BU398 Chapter 10 – Organizational Culture and Ethical Values Week 8
Organizational Culture
-Every organization has a set of values that characterize how people behave and how the
organization carries out everyday business
-Sometimes these values get out of alignment with the environment and cause problems for the
organization
-Social capital – the quality of interactions among people ad whether they share a common
perspective
-In organizations with a high degree of social capital, for example, relationships are based on
trust, mutual understandings, and shared norms and values that enable people to cooperate
and coordinate their activities to achieve organizational goals
-Social capital is like goodwill
-When relationships both within the organization and with customers, suppliers, and partners
are based on honesty trust and respect, a spirit of goodwill exists and people willingly cooperate
to achieve mutual benefits
What is Culture?
-Culture – the set of values, norms, guiding beliefs, and understandings that is shared by
members of an organization and is taught to new members
-Unwritten, feeling part of the organization
-Generally goes unnoticed
Emergence and Purpose of Culture
-Provides members with a sense of organizational identity and generates in them a commitment
to beliefs and values that are larger than themselves
-Ideas that become part of culture can come from anywhere within the organization, an
organization’s culture generally begins with a founder or early leader who articulates and
implements particular ideas and values as a vision, philosophy, or business strategy
-When these ideas and values lead to success, they become institutionalized
-Cultures serve two critical functions:
1. To integrate members to that they know how to relate to one another
2. To help the organization adapt to the external environment
-Internal integration – members develop a collective identity and know how to work together
effectively
-External adaptation – how the organization meets goals and deals with outsiders
-Culture helps guide the daily activities of workers to meet common goals
Interpreting Culture
-To identify and interpret culture requires that people make inferences based on observable
artifacts
-Artifacts can be studied but are hard to decipher accurately
-To decipher what is really going on in an organization requires detective work and probably
some experience as an insider
Rites and Ceremonies
-The elaborate, planned activities that make up a special event and are often conducted for the
benefit of an audience
-Special occasions that reinforce specific values, create a bond among people for sharing an
important understanding, and anoit and celebrate heroes who symbolize important beliefs and
activities BU398 Chapter 10 – Organizational Culture and Ethical Values Week 8
-Four types of rites:
Type of Rite Example Social Consequences
Passage Induction and basic training, Facilitate transition of persons into social roles and
Canadian military statuses that are new for them
Enhancement Annual awards night Enhance social identities and increase status of employees
Renewal Organization development activitiesRefurbish social structures and improve organization
functioning
Integration Office holiday party Encourage and revive common feelings that bind members
together and commit them to the organization
Stories
-Narratives based on true events that are frequently shared among organizational employees
and told to new employees to inform them about an organization
-Heroes – serve as models or ideals
-Legends – historic and may be embellished with fictional details
-Myths – consistent with the values and beliefs of the organization but are not supported by
facts
Symbols
-Something that represents another thing
-Physical symbols are powerful because they focus attention on a specific thing
Language
-Many organizations use a specific saying, slogan, metaphor, or other form of language to
convey special meaning to employees
Organizational Design and Culture
-Organizational culture should reinforce the strategy and structural design that the organization
needs to be effective within its environment
-Culture can be assessed on two dimensions:
1. The extent to which the competitive environment requires flexibility or stability
2. The extent to which the organization’s strategic focus and strength are internal or
external
-Four categories of culture: adaptability, mission, clan and bureaucratic
The Adaptability Culture
-Characterized by strategic focus on the external environment through flexibility and change to
meet customer needs
-Encourages entrepreneurial values, norms, and beliefs that support the capacity of the
organization to detect, interpret, and translate signals from the environment into new behaviour
responses
-Reacts quickly to environmental change
-Innovation, creativity, and risk taking are valued and rewarded
The Mission Culture
-Characterized by emphasis on a clear vision of the organization’s purpose and on the
achievement of goals, such as sales growth, profitability, or market share, to help achieve the
purpose
-Individual employees may be responsible for a specified level of performance, and the
organization promises specified rewards in return BU398 Chapter 10 – Organizational Culture and Ethical Values Week 8
The Clan Culture
-Has a primary focus on the involvement and participation of the organization’s members and on
rapidly changing expectations from the external environment
-Focuses on the needs of employees as the route to high performance
-An important value is taking care of employees and making sure they have whatever they need
to help them be satisfied as well as productive
The Bureaucratic Culture
-Has an internal focus and a consistency orientation for a stable environment
-Succeeds by being highly integrated and efficient
-Most managers are shifting away from this because they have a need for greater flexibility
A Culture of Discipline
-Level 5 leadership – characterized by an almost complete lack of personal ego, coupled with a
strong will and ambition for the success of the organization
-The right values – Leaders build a culture based on values of individual freedom and
responsibility
-The right people in the right jobs – determines, diligent, precise, systematic, consistent,
focused, accountable and responsible
-Knowing where to go
Culture Strength and Organizational Subcultures
-Culture strength – refers to the degree of agreement among members of an organization about
the importance of specific values
-If little agreement exists, the culture is weak
-A strong culture is typically associated with the frequent use of ceremonies, symbols, heroes,
and slogans
-Subcultures – develop to reflect the common problems, goals and experiences that members
of a team, department or other unit share
-Subcultures typically include the basic values of the dominant organ
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