Organizational Culture

Organizational Culture Defined The basic pattern of shared assumptions, values, and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing the organization.

The Basic Functions of Organizational Culture Provides a sense of identity for members Clarifies and reinforces standards of behaviour Enhances commitment to the organization’s mission

Voluntary Survival: Its Connection to Organizational Culture More people voluntarily completed six years of work in organizations whose cultures emphasized the value of interpersonal relationships than those emphasizing the value of hard work Organizational cultures emphasizing the value of interpersonal relationships 100 75 (percentage voluntarily remaining employed in the organization) Voluntary Survival Rate Organizational cultures emphasizing the value of hard work 50 25 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Time Since First Hired Organizational cultures emphasizing the value of interpersonal relationships Organizational cultures emphasizing the value of hard work

Rule #1: Use your good judgment in all situations. An example WELCOME TO NORDSTROM We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Nordstrom Rules Rule #1: Use your good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or divisional general manager any questions at any time.

Elements of Organizational Culture Physical Structures Rituals/ Ceremonies Stories Language Beliefs Values Assumptions Artifacts of Organizational Culture Organizational Culture

Meaning of Cultural Content Cultural content refers to the relative ordering of beliefs, values, and assumptions. Example: RIM values intensity whereas Q-Media values thrift. An organization emphasizes only a handful of the hundreds of cultural values. Kitchener-Waterloo Record

Organizational Culture as Shared Meanings Yes Organizational Culture Shared interpretation of organizational events? Regular interaction? No

Organizational Subcultures Located throughout the organization Can support or oppose (countercultures) firm’s dominant culture Two functions of countercultures: provide surveillance and evaluation source of emerging values Most Organizations Have a Dominant Culture and Numerous Sets of Subcultures.

Values of the Dominant Organizational Culture and Subcultures Subculture values: Honest representation of products Sales group Values of the Dominant Organizational Culture Open to new ideas Customer service Subculture values: Thorough product testing Engineering Group Subculture values: Accurate reporting of financial data Accounting group High quality

Avocational subcultures The employee at the next work station may really be from Mars

Artifacts: Organizational Stories Social prescriptions of desired behaviour Demonstrate that organizational objectives are attainable Most effective stories: Describe real people Assumed to be true Known throughout the organization Are prescriptive

Artifacts: Rituals and Ceremonies programmed routines (e.g., conducting meetings) Ceremonies planned activities for an audience (e.g., award ceremonies)

Artifacts: Organizational Language Words used to address people, describe clients, etc. Leaders use phrases and metaphors as cultural symbols eg. General Electric’s “grocery store” Language also found in subcultures eg. Whirlpool’s “PowerPoint culture”

Artifacts: Physical Structures/Space Oakely, Inc.’s protective and competitive corporate culture is apparent in its building design and workspace. The building looks like a vault to protect its cherished product designs (eyewear, footwear, apparel and watches). Courtesy of Oakely, Inc. Courtesy of Oakely, Inc.

Benefits of Strong Corporate Cultures Social Control Strong Organizational Culture Social Glue Aids Sense-Making

Problems with Strong Cultures Culture content might be incompatible with the organization’s environment. Strong cultures focus attention on one mental model. Strong cultures suppress dissenting values from subcultures.

Mergers and Collaboration Firms Well Matched on Traditional Business Can Stumble in Blending Their Corporate “Personalities.”

Bicultural Audit Part of “due diligence” in merger Minimizes risk of cultural collision by diagnosing companies before merger Three steps in bicultural audit: 1. Collect artifacts 2. Analyze data for cultural conflict/compatibility 3. Recommend solutions

Merging Organizational Cultures Assimilation Acquired company embraces acquiring firm’s culture Deculturation Acquiring firm imposes its culture on unwilling acquired firm Integration Both cultures combined into a new composite culture Separation Merging companies remain separate with their own culture

What does this mean for you?

Strengthening Organizational Culture Founders and leaders Strengthening Organizational Culture Selection and socialization Culturally consistent rewards Managing the cultural network Stable workforce

How to Read an Organization’s Culture Observe the Physical Surroundings. Ask to Sit in on a Team Meeting. Listen to the Language. Note to Whom You’re Introduced and How They Act. Ask Different People the Same Questions and Compare Their Answers. Get the Views of Outsiders.

Assessing the Individual-to-organization Fit