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ORGANIZATIONAL CULTUREORGANIZATIONAL CULTUREORGANIZATIONAL CULTUREORGANIZATIONAL CULTURE

By

KAMALAKKANNAN GVENKATESAN TDEPARTMENT OF MANAGEMENT STUDIESPONDICHERRY UNIVERSITY

Organizational CultureOriginated in 1940s

• organizational climate studies, was prominent during the 1960s and 1970s

• Popularized in early 1980s• Popularized in early 1980s

• viewed theinformal,nonmaterial, interpersonal,moral bases

of cooperation and commitment as perhaps more important

Organizational culture became a business phenomenon in the early 1980s, triggered by four seminal books:

♦ Ouchi’s (1981) Theory Z: How American Business Can Meet the Japanese Challenge

♦ Pascale and Athos’s (1982) The Art of Japanese Management: Applications for American Executivesfor American Executives

♦ Deal and Kennedy’s (1982) Corporate Cultures: The Rites and Rituals of Corporate Life

♦ Peters and Waterman’s (1982) In Search of Excellence: Lessons from America’s Best Run Companies.

Definition

A system of shared meaning held by members that distinguishes the organizations.

Set of key behaviors, beliefs and shared understandings that are shared by members of the organization.

Defines basic organizational values and communicates to new members the correct way to think and act.

PRIMARY CHARACTERISTICS

• Innovation and Risk Taking• Attention to detail• Outcome Orientation• People Orientation• People Orientation• Team Orientation• Aggressiveness• Stability

To Defines the boundary between one To Defines the boundary between one organization and others.organization and others.

To Convey a sense of identity for its To Convey a sense of identity for its members.members.

Why we learn Culture in OBWhy we learn Culture in OB

To Convey a sense of identity for its To Convey a sense of identity for its members.members.

To Facilitate the generation of commitment To Facilitate the generation of commitment to something larger than selfto something larger than self--interest.interest.

To Enhance the stability of the social To Enhance the stability of the social system.system.

Organizational Culture & the Bottom Line- Dr. Kathleen Miller, 1992

1. an environment where people felt that they were all part of the company team

2. consultants on a weekly basis to address their interpersonal and relationship issues

3. owners committed to spending time on the shop floor each day listening to employees about their vision for the company and how the employees fit into that vision

4. daily communications meetings for discussing their opinions and differences behind closed doors rather than in public

How Organizational Cultures Have an Impact on Performance and Satisfaction

Objective Factors• Innovation and risk taking

StrengthPerformance

• Innovation and risk taking• Attention to details• Outcome orientation•People orientation•Team orientation•Aggressiveness•Stability

Perceived

asOrganizational culture

Hi

Low Satisfaction

Do Organizations Have Uniform CulturesDo Organizations Have Uniform Cultures

SubculturesSubculturesDominantDominant

CoreValues

SubculturesSubculturesDominantDominantCultureCulture

Creating And Sustaining Culture

PhilosophyPhilosophy

TopManagement

How Organization Cultures Form

PhilosophyPhilosophyofof

Organization’sOrganization’sFoundersFounders

SelectionSelectionCriteriaCriteria

Socialization

OrganizationalOrganizationalCultureCulture

Keeping Culture Alive

•• Concerned with how well the candidates Concerned with how well the candidates will fit into the organization.will fit into the organization.

•• Provides information to candidates Provides information to candidates about the organization.about the organization.

SelectionSelection

•• Senior executives help establish Senior executives help establish behavioral norms that are adopted behavioral norms that are adopted by the organization.by the organization.

Top Top ManagementManagement

•• The process that helps new The process that helps new employees adapt to the employees adapt to the organization’s culture.organization’s culture.

SocializationSocialization

A Socialization Model

Stages in the Socialization Process

Entry Socialization Options

Formal versus

Informal

Individual versus

CollectiveInformal Collective

Fixed versus

Variable

Serial versus

Random

Contrasting Organization Cultures

Organization A Organization B

• Managers must fully document all decisions

• Creative decisions, change, and risksare not encouraged.

• Management encourages and

rewards risk-taking and change.

• Employees are encouraged to “ run with ” ideas, and failures are are not encouraged.

• Extensive rules and regulations exist

for all employees.

• Productivity is valued over employee

morale.

• Employees are encouraged to stay within their own department.

• Individual effort is encouraged.

“ run with ” ideas, and failures are

treated as “ learning experiences.”• Employees have few rules and

regulations to follow.

• Productivity is balanced with treating

its people right.

• Team members are encouraged to interact with people at all levels and functions.

• Many rewards are team based.

How EmployeesLearn Culture/

StoriesStories RitualsRituals

How we reinforce” itLearn Culture/

How we “reinforce” it

MaterialMaterialSymbolsSymbols

LanguageLanguage

Creating an Ethical Organizational Culture

Organizational Characteristics – Maintaining High Ethical Standards High in risk tolerance Low to moderate in aggressiveness Focus on means as well as outcomes

Ethical Culture can be Created by the following Steps Being a visible role model Communicating ethical expectations Providing ethical training Visibly rewarding ethical acts and punishing unethical ones Provide Protective Mechanism

Creating a Positive Organizational Culture

Positive Organizational Culture Builds on employee strengths Rewards more than it punishes Emphasizes individual vitality and growth Emphasizes individual vitality and growth

Case Study 2Creating Innovative Organizational Culture

1. Recruiting and Retaining Talent

In 3M

- Business Week Magazine, 2007

2. Creating a Challenging Environment

3. Knowledge Sharing

4. Rewarding Innovation

5. Mentors, Sponsors and Champions