Chapter 9 - Organizational Culture
Organizational culture: the values and assumptions shared within an organization
Organizational culture directs everyone in the organization toward the "right way" of doing things. It frames and shapes the decisions that managers and other employees
should make and the actions they should take.
In an organization what is visible are its artifacts (stories/legends, rituals/ceremonies, organizational language, physical structures/decor). What is invisible are an
organization's shared values and shared assumptions. This includes the organization's conscious beliefs, and what they believe to be good or bad, right or wrong. Mental
models of ideals, perceptions and beliefs.
Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. Values tell us what we "ought" to do. They serve as
a moral compass that directs our motivation and potentially our decisions and actions.
Security, tradition, excitement, challenge, and dozens of other values exist within individuals. Shared values are values that people within the organization or work unit have in
common and place near the top of their hierarchy of values. Shared values are important. The company stresses five key principles in order to strengthen its corporate culture:
customer focus, people focus, winning attitude, sense of urgency and simplicity and living the values.
Leaders must live the values, understanding the principles and actually engage a group of people.
Espoused values represent the values that people say they use, when they actually don't. Values are socially desirable, so people create a positive public image by claiming to
believe in values that other expect them to embrace.
Enacted values, on the other hand, represent the values people actually rely on to guide their decisions and actions. These values in use are apparent by watching people in
action. An organization's culture consists of these enacted values, not espoused values.
The deepest element of organizational culture is the shared assumptions that people carry. ASSUMPTIONS are unconscious perceptions or beliefs that have worked so well
in the past that they are considered the correct way to think and act toward problems and opportunities. These assumptions are so deep that they are taken for granted -- they
are so obviously good and right for the company that no one really thinks about or questions them.
Organizations differ in their cultural content -- that is, the relative ordering of values and assumptions. One of these models claims that there are seven corporate cultures in
the world: attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, stability, innovation and risk taking.
Another organizational culture identifies eight cultures organized around a circle, indicating that some cultures are opposite to each other. A rules-oriented culture is opposite
to an innovation culture; an internally focused culture is opposed to an externally focused culture; a controlling culture is opposite to a flexible culture; and a goal oriented
culture is opposite to a supportive culture. Managers like to use organizational culture models because they are handy templates when figuring out what kind of culture they
currently have and what kind of culture they want to develop.
When discussing organizational culture, we are referring to DOMINANT CULTURE: the values and assumptions shared most widely by people throughout the organization.
Organizations also have subcultures located throughout their various divisions, geographic regions, and occupational groups. Subcultures enhance the dominant culture by
espousing parallel assumptions, values, and beliefs.
Other subcultures are called countercultures because they directly oppose the organization's core values. Countercultures potentially create conflict and dissent among
employees. They serve two important functions.
• They maintain the organization's standards of performance and ethical behaviour. Employees who hold countercultural values are an important sources of surveillance
and critique over the dominant order. It encourages constructive conflict and more creative thinking about how the organization should interact with its environment. It
prevents employees from blindly following one set of values, subcultures help the organization to abide by society's ethical values.
• The second function of subcultures is that they are the spawning grounds for emerging values that keep the firm aligned with the needs of customers, suppliers, society,
and other stakeholders.
Artifacts - the observable symbols and signs of an organization's culture, such as the way visitors are greeted, the physical layout, and how employees are rewarded. Artifacts
are the essence of corporate culture, whereas others view artifacts as symbols or indicators of culture. They represent the best source of information about a company's
Stories are the single most powerful tool in a leader's tool kit. Stories and legends articulate the values of the organization through the demonstration of these values. Not all
stores and legends are positive. Some are communicated to demonstrated what is wrong with the dominant corporate culture. Stories are important artifacts because they
personalize the vulture and generate emotions that help people remember lessons within these stories. Stories have the greates effect at communicating corporate culture
when they describe real people, as assumed to be true and are remembered by employees throughout the organization. Stories are also prescriptive -- they advise people
what to do or not to do.
Rituals - the programmed routines of daily organizational life that dramatize an organization's culture. They include how visitors are greeted, how often senior execs vists
subordinates, how people communicate with each other, how much time employees take for lunch, and so on.
Ceremonies - are more formal artifacts than rituals. Ceremonies are planned activities conducted specifically for the benefit of an audience, such as publicly rewarding (or
punishing) employees or celebrating the launch of a new product or newly won contract.
The language of the workplace speaks volumes about the company's culture. How employees address coworkers, describe customers, express anger, and greet stakeholders
are all veral symbols of cultural values. Language also highlights values held by organizational subcultures.
The size, shape, location, and age of buildings might suggest the company's emphasis on teamwork, environmental friendliness, flexibility, or any other set of values. Physical
artifacts like desks, chairs, office space, and wall hangings make the company's culture easier to decipher. Companies with strong cultures are more likely to be successful, but only under a particular set of conditions. A strong corporate culture potentially increases the comany's
success by serving three important functions:
• Control system: as a control system, culture is pervasive and operates unconsciously. You might think of it as an automatic pilot, directing employees in ways that are
consistent with organizational expectations.
• Social glue: organizational culture is the "social glue" that bonds people together and makes them feel part of the organizational experience. Gives them a social identity.
• Sense making: helps employees understand what goes on and why things happen in the company.
A strong culture increases organizational performance only when the cultural content is appropriate for the organization's environment. Culture content refers to the relative
ordering of values and assumptions. Trouble occurs when the relative ordering of cultural values is misaligned with the firm's environment. This lack of fit causes employees to
make decisions and engage in behaviours that are inconsistent with the company's best interests. Strong cultures create a greater risk because culture strength indicates that
a greater number of employees will be guided by those values and assumptions.
Strong cultures might cause decisions makers to overlook or incorrectly define subtle misalignments between the organization's activities and the changing environment.
Strong cultures tend to suppress dissenting subcultural values. Subcultures encourage constructive conflict, which improves creative thinking and offers some level of ethical
vigilance over the dominant culture. In the long run, a subculture's nascent values could become important dominant values as the environment changes. Strong cultures
suppress subcultures, thereby undermining these benefits.
An adaptive culture exists when employees focus on the changing needs of customers and other stakeholders and support initiatives to keep pace with these changes.
Adaptive cultures have an external focus, and employees assume responsibility for the organization's performance. Adaptive cultures have an external focus. Employees hold
a common mental model that change is both necessary and inevitable to keep pace with a dynamic external environment. Adaptive cultures pay as much attention to
organizational processes as they do to organizational goals. They continuously improve internal processes (production, customer service, and so on) to serve external