MGT 201: Organizational Culture

MGT 201 :
ORGANIZATIONAL
CULTURE
Organizational Culture
• Organizational culture refers to a system of shared meaning/ belief
held by members that distinguishes the organization from other
organizations ( Think an example on your own)
Seven primary characteristics seem to capture the essence of an organization’s
culture
• 1. Innovation and risk taking: The degree to which employees are

encouraged to be innovative and take risks.
• 2. Attention to detail: The degree to which employees are expected

to exhibit precision, analysis, and attention to detail.
• 3. Outcome orientation: The degree to which management focuses

on results or outcomes rather than on the techniques and processes
used to achieve them.
• 4. People orientation: The degree to which management decisions
take into consideration the effect of outcomes on people within the
organization.
• 5. Team orientation: The degree to which work activities are

organized around teams rather than individuals.
• 6. Aggressiveness: The degree to which people are aggressive and

competitive rather than easygoing.
• 7. Stability: The degree to which organizational activities emphasize

maintaining the status quo in contrast to growth
Do Organizations Have Uniform Cultures?
• Core Values
• The primary or dominant values that are accepted throughout the
organization
• Dominant Culture
• Expresses the core values that are shared by a majority of the
organization’s members
• Subcultures
• Mini cultures within an organization, typically defined by
department designations and geographical separation
Culture versus Formalization
• The stronger an organization’s culture, the less management need
be concerned with developing formal rules and regulations to guide
employee behavior. Those guides will be internalized in employees
when they accept the organization’s culture.
16-7
What Do Cultures Do?
• Culture’s Functions
1. Defines the boundary between one organization and others
2. Conveys a sense of identity for its members
3. If the cultures are strong, they can facilitate a continuous
commitment to something larger than self-interest over an
extended period of time
4. Cultures also help people know what to expect in the
organization.
16-8
Culture as a Liability
• Institutionalization
• A company can become institutionalized where it is valued for itself
and not for the goods and services it provides
• Barrier to change
• Occurs when culture’s values are not aligned with the values
necessary for rapid change
• Barrier to diversity
• Strong cultures put considerable pressure on employees to
conform, which may lead to institutionalized bias
• Barrier to acquisitions and mergers
• Incompatible cultures can destroy an otherwise successful merger
How Culture Begins
• Cultures start from the very beginning of the organization with the
founders. Founders will tend to hire and keep employees who view
things in a similar fashion. They will also try to get employees to think
about things the way they do and socialize them to their point of view
and ways of doing things. This is done so that the founders’ behavior
will become the behavior to model after in order to succeed in the
organization and to fit in.
How Culture Begins
Stems from the actions of the founders:
• Founders hire and keep only employees who think and feel the
same way they do.
• Founders indoctrinate and socialize these employees to their way
of thinking and feeling.
• The founders’ own behavior acts as a role model that encourages
employees to identify with them and thereby internalize their
beliefs, values, and assumptions.
16-10
Keeping a Culture Alive
Three forces play a particularly important role in sustaining
a culture:
• Selection
• Identify and select individuals who are high performers and whose
values are consistent with at least a good portion of the
organization’s values
• Top Management
• Through words and behaviors, senior executives establish norms
that filter through the organization
• Socialization
• The process that helps new employees adapt to the prevailing
organizational culture
16-
16-12
Stages in the Socialization Process

• Socialization
• The process that helps new employees adapt to the prevailing organizational
culture
• Pre-arrival
• The period of learning prior to a new employee joining the organization (How-
follow the lecture of the faculty)
• Encounter
• The stage at which the new employee sees what the organization is really like
and confronts the possibility that expectations and reality may diverge (How)
• Metamorphosis
• The stage at which the new employee changes and adjusts to the work, work
group, and organization (How)
Result of successful
socialization? (Explain) High
High
Low
Result of unsuccessful Low
socialization? (Explain) Low
high
Socialization Program Options
• Choose the appropriate alternatives:
• Formal versus Informal
• Individual versus Collective
• Fixed versus Variable
• Serial versus Random
• Investiture versus Divestiture
• Socialization outcomes:
• Higher productivity
• Greater commitment
• Lower turnover
Summary: How Organizational Cultures Form
• Organizational cultures are derived from the founder
• They are sustained through the selection process,
managerial action, and socialization methods
16-17
How Employees Learn Culture

• Stories
• They can gain an understanding of culture by hearing stories that
present the past and provide explanations for current practices
• Rituals
• Repetitive sequences of activities that express and reinforce the
key values of the organization
• Material Symbols
• Acceptable attire, office size, nature of the office furnishings, and
executive perks that convey to employees who are important in the
organization
• Language
• Jargon and special ways of expressing one’s self to indicate
membership in the organization
Creating an Ethical Organizational Culture
• As cultures are created, it is important to incorporate
ethics into the cultural norms from the very beginning.
Certain characteristics will help develop high ethical
standards, such as a high tolerance for risk, so people are
not afraid to make mistakes; low to moderate in
aggressiveness so that unethical behaviors are avoided
and a focusing on the means as well as the outcomes so
that ethics is embedded in both.
16-19
Creating an Ethical Organizational Culture

• Characteristics of Organizations that Develop High Ethical Standards
• Has high tolerance for risk
• Low to moderate in aggressiveness
• Focused on means as well as outcomes
• Managerial Practices Promoting an Ethical Culture
• Being a visible role model
• Communicating ethical expectations
• Providing ethical training
• Visibly rewarding ethical acts and punishing unethical ones
• Providing protective mechanisms
• Write the above mentioned points in complete sentences!!

Creating a Positive Organizational Culture
Positive Organizational Culture
• A culture that:
• Builds on employee strengths
• Focus is on discovering, sharing, and building on the strengths of
individual employees
• Rewards more than it punishes
• Articulating praise and “catching employees doing something right”
• Emphasizes individual vitality and growth
• Helping employees learn and grow in their jobs and careers
• Limits of Positive Culture:
• May not work for all organizations or everyone within them
• Write the above mentioned points in complete sentences!!

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MGT 201 :

• 1. Innovation and risk taking: The degree to which employees are

• 2. Attention to detail: The degree to which employees are expected

• 3. Outcome orientation: The degree to which management focuses

• 5. Team orientation: The degree to which work activities are

• 6. Aggressiveness: The degree to which people are aggressive and

• 7. Stability: The degree to which organizational activities emphasize

What Do Cultures Do?

Stages in the Socialization Process

How Employees Learn Culture

Creating an Ethical Organizational Culture

• Write the above mentioned points in complete sentences!!

• Write the above mentioned points in complete sentences!!

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