o.b. c 16 organisational culture

ORGANISATIONAL CULTURE

• Dr. Rajesh Kamath• Assistant Professor• Department of Public Health• Manipal University


• Organisational culture:• A system of shared meaning held by members that

distinguishes the organisation from other organisations.• 7 characteristics:• 1. Innovation and risk taking• 2. Attention to detail• 3. Outcome orientation • 4. People orientation • 5. Team orientation• 6. Aggressiveness• 7. Stability

ORGANISATIONAL 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 focusses on the

results or outcomes rather than on the techniques and processes used to achieve them. Which is more important in your opinion?

• 4. People orientation : The degree to which management decisions take into consideration the effect of outcomes on people within the organisation.

• 5. Team orientation : The degree to which work activities are organised 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 organisational activities emphasize maintaining the status quo in contrast to growth.


• What is the difference between Organisational culture and Job satisfaction?

• Both overlap, but they are different…ORGANISATIONAL CULTURE JOB SATISFACTION

1. Descriptive 1. Evaluative

2. How employees perceive the characteristics of an organisation’s culture.

2. How employees feel about the organisation’s expectations, reward practices, and the like.


• Dominant culture : A culture that expresses the core values that are shared by a majority of the organisation’s members.

• Gives an organisation its distinct personality.• Subculture : Minicultures within an organisation,

typically defined by department designations and geographical seperation.

• Develop in large organisations to reflect common problems, situations or experiences faced by group members.

ORGANISATIONAL CULTURE – Strong vs Weak

• How to differentiate??• If opinions vary widely, the culture is weak.

STRONG CULTURE WEAK CULTUREIf most employees responding to management surveys have the same opinions about the organisation’s mission and values, the culture is strong.

If opinions vary widely, the culture is weak.

Organisation’s core values are intensely held and widely shared

Not so

ORGANISATIONAL CULTURE – Strong vs Weak

• The more members who accept the core values and the greater their commitment, the stronger the culture and the greater its influence on member behaviour because the high degree of sharedness and intensity creates an internal climate of high behavioural control.

• Eg. Tata employees confronting an ethical solution.• Builds cohesiveness,• Loyalty,• Organisational commitment,…• …thereby reducing employee turnover.

ORGANISATIONAL CULTURE – Functional and Dysfunctional effects

• Functions of Organisational Culture : • 1. Boundary defining role : It creates distinctions between

organisations. • 2. Sense of identity for members.• 3. Generation of commitment for something larger than

individual self interest.• 4. Enhances the stability of the social system by providing

appropriate standards for what employers should say and do.

• 5. Sense making and control mechanism that guides and shapes employees’ attitudes and behaviours.


• Organisational climate : The shared perceptions organisational members have about their organisation and work environment.

• Culture created climate.• Eg. Positive attitude inspires; Negative attitude demotivates.• When everyone feels the same way – Synergy -- Effect will be more than the

sum of the individual parts.• All about what aspects are encouraged.• Dimensions:• 1. Safety – safety gear• 2. Justice – People will believe in doing the right thing – eg. whistleblowing• 3. Diversity – Discourages divisiveness of any kind-racism, casteism.• 4. Customer service – Customer centric approach• Positive climate for performance – person will do a good job.


• Culture as a liability : • 1. Institutionalisation• 2. Barriers to change• 3. Barriers to diversity• 4. Barriers to Acquisitions and Mergers


• 1. Institutionalisation : • When an organisation becomes institutionalised, it is valued

for itself and not for the goods or services it produces.• It doesn’t go out of business even if it’s original goals are no

longer relevant.• Behaviours and habits that should be questioned and analysed

become taken for granted, which can stifle innovation and make maintaining the organisation’s culture an end in itself.

• Eg.???• The Armed forces• Arts institutions


• 2. Barriers to change : • Culture is a liability when it is not aligned with

the organisational goals.• Eg. In times of rapid change – SAIL, ITC, SBI,

TATA STEEL, Indian Police department.• Strong cultures worked well for them but if a

change is needed, it is difficult to enforce it.


• 3. Barriers to diversity : • You hire different people to encourage

diversity…fine…• But then you try to homogenise them with

organisational culture????


• 4. Barriers to Acquisitions and Mergers : • Historically, in M & A decisions, the key factors were financial advantage

and product synergy.• Now, it is cultural compatibility.• Research reveals that the primary cause of failure of mergers is

conflicting organisational cultures.• Eg: Merger of FLAKT and ABB. After the merger, the CEO of FLAKT was

moved out and a new CEO was brought in from ABB.• Several employees were asked to leave during this period. Employees

were unhappy with the compensation being offered to them.• Culture clash between the laid back culture of FLAKT and the more

dynamic culture of ABB.• FLAKT employees were accused of lethargy and a negative attitude. They

were told that they could not be trusted.

ORGANISATIONAL CULTURE – CREATING AND SUSTAINING CULTURE – HOW A CULTURE BEGINS

• Factors that CREATE an organisation’s culture : • Founders traditionally have a major impact on an organisation’s early

culture.• Culture creation occurs in 3 ways : • 1. Founders hire and keep only employees who think and feel the same

way as they do.• 2. They indoctrinate and socialise these employees to their way of

thinking and feeling.• 3. The founders’ own behaviour encourages employees to identify with

them and internalise their beliefs, values and assumptions. When the organisation succeeds, the founders’ personality becomes embedded in the culture. Eg Bill Gates – Microsoft, Narayana Murthy – Infosys, Azim Premji – Wipro, Vijay Mallya – Kingfisher, Richard Branson – Virgin group.

ORGANISATIONAL CULTURE – CREATING AND SUSTAINING CULTURE – KEEPING A CULTURE ALIVE

• Factors that keep a culture ALIVE : • 1. Selection• 2. Top Management• 3. Socialisation


• 1. Selection : To identify and hire individuals with the knowledge, skills and abilities to perform successfully. Identification of people whose values are consistent with the organisation’s.

• Selection also provides information to applicants.• Selection thus becomes a 2-way street, allowing

employer or applicant to avoid a mismatch.


• 2. Top management : Through words and behaviour, senior executives establish norms about whether risk taking is desirable, how much freedom managers should give employees, what is appropriate dress, what actions pay off in terms of pay raises, promotions and other rewards.


• 3. Socialisation : A process that adapts employees to the organisation’s culture.

• Necessary to ensure new employees do not disrupt beliefs and customs already in place.

• Eg: Indian Military Academy, Dehradun : All officers must go through a boot camp where they prove their commitment.

• Sometimes socialisation may not be very pleasant, eg. A German government official said “Bribery was Siemens’ business model”. Managers at Siemens were frequently socialised on how to bribe officials, where to obtain the money (bribes were referred to as “useful money”), and how to hide it in a sham accounting system. 2,700 Siemens’ contracts were found to be won through bribes and they had to face severe penalties.

ORGANISATIONAL CULTURE – A SOCIALISATION MODEL

• SOCIALISATION MODEL

PREARRIVAL ENCOUNTER METAMORPHOSIS

PRODUCTIVITY COMMITMENT TURNOVER

ORGANISATIONAL CULTURE – SOCIALISATION – 3 STAGES

• Socialisation has 3 stages:• 1. Prearrival stage• 2. Encounter stage• 3. Metamorphosis stage


• 1. Prearrival stage – The period of learning in the socialisation process that occurs before a new employee joins the organisation.

• Eg.: Business schools socialise business students to the attitudes and behaviours business firms want.


• 2. Encounter stage : The stage in which a new employee sees what the organisation is really like and confronts the possibility that expectations and reality may diverge.

• If expectations were fairly accurate, the encounter stage cements earlier perceptions...

• …or at the other extreme a new member may become disillusioned enough to resign.

• As managers, we should know that proper recruitment and selection significantly reduce negative outcomes. Newcomers are more committed when friends and coworkers help them “learn the ropes”.


• 3. Metamorphosis stage in which the new employee changes and adjusts to the job, work group and organisation.

ORGANISATIONAL CULTURE – SOCIALISATION

• Entry Socialisation Options : • 1. Formal vs Informal: Formal – New employee is segregated from the

ongoing work setting and differentiated in some way to make her role explicit. Eg. Specific training programs.

• 2. Individual vs Collective : Individually, eg.in offices. In groups. Eg. Military.• 3. Fixed vs Variable : Time schedule. Fixed, eg. Probationary periods.

Variable schedules eg.Promotion where the time is not fixed. • 4. Serial Vs Random : Serial: Uses role models, apprenticeship and

mentoring programs. Random : New employees are left on their own to figure things out.

• 5. Investiture vs Divestiture : Investiture – assumes that the newcomer’s qualities and qualifications are the necessary ingredients for job success, so these are confirmed and supported. Divestiture strips away certain characteristics of the recruit.

ORGANISATIONAL CULTURE – SOCIALISATION

• The 3 part socialisation process is complete when new members have become comfortable with the organisation and their job.

• They have internalised and accepted the norms of the organisation and their work group, …

• …are confident in their competence, …• …and feel trusted and valued by their peers.• They understand the system – not only their own tasks but the

rules, procedures and informally accepted practices as well.• Finally, they know what is expected of them and what criteria

will be used to measure and evaluate their work.

ORGANISATIONAL CULTURE – HOW EMPLOYEES LEARN CULTURE

• How employees learn culture : • 1. Stories• 2. Rituals• 3. Material symbols• 4. Language

ORGANISATIONAL CULTURE – HOW EMPLOYEES LEARN CULTURE - STORIES

• 1. Stories : Eg. Wipro - Azim Premji was in a tier 2 city. An employee told him that a large client in that city was keen to see him. Premji said that he would go and personally see the client, since he was free that morning!!

• Azim Premji has never recommended a cv to his HR managers!!

• What Values do these 2 aspects of his behaviour lay emphasis on…??

• Meritocracy …• …and Customer relationship.

ORGANISATIONAL CULTURE – HOW EMPLOYEES LEARN CULTURE - RITUALS

• 2. Rituals : Repetitive sequences of activities that express and reinforce the key valuesof the organisation, which goals are most important, which people are most important, and which are expendable.

• Eg. At IIM Ahmedabad, students of various dormitories have chants (known as tempo chants) that they sing in the middle of the night to increase solidarity and gain energy!!

The same chants have been continuing for years.

ORGANISATIONAL CULTURE – HOW EMPLOYEES LEARN CULTURE – MATERIAL SYMBOLS

• 3. Material Symbols : • Layout of corporate headquarters.• Types of automobiles top executives are given.• Presence or absence of corporate aircraft.• Size of offices. • Elegance of furnishings, executive perks,

attire.

ORGANISATIONAL CULTURE – HOW EMPLOYEES LEARN CULTURE - LANGUAGE• 4. Language : • Unique terms describe equipment, officers, key individuals,

suppliers, customers or products that relate to the business.

• Acronyms and Jargon.• At Boeing, BOLD - Boeing Online Data• CATIA - Computer Graphics Aided 3 dimensional interactive

application• MAIDS – Manufacturing Assembly and Installation Data

System.• SLO - Service Level Objectives.

ORGANISATIONAL CULTURE – CREATING AN ETHICAL ORGANISATIONAL CULTURE

• Creating an ethical organisational culture : • High ethical standards can be seen in cultures

with • 1. High risk tolerance.• 2. Low to moderate aggressiveness.• 3. Focussed on means as well as outcomes.• 4. Long term perspectives.• 5. Balances the rights of multiple stakeholders

including the community.


• Eg.: When poisoned bottles of Tylenol ( a Johnson & Johnson product ) were found in stores some years ago, company employees independently pulled the product from shelves across the U.S. before management had even issued a statement about the tampering.

• Enron : Aggressive culture with its unrelenting pressure on executives to rapidly expand earnings, encouraged ethical lapses.


• As managers, what can you do??• 1. Be a visible role model : Senior managers taking the ethical high road

send a positive message to all employees.• 2. Communicate ethical expectations : Create and disseminate an

organisational code of ethics.• 3. Provide ethical training : Seminars, workshops.• 4. Visibly reward ethical acts and punish unethical ones : Include in

managers’ performance appraisals a point by point evaluation of how their decisions measure up against the organisation’s code of ethics. Review the means taken to achieve goals as well as the ends themselves.

• 5. Provide protective mechanisms : Provide formal mechanisms so employees can discuss dilemmas and report unethical behaviour without fear of reprimand.

ORGANISATIONAL CULTURE – CREATING A POSITIVE ORGANISATIONAL CULTURE

• Creating a positive Organisational culture : • 1. Building on employee strengths.• 2. Rewarding more than punishing.• 3. Emphasizing vitality and growth


• 1. Building on employee strengths :• Eg.: The Mehta group housed 2 cement

companies – Gujarat Sidhee and Saurashtra cement-in western India in the late 1990s. Sidhee had been declared sick and was under the Board of Industrial and Financial reconstruction (BIFR), and Saurashtra cement was a loss making firm. The company adopted HRM strategies and redeployed people according to their competencies and strengths.


• 2. Rewarding more than punishing : • Most organisations are sufficiently focussed on extrinsic rewards

such as pay and promotions. But they often forget about the power of smaller and cheaper rewards such as praise.

• Catch employees doing something right.• Articulate praise.• Many managers withhold praise because they are afraid

employees will coast or because they think praise is not valued, both of which are not true. Failure to rise is like blood pressure…

• …a silent killer.


• 3. Emphasising Vitality and Growth : • What is the difference between a job and a

career??• Individual employee’s growth.• Trying to create a Win-Win situation.

ORGANISATIONAL CULTURE – SPIRITUALITY AND ORGANISATIONAL CULTURE

• SPIRITUALITY AND ORGANISATIONAL CULTURE.• Workplace spirituality : The recognition that people have

an inner life that nourishes and is nourished by meaningful work that takes place in the context of the community.

• This is not about…• …God or Theology.• Eg.: 1. Starbucks paying Third World suppliers an above-

market price for their coffee.• 2. Aravind Eye care encourages employees to spend more

time in the meditation room.


• Reasons for the growing interest in spirituality:• 1. As a counterbalance to the pressures and stress of a

turbulent pace of life – Single parent families, geographic mobility, the temporary nature of jobs, new technologies that create distance between people, the lack of community feeling.

• 2. Formalised religion has not worked for many people and they continue to look for anchors to replace lack of faith.

• 3. People question the meaning of work.• 4. The desire to integrate personal life values with one’s

professional life.• 5. Material pursuits are not making people happy.


• Characteristics of a spiritual organisation : • 1. Strong sense of purpose: Profits may be important, but they are not

the primary values of the organisation. People want to be inspired by a purpose they believe is important and worthwhile.

• 2. Trust and respect : Mutual trust, honesty and openness. Managers are not afraid to admit mistakes. Eg : The President of an auto parts distribution firm says “We do not tell lies here and everyone knows it. We are specific and honest about quality even if we know they might not be able to detect any problem.”

• 3. Humanistic work practices : Flexible work schedules, employee empowerment, job security.

• 4. Toleration of employee expression : Employee expressions are not stifled. They allow people to be themselves - to express their moods and feelings without guilt or fear of reprimand. Eg: Employees at South-West airlines are encouraged to express their sense of humour on the job, to act spontaneously, and to make their work fun.

ORGANISATIONAL CULTURE – HOME WORK

• Home work:• 1. Global implications • 2. Summary and implications for managers.

• References : • ORGANISATIONAL BEHAVIOUR - STEPHEN

ROBBINS – 14TH EDITION

THANK YOU

o.b. c 16 organisational culture

Leadership & Management