Organizational Culture

Learning Objectives
After studying , you should be able to:
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
organizations 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.
16-2

Organizational Culture
Organizational Culture

A common perception held by the organizations

members; a system of shared meaning
Seven primary characteristics
1.
2.
3.
4.
5.
6.
7.

Innovation and risk taking

Attention to detail
Outcome orientation
People orientation
Team orientation
Aggressiveness
Stability

SEE
SEEEEXXHHI IBBI ITT16-1
16-1
16-3

Do Organizations Have Uniform

Cultures?
Culture is a descriptive term: it may act as a substitute
for formalization
Dominant Culture
Expresses the core values that are shared by a majority of
the organizations 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 Culture
A culture in which the core values are intensely held and
widely shared
16-4

What Do Cultures Do?

Cultures 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
16-5

Culture as a Liability
Institutionalization
A company can become institutionalized where it is valued
for itself and not for the goods and services it provides

Barrier to change
Occurs when cultures values are not aligned with the
values necessary for rapid change

Barrier to diversity
Strong cultures put considerable pressure on employees to
conform, which may lead to institutionalized bias

Barrier to acquisitions and mergers

Incompatible cultures can destroy an otherwise successful
merger
16-6

How Culture Begins

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 that encourages employees to
identify with them and thereby internalize
their beliefs, values, and assumptions.
16-7

Keeping a Culture Alive

Three forces play a particularly important role in
sustaining a culture:
Selection
Identify and select individuals who are high performers
and whose values are consistent with at least a good
portion of the organizations values

Top Management
Through words and behaviors, senior executives
establish norms that filter through the organization

Socialization
The process that helps new employees adapt to the
prevailing organizational culture
16-7

Stages in the Socialization

Process
Prearrival
The period of learning prior to a new employee
joining the organization

Encounter
The stage at which the new employee sees what the
organization is really like and confronts the
possibility that expectations and reality may diverge

Metamorphosis
The stage at which the new employee changes and
adjusts to the work, work group, and organization

EEXXHHI IBBI ITT16-2

16-2
16-9

Socialization Program
Options
Choose the appropriate alternatives:
Formal versus Informal
Individual versus Collective
Fixed versus Variable
Serial versus Random
Investiture versus Divestiture

Socialization outcomes:
Higher productivity
Greater commitment
Lower turnover

SEE
SEEEEXXHHI IBBI ITT16-3
16-3

Source: Based on J. Van Maanen, People Processing: Strategies of Organizational Socialization, Organizational Dynamics, Summer 1978, pp. 19
36; and E. H. Schein, Organizational Culture, American Psychologist, February 1990, p. 116.

16-10

Summary: How Organizational

Cultures Form
Organizational cultures are derived
from the founder
They are sustained through the
selection process, managerial action,
and socialization methods

EEXXHHI IBBI ITT16-4

16-4
16-11

How Employees Learn

Culture
Stories
Anchor the present into the past and provide explanations
and legitimacy for current practices

Rituals
Repetitive sequences of activities that express and
reinforce the key values of the organization

Material Symbols
Acceptable attire, office size, opulence of the office
furnishings, and executive perks that convey to employees
who are important in the organization

Language
Jargon and special ways of expressing ones self to indicate
membership in the organization
16-12

Creating an Ethical Organizational

Culture
Characteristics of Organizations that Develop High
Ethical Standards
Has high tolerance for risk
Low to moderate in aggressiveness
Focused on means as well as outcomes

Managerial Practices Promoting an Ethical Culture

Being a visible role model
Communicating ethical expectations
Providing ethical training
Visibly rewarding ethical acts and punishing unethical
ones
Providing protective mechanisms
16-13

Creating a Positive Organizational

Culture
Positive Organizational Culture
A culture that:
Builds on employee strengths
Focus is on discovering, sharing, and building on the strengths
of individual employees

Rewards more than it punishes

Articulating praise and catching employees doing something
right

Emphasizes individual vitality and growth

Helping employees learn and grow in their jobs and careers

Limits of Positive Culture:

May not work for all organizations or everyone
within them
16-14

Spirituality and Organizational

Culture
Workplace
Spirituality

Recognizes that
people have an inner
life that nourishes
and is nourished by
meaningful work in
the context of the
community
NOT about organized
16-15
religious practices

Why Spirituality Now?

It helps to counterbalance the pressures and
stress of a turbulent pace of life and caters to the
increased need for involvement and connection
Job demands have made the workplace dominant
in many peoples lives; yet they continue to
question the meaning of work
People feel the need 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
SEE
SEEEEXXHHI IBBI ITT16-5
16-5
16-16

Characteristics of a Spiritual
Organization
Concerned with helping people develop and
reach their full potential
Directly addresses problems created by work
life conflicts
Four characteristics of spiritual organizations:
1.
2.
3.
4.

Strong sense of purpose

Trust and respect
Humanistic work practices
Toleration of employee expression

16-17

Criticisms of Spirituality
What is the scientific foundation?
We still dont have an answer; there is very little
research on the subject

Are spiritual organizations legitimate do they

have the right to impose values on employees?
The goal of spirituality is to help employees find
meaning and value in their work
Spirituality is not about God or any religious values

Are spirituality and profits compatible?

Initial evidence suggests that they are
Spirituality may result in greater productivity and
dramatically lower turnover
16-18

Global Implications
Organizational cultures, while
strong, cant ignore local culture
Managers should be more culturally
sensitive by:
Adjusting speech to cultural norms
Listening more
Avoiding discussions of controversial
topics

All global firms need to be more

culturally sensitive
16-19

Culture as an Intervening
Variable
Employees form an overall subjective perception of
the organization based on these objective factors
mentioned in the diagram

The opinions formed affect employee performance

and satisfaction.

EEXXHHI IBBI ITT16-6

16-6

16-20

Summary and Managerial

Implications
Strong cultures are difficult for managers to
change
Strong cultures tend to be stable over time

Selecting new hires that fit well in the

organizational culture is critical for motivation,
job satisfaction, commitment, and a low 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
16-21

Organizational Change and

Stress Management

17-22

Chapter Learning Objectives

After studying this chapter, you should be able to:
Identify forces that act as stimulants to change, and
contrast planned and unplanned change.
List the forces for resistance to change.
Compare the four main approaches to managing
organizational change.
Demonstrate two ways of creating a culture for change.
Define stress and identify its potential sources.
Identify the consequences of stress.
Contrast the individual and organizational approaches to
managing stress.
Explain global differences in organizational change and
work stress.
17-23

Forces for Change

Nature of the Workforce
Greater diversity

Technology
Faster, cheaper, more mobile
computers and handheld devices

Economic Shocks
Mortgage meltdown

Competition
Global marketplace

Social Trends
Environmental awareness and liberalization
of attitudes towards gay, lesbian and transgender
employees

World Politics

Opening of markets of China

17-24

SEE
SEEEEXXHHI IBBI ITT17-1
17-1

Planned Change
Change
Making things different

Planned Change
An intentional, goal-oriented activity
Goals of planned change
Improving the ability of the organization to adapt to
changes in its environment
Changing employee behavior

Change Agents
Persons who act as catalysts and assume the
responsibility for managing change activities
17-25

Resistance to Change
Resistance to change appears to be a natural
and positive reaction to change.
Forms of Resistance to Change:
Overt and Immediate
Voicing complaints, engaging in job actions

Implicit and Deferred

Loss of employee loyalty and motivation, increased
errors or mistakes, increased absenteeism
Deferred resistance clouds the link between source
and reaction
17-26

Sources of Resistance to
Change

SEE
SEEEEXXHHI IBBI ITT17-2
17-2
17-27

Tactics for Overcoming Resistance to

Change
Education and Communication
Show those effected the logic behind the
change

Participation
Participation in the decision process lessens
resistance

Building Support and Commitment

Counseling, therapy, or new-skills training

Implementing Change Fairly

Be consistent and procedurally fair

Manipulation and Cooptation

Spinning the message to gain cooperation

Selecting people who accept change

Hire people who enjoy change in the first place

Coercion
Direct threats
and force
17-28

The Politics of Change

Impetus for change is likely to come from
external change agents, new employees, or
managers outside the main power
structure.
Internal change agents are most threatened
by their loss of status in the organization.
Long-time power holders tend to implement
incremental but not radical change.
The outcomes of power struggles in the
organization will determine the speed and
quality of change.

17-29

Lewins Three-Step Change

Model
Unfreezing
Change efforts to overcome the pressures of both
individual resistance and group conformity by increasing
the driving force and decreasing the restraining force

Moving
Moving from the status quo to the desired end state

Refreezing
Stabilizing a change intervention by balancing driving
and restraining forces

Unfreeze

Move

Refreeze
SEE
SEEEEXXHHI IBBI ITT17-3
17-3

17-30

Lewin: Unfreezing the

Status Quo
Driving Forces
Forces that direct behavior away from the status quo

Restraining Forces
Forces that hinder movement from the existing
equilibrium

EEXXHHI IBBI ITT17-4

17-4
17-31

Kotters Eight-Step Plan

A detailed approach to implementing change that
is built on Lewins three-step model
To implement change:
1.
2.
3.
4.
5.
6.
7.
8.

Establish a sense of urgency

Form a coalition
Create a new vision
Communicate the vision
Empower others by removing barriers
Create and reward short-term wins
Consolidate, reassess, and adjust
Reinforce the changes

Unfreezing

Movement

Refreezing
SEE
SEEEEXXHHI IBBI ITT17-5
17-5
17-32

Action Research
A change process based on systematic
collection of data and then selection of a
change action based on what the analyzed
data indicates

Process steps:
1.Diagnosis
2.Analysis
3.Feedback
4.Action
5.Evaluation

Action research benefits:

.Problem-focused rather than solution-centered
.Heavy employee involvement reduces
resistance to change
17-33

Organizational Development
Organizational Development (OD)
A collection of planned interventions, built on
humanistic-democratic values, that seeks to
improve organizational effectiveness and
employee well-being

OD Values
Respect for people
Trust and support
Power equalization
Confrontation
Participation
17-34

Six OD Techniques
1. Sensitivity Training
Training groups (T-groups) seek to change behavior through
unstructured group interaction
Provides increased awareness of others and self
Increases empathy with others, listening skills, openness, and
tolerance for others

2. Survey Feedback Approach

The use of questionnaires to identify discrepancies among
member perceptions; a discussion follows and remedies are
suggested

3. Process Consultation (PC)

A consultant gives a client insights into what is going on
around the client, within the client, and between the client and
other people; identifies processes that need improvement.
17-35

Six OD Techniques
(Continued)
4. Team Building
High interaction among team members to increase trust and
openness

5. Intergroup Development
OD efforts to change the attitudes, stereotypes, and
perceptions that groups have of each other

6. Appreciative Inquiry
Instead of looking for problems to fix, appreciative inquiry
seeks to identify the unique qualities and special strengths
of an organization, which employees can then build on to
improve performance. This process comprises of four steps:

Discovery: Recalling the strengths of the organization

Dreaming: Speculation on the future of the organization
Design: Finding a common vision
Destiny: Deciding how to fulfill the dream
17-36

Creating a Culture for Change:

Innovation

1. Stimulating a Culture of Innovation

Innovation: a new idea applied to initiating
or improving a product, process, or service
Sources of Innovation:

Structural variables: organic structures

Long managerial tenure
Slack resources
High degree of interunit communication

Idea Champions: Individuals who actively

promote the innovation
17-37

Creating a Culture for Change:

Learning
2. Learning Organization

An organization that has

developed the continuous
capacity to adapt and change
Characteristics
Holds a shared vision
Discards old ways of thinking
Views organization as a system of
relationships
Communicates openly
Works together to achieve SEE
shared
SEEEEXXHHI IBBI ITT17-6
17-6
vision
17-38

Creating a Learning
Organization

Overcomes traditional organization

problems such as:
Fragmentation
Competition
Reactiveness

Manage Learning by:

Establishing a strategy
Redesigning the organizations structure
Flatten structure and increase cross-functional
activities

Reshaping the organizations culture

Reward risk-taking and intelligent mistakes
17-39

Work Stress
Stress
A dynamic condition in which an individual is
confronted with an opportunity, constraint, or
demand related to what he or she desires and
for which the outcome is perceived to be both
uncertain and important

Types of Stress
Challenge Stressors
Stress associated with workload, pressure to
complete tasks, and time urgency

Hindrance Stressors
Stress that keeps you from reaching your goals, such
as red tape
Cause greater harm than challenge stressors
17-40

Demands-Resources Model of Stress

Demands
Responsibilities, pressures, obligations, and
uncertainties in the workplace

Resources
Things within an individuals control that can be
used to resolve demands

Adequate resources help reduce the stressful

nature of demands

17-41

A Model of Stress

EEXXHHI IBBI ITT17-7

17-7
17-42

Potential Sources of Stress

Environmental Factors
Economic uncertainties due to changes in the business cycle
Change in business priorities due to changes in the political
scenario
Threat to manpower requirement due to technological
changes/innovation

Organizational Factors
Task demands related to the job
Role demands of functioning in an organization
Interpersonal demands created by other employees

Personal Factors
Family and personal relationships
Economic problems from exceeding earning capacity
Personality problems arising from basic disposition
17-43

Consequences of Stress
Stressors are additive: high levels of stress can
lead to the following symptoms
Physiological
High blood pressure, headaches, stroke

Psychological
Dissatisfaction, tension, anxiety, irritability, boredom, and
procrastination
Greatest when roles are unclear in the presence of
conflicting demands

Behavioral
Changes in job behaviors, increased smoking or drinking,
different eating habits, rapid speech, fidgeting, sleep
disorders
17-44

Not All Stress Is Bad: The Proposed InvertedU Relationship Between Stress and Job
Performance

Note: This model is not empirically supported

Not all stress is bad: some level of stress can
increase productivity
Too little or too much stress will reduce performance
EEXXHHI IBBI ITT17-8
17-8

17-45

Managing Stress
Individual Approaches

Implementing time management

Increasing physical exercise
Relaxation training
Expanding social support network

Organizational Approaches

Improved personnel selection and job placement

Training
Use of realistic goal setting
Redesigning jobs
Increased employee involvement
Improved organizational communication
Offering employee sabbaticals
Establishment of corporate wellness programs
17-46

Global Implications
Organizational Change
Cultures vary in terms of beliefs in their ability to
implement change
A cultures time orientation (long-term/short term)
will affect implementation of change
Reliance on tradition can increase resistance to
change
Power distance can affect how change is
implemented in a culture
Idea champions act differently in different cultures

Stress
Job conditions that cause stress vary across cultures
Evidence suggests that stress is equally bad for
employees of all cultures
17-47
Having friends
and family can reduce stress

Summary and Managerial

Implications
Organizations and the individuals within
them must undergo dynamic change
Managers are change agents and modifiers
of organizational culture
Stress can be good or bad for employees
Despite possible improvements in job
performance caused by stress, such
improvements come at the cost of
increased job dissatisfaction
17-48