Lec. 02 - Modified
Lec. 02 - Modified
Chapter 15
Organizational Culture
Lect. 02
15.6 Show how national culture can affect the way organizational culture is transported to
another country.
❑ 69% of organizations that adapted amid the pandemic say culture offers a
competitive advantage.
What is culture ?
The attitude, traits and behavioral patterns which govern the way an
individual interacts with others is termed as culture. Culture is
something which one inherits from his ancestors and it helps in
distinguishing one individual from the other.
• However, simply looking at these tangible aspects is unlikely to give a full picture of
the organization.
Appraising an organization on the strength of each provides a basis for the shared understanding
that members have about the organization, how things are done in it, and the way they are
supposed to behave.
– The Market
▪ A culture which is based on achievement. Employees value communication,
competence, and competition.
– Boundary-defining role.
– Conveys a sense of identity for members.
– Facilitates the generation of commitment to the Org..
– Enhances the stability of the social system.
– Serves as a sense-making and control mechanism.
• The Functions of Culture: Culture is the social glue that helps hold
an organization together by providing appropriate standards for what
employees should say or do.
– Boundary-defining role.
▪ Culture helps to create distinctions between one organization and others.
– Conveys a sense of identity for members.
– Facilitates the generation of commitment.
▪ Culture encourages the members of the organization to give priority to organizational
interests over and above their personal interests
– Enhances the stability of the social system.
▪ Culture is also known as the social glue that helps to hold the organization together by
providing appropriate standards for what employees should say and do. It provides a list
of social do’s and don’ts for the employees
– Serves as a sense-making and control mechanism.
▪ Every organization has its own set of assumptions, understandings and implicit rules to
guide the day to day behavior of the employees.
• Sustainability
– A culture of sustainability is one in which organizational members hold shared
assumptions and beliefs about the importance of balancing economic efficiency,
social equity and environmental accountability.
Climate
Difference alsoorganizational
between influences culture
the habits people adopt.
and organizational climate is that the
culture is about the norms, values and behavior adopted by the
employees within the organization while the climate is about the
atmosphere of the organization that is created based on the culture.
Sustainability: practices that can be maintained over very long periods of time because the tools or structures that support
the practices are not damaged by the processes.Social sustainability practices.Sustainable management doesn’t need to be purely
altruistic.
• Culture as an Asset
– Culture can significantly contribute to an organization’s bottom
line in many ways.
– There are many more cases of business success stories
because of excellent organizational cultures than there are of
success stories despite bad cultures, and almost no success
stories because of bad ones.
– Culture is beneficial to the organisation as it enhances
organizational commitment and increases the consistency of
employee behavior.
– Culture is beneficial to the employee also as it reduces
ambiguity. Employees become very clear as to how things are to
be done and what is more important for the organisation.
• Culture as a Liability
– Institutionalization
▪ Barriers to Change. (IBM, XEROX, GM)
▪ Barriers to Diversity
▪ Toxicity and Dysfunctions
▪ Barriers to Acquisitions and Mergers.
(DaimlerChrysler merger)
– the new executive team ripped out the recently installed smoke detectors on the executive
floor at Chrysler headquarters in Detroit so they could smoke cigars with their red wine in the
evenings.
• Culture as a Liability
– Institutionalization
• That is, the organization is valued for itself and not for the goods or services it produces—and it takes
on a life of its own, apart from its founders or members. It doesn’t go out of business even if its
original goals are no longer relevant. Acceptable modes of behavior become largely self-evident to
members, and although this isn’t entirely negative, it does mean behaviors and habits that should be
questioned and analyzed become taken for granted, which can stifle innovation and make
maintaining the organization’s culture an end in itself.
– Barriers to Change
• Consistency of employee behavior is an asset to the organization, when it has a stable
environment. When the organization is dynamic, it will prove to be a liability as the employees will try
to resist changes in the environment. Companies such as IBM, Xerox and General motors’ have very
strong cultures which worked well for them in past, but these strong cultures only become barriers to
change when business environment changes. Therefore, organizations which have strong cultures
which proved successful in the past can lead to failure in future, when these cultures do not match
with the changing environmental needs.
• Culture as a Liability
– Barriers to Diversity
Strong cultures put a lot of pressure on the employees to conform to the accepted values and styles of the
organization. Even the new employees who belong to different race, religion etc. are expected to conform to
the organization’s core cultural values, otherwise they are deemed to be unfit for the organization. Strong
cultures do not acknowledge the fact that people from different backgrounds bring unique strengths to the
organization. Strong cultures can also prove to be barriers to diversity when these support organization bias
or when these become insensitive to people who are different in one way or the other. Diverse behaviors and
strengths are likely to diminish in strong cultures as people attempt to fit in. Strong cultures can be
liabilities when they effectively eliminate the unique strengths that people of different backgrounds
bring to the organization, or when they support institutional bias or become insensitive to people who are
different.
• Culture as a Liability
– Barriers to Acquisitions and Mergers
• Culture can act as barrier to mergers and acquisitions. Historically financial matters and product synergy alone were
considered to decide which company should acquire which company or which unit should merge with which firm. But
in the recent years there has been a change in the trend. Cultural compatibility has become a primary concern while
deciding about acquisitions and mergers. Favorable financial statement or product line are, of course, the initial
attractions at the time of acquisition, but another important factor to be considered is how well the cultures of the two
organizations match with each other.
• Understanding this question is important so that you know how they can be changed.
– The first stage is prearrival, which explicitly recognizes that each individual arrives with
a set of values, attitudes, and expectations. One way to capitalize on pre-hire
characteristics in socialization is to use the selection process to inform prospective
employees about the organization as a whole. The selection process ensures the
inclusion of the “right type”—those who will fit in.
– The second stage is encounter, in which the individual confronts the possible
dichotomy between expectations and reality. If expectations were fairly accurate, the
encounter stage merely cements earlier perceptions. However, this is often not the case.
At the extreme, a new member may become disillusioned enough to resign. Proper
recruiting and selection should significantly reduce that outcome, along with
encouraging friendship ties in the organization—newcomers are more committed
when friends and coworkers help them “learn the ropes.”
– Finally, to work out any problems discovered during the encounter stage, the new
member changes or goes through the metamorphosis stage.