2014-03-21 Reading: Corporate
What Is Organizational Culture?
• Organizational Culture: The values and assumptions shared within an organization.
• Organizational culture directs everyone in the organization toward the “right way” of
• It frames and shapes the decisions that managers and other employees should make
and the actions they should take.
• Organizational culture consists of two main components: shared values and
o are stable, evaluative beliefs that guide our preferences for outcomes or courses
of action in a variety of situations.
o They are conscious perceptions about what is good or bad, right or wrong. V
o alues tell us what we “ought” to do.
o They serve as a moral compass that directs our motivation and potentially our
decisions and actions. o Everyone has values because they partly define who we are as individuals and
as members of groups with similar values.
o People organize the dozens of values into a hierarchy or value system.
• Shared values
o are values that people within the organization or work unit have in common and
place near the top of their hierarchy of values.
• The key distinction managers need to consider is whether they are referring to espoused
values or enacted values
o Espoused values
represent the values people say they use and, in many cases, think they
use even if they don’t. Values are socially desirable, so people create a
positive public image by claiming to believe in values that others expect
them to embrace
o Enacted values
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
o 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
o they are so obviously good and right for the company that no one really thinks
about or questions them
• shared assumptions are the most difficult to change
CONTENT OF ORGANIZATIONAL CULTURE
• Organizations differ in their cultural content—that is, the relative ordering of values and
• Managers like to use these 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.
• models oversimplify the diversity of cultural values in organizations
• organizational culture, refers to the 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,
• As long as the goals are important to the overall organization the subculture’s values
should be compatible, but the priorities of values may be somewhat different
• Subculture motive:
o maintain the organization’s standards of performance and ethical behaviour
o The spawning grounds for emerging values that keep the firm aligned with the
needs of customers, suppliers, society, and other stakeholders.
• Other subcultures are called countercultures because they directly oppose the
organization’s core values.
o potentially create conflict and dissent among employees
o Employees who hold countercultural values are an important source of
surveillance and critique over the dominant order
o They encourage constructive conflict and more creative thinking about how the
organization should interact with its environment
Deciphering an Organization’s Culture
• organizational culture needs to be deciphered through artifacts
o are the observable symbols and signs of an organization’s culture
o the essence of corporate culture
o symbols or indicators of culture
o represent the best source of information about a company’s culture
o reinforce and potentially support changes to an organization’s culture
• Discovering organizational culture through:
o observing workplace behaviour,
o listening for unique language in everyday conversations,
o studying written documents,
o interviewing staff about corporate stories • Surveys can reveal some information about a company’s culture, but managers should
not rely on that information alone to understand the company’s culture
• they recommend a combination of surveys and painstaking assessment of many
• Four broad categories of artifacts are
o organizational stories and legends,
o rituals and ceremonies,
o organizational language,
o physical structures and symbols
ORGANIZATIONAL STORIES AND LEGENDS
o Stories and legends articulate the values of the organization through the demonstration
of these values
o Not all stories and legends are positive. Some are communicated to demonstrate what is
wrong with the dominant corporate culture
o Stories are important artifacts because they personalize the culture and generate
emotions that help people remember lessons within these stories
o Stories have the greatest effect at communicating corporate culture when they describe
real people, are assumed to be true, and are remembered by employees throughout the
o Stories are also prescriptive—they advise people what to do or not to do
RITUALS AND CEREMONIES
o Rituals are the programmed routines of daily organizational life that dramatize an
o Ceremonies are more formal artifacts than rituals.
o 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
o The language of the workplace speaks volumes about the company’s culture.
o How employees address coworkers, describe customers, express anger, and greet
stakeholders are all verbal symbols of cultural values
PHYSICAL STRUCTURES AND SYMBOLS
o The size, shape, location, and age of buildings might suggest the company’s emphasis
on teamwork, environmental friendliness, flexibility, or any other set of value Is Organizational Culture Important?
o companies with strong cultures are more likely to be successful, but only under a
particular set of conditions
o effect of organizational culture depends partly on its strength
o Corporate culture strength refers to how widely and deeply employees hold the
company’s dominant values and assumptions.
o strong cultures tend to be long-lasting
o can be traced back to the beliefs and values established by the company’s
o A strong corporate culture potentially increases the company’s success by serving three
o Control system
culture is a deeply embedded form of social control that influences
employee decisions and behaviour
As a control system, culture is pervasive and operates unconsciously
o Social glue
Organizational culture is the “social glue” that bonds people together and
makes them feel part of the organizational experience
Employees are motivated to internalize the organization’s dominant
culture because it fulfills their need for social identity
o Sense making
helps employees understand what goes on and why things happen in the
Corporate culture also makes it easier for them to understand what is
expected of them and to interact with other employees who know the
culture and believe in it
ORGANIZATIONAL CULTURE STRENGTH AND FIT
o studies have found only a modestly positive relationship between culture strength and