CHAPTER SEVEN- ORGANIZATIONAL CULTURE AND DIVERSITY

1.1. Definition of Organizational Culture

When thinking and actions of employees are institutionalized, an organizational culture is
deemed to have taken birth.
Edgar Schein defined culture as “A pattern of basic assumptions invented, discovered or
developed by given group as it learns to cope with its problems of external adoption and
internal integration worked well enough to be considered valuable and therefore, to be
taught to new members as a correct way to perceive, think and feel, in relation to those
problems.”

Organizational culture is not inborn. It has to be invented and later developed over a period of
time. It enables employees to perform within the framework of the organization’s culture.
Environment plays a dominant role in developing the culture and so does demographic factors.
That is why we generally refer to Ethiopian culture or Indian culture.
Value system is the corner stone of the organization culture. It promotes standardization in
various systems and sub-systems, which reduce role conflict to a great extent. It promotes
communication that improves productivity and job satisfaction.
Organization culture promotes equality and work culture.

The corporate culture “consists of norms, values and unwritten rules of conduct of an
organization as well as management styles, priorities, belief and interpersonal behaviors
that prevail. Together they create climate that influences how well people communicate,
plan and make decisions”

Organizational culture originates from the founders of the organization based on value system
held by them. It is further passed on, down the line. Organizational culture is also a function of
the nature of work and goals of the organization. It is visible from the organizational structure.
Centralized command and control, strict hierarchy and fixed communication are indicative of
formal culture with little freedom of action and with scant attention to innovation and creativity.
While decentralized work culture will promote autonomy that will lead to greater job
satisfaction.

Functions of Organizational Culture

This function of culture helps employees understand why the organization does, what it does and
how it intends to accomplish its long-term goals.

Organization
al
Identity

Sense-making
Collective
device Organizational commitment
culture

Fig: Four functions of organizational culture

Social system
stability
(a) It gives members an organizational identity: Sharing norms, values and perceptions gives
people a sense of togetherness that helps promote a feeling of common purpose. Culture provides
shared pattern of cognitive perceptions or understanding about the values or beliefs held by the
organization. This enables the organizational members how to think and behave as expected of
them.

(b) It facilitates collective commitment. The common purpose that grows out of shared culture
tends to elicit strong commitment from all those who accept the culture as their own. It provides
shared – pattern of feelings to the organizational members to make them know what they are
expected to value and feel.

(c) It promotes systems stability. By encouraging a shared sense of identity and commitment,
culture encourages lasting integration and cooperation among the members of an organization. It
enhances social stability by holding the organizational members together by providing them
appropriate standards for which the members should stand for.

(d) It shapes behavior by helping members make sense of their surroundings.

An organization culture serves as a source of shared meaning that explains why things occur the
way they do. Organizational culture is not fully visible but felt. At less visible level culture
reflects the value shared by organizational members.
(e) It provides a boundary: Culture creates distinction between one organization and the other.
Such boundary – defining helps identify members and non-members of the organization. Culture
facilitates the generation of commitment to something larger them one’s individual self-interest.
It serves as a control mechanism that guides and shapes the attitude and behavior of
organizational members.

(f) It helps organizational members stick to conformity and expected mode of behavior:
Culture ensures that everyone thinks and behaves in a prescribed manner.

Levels of Culture
According to Edgar Schein, there are three levels of culture; as discussed in the succeeding
paragraphs.

(a) Observable artifacts of culture: These are the symbols of culture in the physical and social
work environment. These are visible and most accessible. They include organizational heroes.
As mentioned earlier, organizational culture originates from the top management and their
leadership styles. These leaders become the role model. Employees would like to copy their
behavior, work ethics and represent what an organization stands for.

Modeled behavior is a powerful tool and organization should continuously learn. They should
re-enforce organizational value system.
Rites and rituals are recurring activities that are used at special times to influence the behavior
and understanding of organizational members.
Rituals are systems of rites like departmental song, colors, and company picnic or retirement
dinners.
“Cultural symbols are an object, act, or event that serves to transmit cultural meaning”.
Corporate uniform, tie, buttons etc are the examples. Saga is a heroic account of
accomplishments.
Sagas are important because they are being used to tell new members the real mission of the
organization, how the organization operates, and how individual can fit into the organizational
settings. A saga of valour and sacrifices in the regimental history is a good example of
organizational culture. Certain dress logo can reflect its value and orientation. Some of the
material artifacts are reserve parking, air conditioned office, luxury automobiles given to senior
members of the organization.
(b) Shared values. In earlier chapter we have studied two types of values, i.e. terminal values
that reflect end state of existence and instrumental values which are means to achieve terminal
values. Being hard working (instrumental value) may lead to achieve solace (Terminal value).

Shared value resides at the very heart of the organizational culture. It helps turn routine activities
into valuable, important actions, tie the corporation to important value of society that may
provide a very distinctive source of competitive advantage. Values should be linked with work.
A person should feel that he is producing an umbrella that keeps health of the society. He is not
merely working for material gain but for good of society. Organizations should therefore develop
a “dominant and coherent set of shared values” so that individual behaves in a graduated
manner in line with the organizational philosophy.
(c) Common Assumptions. Common assumptions are fallout of shared value system and
observable artifacts of culture. Employees, over a period of time form within themselves a
common culture.
 Keeping Culture Alive
Once a culture is in place, there are HR practices within the organization that acts to maintain it
by giving employees a set of similar experiences.
These forces play a particularly important part in sustaining a culture: selection practices, the
actions of top management, and socialization methods.
• Selection: Concerned with how well the candidates will fit into the organization.
For example, provides information to candidates about the organization.
• Top Management: Senior executives help establish behavioral norms that are adopted by the
organization.
• Socialization: The process that helps new employees adapt to the organization’s culture. The
most critical socialization stage occurs when the new employee enters the organization.
Socialization can be conceptualized as a process composed of 3 stages.
These are: Pre-arrival; encounter and metamorphosis.
Outcomes
Socialization Process
Productivity

Pre-arrival Encounter Metamorphosis

Commitment
Fig. 7.1. A socialization model
Turnover
The pre-arrival stage
The pre-arrival is the first stage that encompasses all the learning that occurs before a new
member joins the organization. It is the period of learning in the socialization process that
occurs before new employee joins the organization.

The encounter stage

The encounter is the second stage in which the new employee sees what the organization is really
like and confronts the possibility that expectations & reality may diverge. Here the individual
confronts the possible gap between expectations (- of the job, co-workers, boss, and the
organization in general) and reality.
The metamorphosis stage: is the third stage that the relatively long-lasting changes take place.
The new employee masters the skills required for his/her job, successfully performs his/her new
roles, and makes the adjustments to his/her work group’s values and norms. The metamorphosis
stage is the stage in the socialization process in which a new employee adjusts to the work
group’s values & norms.
Important Elements in Managing Culture
• What leaders pay attention to?
• How leaders react to crises
• How leaders behave
• How leaders allocate rewards
• How leaders hire and fire individuals

1.2. Diversity
Diversity in the realm of OB has traditionally emphasized the difference among people in a
group or organization. Now that the demographic projections of a few years ago have become a
reality (the work force is older and has an increasing percentage of women and racial/ethnic
minorities), there is an emerging perspective on diversity as an all inclusive mixture of
differences and similarities.

One of the most important and broad based challenges currently facing U.S. organizations is
adapting to people who are different. The term we use for describing this challenge is work force
diversity. Workforce diversity means that organizations are becoming heterogeneous in terms of
gender, race and ethnicity. But the term encompasses any one who varies from the so – called
norm. we used to take a melting pot approach to differences in organizations, assuming people
who were different would some how automatically want to assimilate. But we now recognize
that employees don’t set a side their cultural values and lifestyle preferences when they come to
work. The challenge for organizations, therefore, is to make themselves more accommodating to
diverse groups of people by addressing their different style, family needs, and work styles. The
melting pot assumption is being replaced by one that recognizes and values differences.

Guidelines for Managing Cultural Diversity

• Organization members must:
– Recognize and value a variety of opinion and insight.
– Recognize the learning opportunities and challenges presented by the expression of different
perspectives.
• The organizational culture must:
– Foster high performance expectations for everyone.
– Stimulate personal development.
– Encourage openness.
– Make workers feel valued.
• The organization must have:
– A well-articulated and widely understood mission.

Effects of Organizational Culture on Employee Behavior and Performance

• Allows employees to understand the firm’s history and current approach.
• Fosters commitment to corporate philosophy and values.
• Serves as a control mechanism for employee behaviors.
• Certain cultural types may produce greater effectiveness and productivity.
1.3. Globalization and People at Work
Besides information technology, the other major environmental context impacting organizational
behavior is globalization. The advances made in information technology aspects have made the
world a smaller place. This has led to a borderless world – one big global market place.

The implications of this globalization for organization behavior are profound and direct.
Globalization affects a manager’s people skills in at least two ways. First, if you are a manager
you are increasingly likely to find yourself in a foreign assignment. You will be transferred to
your employer’s operating division or subsidiary in another country. Once there, you will have to
manage a work force that is likely to be very different in needs, want, aspiration, attitudes and
culture from the ones you were used to back home. Second, even in your own country, you are
going to find your self working with bosses, peers, and subordinates who were born and raised to
different culture. What motivates you may not motivate them. While your style of
communication may be straightforward and open, they may find this style uncomfortable and
threatening. This suggests that if you are going to be able to work effectively with these people,
you will need to understand their culture, how it has shaped them, and learns to adapt you
management style to these differences.