Organisational

Culture
What is organisational culture?
• Values, norms, guiding beliefs, and understandings that are shared by
members of an organization
• Taught to new members as the correct way to think, feel, and behave

• Organizational culture exists at two levels

• Observable symbols
• Underlying values
How is culture created?
External adaptation and survival:
• Mission and strategy
• Goals - setting targets
• Means – determining ways to pursue the goals
• Measurement – Establishing criteria, standards - evaluation
Internal integration:
• Language and concepts – methods of communication.
• Group and team boundaries – establishing criteria for membership in groups and teams
• Power and status – determining rules for acquiring, maintaining or losing power
• Reward and punishment – developing systems for encouraging desirable behaviours
Determinants of Culture
• Economic condition
• Leadership style
• Organizational policies
• Managerial assumptions about human nature
• Managerial norms and values about what is a good management
practice
 Stories
Stories Rituals
Rituals

How
How Employees
Employees
Learn
Learn Culture/
Culture/
How
How it
it is
is “reinforced”
“reinforced”

Material
Material
Language
Language
Symbols
Symbols
5
 Artifacts – symbols of
culture in the physical
and social work environment

Values
Espoused: what members of
an organization say they value
Levels of
Enacted: reflected in the way Organizational
individuals actually behave
Culture
Assumptions – deeply held
beliefs that guide behavior and tell
members of an organization how
to perceive and think about things
Types of Artifacts
• Personal Enactment
• Ceremonies and Rites
• Stories
• About the boss
• About getting fired
• About relocating
• About promotions
• About crisis situations
• About status considerations
• Rituals
• Symbols
Stories
• Transmitting the organization culture by narrating the hardships and
sufferings of people who have founded the organization.
• Once the employees understand the same, they will be able to
appreciate and emulate the values and beliefs for the promotion of
which the org has been founded.
Symbols
• Certain physical symbols used in the organization do reflect its
culture. Examples - Inscribing the logo of the organization in all the
stationery items provided for the staff, uniforms for different
categories of employees, reserved car park for executives, luxurious
office furnishing etc.
• These symbols become important tools of transmitting and sustaining
the culture of the organization.
Language
• Every organisation develops certain unique terms to describe the staff,
customers, suppliers, equipment's, work situation and so on.
• It may take sometimes for a new employee to become familiar with
these terms that are used effortlessly by the existing employees.
• By learning the language of the organisation the members convey
their acceptance of the organizational culture.
Rituals
Repetitive sequences of activities that express and reinforce the key
values of the organization.
Examples- Daily morning prayer, weekly family dinner, monthly picnic,
annual award presentation etc are a few examples of such rituals.
The performance of these rituals helps the employees appreciate the
organization’s culture.
Levels of Corporate Culture
 Constructive Versus
Non-Constructive Cultures

13
 How Organizational Cultures Form

Top
Top
Management
Philosophy
Philosophy
of the
Organization’s
Organization’s Organizational
Selection
Selection
Founders: Culture
Culture
Dr
Dr TMA
TMA Pai
Pai

Socialization
Socialization
Understanding Organizational Culture
Antecedents Organizational Organizational Group & Social
Culture Structure & Processes
• Founder’s values Practices • Socialization
• Observable artifacts
• Industry & business • Reward systems • Mentoring
environment
• National culture • Organizational • Decision
• Espoused values
• Senior leaders’ design making
vision and behavior • Group
• Basic assumptions dynamics
• Communication
• Influence &
Collective empowerment
Attitudes & • Leadership
Organizational
Behavior
Outcomes
• Work attitudes
• Effectiveness
• Job satisfaction
• Innovation &
stress • Motivation
Functions of Organizational Culture

• Culture provides a sense of identity to members and

increases their commitment to the organization
• Culture is a sense-making device for organization
members
• Culture reinforces the values of the organization
• Culture serves as a control mechanism for shaping
behavior
Organizational Culture
Functions Liabilities

 Controlling behavior  Blocking mergers

 Defining boundaries  Inhibiting diversity

 Conveying identity  Inhibiting change

 Promoting commitment  Blocking acquisitions

Prentice Hall, 2001 17

Types of organisational culture
Mechanistic culture:
• Values of bureaucracy and feudalism
• Communication flows through prescribed channels(top-down)
• Typical “organisational men”-job security, happy with status quo
• Change is resisted and innovators isolated and ridiculed

Organic Culture:
• Formal hierarchies of authority
• Free flow of communication, team work, task accomplishment
• Stresses upon flexibility,consultation,change and innovation
Types of organisational culture
Authoritarian culture:
• The Power is concentrated in leader.
• Disobedient is punished to be an example to other. •
• Leader act in his own interest and change the culture according to his needs.
• Similar to mechanistic culture
Participative culture:
• Peoples are involved in decision making. •
• Group Problem Solving Methods •
• Workers participation in top management •
• See them equally and share all the innovative information
Types of organisational culture
Dominant culture:
The values,beleifs and norms evolved by the large organisations are
binding and shared by all employees

Sub-culture:
Found in departments, divisions and geographical areas and reflect the
common problems or experiences of employees who reside in those
areas
 Maintaining
Maintaining aastable
stable Managing
Managingthethe
workforce
workforce cultural
cultural network
network

Sustaining
Sustaining
organizational
organizational culture
culture
Actions
Actionsof
of founders
founders
Selecting
Selectingand
and and
andleaders
leaders
socializing
socializingemployees
employees

Culturally
Culturallyconsistent
consistent
rewards
rewards
Impact of organisational culture
• A source of competitive advantage & potentially the most important
intangible asset of an organisation
• Clear set of values, mission & goals
• Performance-orientated
• Strong internal communication
• Engaged employees: higher motivation & loyalty
• Better connection between depts. & divisions
• Not easily copied
Culture as a Competitive Advantage
(Intangible Asset: “Built to Last")
• Southwest Airlines: A strong culture based on employee engagement
has helped make it the most profitable, low-cost airline in the world.
Herb Kelleher (CEO): "The business of business is people"
When Culture Goes Wrong:
• GlaxoSmithKline: record $3bn fine for misselling of drugs and
bribery (US sub-culture)
• Barclays: role in LIBOR rigging & PPI misselling leads to departure
of CEO Bob Diamond; New CEO implements Project Transform –
attempting step change in culture
Thank you