Mechanical Engineering Department

Economics and Management

(10000302)

Chapter: 8
Organizational culture
Presented By
Prof. Someshwar S Pandey

GANDHINAGAR INSTITUTE OF TECHNOLGY

Outlines
 Organizational Culture
 Importance of Organizational Culture
 Attributes of Organization Culture
 How does culture affect managers?
 How does culture affect employees?
 Environment concept of organization
Organizational culture
 Organizational culture is defined as the underlying beliefs,
assumptions, values and ways of interacting that contribute to the
unique social and psychological environment of an organization.

Reference: www.tutorialspoint.com/human_resource_management/human_resource_management_organizational_culture.htm
Organizational culture
 Organizational culture includes Following things:
• An organization’s expectations
• Experiences
• Philosophy
• Values that guide member behavior
 Organizational culture is expressed in:
• Member self-image
• Inner workings
• Interactions with the outside world
• Future expectations.
Cont.
 Members behavior, attitude and performance are directly
influenced by the culture although it varies from person to person.
 It is not always easy to define the culture of any organization but it
can be observed in day to day activities of any organization.
 It works at an unconscious level.
 People follow organizational culture as an integral part of their
professional life sometimes without even realizing it.
Importance of organizational culture

1. It defines your company’s internal and external identity

2. Organizational culture is about living your company’s core values
• A strong organizational culture keeps your company’s core values
front and center in all aspects of its day-to-day operations and
organizational structure. The value of doing so is incalculable.
3. Your culture can transform employees into advocates (or critics)
• Your people want more than a steady paycheck and good benefits,
they want to feel like what they do matters.
• And when your people feel like they matter, they’re more likely to
become culture advocates that is, people who not only contribute to
your organization’s culture, but also promote it.
• And If your culture doesn’t do this, you may be inviting criticism.
Cont.
4. A strong organizational culture helps you keep your best people
5. A well-functioning culture assists with onboarding
• This is particularly the case with new hires who have put some
considerable thought about the type of culture they’re entering into.
• The culture at your organization is essentially a guiding force for
them, so it’s important that it starts with onboarding.
6. Your culture transforms your company into a team
7. Culture impacts performance and employee wellbeing
Attributes of organization culture
1. Retention is high, turnover is low
• Employees stay when they are appreciated for their contribution, have
opportunities to learn and grow, and enjoy what they do.
2. Work is both challenging and rewarding
• When work is rewarding and challenging, employees are always
looking for ways to do things better because they care about the results.
3. People want to join your team
• Attracting top talent is easier for companies with a healthy culture.
4. Leadership is shared
• In healthy corporate cultures, leaders actively involve more people in
making important decisions.
• They value input, feedback and continuous learning.
Cont.
5. There is a lack of complaining, whining, finger pointing and
gossip
• Healthy corporate cultures have little tolerance for workplace politics.
• There are no “behind-the-scenes”, conversations, issues are dealt with
directly, openly, and without fear of effect.
6. Employees smile
• As inconsequential as it may seem, employees at healthy companies
consistently greet each other happily at work and genuinely look
forward to time together.
• Smiling also aligns with the old adage that “a happy worker is a
productive worker.”
Cont.
7. Employees feel valued
• Rather than feeling they are simply a cog in the wheel of their
organization, healthy cultures make sure employees know they truly
matter.
• Employees feel valued when they are paid fairly, the organization
makes investments to make them more successful and leaders are
committed to making it a great place to work.
8. Change is generally well received
• In a healthy work environment, change does not inspire the fear that
it does elsewhere.
• Employees are well-informed beforehand, trust their leaders, are
asked for input regarding changes that affect their work and
understand why the changes are happening.
How does culture affect managers?

 There are a number of ways in which the attitudes possessed by

management can be sculpted, enhanced or otherwise changed by
the demands of business culture. Which are:
1. Motivation
2. Leadership
3. Ambiguous Cultures
4. Ethics
1. Motivation
 When a company culture demonstrates its values by singularly
tying achievement to managers’ ability to move ahead with the
company, the attitudes of supervisors can be either positively or
negatively affected, depending on what drives the individual.
 For example, a culture stated as, “Our company rewards leadership
that focuses on producing new ideas and inventive thinking,” could
do one of two things:
1. It might positively influence a manager's can-do, problem-solving
attitude, resulting in rapid advancement.
2. It could overwhelm leaders who may excel in other necessary
business functions, such as finance, which may not offer many
opportunities to provide innovative ideas.
2. Leadership
 A company culture can alter a manager’s attitude toward leadership.
 For example, an employee-centric culture might be expressed with a
statement such as, “Our Company’s culture asserts our fundamental
belief that leaders are cultivated from within our ranks, and we
consistently work from this precept.”
 When this type of cultural environment consistently supports and
grooms managers through training and similar investments,
subsequent leadership possesses attitudes that, in turn, short-term
internal employee growth.
 Conversely, should a company deviate from its cultural declarations
by hiring external management, managers’ attitudes, as well as those
of line employees, may suffer.
3. Ambiguous cultures
 Business cultures that are not clearly established can change
managers’ attitudes from positive to negative.
 A new manager may be excited and energized to prove his worth to
a company.
 However, if the culture does not specifically support and empower
managers' decision-making efforts, a reversal may occur, changing
the upbeat attitude to a fearful one.
 For example, when challenges arise, managers who typically feel
highly capable may experience a change in attitude to being:
• Reactive – non-responsive.
• Avoiding responsibility –such as by claiming that the problem was
not related to them but caused by others.
4. Ethics
 Managers with strong values match up with company cultures
maintaining high ethical standards in all business dealings.
 During the course of business, circumstances may require a test of
these standards, such as when an ethical question arises from an
improper marketing-related decision.
 Business owners can fall back on the company’s culture to hold
offending managers accountable, thereby retaining the culture's
validity.
 Failing to do so can tarnish for managers the company’s belief
structure, transforming attitudes into those that may detrimentally
ignore breaches in ethics standards.
How does culture affect employees?

 Organizational culture provides a framework with respect to the

behavior of employees in their workplace.
 Depending on the type of culture that is created in an organization,
it can have a positive or negative effect on employee performance.
 Let’s look at a few situations that result in either positive or
negative employee performance.
 An organizational culture where employees are considered an
integral part of the growth process of the organization fosters
employee commitment towards the organization.
 They align their goals and objectives with those of the organization
and feel responsible for the overall well-being of the organization.
Cont.
 As their efforts are in turn appreciated by the management and
suitably rewarded, they have immense job satisfaction.
 In such organizational cultures, the employees are committed to
achieving their goals and thus have a positive effect on the overall
performance of the organization.
 In organizations where managers are not facilitators but taskmasters,
employees live with fear and distrust and work is nothing but a boring
routine.
 Since they are not involved in the overall organizational goals, they
do not understand the implications of their tasks and hence may not
be committed to achieving them.
 Organizational culture to a large extent determines the performance of
the employees.
Environment concept of organization
Cont.
 Forces and institutions outside the organization that may affect
organizational performance are:
• Specific environment – which includes those constituencies that have
a direct and immediate impact on managers’ decisions and actions.
o Customers - absorb organization’s outputs.
o Suppliers - provide material and equipment.
o Competitors - provide similar services/products.
o Pressure groups - special-interest groups.
Cont.
• General environment - includes the broad conditions that may affect
organizations.
o Economic conditions - interest rates, changes in disposable income, and
stage of the business cycle.
o Political/legal conditions - federal, provincial, and local governments.
o Socio-cultural conditions - expectations of society (values, customs and
tastes).
o Demographic conditions - trends in the physical characteristics of a
population.
o Technological conditions - most rapidly changing aspect of the general
environment.
• Global conditions - increasing number of global competitors and
consumer markets.