ORGANIZATION CULTURE

Learning objectives

• Organizational culture
• Different Perspectives of Organizational culture
• Can we manage Organizational culture?
• Culture as an important ingredient of Organizational creativity
• Norms that promote Creativity and Innovation
• Norms that promote Implementation.
• Principles of creativity and innovation.
• Do strong, cohesive cultures hinder innovation?

Introduction

Encouraging and sustaining an organization wide culture that promotes the generation and
implementation of new ideas among organizational members has long be considered as central to
nurturing ‘culture of change’ in the development of creative and innovative work settings, as
well as companies such as Lunar Design in the San Francisco Bay area and Smart Design in New
York and London [two leading creative product design consultancies] have constantly been
praised in the business press for their ‘creative organizational DNA’, a metaphor for those
hidden characteristics that can define the culture of an organization and generally pride
themselves on sustaining an intra-organizational value and behavioural norm system that enables
the perpetual development and introduction of original and useful products.

Q.1. What is Organizational Culture [OC]? State different perspectives of OC.

Some have defined as ‘the way we do things around here’ Schneider (1988), for instance,
defines culture as:‘the values that lie beneath what the organization rewards, supports and
expects; the norms that surround and/or underpin the policies, practices and procedures of
organizations; the meaning incumbents share about what the norms and values of the
organization are.”

Kotter and Heskett “culture refers to values that are shared by the people in a group … at the
more visible level, culture represents the behavior patterns or style of an organization that new
employees are automatically encouraged to follow by their fellow employees.’
Three dominant characteristics of culture are

1. Culture is a shared phenomenon

2. Culture exists at two levels, namely the surface[visible] level and deeper [less visible]
level; [espoused values’ and [ values in use’.
3. Culture is learned.

Different perspectives on Organizational Culture

Organizational culture can be approached from different directions. Martin (2001) conducted
some extensive research on the topic. She identified three theoretical perspectives in studies on
organizational culture and named them “integration”, “differentiation”, and “fragmentation. No
perspective is in itself “right” or “wrong”. They all express different worldviews and have
diverse advantages and disadvantages.
In short, integration studies focus on the perception that all mentioned cultural aspects are
consistent and reinforce each other. If deviations are found, they are seen as shortcomings that
must be remedied. In contrast, differentiation studies “focus on cultural manifestations that have
inconsistent interpretations”. This means, “the integration perspective focuses on those
manifestations of a culture that have mutually consistent interpretations. An integration portrait
of a culture sees consensus (although not necessarily unanimity) throughout an organization.
From the integration perspective, culture is that which is clear; ambiguity is excluded.
The differentiation perspective focuses on cultural manifestations that have inconsistent
interpretations, such as when top executives announce a policy and then behave in a policy-
inconsistent manner. From the differentiation perspective, consensus exists within an
organization—but only at lower levels of analysis, labeled ‘subcultures.’ Subcultures may exist
in harmony, independently, or in conflict with each other. Within a subculture, all is clear;
ambiguity is banished to the interstices between subcultures.
The fragmentation perspective conceptualizes the relationship among cultural manifestations as
neither clearly consistent nor clearly inconsistent. Instead, interpretations of cultural
manifestations are ambiguously related to each other, placing ambiguity, rather than clarity, at
the core of culture. In the fragmentation view, consensus is transient and issue specific” (Martin
2001].
Q.2 “Culture as an important ingredient of Organizational change”, Comment.

Culture is the backbone of every organization. But how exactly do you create great culture?
As a company matures, its cultural values are refined and strengthened. The early values of a
company’s culture exert influence over its future values. It is possible to think of organizational
culture as an organism that protects itself from external forces. Organizational culture determines
what types of people are hired by an organization and what types of people are left out.
Moreover, once new employees are hired, the company assimilates new employees and teaches
them the way things are done in the organization. We call these processes attraction-selection-
attrition and onboarding processes.

• Attraction-Selection-Attrition

Organizational culture is maintained through a process known as attraction-selection-attrition

(ASA). First, employees are attracted to organizations where they will fit in. Someone who has a
competitive nature may feel comfortable in and may prefer to work in a company where
interpersonal competition is the norm. Others may prefer to work in a team-oriented workplace.
Research shows that employees with different personality traits find different cultures attractive.
For example, out of the Big Five personality traits, employees who demonstrate neurotic
personalities were less likely to be attracted to innovative cultures, whereas those who had
openness to experience were more likely to be attracted to innovative cultures.
Just as candidates are looking for places where they will fit in, companies are also looking for
people who will fit into their current corporate culture. Many companies are hiring people for fit
with their culture, as opposed to fit with a certain job. For example, Google relies on multiple
interviews with future peers. By introducing the candidate to several future coworkers and
learning what these coworkers think of the candidate, it becomes easier to assess the level of fit.
Because of the ASA process, the company attracts, selects, and retains people who share its core
values, whereas those people who are different in core values will be excluded from the
organization either during the hiring process or later on through naturally occurring turnover.
Thus, organizational culture will act as a self-defending organism where intrusive elements are
kept out. Supporting the existence of such self-protective mechanisms, research shows that
organizations demonstrate a certain level of homogeneity regarding personalities and values of
organizational members (Giberson, et. al., 2005).

• New Employee Onboarding

Another way in which an organization’s values, norms, and behavioral patterns are transmitted to
employees is through onboarding (also referred to as the organizational socialization process).
Onboarding refers to the process through which new employees learn the attitudes, knowledge,
skills, and behaviors required to function effectively within an organization. If an organization
can successfully socialize new employees into becoming organizational insiders, new employees
will feel accepted by their peers and confident regarding their ability to perform; they will also
understand and share the assumptions, norms, and values that are part of the organization’s
culture. This understanding and confidence in turn translate into more effective new employees
who perform better and have higher job satisfaction, stronger organizational commitment, and
longer tenure within the company (Bauer, et. al., 2007). Organizations engage in different
activities to facilitate onboarding, such as implementing orientation programs or matching new
employees with mentors.
• Leadership
Leaders are instrumental in creating and changing an organization’s culture. There is a direct
correspondence between the leader’s style and an organization’s culture. For example, when
leaders motivate employees through inspiration, corporate culture tends to be more supportive
and people-oriented. When leaders motivate by making rewards contingent on performance, the
corporate culture tended to be more performance-oriented and competitive. In these and many
other ways, what leaders do directly influences the cultures of their organizations. This is a key
point for managers to consider as they carry out their leading P-O-L-C function.

Part of the leader’s influence over culture is through role modeling. Many studies have suggested
that leader behavior, the consistency between organizational policy and leader actions, and leader
role modeling determine the degree to which the organization’s culture emphasizes ethics
(Driscoll & McKee, 2007). The leader’s own behaviors will signal to individuals what is
acceptable behavior and what is unacceptable. In an organization in which high-level managers
make the effort to involve others in decision making and seek opinions of others, a team-oriented
culture is more likely to evolve. By acting as role models, leaders send signals to the
organization about the norms and values that are expected to guide the actions of its members.

Leaders also shape culture by their reactions to the actions of others around them. For example,
do they praise a job well done or do they praise a favored employee regardless of what was
accomplished? How do they react when someone admits to making an honest mistake? What are
their priorities? In meetings, what types of questions do they ask? Do they want to know what
caused accidents so that they can be prevented, or do they seem more concerned about how
much money was lost because of an accident? Do they seem outraged when an employee is
disrespectful to a coworker, or does their reaction depend on whether they like the harasser?
Through their day-to-day actions, leaders shape and maintain an organization’s culture.

• Reward Systems

Finally, the company culture is shaped by the type of reward systems used in the organization
and the kinds of behaviors and outcomes it chooses to reward and punish. One relevant element
of the reward system is whether the organization rewards behaviors or results. Some companies
have reward systems that emphasize intangible elements of performance as well as more easily
observable metrics. In these companies, supervisors and peers may evaluate an employee’s
performance by assessing the person’s behaviors as well as the results. In such companies, we
may expect a culture that is relatively people- or team-oriented, and employees act as part of a
family (Kerr & Slocum, 2005). However, in companies in which goal achievement is the sole
criterion for reward, there is a focus on measuring only the results without much regard to the
process. In these companies, we might observe outcome-oriented and competitive
cultures. Whether the organization rewards performance or seniority would also make a
difference in culture. When promotions are based on seniority, it would be difficult to establish a
culture of outcome orientation. Finally, the types of behaviors that are rewarded or ignored set
the tone for the culture. Which behaviors are rewarded, which ones are punished, and which are
ignored will determine how a company’s culture evolves. A reward system is one tool managers
can wield when undertaking the controlling function.

In Summary,
 • The components of organizational culture (shared values, beliefs and behavioural
norms) are key in promoting the generation and implementation of novel and useful
ideas.
• Through formal and informal socialization processes, employees gradually learn
which behaviours are acceptable.

• Innovative companies, therefore, tend to have cultures, which emphasize and reward
values and norms that support the generation and implementation of new ideas.

Q.3 Describe Norms that promote Creativity and Innovation

Innovation usually involves risk taking, non standard solutions and unconventional teamwork,
practices {elements that are not easily managed by formal control systems]. The effective
management of culture is critical in mobilizing organizational creativity and innovation. Pivotal
in these efforts is the establishment and continuous encouragement of behavioural norms that
promote the generation and implementation of novel solutions. Over the years, scholars have
documented a variety of norms that tend to consistently promote creativity and innovation in
organizational settings.

1. A focus on idea generation –It may sound obvious, but promoting idea generating
behaviours is a key for mobilizing creativity in the workplace. In Google for instance, a
company often quoted as a prototype for its innovate outputs, employees are required to
follow the so-called 20% rule. Google engineers are expected to devote up to one day a
week working on projects that are not necessarily in their job descriptions. Thus, they
can develop something new, and use their time on refinements. Martins and Terblanche
emphasize that managers of creative environments need to promote open communication
and forums of intra and extra organizational debate. Sustaining such an information flow
is pivotal. Lastly Tushman and O’Relly highlight that an important way of signalling the
value of idea generating behaviours is by rewarding them.
2. Supporting a continuous learning Culture – Creativity is also mobilized in environments
where continuous learning is a companywide expectation. [Martins and Terblanche]
Keeping staff’s knowledge and thinking skills up to date is key in this respect.
3. Risk Taking- the generation of ideas requires experimentation and, as such, taking risks is
usually unavoidable[and often necessary]. Encouraging risk taking behaviours therefore
needs to be art of the creative culture. To mobilize and encourage risk taking managers
need to avoid applying too many controls in the creative process, as this is likely to
inhibit experimentation and impede ‘creative flow’. However, creative organization also
hve to face a commercial reality and, hence, excessive risk taking may lead to costly
results on the profit and loss account.
4. Tolerance of mistakes- experimentation and risk taking is likely to lead to mistakes.
Mistakes are therefore an everyday practice in creative environments. Martins and
Terblanceh argue that supporting a culture that tolerates mistakes and handles them
effectively is central to encouraging staff to think and act creatively. Creative
organizations need to have faith in their employees to try new things, even if this leads to
failure or disappointing results. Organizations that punish employee mistakes discourage
creativity, inhibit change and stifle innovation. The successful management of mistakes
often also relies on manager’s skill to clarify, which mistakes are acceptable and which
are not.
5. Supporting Change : Arad emphasize that behaviours that promote change in the work
setting are likely to positively influence organizational creativity and innovation. To
support creativity the culture must tolerate uncertainty, promote and reward positive
attitudes towards change and encourage employees to constantly challenge the status quo
and explore novel ways of finding creative solutions.
6. Conflict handling- change and constant experimentation are likely to lead to conflict in
the workplace; conflict between colleagues, conflict between departments, conflict
between individuals’ creative freedom and the constraints set by the client’s commercial
reality.

Norms that promote implementation

• Team work and effective group functioning
The need to work together in project teams is common in creative environments. Depending
on the company, teams may be fixed for each and every project or staff may join different
teams depending on the nature of the project, this expertise, the challenge that senior
colleagues aim to set to junior staff and so forth. Tushman and O’Relly note that employees
 need to be encouraged to work and communicate effectively, and that implementation is
enhanced when teams work harmoniously, communicate well and have common goals.
• Speed and urgency
Promoting behaviours that support speed and urgency is also important for translating ideas
into innovation. After the initial experimentation stage, which is key in generating creative
outputs, decisions need to be made quickly. Norms like speed, a sense of urgency and
commitment to meeting deadlines are important.

• Flexibility and adaptability

Promoting flexibility and adaptability in the workplace is also a key factor in supporting
implementation. Effective teamwork requires team co-operations as quick decision and tight
deadlines mean that staff are often required to work on other’s ideas, build on their strengths
and deal with their weaknesses. The constructive confrontation required in the creative
process demands staff to be open minded and flexible in their thinking. The team also needs
to agree on the potential value of the idea for the company or its clients.

• A sense of autonomy
Sustaining a sense of autonomy is the workplace is also important in promoting
implementation in the work setting. Innovative has no room for a ‘taking a back seat’
attitude. Individuals need to be autonomous, self starters and take action without necessarily
being asked to do so. This not only promotes the perpetual generation of new ideas but also
the quick filtering and implementation of valuable concepts.

Q.4 Elaborate Principles of creativity and innovation.

1. Sustain faith and treasure identity as an innovative company

To Sustain faith and treasure identity as an innovative company: This principle states that faith
and confidence in organizational environment is necessary for creativity and innovation as these
elements boosts confidence of the chances that unusual ideas can become great products.
Idealistic management always promotes novelty in organizational growth and production but
with conviction as because of their belief innovation drives profitability.
2. Be truly experimental in all functions especially at the front end
Be truly experimental in all functions, especially at the front end:
 Exercising/experimenting new ideas and thoughts is significant for creative process to
succeed. It is true that experimentation does comprise risk but it is important for creative
mind to be dared through experiments. Apple’s iPod music player is an example to
experiment with a new concept of selling music online. (BusinessWeek, 2004)
3. Structure ‘real’ relationships between marketing and technical people.
To Structure ‘real’ relationships between marketing and technical people: Based on the
hypothesis of constructive criticism, Zien and Buckler suggests that important communication
and interaction should be promoted among technical innovators and marketing department. This
interaction helps to bring stability between creative thinking and concept of feasibility of newer
ideas.
4. Generate customer intimacy.
Generate customer intimacy: In order to attain stability of creativity with that of market-driven
desires, innovative organizations shall work on establishing customer relationship. By
understanding the customer through surveys, interviews and observing customer, are important
to be considered as transforming creativity into innovation. For this purpose, current
organizations also employ sociologists, anthropologists and business administrators to foster
meaningful creative process. Techniques such as ‘beta’ version used by Yahoo, Google, MSN
are also key in understanding users. Google uses this technique for innovation purposes.
5. Engage the whole organization.
Engage the whole organization: Revolutionary leaders prefer to instil a sense of belongingness
among the people of organization, which can be working to accomplish a common goal. With
help of planned communicational activities, periodic meetings, facilities to provide feedback,
celebrations, organization can work and think as a whole team, which is obligatory for creativity.
6. Never forget the individual
Never forget an individual: Individual shall be provided with confidence to take up experiments,
there should be freedom of expression and should be compensated accordingly in order to
channelize the culture of creativity and innovation. Individuals must be encouraged to work with
their appetites.
7. Tell and embody powerful and purposeful stories.
Tell and embody powerful and purposeful stories: Organization’s early days’ stories or rich
history, recollection of senior or extraordinary colleagues’ contribution and their breakthrough
concepts are required to be kept fresh in minds of employees. This practice helps in sustaining
the creative culture.
Q.5 “Do strong, cohesive cultures hinder innovation?” Comment

Those who agree with this notion argue that strong cultures are likely to induce uniformity and
hence hinder the ambiguity and divergence needed in creative environment. Culture is a system
of social control that influences the attitudes and behaviours of organizational members, and
strong cultures tend to exhibit cohesion and around acceptable values and behavioural norms.
Some authors argue that companies that exhibit strong cultures tend to limit their creative and
innovative potential though selection processes that promote uniformity in workplace. The
resulting homogeneity goes against the diversity that is so essential for encouraging dialogue
between different perspectives, which ultimately promotes new combinations of ideas in the
creative process.

Scholars following this school of thought argue that one should not confuse cultural strength
with cultural content. However, this confusion often exists because many organizations that are
known for their strong cultures are regularly portrayed as controlling and manipulative.
Although authors like Nemeth and Staw propose that the mere presence of shared norms hinders,
by default, creativity and innovation in the workplace, others argue that this depends on the
nature of the behavioural norms that prevail within the organization. Flynn and Chatman refer to
many companies that have strong cultures that are in the form of innovation enhancing
behavioural norms. Many innovative companies are known for their strong, cohesive cultures
(3M, Apple, etc.) 3M encouraged to take risks and make mistakes and consider this process as
part of their learning experiences, rather than as incidents to be ashamed of.
At first glance, strong cultures that demand employees to conform to and continuously follow
established norms would seem to be an anathema to creative employees. Strong cultures may
therefore promote conformity but not uniformity (Nemeth and Staw, 1989). It depends on the
nature of the behavioural norms that prevail within the organization. Social cohesion is necessary
in order to implement creative ideas and to translate creativity into innovation (Caldwell and
O’Reilly, 1995).