Social System and Organizational Culture

I. Understanding a Social System

a) Social System
b) Social Equilibrium
c) Functional and Dysfunctional Effects
d) Psychological and Economic Contracts
II. Social Culture
a) Social Culture
b) Cultural Diversity
c) Social Culture Values
d) Social Responsibility
III. Organizational Culture
a) Organizational Culture
b) Characteristics of Culture
c) Measuring Organizational Culture
d) Communicating and Changing Culture
IV. Elements of Organizational Culture
a) Stories
b) Symbols
c) Power structure
d) Organizational Structure
e) Control systems
f) Rituals and Routine
V. Fun Workplaces
UNDERSTANDING A SOCIAL SYSTEM

A social system is a complex set of human relationships interacting in many ways. Possible
interactions are as limitless as the stars in the universe. Each small group is a subsystem within larger
groups that are subsystems of even larger groups, and so on, until all the world's population is
included. Within a single organization, the social system includes all the people in it and their
relationships to one another and to the outside world.

Two points stand out in the complex interactions among people in a social system. First, the
behavior of any one member can have an impact, directly or indirectly, on the behavior of any other.
Although these impacts may be large or small, all parts of the system are mutually interdependent.
Simply stated, a change in one part of a system affects all other parts, even though its impact may be
slight.

A second important point revolves around a system's boundaries. Any social system engages in
exchanges with its environment, receiving input from it and providing output to it (which then
becomes inputs for its adjacent systems). Social systems are, therefore, open systems that interact with
their surroundings.

Social Equilibrium

A system is said to be in social equilibrium when its interdependent parts are in dynamic
working balance. Equilibrium is a dynamic concept, not a static one. Despite constant change and
movement in every organization, the system's working balance can still be retained. The system is like
a sea: in continuous motion and even suffering substantial disruption from storms, over time the sea's
basic character changes very little.

Functional and Dysfunctional Effects

If the effects of change are favorable for the system, it has a functional effect. When an action
or a change creates unfavorable effects, such as a decline in productivity, for the system it has a
dysfunctional effect.

Employees can also have functional or dysfunctional effects on the organization. They can be
creative, productive, and enthusiastic and actively seek to improve the quality of the organization's
product or service. On the other hand, they can be tardy. absent frequently, unwilling to use their
talents, and resistant to organizational changes. For employees to exhibit functional behaviors, they
need to receive clear expectations and promises of reward. Furthermore, in exchange, the organization
needs to receive a commitment from the employees.

Psychological and Economic Contracts

When employees join an organization, they make an unwritten psychological contract with it,
although often they are not conscious of doing so. This contract is in addition to the economic contract
where time, talent and energy are exchanged for wages, hours, and reasonable working conditions. The
psychological contract defines the conditions of each employee's psychological involvement - both
contributions and expectations - with the social system. Employees agree to give a certain amount of
loyalty, creativity, and extra effort, but in return they expect more than economic rewards from the
system. They seek job security, fair treatment (human dignity), rewarding relationships with co-
workers, and organizational support in fulfilling their development expectations.

If the organization honors only the economic contract and not the psychological contract,
employees tend to have lower satisfaction because not all their expectations are being met They may
also withhold some of their work-related contributions. On the other hand, if both their psychological
and economic expectations are met, they tend to experience satisfaction, stay with the organization, and
perform well. A desirable sense of mutuality has been reached.

The psychological contract builds upon the concept of exchange theory. This theory simply
suggests that whenever a continuing relationship exists between two parties, each person regularly
examines the rewards and costs of that interaction. In order to remain positively attracted to the
relationship, both parties must believe that a net positive ratio (rewards to costs) exists from their
perspective. Consequently, the psychological contract is continually examined and often revised as
new needs emerge and new rewards become available.

SOCIAL CULTURE

An environment of human-created beliefs, customs, knowledge and practices is called social

culture. Culture is the conventional behavior of society, and influences all actions of a person even
though it seldom enters into conscious thoughts.

Social cultures are often portrayed as consistent within a nation, thereby producing a so-called
national culture. At the simplest level, national cultures can be compared on the bases of how their
members relate to each other, accomplish work, and respond to change. However, distinctive social
cultures can exist within a nation, as well, as seen in the tragic dispute between people of various
ancestry within the former country of Yugoslavia. Social cultures can have dramatic effects on behavior
at work. Some of the ways in which cultures differ include patterns of decision making, respect for
authority, treatment of females, and accepted leadership styles. Knowledge of social cultures is
especially important because managers need to understand and appreciate the backgrounds and beliefs
of all members of their work unit.

People learn to depend on their culture. It gives them stability and security, because they can
understand what is happening in their cultural community and know how to respond while in it.
However, this one-culture dependency may also place intellectual blinders on employees, preventing
them from gaining the benefits of exposure to people from other cultural backgrounds. Cultural
dependency is further compounded under conditions involving the integration of two or more cultures
into the workplace. Employees need to learn to adapt to others in order to capitalize on the
opportunities they present, while avoiding possible negative consequences.
Cultural Diversity

Employees in almost any organizations are divided into subgroups of various kinds. Formation
of groups is determined by two broad sets of conditions. First, job-related (organizationally created)
differences and similarities, such as type of work, rank in the organization, and physical proximity to
one another, sometimes cause people to align themselves into groups. However, a second set of non-
job-related conditions (those related to culture, ethnicity, socioeconomics, sex and race) arise primarily
from an individual's personal background: these conditions are highly important for legal, moral, and
economic reasons.

This cultural diversity or rich variety of differences among people at work, raises the issue of
fair treatment for workers who are not in positions of authority.

Problems may persist because of a key difference in this context between discrimination and
prejudice. Discrimination is generally exhibited as an action, whereas prejudice is an attitude. Either
may exist without the other. The law focuses on an employer's actions, not feelings. If actions lead to
what is legally determined to be discriminatory results, such actions are unlawful regardless of the
employer's alleged good intentions.

A promising approach to overcoming discriminatory practices actually attempts to change the

underlying attitudes. Programs aimed at managing and valuing diversity build from a key premise:
Prejudicial stereotypes develop from unfounded assumptions about others and from their overlooked
qualities. Differences need to be recognized, acknowledged, appreciated, and used to collective
advantage.

Social Culture Values

Work ethic means that they view work as very important and as desirable goal in life. They
tend to like work and derive satisfaction from it. They usually have a stronger commitment to the
organization and to its goals than do other employees. These characteristics of the work ethic make it
highly appealing to employers.

In spite of its prevalence, the work ethic is a subject of continuing controversy. The available
research indicates that two conclusions can be safely reached. First, the proportion of employees with a
strong work ethic varies sharply among sample groups. Differences depend on factors such as personal
background, type of work performed, and geographical location. The range is quite broad, with the
proportion of employees in different jobs who report that work is a central life interest extending from
15 to 85 percent.

A second conclusion is that the general level of the work ethic has declined gradually over
many decades. The decline is most evident in the different attitudes between younger and older
workers. Not only are younger employees not as supportive of the work ethic, but the level of support
that young people once exhibited has dropped substantially. This decline carries serious implications
for industrial productivity, especially as international competition intensifies.
 Why has the work ethic declined? Dramatic social changes have brought about the work ethics
deterioration. Competing social values have emerged, such as leisure ethic (a high priority placed on
personal gratification), desire for intimacy (an emphasis on close personal relationships), and
entitlement (a belief that people should receive benefits without having to work). In addition, changes
in social policy and tax laws have reduced incentives to work and occasionally even penalized hard
work and success in the minds of some workers, at least). Finally, the "instant wealth" phenomenon has
blossomed in recent times. This occurs when thousands of people - either as employees in high-tech
start-up companies or as fortunate investors in real estate or the stock market - become millionaires
after just a few years of work. The dramatic change they experience in their financial assets has led to a
belief among some people that vast sums of money can be made by simply being in the right place at
the right time, regardless of their belief in the work ethic. These factors all represent additional
illustrations of complex social relationships in action, and they show how an employee's work ethic is
contingent on factors in the larger social system. In the twenty-first century, managers are no longer
able to rely on the work ethic alone to drive employees to be productive.

Social Responsibility

Every action that organization takes involves costs as well as benefits. In recent years there has
been a strong social drive to improve the cost-benefit relationship to make it possible for society to gain
benefits from organizations and for the benefits to be fairly distributed.

Social responsibility is the recognition that organizations have significant influence on the
social system and that this influence must be properly considered and balanced in all organizational
actions.

The presence of strong social values such as social responsibility has a powerful impact on
organizations and their actions. It leads them to use a socioeconomic model of decision making, in
which both social costs and benefits are considered along with the traditional economic and technical
values. Organizations take a broader view of their role within a social system and accept their
interdependence with it.

ORGANIZATIONAL CULTURE

Social (national) culture creates the wide-ranging context in which organizations operate. It
provides the complex social system of laws, values, and customs in which organizational behavior
occurs. Employee behavior (B), according to social psychologist Kurt Lewin, is a function of the
interaction between personal characteristics (P) and the environment (E) around the person, or B =
f(P.E). part of that environment is the social culture in which the individual lives and works, which
provides broad clues as to how a person with a given background will behave.

Inside the organization lies another powerful force for determining individual and group
behavior. Organizational culture is the set of assumptions, beliefs, values and norms that are shared by
an organization's members. This culture may have been consciously created by its key members, or it
may have simply evolved across time. It represents a key element of the work environment in which
employees perform their jobs. This idea of organizational culture is somewhat intangible, for we cannot
see it or touch it, but it is present and pervasive. Like the air in a room, it surrounds and affects
everything that happens in an organization. Because it is a dynamic systems concept, culture is also
affected by almost everything that occurs within an organization.

Organizational cultures are important to a firm's success for several reasons. They give an
organizational identity to employees - a defining vision of what the organization represents. They are
also an important source of stability and continuity to the organization, which provides a sense of
security to its members. At the same time, knowledge of the organizational culture helps newer
employees interpret what goes on inside the organization, by providing an important context for
events that would otherwise seem confusing. More than anything else, perhaps, cultures help stimulate
employee enthusiasm for their tasks. Culture attracts attention, convey a vision, and typically honor
high-producing and creative individuals as heroes. By recognizing and rewarding these people,
organizational cultures are identifying them as role models to emulate.

Characteristics of Cultures

Organizations, like fingerprints and snowflakes, are unique. Each has its own history, patterns
of communication, systems and procedures, mission statements and visions, stories and myths which,
in their totality, constitute its distinctive culture. Cultures are relatively stable in nature, usually
changing only slowly over time. Exceptions to this condition may occur when a major crisis threatens a
firm or when two organizations mere with each other (requiring a careful blending of the two as to
avoid culture clash).

Most organizational cultures have historically been implicit rather than explicit. More recently,
though, organizations have begun talking about their intended cultures, and many top leaders see one
of their major roles as speaking out about the kind of environment they would like to create within
their firms. A final defining characteristic of most cultures is that they are seen as symbolic
representations of underlying beliefs and values. Seldom do we read a description of a firm's culture.
More frequently, employees make inferences about it from hearing stories about the way things are
done, from reading slogans that portray corporate ideals, from observing key artifacts, or from
watching ceremonies in which certain types of employees are honored.

Several other dimensions of culture are important to note. For one, there is no best culture for
all firms; culture clearly depends on the organization's goals, industry, nature of competition, and other
factors in its environment. Cultures will be more easily recognized when their elements are generally
integrated and consistent with each other; in other words, they fit together like pieces of a puzzle. Also,
most members must at least accept if not embrace, the assumptions and values of the culture.

Historically, employees seldom talked explicitly about the culture in which they worked; more
recently, culture has become an increasingly acceptable conversation topic among employees. Most
cultures evolve directly from top management, who can have a powerful influence on their employees
by what they say. However, management's actions are even more important to watchful employees,
who can quickly detect when managers give only lip service but not true support to certain ideals, such
as customer service and quality products. A culture may exist across an entire organization, or it may
be made up of various subcultures - the environment within a sinale division. branch, plant, or
department. Finally, cultures have varying strengths - they can be characterized as relatively strong or
weak, depending largely on the degree of their impact on employee behavior and how widely the
underlying beliefs and values are held.

The effect of organizational culture on employee behavior is difficult to establish. Some research
indicates that there is a positive relationship between certain organizational cultures and performance.
Agreement within an organization on a culture should result in a larger degree of cooperation,
acceptance of decision making and control, communication, and commitment to the employer. Such a
result is especially likely when a firm consciously seeks to create a performance-enhancing culture that
removes barriers to success.

Measuring Organizational Culture

Systematic measurement and comparison of cultures is difficult at best. Most early attempts by
researchers relied on examination of stories. Symbols, rituals, and ceremonies to obtain clues and
construct a composite portrait. Others have used interviews and open-ended questionnaires in an
attempt to assess employee values and beliefs. In other cases, examination of corporate philosophy
statements has provided insight into the espoused culture (the beliefs and values that the organization
states publicly). Another approach is to survey employees directly and seek their perceptions of the
organization's culture. One of the more interesting methods is to become a member of the organization
and engage in participant observation.

Communicating and Changing Culture

If organizations are to consciously create and manage their cultures, they must be able to
communicate them to employees, especially the newly hired ones. People are generally more willing to
adapt and learn when they want to please others, gain approval, and learn about their new work
environment. Similarly, organizations are eager to have the new employees fit in, and therefore an
intentional approach that helps make this happen is used by many firms.

Collectively, these cultural communication acts may be lumped under the umbrella of
organizational socialization, which is the continuous process of transmitting key elements of an
organization's culture to its employees. It consists of both formal methods (such as military
indoctrination at boot camp or corporate orientation training for new employees) and informal means
(like the role modeling provided by mentors). All these approaches help shape the attitudes, thoughts,
and behavior of employees. Viewed from the organization's perspective, organizational socialization is
like placing an organization's fingerprints on people or stamping its own genetic code on them. From
the employee's viewpoint, it is the essential process of learning the ropes to survive and prosper within
the firm. The important point is that socialization can be functional for both workers and their
employers.

Managers are encouraged to engage in storytelling as a way to forge a culture and build
organizational identity. Good stories tap into the emotions of an audience and have proven to be
powerful ways to create shared meaning and purpose. Stories convey a sense of tradition, explain how
past problems have been solved, convey personal frailty through tales of mistakes made and learned
from, and enhance cohesion around key values. The most memorable stories entertain as well as inform
and uplift as well as teach. These stories highlight purposeful plots and patterns that the organization
cherishes, they point out consequences of actions, and they provide valuable lessons that carry forward
the wisdom gained through previous years. Storytelling, then, is a key means for achieving
socialization of employees.

A reciprocal process emerges when changes occur in the other direction. Employees can also
have an active impact on the nature of the organization's culture and operations. Individualization
occurs when employees successfully exert influence on the social system around them at work by
challenging the culture or deviating from it. The interaction between socialization and
individualization which shows the types of employees who accept or reject an organization's norms
and values while exerting various degrees of influence. The two extremes - rebellion and total
conformity - may prove dysfunctional for the organization and the individual's career in the long run.
Isolation, of course, is seldom a productive course of action. If we assume that the culture of a certain
organization invites its employees to challenge, question, and experiment while also not being too
disruptive, then the creative individualist can infuse new life and ideas for the organization's benefit.

ELEMENTS OF ORGANIZATIONAL CULTURE

Johnson and Scholes referred to the coherent whole of natural assumptions that form the paradigm by
the term ‘Cultural Web’. The paradigm consists of six types of physical and observable utterances of
organizational culture.

1. Stories

These are the stories of events that are constantly talked about within the organisation. These stories
are kept alive by the employees and are passed along to newcomers. The stories are told in the
hallways, in the canteen, or in the smoking area and are often about the heroes, villains, successes and
failures of an organisation. The stories reveal much about the values that apply within the organisation.

These are the previous events – both accurate and not – which are discussed by individuals within and
outside the company. Which events and people are remembered by the company indicates what the
company values, and what it chooses to immortalise through stories.

· What form of company reputation is communicated between customers and stakeholders?

· What stories do people tell new employees about the company?
· What do people know about the history of the organisation?
 · What do these stories say about the culture of the business?

2. Symbols

The symbols are about recongisable expressions of the organisation, such as the office building, the
corporate identity, the logo, the company cars, the functions, the dress code and the use of language.

This is the visual representation of the company; how they appear to both employees and
individuals on the outside. It includes logos, office spaces, dress codes and sometimes advertisements.

· What kind of image is associated with the company from the outside?
· How do employees and managers view the organisation?
· Are there any company-specific designs or jargon used?
· How does the organisation advertise itself?

3. Power structure

The power structure is directly related to the paradigm, because the most powerful people within an
organisation are deemed to have the most direct influence on the core assumptions and ideas within an
organisation.

This is the genuine power structures and responsible individuals within the organisation. It may
refer to a few executives, the CEO, board members, or an entire managerial division. These individuals
are those who hold the greatest influence over decisions, and generally have the final say on major
actions or changes.

· Who holds the power within the organisation?

· Who makes decisions on behalf of the company?
· What are the beliefs and culture of those as the top of the business?
· How is power used within the organisation?

4. Organisational structure

The organisational structure includes the hierarchical composition of the organisation and the
relationship between people from these various layers of the organisation. The informal and unwritten
power structures are also part of the organisational structure.

This refers to both the hierarchy and structure designated by the organisation. Alongside this,
Johnson and Scholes also use it to refer to the unwritten power and influence that some members may
exert, which also indicate whose contributions to the organisation are most valued by those above
them.

· How hierarchical is the organisation?

· Is responsibility and influence distributed in a formal or informal way?
· Where are the official lines of authority?
 · Are there any unofficial lines of authority?

5. Control systems

This element is regarding the way in which the organisation is being managed and controlled. This
includes the financial systems, the quality systems and rewards. How these rewards are determined
and how these are distributed within the organisation also falls under control systems.

These are the systems and pathways by which the organisation is controlled. This can refer to many
things, including financial management, individual performance-based rewards (both measurement
and distribution) and quality-control structures.

· Which processes are strongly and weakly controlled?

· In general, is the company loosely or tightly controlled?
· Are employees rewarded or punished for performance?
· What reports and processes are used to keep control of finance, etc?

6. Rituals and routines

Rituals are the events of an organisation in which they emphasise what is truly important to them and
how they handle matters. Examples of this are: Friday afternoon drinks, training courses, promotions
and the recruitment and selection policy of the organisation. Routines that reveal much about the way
employees interact with each other and others both within and outside the organisation.

Rituals and Routines

This refers to the daily actions and behaviours of individuals within the organisation. Routines indicate
what is expected of employees on a day-to-day basis, and what has been either directly or indirectly
approved by those in managerial positions.

· What do employees expect when they arrive each day?

· What experience do customers expect from the organisation?
· What would be obvious if it were removed from routines?
· What do these rituals and routines say about organisational beliefs?

To summarise

The organisational culture, big or small, influences the organisation’s performance. Despite the fact that
not many organisations stimulate or manage their own culture, the culture is very telling when it
comes to the organisation’s future. Johnson and Scholes’ Cultural Web shows that the organisational
culture is related to both the way in which employees interact with each other and the way in which
the organisation interacts with the outside world. Despite the fact that a strong organisational culture
stimulates unity, there are always sub-cultures that create division. The benefits that a strong
organisational culture brings are difficult to replicate and provide the organisation with a strong
competitive advantage.
FUN WORKPLACES

Society encourages and provides many ways in which people can play and have fun in their
recreational lives. Play typically has a number of common elements - immersion in the activity,
surprise, variety, choice, experience of progress, and the opportunities to make personal contributions
and to "win". Most of these features can also be incorporated into the daily life of employees, many
whom also desire to have fun at work. A fun work environment is a unique and increasingly popular
organizational culture in which supervisors encourage, initiate, and support a variety of playful and
humorous activities. A fun workplace culture has several key features:

 It is easily recognized (by observing the presence of laughter, smiles, surprise, and
spontaneity)
 It means different things to various people
 It is relatively easy to create at work
 It elicits a broad range of personal and organizational payoffs

REFERENCES

Janse, B. (2018). Cultural Web Analysis. Retrieved [insert date] from ToolsHero:

https://www.toolshero.com/management/cultural-web-analysis/

https://www.businessballs.com/strategy-innovation/cultural-web-johnson-scholes/

https://www.scribd.com/doc/33735438/Chap-4-Social-Systems-and-Organizational-Culture