Master

Your
Career
Growth
MGNT803 Organisational Behaviour and
Management
Topic 9: Organisational Culture
Reading for today:
• McShane et al. (2018), Ch. 14 Organisational
Culture
• Warrick, DD 2017, ‘What leaders need to know
about organizational culture’, Business Horizons,
vol. 60, no. 3, pp. 395-404.
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Outline for Today

5. What is culture?

4. Why is culture important?

3. What is the Australian business culture?

2. What is the value in having a good culture?

1. How do you develop a good culture?

What is Culture?
 Culture

According to anthropologists and sociologists,

culture represents the belief systems, values and
specific human behaviours that distinguish one
society from another.
Wood et al (2001)
 3

Organisational culture
Despite the connection between
organisational culture and national or
host culture, organizations will still
develop their own individual cultures
derived from the particular characteristics
and experiences unique to the organization,
eg. multinational companies.
Wood et al, (2001)
 What is Culture?
• 151 + definitions – (Olie, 1951)

• “a collective programming of the mind

which distinguishes one group from
another” (Hofstede 1980, 25)
• “mental programming … patterns of
thinking and feeling and potential acting”
(Hofstede 1991, 4)
 Culture Defined
“A group’s pattern of shared taken-for-granted
basic assumptions” (Edgar Schein)

More informally: “the way we do things around

here”

Schein also observes that culture is the result

of a complex group learning process that is
only partially influenced by leader behaviour
Culture Defined
 3

Organisational culture
- a definition

Culture is a system of shared beliefs

and values that develops within an
organisation or within its sub-units,
and that guides the behaviour of its
members.
 Organisational culture
- SYMBOLISM

Culture is often symbolised in

ways which express meaning
for those who are a part of the
culture (Emic) or who are
outside the culture (Etic).
 Organisational culture
- SYMBOLISM

Symbolism leads to
‘retention’ or ‘stickiness’
See for example, the following:
what thoughts and emotions do these symbols invoke in you?
 The Organisational Iceberg
Goals
Strategy
Formal Structure
Organisation Systems & procedures
Products & services
Financial resources
Management
Informal
Values, attitudes & beliefs
Organisation
Leadership style & behaviour
Org. Culture & norms of behaviour
Power, politics & conflict
Informal groupings
Source of culture: usually reflects
the vision or mission of the founder

Stories
How Do
Employees Rituals
Learn About
Material
the Culture of Symbols
an organisation?
Language
 Stories

 How did Nike begin?

 Rituals

 IBM
Material Symbols
 Language

 Military
Source of culture: usually reflects
the vision or mission of the founder

Stories
What
How Do

examples
Employees Rituals
Learn About
can you
the Culture of
Material
Symbols
an share?
organisation?
Language
 Levels of cultural analysis
Wood et al, (2001)

Observable culture

Shared values

Common
Assumptions

20
 Functions of Culture
• Cultures develop as ways of solving
basic problems of survival
• External adaptation – how to cope with
the environment?
• Internal integration –
how to live and work
together?
 Organisational culture:
the set of shared values and
norms that controls organisational
members’ interactions with each
other and with people outside
the organisation.

Jones 2007, 195

 Why do cultures emerge?
1. Homophily: The tendency of individuals
to seek out and join groups of individuals with
similar characteristics.
 Why do cultures emerge?
2. Social Influence/Social Contagion:
The tendency of members
of a group to become
more alike one another
as time progresses.
 Think about your five closest friends. What do they care about?
Do they love the gym? Long walks on the beach? Maybe they
smoke, or are overweight. You should choose your friends
wisely, because they can have a big influence on your health.
https://theconversation.com/how-your-friends-affect-your-health-53168
• Growing evidence suggests
disease spreads through
social networks.
• According to a US study
which followed 12,000
people for 32 years, if you have a close friend who
becomes obese, your chances of becoming obese increase
by 171%. And your risk of attempting suicide is four
times higher if you have a friend who has tried to kill
themselves.

https://theconversation.com/how-your-friends-affect-your-health-53168
Recent studies have shown:
• quitting smoking spreads through social networks. If your
significant other quits you have a 67% decreased chance
of smoking.
• happiness is contagious. Your chances of becoming
happier increase if you are surrounded by happy people.
• happy siblings or spouses can also help, but less so,
increasing your chances of becoming happy by 14% and
8% respectively. Happy co-workers has no effect at all, so
it’s OK to be grumpy at work.

https://theconversation.com/how-your-friends-affect-your-health-53168
Why is Culture Important?
^
CULTURE

MGMT915 - Week 6 - 2008 29

 So, why is culture so Important?
• 2 teams need to collaborate on a project:
Let’s call them Accountants and Financial Advisors.
• Each has their own comfort zone
– which is perpetuated through culture.

• Conflict arises as each disparate team tries to operate in their

own comfort zone.
• EG: efficient scheduled meetings versus informal impromptu
meetings; information exchange via face-to-face versus email and
social media

• The challenge is to create a new common comfort zone.

30
Hence the need for cultural alignment
So, why is culture so Important?
Accountants Financial Advisors
Inefficient Operations
Destructive Conflict
Misunderstandings

Comfort Zone/Culture Comfort Zone/Culture

Shared
Comfort
31
Zone
 So, why is culture so Important?
Accountants Financial Advisors

Successful alignment leads to:

Increased Operational Efficiency
Constructive Conflict
Co-created understanding

Comfort Zone/Culture
Comfort Zone/Culture

Shared
Comfort
32
Zone
What is the Australian Culture?
^
 Research

• Hofstede – 1980
• Schein – 1985
• Hall – 1990
• Adler – 1991
• Trompenaars – 1993
• GLOBE – 1995
 Research – Geert Hofstede

• Study of IBM involving 60,000

people in more than 50 countries, from
1967-1978.

• 4 dimensions + 1 from Bond (1987)

 Research – Geert Hofstede

• Power Distance – PDI

• Individualism/Collectivism – IDV
• Uncertainty Avoidance – UAI
• Masculinity/Feminity – MAS
+
• Long/Short Term Orientation – LTO
 Research – Geert Hofstede

• Power Distance – PDI

• Individualism/Collectivism – IDV
• Uncertainty Avoidance – UAI
• Masculinity/Feminity – MAS
• Long/Short Term Orientation – LTO
• Pragmatic versus Normative – PRA
• Indulgence versus Restraint – IVR(IND)
Hofstede’s Dimensions of National Cultures
The 7 Dimensions of organisational culture

Innovation &
Outcome risk taking
orientation Attention
People to detail
orientation
Team
Stability
orientation

Aggressiveness
 The 7 Dimensions of organisational culture
7 Dimensions

Attention to Detail:

The degree to which

employees are expected
to exhibit:
precision,
analysis and
attention to detail
 The 7 Dimensions of organisational culture
7 Dimensions

Outcome Orientation:

The degree to which managers focus on results or

outcomes, rather than how these outcomes are
achieved.
The 7 Dimensions of organisational culture
7 Dimensions

Innovation & Risk Taking:

The degree to which

employees are
encouraged to be
innovative and to
take risks.
 The 7 Dimensions of organisational culture
7 Dimensions

Stability:

The degree to which organisational decisions and

actions emphasise maintaining the status quo
 The 7 Dimensions of organisational culture
7 Dimensions

Aggressiveness:

The degree to which

employees are aggressive
and competitive rather than
cooperative
 The 7 Dimensions of organisational culture
7 Dimensions

Team Orientation:

The degree to which work is

organised around teams
rather than individuals
 The 7 Dimensions of organisational culture
7 Dimensions

People Orientation:

The degree to which management decisions take

into account the effects on people in the
organisation
Value of a good (strong) Culture
 What Do Cultures Do?

Culture as a Proxy:

• Leadership

• Motivation

• Formal Systems – rules & processes

 What Do Cultures Do?
Culture’s Functions:
1. Defines the boundary between one
organisation 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.
 What Do Cultures Do?
With the right culture, the problems of
commitment, alignment and motivation go away
and hierarchy becomes irrelevant… --Akardi
Kuhlmann, CEO of ING Dire

…our belief is that if you get the culture right, most

of the other stuff—like great customer service or
building a great long-term brand, or passionate
employees and customers— will happen naturally
on its own. –Tony Hseih, CEO of Zappos.com
 What Do Cultures Do?
Until I came to IBM, I probably would have told
you that culture was just one among several
important elements in any organization’s makeup
and success— along with vision, strategy,
marketing, financials, and the like ... I came to see,
in my time at IBM, that culture isn’t just one aspect
of the game— it is the game. –Lou Gerstner, CEO
of IBM
 What Do Cultures Do?

Culture as a Liability:
• Barrier to change
• Barrier to diversity
• Barrier to acquisitions and
mergers
Developing a good (strong) Culture
 Managing culture

• Difficult and delicate

• Actions, rewards and values need to be
aligned
• ‘Surface’ changes (songs, logos, formal
statements) have little effect on their own
• Different strategies may be effective at
different times.
 Strong Cultures
• The degree to which elements of a culture
are shared uniformly by all members of a
group
– key values are universally held
– shared artefacts respected by all
– incorporated beliefs are not questioned
 Weak Cultures
– High levels of variation in adherence to shared
elements among members
– Groups constructed around a particular set of
ideas or beliefs will often devolve into
subgroups to accommodate different levels of
strength of culture
– These sub-cultures constitute minor variations
of the dominant culture, which if not properly
controlled weaken the overall culture.
 Organisational culture
determinants: strong vs. weak

Size of the Age of the

Organisation Organisation

Organisational culture
determinants

Intensity of Employee
Original Culture Turnover
 Elements of
a strong corporate culture

• A widely-shared philosophy
• Concern for individuals
• Recognition of heroes
• Belief in ritual and ceremony
• Sense of informal rules & expectations
• Belief that what employees do is
important
Creating Strong Organisational cultures

• A culture exists as a result of an organisation's

values being shared and experienced by a
majority of staff.
• An organisation can strengthen its culture by
develop these 4 areas:
– Human Resource Management.
– Leadership.
– Strategy
– Socialisation.
Creating Strong Organisational cultures
• Human Resource Management.
– Selection, promotion and removal processes
• New employees should be
screened and hired when they
have a close cultural fit.
• This is reinforced through
promotion.
• Employees who do not fit can
be removed.
 Creating Strong Organisational cultures
• Human Resource Management.
– Power, status, and rewards
• to emphasise individuals who represent
the desired culture,
putting their deeds
and acts into a
positive frame.
– Punishment
• to deemphasise individuals
who work against the culture.
 Creating Strong Organisational cultures
• Leadership.
– Lead by example.
• Through role modelling
and coaching
– Sponsorship and
facilitation of training
• leaders can influence how others should act and
behave.
New employees, especially, should be exposed
to these culture building examples.
 Creating Strong Organisational cultures
• Strategy
– Careful articulation,
communication &
reinforcement of
corporate strategy
through vision, mission,
goals, and values
• a powerful way of maintaining a strong culture.
• These strategic elements of the culture should be
consistent and ubiquitous.
Creating Strong Organisational cultures
• Strategy
– Material symbols – like dress and office
space – are strong communicators of ‘what
we do around here’.
– Symbols should be used to
reinforce cultural alignment.
 Creating Strong Organisational cultures
• Socialisation.
– Rites and ceremonies.
• provide a code of conduct illustrating behavioural
protocols.
– Stories and myths.
• are a means of manipulating the culture to something the
company finds more desirable.
• For example, Tom Hanks’ portrayal
of a loyal Federal Express worker in
‘Castaway’ is a way of reinforcing a
culture through fictional accounts.
 Creating Strong Organisational cultures
• Socialisation.
– Language and jargon.
• Employees who have been socialised through a
shared language feel part of the culture and
identify with it more
strongly.
A Socialisation Model