

Stages
Stages in
in the
the Socialization
Socialization Process
Process
Prearrival Stage
The period of learning in the socialization process that
occurs before a new employee joins the organization.

Encounter Stage
The stage in the socialization process in which a new
employee sees what the organization is really like and
confronts the possibility that expectations and reality
may diverge.

Metamorphosis Stage
The stage in the socialization process in which a new
employee changes and adjusts to the work, work group,
and organization.

A
ASocialization
Socialization Model
Model

Entry
Entry Socialization
Socialization Options
Options

Formal
Formalversus
versusInformal
Informal
Individual
Individualversus
versusCollective
Collective
Fixed
Fixedversus
versusVariable
Variable
Serial
Serialversus
versusRandom
Random
Investiture
Investitureversus
versusDivestiture
Divestiture

How
How Organization
Organization Cultures
Cultures Form
Form

How
How Employees
Employees Learn
Learn Culture
Culture
Stories
Stories
Rituals
Rituals
Material
MaterialSymbols
Symbols
Language
Language

Creating
Creating An
An Ethical
Ethical Organizational
Organizational Culture
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.

Creating
Creating aa Customer-Responsive
Customer-Responsive Culture
Culture
Key Variables Shaping Customer-Responsive
Cultures
1. The types of employees hired by the
organization.
2. Low formalization: the freedom to meet customer
service requirements.
3. Empowering employees with decision-making
discretion to please the customer.
4. Good listening skills to understand customer
messages.
5. Role clarity that allows service employees to act
as boundary spanners.
6. Employees who engage in organizational
citizenship behaviors.

Creating
Creating aa Customer-Responsive
Customer-Responsive Culture
Culture
Managerial
ManagerialActions
Actions::
Select
Select new
new employees
employees with
with personality
personality and
and
attitudes
attitudesconsistent
consistentwith
withhigh
highservice
serviceorientation.
orientation.
Train
Train and
and socialize
socialize current
current employees
employees to
to be
be more
more
customer
customerfocused.
focused.
Change
Change organizational
organizational structure
structure to
to give
give
employees
employeesmore
morecontrol.
control.
Empower
Empoweremployees
employeesto
tomake
makedecision
decisionabout
abouttheir
their
jobs.
jobs.

Creating
Creating aa Customer-Responsive
Customer-Responsive Culture
Culture
Managerial
ManagerialActions:
Actions:
Lead
Lead by
by conveying
conveying aa customer-focused
customer-focused vision
vision
and
anddemonstrating
demonstratingcommitment
commitmentto
tocustomers.
customers.
Conduct
Conduct performance
performance appraisals
appraisals based
based on
on
customer-focused
customer-focusedemployee
employeebehaviors.
behaviors.
Provide
Provideongoing
ongoingrecognition
recognitionfor
foremployees
employeeswho
who
make
makespecial
specialefforts
effortsto
toplease
pleasecustomers.
customers.

Spirituality
Spirituality and
and Organizational
Organizational Culture
Culture
Workplace 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.
Characteristics:
Characteristics:
Strong
Strongsense
senseof
ofpurpose
purpose
Focus
Focuson
onindividual
individualdevelopment
development
Trust
Trustand
andopenness
openness
Employee
Employeeempowerment
empowerment
Toleration
Tolerationof
ofemployee
employeeexpression
expression

Reasons
Reasonsfor
forthe
the Growing
Growing Interest
Interestin
inSpirituality
Spirituality

As a counterbalance to the pressures and stress of a turbulent

pace of life and the lack of community many people feel and
their increased need for involvement and connection.

Formalized religion hasnt worked for many people.

The desire to integrate personal life values with ones

professional life.

An increasing number of people are finding that the pursuit of

more material acquisitions leaves them unfulfilled.

Job demands have made the workplace dominant in many

peoples lives, yet they continue to question the meaning of
work.

How
How Organizational
Organizational Cultures
Cultures Have
Have an
an
Impact
Impact on
on Performance
Performance and
and Satisfaction
Satisfaction

Hofstede
Hofstede Cultural
Cultural Framework
Framework
Culture
Cultureisismore
moreoften
oftenaasource
sourceof
ofconflict
conflict than
thanof
ofsynergy.
synergy.
Cultural
Culturaldifferences
differences are
are aanuisance
nuisanceat
at best
best and
and often
often aa
disaster."
disaster."
Prof.
Prof.Geert
GeertHofstede
Hofstede

Hofstede
Hofstede Cultural
Cultural Framework
Framework
National cultures can be described according to the
analysis of Geert Hofstede.
These ideas were first based on a large research
project into national culture differences across
subsidiaries of a multinational corporation (IBM) in 64
countries.
Subsequent studies by others covered students in 23
countries, elites in 19 countries, commercial airline
pilots in 23 countries, up-market consumers in 15
countries, and civil service managers in 14 countries.
Together these studies identified and validated four
independent
dimensions
of
national
culture
differences, with a fifth dimension added later.

The
The drawbacks
drawbacks of
of applying
applying the
the Hofstede
Hofstede
Model
Model
Firstly, the averages of a country do not relate to
individuals of that country. One must be aware that
not all individuals or even regions with subcultures
fit into the mould. It is to be used as a guide to
understanding the difference in culture between
countries, not as law set in stone. As always, there
are exceptions to the rule.
Secondly, how accurate is the data? The data has
been collected through questionniares, which have
their own limitations.
Lastly, is the data up to date? How much does the
culture of a country change over time, either by
internal or external influences?

Hofstede
Hofstede Cultural
Cultural Framework
Framework

1.
2.
3.
4.
5.

Power Distance
Individualism vs. Collectivism
Masculinity vs. Femininity
Uncertainty Avoidance
Long Term Orientation

Power
Power Distance
Distance
...the extent to which the
less powerful members of
institutions
and
organizations within a
country expect and accept
that power is distributed
unequally.

PD

P.R.C

Russia

West Africa

Indonesia

Hong Kong

Netherlands

France

Japan

Germany

Canada

U.S.A.

100

90

80

70

60

50

40

30

20

10

Power
Power Distance
Distance at
at Work
Work

Hierarchy
Centralization
Salary range
Participation
Ideal Boss
Privilege & status symbols

Individualism
Individualism vs.
vs. Collectivism
Collectivism
Individualist societies: ties
are loose and everyone
looks out for himself or
herself.
Collectivist
societies:
people
integrated
into
strong, cohesive groups;
protection is exchanged
for loyalty.

ID

P.R.C

Russia

West Africa

Indonesia

Hong Kong

Netherlands

France

Japan

Germany

Canada

U.S.A.

100
90

80

70

60

50

40

30

20

10

Individualism
Individualism // Collectivism
Collectivism at
at Work
Work
Employee-employer
relationship
Hiring and promotion
decisions
Managerial focus
Task vs. relationship
priority

Masculinity
Masculinity vs.
vs. Femininity
Femininity
Masculine societies: social
gender roles are distinct
(men focus on material
success;
women
on
quality of life).
Feminine societies: social
gender roles overlap (both
quality of life).

MA

P.R.C

Russia

West Africa

Indonesia

Hong Kong

Netherlands

France

Japan

Germany

Canada

U.S.A.

100
90

80

70

60

50

40

30

20

10

Masculinity
Masculinity // Femininity
Femininity at
at Work
Work
Centrality of work
Ways of managing &
decision making
Fem: equality, solidarity,
quality of work life
Mas:
equity,
compete,
performance
Conflict resolution

Uncertainty
UncertaintyAvoidance
Avoidance
the extent to which the
members of a culture feel
threatened by uncertain or
unknown situations.
NOT the same as risk
avoidance
Presence of rules

UA

P.R.C

Russia

West Africa

Indonesia

Hong Kong

Netherlands

France

Japan

Germany

Canada

U.S.A.

100
90

80

70

60

50

40

30

20

10

Uncertainty
UncertaintyAvoidance
Avoidance at
at Work
Work
Necessity of rules
Time orientation
Precision & punctuality
Interpretation of What is
different
Appropriateness of
emotional displays

Long
Long term
term orientation
orientation (Confucian
(Confucian Dynamism
Dynamism))
The newest dimension
three universal
dimensions and two fourth
dimensions
Truth vs. Virtue: What one
believes vs. What one
does

LT

P.R.C

Russia

West Africa

Indonesia

Hong Kong

Netherlands

France

Japan

Germany

Canada

U.S.A.

120

100

80

60

40

20

Confucian
Confucian Dynamism
Dynamism
Short-term orientation

Long-term orientation

Social pressure to keep up

with the Joneses
small savings
expect quick results
concern with possessing
Truth

Thrift: being sparing with

resources
large savings
perseverance toward slow
results
concern with respecting the
demands of Virtue

Hofstede Framework Comparisons

140

120

100

U.S.A.
Canada

80

Japan
Netherlands
60

P.R.C

40

20

PD

ID

MA

UA

LT

Long
Long term
term orientation
orientation at
at Work
Work
Stress on Market
Processes
Stress on the Individual
Stress on Managers rather
than Workers

The
The GLOBE
GLOBE framework
framework for
for assessing
assessing cultures
cultures
In 1993, the Global Leadership and Organizational
Behavior Effectiveness (GLOBE) research program
is an ongoing cross-cultural investigation of leadership
and national culture. Using data from 825 organizations
in 62 countries, the GLOBE team identified nine
dimensions on which national culture differs. Some of
these are:

Power distance
Individualism/ collectivism
Uncertainty avoidance
Gender differentiation
Future orientation
Humane orientation
Performance orientation

Edgar
Edgar H
H Schein
Schein
Organizational
Organizational Culture
Culture &
& Leadership
Leadership
AAprofessor
professorat
atthe
theMIT
MITSloan
SloanSchool
Schoolof
ofManagement,
Management,isisone
oneof
ofthe
the
most
mostwell
wellknown
knowntheorists
theoristsworking
workingwith
withorganizational
organizationalculture.
culture.

"Some
"Some are
are born
born great,
great,
some
some achieve
achieve greatness,
greatness,
and
and some
some have
have greatness
greatness thrust
thrust upon
upon 'em"
'em"
Shakespeare,
Shakespeare,Twelfth
TwelfthNight
Night

Edgar
Edgar H.
H. Schein
Schein and
and Culture
Culture
He developed a model to explain the basicelements
of cultures. Edgar Schein's model resembles the
functionalistic models put forward by cultural
theorists such as Geert Hofstede and Fons
Trompenaars, and can be used to analyzeall kinds of
cultures
includingcorporate
and
national
cultures.The models put forward by Hofstede,
Trompenaars and Schein all presumes that cultures
can beexplained and understood by lookingat
thecore values and assumptions of a given culture.
Core values willshape the visible elements within
cultures such as e.g. behaviors, expected behaviors,
dress codes etc.Edgar Schein defines these visible
elements of culturesas espoused values and
artifacts.

Defining
Defining Organizational
Organizational Culture
Culture
Culture is customs and rights.
Good managers must work from a more
anthropological model.
Each organization has its own way and an outsider
brings his/her baggage as observer.
Understand new environment and culture before
change or observation can be made.
A pattern of shared 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 you
perceive, think, and feel in relation to those problems.

Levels
Levels of
of Culture
Culture
Artifacts
On surface
sees
hears
feels

Visible products

Language
technology products
creations
style: clothing, manners of address, myths, stories

Easy to observe
Difficult to decipher symbols are ambiguous
Problems in classification

Edgar
Edgar Schein's
Schein's model
model of
of culture
culture contains
contains the
the
following
following layers:
layers:

Artifacts
They are the visible elements in a culture. Artifacts
can be recognized by people not part of the culture.
Artifacts can e.g. be dress codes, furniture, art,
work
climate,
stories,
work
processes,
organizational structures etc. The outsider might
easily see these artifacts, but might not be able to
fully understand why these artifacts have been
established. To understand this, outsiders can look
at the espoused values in the culture.

Edgar
Edgar Schein's
Schein's model
model of
of culture
culture contains
contains the
the
following
following layers:
layers:

Espoused values
They are the values normally espoused by the
leading figures of a culture. Espoused values could
e.g. be represented by the philosophies, strategies
and goals sought realized by e.g. leaders. However,
the values sought by leaders should be supported
by some general and shared assumptions about e.g.
how a company should be run, or how employees
should be managed. If espoused values by leaders
are not in line with the general assumptions of the
culture, this might signal trouble.

Edgar
Edgar Schein's
Schein's model
model of
of culture
culture contains
contains
the
the following
following layers:
layers:

Assumptions
They reflects the shared values within the specific
culture. These values are often ill-defined, and will
oftentimes not be especially visible to the members
of the culture.Assumptions and espoused values
are possibly not correlated, and the espoused
values may not at all be rooted in the actual values
of the culture. This may cause great problems,
where the differences between espoused and actual
values may create frustrations, lack of morale and
inefficiency. Core assumptions can e.g. be
assumptions regarding the human nature, human
relationships etc.

Why
Why to
to Study
Study Shein?
Shein?
By using Edgar Schein's model, leaders will be
able to understand cultural elements, and beable
to analyze the relationship between deep rooted
assumptions and common business practices
within the company.
Likewise, leaders can try to change the basic
assumptions of a given culture, and hence maybe
improve the effectiveness of the company. The
latter can therefore be seen as a cultural change
process,
where
basic
assumptions
are
soughtchanged to fit the wantedespoused
values and artifacts of a company.

Why
Why to
to Study
Study Shein?
Shein?
Cultural change may be needed when the environment
of the company changes.
Competition or new regulations may require a new
organizational culture, in which whole new sets of
organizational values may be needed.
Accordingly, assumptions may have to be changed, so
that the company can survive and develop, and so that
the values pursued by business leaders will get
accepted by the members of the culture.