Organisational Culture Refers to the “context” – the organisational environment Determines the the type of communication that will take place

Organisational Culture “How things are done around here” Reflects underlying assumptions about the way work is performed What is acceptable and not acceptable What behaviour and actions are encouraged or discouraged

“Strong culture” Core values are intensely held High agreement Shared purpose Builds cohesiveness Loyalty

National Culture Usually takes precedence over organsiational culture Mercedes Benz in Alabama –Abandoned strict heirarchy of German plant –Employee teams –Employee intervention –Sense of ownership

Culture’s Functions identity for organisation sense of identity for members social system stability –provides “social glue” –provides appropriate standards guides and shapes attitudes and behaviours

What are the characteristics of organsiational cultures? 1.innovation & risk taking 2.interest in having employees generate new ideas 3.openness of communication 4.Sensitivity to the needs of customers and employees

How does a culture begin? 1. The founders –Philosophy/vision of the founders influences –Indoctrinate and socialize employees –Founder’s behaviour acts as model 2. Selection of candidates 3. Socialization methods - A process that adapts employees to the culture

Organisational Values Formal Statement of Values –Found in mission statements, value statements or coporate credos

–What we believe in The Body Shop is a stake-holder led company. It believes its success is dependent upon its relationships with all its stakeholders, including its employees, franchisees, customers, communities, suppliers, shareholders and NGOs. –The Body Shop approach to ethical business operates on three levels: 1) compliance: opening up to defined standards of human rights, social welfare and worker safety, environmental protection and, where relevant, wider ethical issues like animal protection 2) disclosure: only through public disclosure can a real process of dialogue and discussion with stakeholders be achieved and the right direction charted for the future 3) campaigning: to play an active part in campaigning for positive change in the way the business world works, with the ultimate aim of making a positive impact on the world at large.

We believe in making a difference. In our customer’s eyes, Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge. We deliver a quality service by empowering our employees and we facilitate and monitor customer feedback to continually improve the customer’s experience through innovation

Values – in - Use The way people in the company actually behave – May differ from the “espoused values”

Ford Pinto Case Study

Pinto Crash Tests

Cost Benefit Analysis if the cost is greater than the benefit, the project is not worth it—no matter what the benefit. Examine the cost of every action, decision, contract part or change, then carefully evaluate the benefits to be certain that they exceed the cost before you begin a program

BENEFITS Savings: 180 burn deaths, 180 serious burn injuries, 2,100 burned vehicles. Unit Cost: $200,000 per death, $67,000 per injury, $700 per vehicle. Total Benefit: 180 X ($200,000) X ($67,000) + $2,100 X ($700) = $49.5 million. COSTS Sales: 11 million cars, 1.5 million light trucks. Unit Cost: $11 per car, $11 per truck. Total Cost: 11,000,000 X ($11) + 1,500,000 X ($11) = $137 million.

Stakeholder vs Stockholder Approach Stakeholder Approach Stockholder Approach

Homework Read the Ford Pinto case study enclosed in the course packet Answer the following questions in your communciations notebook: –How would you describe the culture that existed at Ford Motor Company in the 1970s? –How did that culture affect internal and external communciation?