Chapter 7

Organizational Culture

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 Organizational Culture

A system of shared meaning held by

members that distinguishes the organization
from other organizations
• Composed of seven key characteristics

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 Seven Characteristics of
Organizational Culture
1. Innovation and Risk Taking: the
degree to which employees are
encouraged to be innovative and take
risks.
2. Attention to Detail: the degree to
which employees are expected to
exhibit precision, analysis, and
attention to details.

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 Seven Characteristics of
Organizational Culture
3. Outcome Orientation: the degree to
which the management focuses on
results.
4. People Orientation: the degree to
which management decisions take into
account the effects of outcomes on the
people.
5. Team Orientation: the degree to
which work activates are organized
around teams rather that individuals. 4
 Seven Characteristics of
Organizational Culture
6. Aggressiveness: the degree to which
people are aggressive and competitive
rather than easy-going.
7. Stability: the degree to which
organizational activities emphasize
maintaining the status quo in contrast to
growth.

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 Culture Is a Descriptive Term

Culture Job Satisfaction

• Organizational • Measures affective
culture is concerned responses to the
with how employees work environment:
perceive an concerned with how
organization’s employees feel
culture, not whether about the
or not they like it organization
• Descriptive • Evaluative
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 Do Organizations Have Uniform
Cultures?
• The dominant culture expresses the core
values that are shared by a majority of the
organization’s members
• Subcultures tend to develop in large
organizations to reflect common problems,
situations, or experiences of members that
are unique to certain departments or
geographic area
• Subcultures mirror the dominant culture 7

but may add to or modify the core values

 Strong Cultures
• In a strong culture, the organization’s core
values are both intensely held and widely
shared
• Strong cultures will:
 Have great influence on the
behavior of its members
 Increase cohesiveness
 Result in lower employee
turnover
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 Organizational versus
national culture
• National culture: has greater impact on
employee behavior than does
organization’s culture.

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 Culture Versus Formalization

• Both seek predictability, orderliness, and

consistency
• Culture controls by increasing behavioral
consistency
• Formalization controls through policies and
written documentation
• Strong cultures can be a substitute for
formalization
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Culture’s Five Basic Functions
• Defines Boundaries
• Conveys a Sense of Identity
• Generates Commitment Beyond Oneself
• Enhances Social Stability
• Sense-making and Control Mechanism:
serves as a guides and shapes the
attitudes and behavior of employees.

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 Culture as a Liability

• Barrier to Change
 Culture is slow to change – even in a dynamic
environment
• Barrier to Diversity
 Culture seeks to minimize diversity
 Can embed prevalent bias and prejudice
• Barrier to Acquisitions and Mergers
 Most mergers fail due to cultural incompatibility

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 Creating Culture

• Ultimate source of an organization’s culture

is its founders
• Founders create culture in three ways:
 By hiring and keeping those who think and feel the
same way they do
 Indoctrinating and socializing those employees to their
way of thinking and feeling
 Acting as a role model and encouraging employees to
identify with them
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 Keeping a Culture Alive

• Selection – seek out those who fit in

• Top Management – establish norms of
behavior by their actions
• Socialization – help new employees adapt
to the existing culture

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 A Socialization Model

• Pre-arrival –initial knowledge about the

organization and own unique ideas
• Encounter – exposed to the organization
• Metamorphosis – member changed to fit
within the organization 15
 Dimensions of
Socialization Programs
Intense Programs Moderate Programs
• Formal – new workers • Informal – new workers
separated for training immediately put to
• Collective – group basis work
• Fixed – planned • Individual – one-on-one
activities • Variable – no
• Serial – role models timetables
used • Random – on your own
• Divestiture – strip away • Investiture – accepts
characteristics to build and confirms existing
up new ones characteristics 16
 How Organization Cultures Form

Success in employee socialization depends

on management’s selection of socialization
method and the closeness of new employees’
values to those of the organization
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 How Employees Learn Culture
Culture is transmitted to employees
through:
 Stories – provide explanations
 Rituals – reinforce key values
 Material Symbols – convey importance
 Language – identify and segregate members

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 Creating an Ethical
Organizational Culture
A strong culture with high risk tolerance,
low-to-moderate aggressiveness, and
focuses on means as well as outcomes is
most likely to shape high ethical standards
 Managers must be visible role models
 Communicate ethical expectations
 Provide ethical training
 Visibly reward ethical acts and punish unethical
ones
 Provide protective mechanisms
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 Creating a Positive
Organizational Culture
A positive culture is one that emphasizes
the following:
• Building on Employee Strengths
• Rewarding More Than Punishing
• Emphasizing Vitality and Growth of the
Employee

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 Implications for Managers

• Create the culture you want when the

organization is small and new
• If established, culture needs to be
changed, expect it to take years

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 Keep in Mind…

• Organizational culture is concerned with

how employees perceive the culture, not
whether or not they like it
• Ethical and positive organizational cultures
can be created – methods differ
• National culture influences organizational
culture

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Thank You

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