Chapter Outline
· What is Organizational Culture?
· What do Cultures do?
· Creating and Sustaining Culture:
· How Employees Learn Culture?
· Creating an Ethical Organizational Culture:
· Creating a Positive Organizational Culture:
· Spirituality and Organizational Culture:
· Global Implications:
Definition:
It refers to system of shared meaning held by members that distinguishes the organization from the other organization.
Seven primary characteristics which take part in developing organizational culture are:
· Innovation and risk taking:
Whether the employees are encouraged or discouraged to be innovative and take risks.
· Attention to detail:
To which extent employees are expected to exhibit analysis, precision and attention to details.
· Outcome orientation:
Do management focusses on results or outcomes rather than the processes and techniques used to achieve them.
· People Orientation:
What is the effect of outcomes on the people of organization?
· Team Orientation:
Do the tasks are organized around teams rather than individuals.
· Aggressiveness:
Do the people are easygoing or aggressive and competitive.
· Stability:
The degree to which organizational activities emphasizes on maintaining the status quo in contrast to growth.
Some other researchers have described culture into four different types based on competitive values, i.e.,
· Clan: the collaborative and cohesive.
· Adhocracy: Innovative and adaptable
· Hierarchy: Controlled and consistent.
· Market: competitive and customer focused.
Studies have shown that positive job attitude was high in clan culture, innovation was strong in market culture and financial performance was good in market cultures.
Culture is a Descriptive Term:
It is a descriptive because employees perceive the characteristics of organizational culture for example, does organization encourage teamwork, does it reward innovation.
In contrast job satisfaction is evaluative, i.e., how employees feel about the organizations’ expectations, reward practices etc.
Do Organizations have Uniform Cultures?
Organizational culture represents the common perception, that the organization’ members hold.
In most of the large organizations, there is a Dominant culture and subcultures as well.
Dominant Culture: Represents the core values shared by majority of organizational members and gives organizations a distinctive personality.
Subculture: it’s a departmental wise culture, which includes the problems and experiences faced within the department or location.
Strong vs Weak Cultures:
Strong Culture: if the organization’ mission and core values of organization are widely shared among majority of employees, then the Culture is Strong.
Weak Culture: If opinions of employees vary widely about organization’ mission and its core values then the culture is weak.
Culture vs Formalization:
High formalization in any organization brings predictability, consistency and orderliness.
Culture and formalization are two road for the same destination, as if culture is strong and widely accepted then organizations less need to be concerned with developing formal rules and regulations to guide employee’s behavior.
Culture Functions:
Culture defines the rules of game.
· Culture defines boundaries, it differentiates one organization from another.
· It provides identity to organization’ members.
· Culture serves the purpose which is larger than the individual’ self-interest.
· It improves the stability of social system. It sets standards for what employees should say and do.
· It is sense-making and control mechanism that guides and shape employee’ behavior and attitude.
Implementation of Culture in decentralized organizations is so important but as there is less interaction and face to face contact so, it’s difficult to implement proper cultural practices in such organizations.
Individual-Organization Fit: it is to say that the employee or job applicant’ behavior and attitude is compatible with organization’ culture. That means, companies put their maximum effort while selecting the employee who they think is suitable and can maintain that image of the company.
Culture Creates Climate:
The shared perceptions organizational members have about their organization and work environment is termed as organizational climate.
Analysis have shown that psychological climate is strongly related with job satisfaction, involvement, motivation and commitment and a positive workplace climate is directly linked with higher customer satisfaction.
A person who encounters positive climate for performance will try to perform better on job and will believe that other employees support his or her success. Similarly, if a person encounters positive climate for diversity, then he will interact with everyone in the company without thinking about their demographic background.
Culture as a Liability:
Strong culture in company can enhance commitment and increase the consistency of employee’s behavior. But it can affect organization in negative way.
Institutionalization:
When organization becomes institutionalized, that means, it is valued for itself and not for its products and services. It becomes rigid.
Companies don’t come out of their original goals even if the goal is no longer relevant in the industry.
Barriers to change:
As if there is strong culture in the organization and employees are stick with the rituals and its norms, then it becomes difficult for organizations to adopt change.
An asset in a stable environment may burden the organization and make it difficult to respond to changes.
Barriers to Diversity:
In an organization who support bias or becomes insensitive to people who are different often undermine the formal corporate diversity policies.
In such organizations every new employee, to fit in the organization must accept the existing norms and behaviors.
Barriers to acquisitions and mergers:
In earlier times, financial advantage and product synergy were considered when management go for mergers or acquisitions, but in recent years cultural compatibility is now a primary concern.
As per a survey by consulting firm A.T. Kearney, 58% of mergers failed to reach financial goals, and experts have commented that it is because of conflicting organizational culture.
Example: the merger of American Online and Time Warner in 2001 was the disastrous failure of US corporate history was due to cultural differences.
Culture does not develop unexpectedly or in a sudden way but once it is established it rarely fades away.
How a Culture Begins:
Culture creation occurs in three ways:
· First, founders hire the employees who they think are alike.
· Second, they indoctrinate and socialize these employees to their way of thinking and feeling.
· Lastly, owner’ own behavior encourages employees to identify their beliefs, values and assumptions.
When the organization succeeds, the founder’ personality becomes embedded in the culture.
Keeping Culture Alive:
Once a culture is in place, employee practices within the organization keeps it alive, i.e., the selection process, training and development programs, evaluation criteria, reward those who support the culture and penalize those who don’t.
Selection:
While selecting employees, selectors need to keep the most significant point in mind, whether the candidate will fit into the organization. Identify candidates, whose values must match a good portion of organizational culture.
In order to avoid a big mismatch, companies should provide complete requirements in the advertisement, so that the person find himself as misfit for the job should not apply.
Top Management:
Top management can impact organization’ culture through their actions, words and behavior.
Whether managers support innovative ideas, what actions result in pay rise, rewards and promotions, office dress code etc.
Socialization:
An employee, who join a new company, he needs assistance to learn the prevailing culture. This help or assistance is called as socialization.
Socialization is a 3 steps process, which are Prearrival stage, Encounter, and Metamorphosis. Each step has an impact over new employees’ performance, commitment to organization’ objectives and eventual decision to stay with the organization.
· Prearrival stage:
At this stage it is believed that new employee arrives in the organization with set of values, attitude and expectations about both the organization and work. The most important predictor of future behavior of employee or a person is his past behavior.
To find the best suitable employee, while posting job advertisement, mention the skills which an organization is looking for and inform people about the organization as whole, so that, if a person finds himself as misfit, will probably not apply.
· Encounter:
When an employee enters the organizations, then he experiences the encounter stage, i.e., the difference between the expectations and reality about jobs and environment of organization.
If the expectation and reality are fairly accurate, then it would be easier for employee to settle, which is not often the case. In other case employee may opt to resign and recruitment and selection process should reduce this outcome.
New comers work more passionately when colleagues become friends and help him to learn the things quickly.
· Metamorphosis:
There are two types of practices used to bring in order the differences found in newcomers in comparison with the organization’ environment, first is institutional and second is individual.
Institutional practices are more formal, collective, sequential, fixed and serial socialization programs and emphasize divesture. This improves employee’s commitment for the organization. This is commonly used in police department or fire department etc.
Institutional practices are informal, individual, random variable and disjunctive (lack consistency) and emphasize investiture. This makes employees more innovative. It is commonly used in research base firms’ development, advertising and filmmaking etc.
Original culture derives from the philosophy of Organization’ founders. And this philosophy greatly influences the hiring criteria.
Top management’ actions and socialization also play a great part in the development of culture as new and old employees learn what is expected from them and what is not.
Through socialization it is made sure that the behaviors and attitudes of new employees are now matching with prevailing organizational norms.
Culture is transmitted to employees through stories, rituals material symbols and language etc.
Stories:
Stories are told in the organizations to make the employees learn culture. These stories connect the present with the past.
Stories about the founder’s hardships from the beginning till date, how they manage to develop the set of rules, how some employee was awarded, and on which bases an employee was fired from job, etc.,
Rituals:
Rituals are repetitive sequence of activities that express and reinforce the key values of the organization. Design a rite of passage, celebrate business success, encourage people to take side, celebrate failure, build a sense of belonging, etc.,
Material symbols:
International firms are now transferring from closed room offices to open halls, meeting tables This shows, company prefers openness, creativity, innovation, and still there are companies who provide closed offices to its employees.
In some companies, senior executives are given chauffeur-driven cars and in some companies, executives drive cars themselves.
These are the examples of material symbols, which tells what is more important to the company, the type of behavior top management desires such as participation, risk taking conservative, individual or social.
Language:
Different acronyms and jargons are used in the organizations and among different departments to help members identify with the culture.
Organizations with ethical organizational culture are be like high in risk tolerance, low to moderate in aggressiveness and focused on means as well as results. This type of culture takes a long-term perspective and balances the rights of multiple stakeholders, including employees, community and stockholders.
Organizations with high ethical standards should have a powerful and positive impact on employee’s behavior. Following are the ways to develop ethical culture:
Be a visible role model:
Actions of top management sets bench mark for appropriate behavior.
Communicate ethical expectations:
Tell employees clearly what type of behavior is expected from them
Provide ethical training:
Conduct seminar, workshops and training programs to make the employees learn ethical values and behaviors.
Visibly reward ethical acts and punish unethical ones:
Reward those employees who show positive attitude towards ethical organizational culture and punish those who violate it.
Provide protective mechanisms:
Provide protection to employees who report unethical practices happening in the organizations.
Positive organizational culture can be created by putting emphasis on building employees’ strengths, reward more than it punishes, and emphasize individual vitality and growth.
Building on Employee Strengths:
Most of the people don’t know about their strengths. Its better if you find a chance to work in an organizational culture that helps you to discover your strengths and learn how to make the most out of them.
Larry Hammond (CEO of Auglaize Provico, an agribusiness company) says “if you really want to excel you have to know yourself, you have to know what you are good at, and you have to know what you are not so good at”
Rewarding more than Punishing:
Rewarding is not only pay rise or promotions, and managers often ignore the power of smaller and cheaper rewards such as praise.
It’s about “catching employees doing something right.”
Employees don’t ask for it and managers often don’t realize the costs of failing to give it.
Emphasizing Vitality and Growth:
Organizations with positive culture recognizes the difference between a job and a career. They support employee’ contribution to organizational effectiveness but also help them become more effective both personally and professionally.
Limits of positive culture:
Is positive culture a cure-all?
If a positive culture is introduced in the organization, employees are given chance to find their best strengths, rewarding employees performing well supporting employee in becoming more effective, but what about those employees, who fail to take part in it?
What is workplace spirituality?
Workplace spirituality is to say, that, people have an inner life, which nourishes and is nourished by meaningful work in the context of community. People find meaning and purpose in their work and want to connect with other human beings as a part of community.
Job design and transformational leadership are much related concepts.
Why workplace spirituality?
Study of emotions improves our understanding of organizational behavior, so the study of workplace spirituality can help better understand employee behavior in the future.
· Spirituality can counterbalance the stress and pressure of a turbulent pace of life.
· People who lack in faith, want to fill the growing feeling of emptiness.
· People want to integrate professional life values with their personal life.
· Job demands have made the workplace dominant in many employees’ lives, still they don’t find the meaning of their work.
· Many people find that their desire for material acquisitions leaves them unfilled.
Characteristics of a Spiritual Organization:
Characteristics which differentiate spiritual organization from non-spiritual counterparts are:
Benevolence:
Spiritual organizations promote the happiness of employees and other organizational stakeholders and value showing kindness toward others.
Strong sense of purpose:
These organizations design cultures around a meaningful purpose. Profits are important but are not of primarily value of organization.
Trust and respect:
Organizations treat employees with esteem and value, mutual trust, honesty and openness.
Open-mindedness:
These organizations promote and support creative minds.
Achieving a spiritual organization:
Many organizations want to go spiritual but find difficulty when it implementing its principles into practice.
Actions which can help organizations to become spiritual may be:
· Facilitating employees with work-life balance.
· Managers can demonstrate values, attitudes and behavior that can trigger intrinsic motivation.
· Tell employees how their work provides a sense of purpose through community building.
· Group counselling and organizational development will also play important role in making organizations spiritual.
Criticisms of Spirituality:
Critics ask some questions, which are:
Q: what is scientific foundation of spirituality? Very little research is made on workplace spirituality. Spirituality is defined so broadly from individuals job rotation to corporate retreat at meditation center.
Q: Second, are spiritual organizations being legitimate? Do organizations have right to impose spiritual values on their employees? Is bringing God and religion in the business is right? May some employees feel uneasiness with this concept of spirituality. It is acceptable if it limited to its characteristics we have discussed earlier, like helping each other and finding purpose in work.
Q: Third, are spirituality and profits being compatible? It is the concern of investors and stakeholders. Research have shown that in spiritual organizations employees are more motivated, job satisfaction, job involvement and organizational commitment.
Organizational
culture reflect national culture and it is so powerful that it often goes
beyond the national boundaries.
Culture varies from
country to country.
For example, AirAsia, a
Malaysian-based airline enforces informal dresses to avoid status differences,
they hold parties, participative management and no private offices, Malaysia’
culture is collectivistic.
The culture at US
Airways don’t have the same culture of informality as in AirAsia.
Now if US Airways want
to start operations in Malaysia or merge with AirAsia, it will have to take
these cultural differences into account.