ORGANIZATIONAL CULTURE Organisational culture is the beliefs and values * .which are understood by employees Culture is the expression of organisational * experience which personalises the meaning of the .organisation for its members Organisations use training and development, * performance appraisal and orientation .programs to transmit values
ORGANIZATIONAL CULTURE Culture is a way of life. 1. Culture is stable over time 2. Culture is resistant to quick change 3. Once a culture is well developed, it can resist change despite turnover, changes in product line or any strategic change.
ORGANIZATIONAL CULTURE Culture can develop in a random fashion or it can be managed if a firm has a strategic plan that suggests specific properties for its culture. Culture is known by employees and they can 1. Describe its characteristics 2. Cultures can be evaluated 3. Culture can be perfected
ORGANIZATIONAL CULTURE Merger can be a good example of a culture clash that may result in a high turn over (e.g. level of risk taking) Dramatic changes in the external environment may lead to organization culture crisis: change in technology, goals and strategies, economy, politics, demography, legislation…etc
ORGANIZATIONAL CULTUREORGANIZATIONAL CULTURE Organisational culture is reflected in theOrganisational culture is reflected in the quality of the employment relationship.quality of the employment relationship. Culture hasCulture has external and internalexternal and internal aspects.aspects. Large firms haveLarge firms have multiple culturesmultiple cultures andand management must integrate them.management must integrate them. A good cultureA good culture integrates variousintegrates various subunits and occupational culturessubunits and occupational cultures andand have solid methods for managing conflicts.have solid methods for managing conflicts.
Multiple Cultures inMultiple Cultures in OrganisationsOrganisations • * Organisations develop subcultures which* Organisations develop subcultures which reflect variations among subunits.reflect variations among subunits. • * Organisational culture is reflected in the* Organisational culture is reflected in the specific, professional orientations and skillsspecific, professional orientations and skills of groups of employees.of groups of employees. • * If these professionals acquire their work* If these professionals acquire their work values and beliefs through their educationalvalues and beliefs through their educational training, then they are bound to exert antraining, then they are bound to exert an effect on their employers’ organisationaleffect on their employers’ organisational culture.culture.
Strong CultureStrong Culture Some strong culturesSome strong cultures threaten organisational goalthreaten organisational goal attainment because the cultures legitimiseattainment because the cultures legitimise infighting, secrecy and empire building.infighting, secrecy and empire building. A good organisational cultureA good organisational culture must fit themust fit the organisation’s strategic and financial goals.organisation’s strategic and financial goals. The main feature of any good culture should beThe main feature of any good culture should be adaptabilityadaptability.. Strong culturesStrong cultures may not mix well in mergers &may not mix well in mergers & acquisitions.acquisitions.
Culture WeaknessCulture Weakness Reasons for culture weakness include:Reasons for culture weakness include: 1)1) Poor fitPoor fit of incoming employees’ personal values.of incoming employees’ personal values. 2)2) Poor trainingPoor training of new employees in the coreof new employees in the core aspects.aspects. 3) Reward and performance appraisal systems3) Reward and performance appraisal systems do not make performance behaviours explicit.do not make performance behaviours explicit. 4) Reward systems4) Reward systems are not merit based.are not merit based. 5) Top5) Top managers are poor role modelsmanagers are poor role models andand mentorsmentors 6) E6) Emphasises on failure as much as successmphasises on failure as much as success
Internal Aspects of Org.Internal Aspects of Org. CultureCulture 4. Encourage4. Encourage 1. Product quality1. Product quality InnovationInnovation And teamAnd team workwork 3. Minimize3. Minimize Cost effectivenessCost effectiveness ..22 ProductionProduction errorerror
External Aspects of Org.External Aspects of Org. CultureCulture 1.1. SocialSocial 4. Promote4. Promote responsibilityresponsibility CustomerCustomer serviceservice TimelyTimely ..22 3. Price3. Price distributiondistribution competitioncompetition
Factors AffectingFactors Affecting the Culture Developmentthe Culture Development 1- The Chief Executive1- The Chief Executive or Founderor Founder * An organisation’s culture depends heavily* An organisation’s culture depends heavily on the role of the chief executive oron the role of the chief executive or founder.founder. * Many successful companies owe a lot to* Many successful companies owe a lot to their founders or charismatic leaders.their founders or charismatic leaders. ** Strong cultures of some successfulStrong cultures of some successful companies reflect the personal values ofcompanies reflect the personal values of the founder.the founder.
2- Socialisation2- Socialisation SocialisationSocialisation transmitstransmits an organisation’san organisation’s cultureculture from one generation offrom one generation of employees to the nextemployees to the next.. Haphazard employeeHaphazard employee selectionselection Unchallenging job assignmentsUnchallenging job assignments Fragmented employee developmentFragmented employee development processesprocesses erode the culture and cause the company toerode the culture and cause the company to drift from core organisational goals anddrift from core organisational goals and strategy.strategy.
Pascale’s Socialization ProcessPascale’s Socialization Process in Supporting Organizationin Supporting Organization CultureCulture 1-1- Realistic Job Previews:Realistic Job Previews: Descriptions of the characteristics of jobs areDescriptions of the characteristics of jobs are used to communicate the company’sused to communicate the company’s expectations for new employees.expectations for new employees. 2-2- Debasement and Indoctrination:Debasement and Indoctrination: are used toare used to create humilitycreate humility in new employeesin new employees so that they are open to norms aboutso that they are open to norms about performance excellence.performance excellence. 3- Employees are given intensive3- Employees are given intensive on the jobon the job training:training: so that they master the core areas of theso that they master the core areas of the business.business.
Pascale’s Socialization ProcessPascale’s Socialization Process in Supporting Organizationin Supporting Organization CultureCulture 4-4- Reward and Promotion System Adjustment :Reward and Promotion System Adjustment : to define performance excellence in the core areas of theto define performance excellence in the core areas of the business.business. 5-5- Base rewards on meritBase rewards on merit 6-6- Use managers as personal role models for theUse managers as personal role models for the culture.culture. ToTo run meetings, open door policies & rewardrun meetings, open door policies & reward entrepreneurs.entrepreneurs. 7-7- Reinforce the culture with stories about theReinforce the culture with stories about the organisation and its founder.organisation and its founder. 8-8- Use mentors to develop younger employeesUse mentors to develop younger employees whowho exhibit personal characteristics consistent with theexhibit personal characteristics consistent with the organisation’s culture.organisation’s culture.
SocialisationSocialisation Top management Should:Top management Should: 1) View the employment relationship as a core1) View the employment relationship as a core aspect of the businessaspect of the business 2) Embrace their role of mentors for excellence2) Embrace their role of mentors for excellence 3) Be comfortable with the more personal or3) Be comfortable with the more personal or human aspects of running a businesshuman aspects of running a business 4) Be open to information from customers and4) Be open to information from customers and other externals about ways to improve theother externals about ways to improve the business.business.
Company CommitmentCompany Commitment to a Strong Culture Questionnaireto a Strong Culture Questionnaire Can you state the company mission?Can you state the company mission? Do your co-workers display commitment to the MissionDo your co-workers display commitment to the Mission Do employees place company’s goals ahead of personalDo employees place company’s goals ahead of personal interestsinterests Are you personally committed to the company’s missionAre you personally committed to the company’s mission Can employee describe the company’s areas ofCan employee describe the company’s areas of competence?competence? Are employees committed to high standards of performanceAre employees committed to high standards of performance ?? Does the company reward employees who excel in theDoes the company reward employees who excel in the business?business? Do customers & competitors value your company’sDo customers & competitors value your company’s commitment to top product quality and service excellence?commitment to top product quality and service excellence? Are employees screened to ensure a match with theAre employees screened to ensure a match with the company?company? Do senior executives act as mentors to young employees?Do senior executives act as mentors to young employees?
Developing High-PerformanceDeveloping High-Performance Organisational CulturesOrganisational Cultures A strong culture is not always a goodA strong culture is not always a good thing in a company.thing in a company. A strong, change resistant culture mayA strong, change resistant culture may retard growth, earnings andretard growth, earnings and competitiveness.competitiveness. TheThe qualitiesqualities of a company’s culture areof a company’s culture are much more important than its strength.much more important than its strength.
Developing High-PerformanceDeveloping High-Performance Organisational CulturesOrganisational Cultures Good Company Culture should:Good Company Culture should: 1)1) Support the sources of financial strengthSupport the sources of financial strength (e.g. key financial performance goals)(e.g. key financial performance goals) 2) Fit the company’s strategic goals2) Fit the company’s strategic goals (e.g. market position, industry rank and(e.g. market position, industry rank and product rankings)product rankings) 3) Help the company3) Help the company to adaptto adapt its coreits core competenciescompetencies to market conditionsto market conditions..
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