Chapter 16

Creating and Maintaining Organizational Culture

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Learning Objectives

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1 Describe the common characteristics of organizational culture.

2Compare the functional and dysfunctional effects of organizational culture on people and the

organization.

3 Identify the factors that create and sustain an organization’s culture.

4 Show how culture is transmitted to employees.

5Describe the similarities and differences in creating an ethical culture, a positive culture, and a

spiritual culture.

6Show how national culture can affect the way organizational culture is interpreted in another

country.

What is Organizational Culture?

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Organizational Culture

A system of shared meaning held by members that distinguishes the organization from other organizations.

“Culture is A Descriptive Term”

Organizational Culture Primary Characteristics

1 Innovation and risk taking 2 Attention to detail

3 Outcome orientation 4 People orientation

5 Team orientation 6 Aggressiveness

7 Stability

What is Organizational Culture?

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Do Organizations Have Uniform Cultures?

Dominant Culture

A culture that expresses the core values that are

shared by a majority of the organization’s

members.

Subcultures

Minicultures within an organization, typically

defined by department designations and

geographical separation.

Core ValuesThe 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.

Strong versus Weak Cultures Culture versus Formalization

What Do Cultures Do?

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The Functions of Culture

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

2 Enhances the stability of the social system

3 Serves as a sense-making and control mechanism for fitting employees in the organization

What Do Cultures Do?

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Culture Creates Climate

Organizational ClimateThe shared perceptions organizational members have about their organizationand work environment.

The Ethical Dimension of Culture

Ethical Work Climate(EWC)

The shared concept of right and wrong behavior in the workplace that reflectsthe true values of the organization and shapes the ethical decision making ofits members.

Culture and Sustainability

SustainabilityOrganization practices that can be sustained over a long period of timebecause the tools or structures that support them are not damaged by theprocesses.

What Do Cultures Do?

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Culture and Innovation

Culture as an Asset

How can culture contribute to organizational innovation?

How can culture contribute to organizational assets?

What Do Cultures Do?

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Culture as a Liability

1 Institutionalization

2 Barrier to change

3 Barrier to diversity

2 Strengthening dysfunctions

3 Barrier to acquisitions and mergers

A condition that occurs when an organization takes on alife of its own, apart from any of its members, and acquiresimmortality.

How?

Creating and Sustaining Culture

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How a Culture Begins?

Culture stems from the actions of the founders

1 Founders hire and keep only employees who think and feel the same way they do

2 Founders indoctrinate and socialize these employees to their way of thinking and feeling

3 The founders’ own behavior acts as a role mod

Creating and Sustaining Culture

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Keeping a Culture Alive

1 Selection

2 Top Management

3 Socialization

A process that adapts employees to the organization’s culture.

Creating and Sustaining Culture

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Keeping a Culture Alive

3 Socialization

Socialization Process:

Stage 1 Stage 2 Stage 3

Creating and Sustaining Culture

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Keeping a Culture Alive

3 Socialization

Socialization Alternatives

Formal versus Informal Individual versus Collective

Fixed versus Variable Serial versus Random

Investiture versus Divestiture

Creating and Sustaining Culture

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How Organizational Cultures Form?

Organizational cultures are derived from the founder

Then they are sustained through managerial action

How Employees Learn Culture?

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1 Stories Hear tales from storytellers

2 RitualsRepetitive sequences of activities that express and reinforce the keyvalues of the organization, which goals are most important, whichpeople are important, and which are expendable.

3 Material SymbolsWhat conveys to employees who is important, the degree ofegalitarianism top management desires, and the kinds of behaviorthat are appropriate.

4 LanguageUse language to help members identify with the culture using uniqueterms to describe different work requirements

Influencing an Organizational Culture

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An Ethical Culture

Managers can create a more ethical culture by adhering to the following principles:

1 Being a visible role model 2 Communicating ethical expectations

3 Providing ethical training 4Rewarding ethical acts and punishing

unethical ones

5 Providing protective mechanisms

Characteristics of Ethical Culture

A culture that emphasizes high tolerance for risk, low to moderate in aggressiveness, and focus on

means as well as outcomes

Influencing an Organizational Culture

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A Positive Organizational Culture

Recognizing Outside Context

A culture that emphasizes building on employee strengths, rewards more than it punishes, and encourages individual vitality and growth.

Positive organizational culture may not work for all organizations or everyone within them

Influencing an Organizational Culture

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A Spiritual Culture (Workplace Spirituality)

The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community.

People seek to find meaning and purpose in their work

Why Spirituality Now?

Awareness of spirituality can help us better understand employee behavior.

Influencing an Organizational Culture

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A Spiritual Culture (Workplace Spirituality)

Characteristics of a Spiritual Organization

Achieving Spirituality in the Organization

1 Benevolence 2 Strong sense of purpose

3 Trust and respect 4 Open-mindedness

1Helping people develop and reach theirfull potential

2Directly addresses problems created bywork/life conflicts

Influencing an Organizational Culture

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A Spiritual Culture (Workplace Spirituality)

Criticisms of Spirituality

1 The scientific foundation Little research. Still needs more research.

2

Are spiritual organizations

legitimate: do they have the right

to impose values on employees?

It is not about religious values

2Are spirituality and profits

compatible?

Yes they are, but not very strong evidence. As it result in

greater productivity and lower turnover

The Global Context

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1 Even strong organizational cultures, can’t and shouldn't ignore local culture

2 All global firms (not just U.S. firms) need to be more culturally sensitive

3 Managers should be more culturally sensitive by:

Speaking slowly and in a low tone - Listening more - Avoiding discussions of religion or politics

4 Strong cultures are difficult for managers to change

5Selecting new hires that fit well in the organizational culture is critical for motivation, job

satisfaction, commitment, and turnover

The Global Context

6 Socialization into the corporate culture is important

7As a manager, your actions as a role model help create the cultural values of ethics, spirituality,

and a positive culture

8Employees form an overall subjective perception of the organization based on the following

objective factors which will affect employee performance and satisfaction.