1. Organizational Culture
Ikea in Saudi Arabia

2. What is organizational culture?
How does it work with national culture?
Challenges of standardization vs. localization

3. Team Exercise What is Aalto University culture?
How did you experience this culture?

4. Examples of organizational culture
Culture at Apple
Culture at Goldman Sachs

5. Therefore, what is organizational culture?

6. Organizational Culture Defined
The basic pattern of shared values and assumptions governing the way employees within an organization think about and act on problems and opportunities.
Values, norms, guiding beliefs, and understandings that are shared by members of an organization
Taught to new members as the correct way to think, feel, and behave

7. Emergence and Purpose of Culture
Provides sense of organizational identity
Two critical functions in organizations:
To integrate members so they know how to relate to one another
To help organization adapt to external environment
Internal Integration – collective identity and know how to work together
External Adaption – how the organization meets goals and deals with outsiders

8. Observable Aspects of Organizational Culture

9. Elements of Organizational Culture
Artifacts
• Stories/legends
• Rituals/ceremonies
• Organizational language
• Physical structures/décor
Visible
• Conscious beliefs
• Evaluate what is good or bad, right or wrong
Shared values
Invisible
(below the surface)
• Unconscious, taken-for-granted perceptions or beliefs
• Mental models of ideals
Shared assumptions

10. Organizational Design and Culture
Managers want a corporate culture that reinforces the strategy and structural design the organization needs to be effective within environment.

11. Organizational Culture Profile
Org Culture Dimensions
Dimension Characteristics
Innovation
Experimenting, opportunity seeking, risk taking, few rules, low cautiousness
Stability
Predictability, security, rule-oriented
Respect for people
Fairness, tolerance
Outcome orientation
Action oriented, high expectations, results oriented
Attention to detail
Precise, analytic
Team orientation
Collaboration, people-oriented
Aggressiveness
Competitive, low emphasis on social responsibility
Source: O’Reilly et al (1991)

12. Artifacts: Stories and Legends
Social prescriptions of desired (undesired) behavior
Provides a realistic human side to expectations
Most effective stories and legends:
Describe real people
Assumed to be true
Known throughout the organization
Are prescriptive

13. Artifacts: Rituals and Ceremonies
programmed routines
(eg., how visitors are greeted)
Ceremonies
planned activities for an audience
(eg., award ceremonies)

14. Artifacts: Organizational Language
Words used to address people, describe customers, etc.
Leaders use phrases and special vocabulary as cultural symbols
Language also found in subcultures

15. Artifacts: Physical Structures/Symbols
Building structure -- may shape and reflect culture
Office design conveys cultural meaning
Furniture, office size, wall hangings
Courtesy of Microsoft Corp.

16. Benefits of Strong Corporate Cultures
Social Control
Strong
Organizational
Culture
Social Glue
Improves Sense-Making

17. Strengthening Organizational Culture

18. Attraction-Selection-Attrition Theory
Organizations attract, select, and retain people with values and personality characteristics consistent with the organization’s character, resulting in a more homogeneous organization and a stronger culture
Attraction -- applicants self-select and weed out companies based on compatible values
Selection -- Applicants selected based on values congruent with organization’s culture
Attrition -- Employee quit or are forced out when their values oppose company values

19. Organizational Socialization Defined
The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization.

20. Socialization: Learning & Adjustment
Learning Process
Newcomers make sense of the organization’s physical, social, and strategic/cultural dynamics
Adjustment Process
Newcomers need to adapt to their new work environment
New work roles
New team norms
New corporate cultural values

21. Organizational Subcultures
Located throughout the organization
Can enhance or oppose (countercultures) firm’s dominant culture
Two functions of countercultures:
provide surveillance and critique, ethics
source of emerging values

22. Culture and Performance
Most high performing firms have strong cultures.
Strong organizational cultures do not always result in higher organizational performance because:
Culture content might be misaligned with the organization’s environment.
Strong cultures may focus on mental models that could be limiting
Strong cultures suppress dissenting values from subcultures.

23. Ethical Values and Social Responsibility
What is ethics?
Ethics
Ethics refer to the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong
Managerial Ethics
Ethical decisions go far beyond behaviors governed by law
Managerial ethics guide the decisions and behaviors of managers

24. Sources of Individual Ethical Principles and Actions

25. Significance of Ethics in IB

26. HSBC and National Cultures