Download Chapter 1: Introducing Organization Theory: What is it and why does

Organizational Culture
Theory
by
Erlan Bakiev, Ph. D.
Zirve University
Spring 2012
Organizational Culture
• What is organizational culture?
• When is organizational culture functional?
Dysfunctional?
• How do employees learn about the culture of their
organization?
Henry Mintzberg on Culture
• “Culture is the soul of the organization
— the beliefs and values, and how they
are manifested. I think of the structure
as the skeleton, and as the flesh and
blood. And culture is the soul that holds
the thing together and gives it life
force.”
What is Organizational Culture?
• A system of meaning shared by the
organization’s members
• Cultural values are collective beliefs,
assumptions, and feelings about what things
are good, normal, rational, valuable, etc.
Organizational Culture
• The pattern of shared values, beliefs and
assumptions considered to be the
appropriate way to think and act within an
organization.
•
•
•
•
Culture is shared
Culture helps members solve problems
Culture is taught to newcomers
Culture strongly influences behaviour
Where Does Culture Come From?
• Organization founder
• Vision and mission
• Past practices
• Top management
behavior
• Socialization - The
process that helps
employees adapt to
the organization’s
culture.
Exhibit 9-1 Layers of Culture
Artifacts of
Organizational
Culture
Organizational
Culture
Material Symbols
Language
Rituals
Stories
Beliefs
Values
Assumptions
Culture’s Overall Function
Culture is the social glue that helps hold an
organization together by providing
appropriate standards for what employees
should say or do.
Characteristics of Organizational
Culture
• Innovation and risk-taking
• The degree to which employees are encouraged to be innovative and take
risks.
• Attention to detail
• The degree to which employees are expected to exhibit precision, analysis,
and attention to detail.
• Outcome orientation
• The degree to which management focuses on results or outcomes rather
than on technique and process.
• People orientation
• The degree to which management decisions take into consideration the
effect of outcomes on people within the organization.
Characteristics of Organizational
Culture
• Team orientation
• The degree to which work activities are organized around teams
rather than individuals.
• Aggressiveness
• The degree to which people are aggressive and competitive rather
than easygoing.
• Stability
• The degree to which organizational activities emphasize
maintaining the status quo in contrast to growth.
Cultural Artifacts
•
•
•
•
Stories
Rituals
Material Symbols
Language
Stories
Rituals
How Employees
Learn Culture/
How it is “reinforced”
Language
Material
Symbols
Organizational Culture
Functions
Liabilities
v Controlling behavior
v Blocking mergers
v Defining boundaries
v Inhibiting diversity
v Conveying identity
v Inhibiting change
v Promoting commitment
v Blocking acquisitions
Do Organizations Have Uniform
Cultures?
• Organizational culture represents a common
perception held by the organization members.
• Core values or dominant (primary) values are
accepted throughout the organization.
• Dominant culture
• Expresses the core values that are shared by a majority of the
organization’s members.
• Subcultures
• Tend to develop in large organizations to reflect common
problems, situations, or experiences.
Exhibit 9-3 How Organizational
Culture Forms
Philosophy
of
organization's
founders
Top
management
Organization's
culture
Selection
criteria
Socialization
Keeping a Culture Alive
• Selection
• Identify and hire individuals who will fit in with the
culture
• Top Management
• Senior executives establish and communicate the norms
of the organization
• Socialization
• Organizations need to teach the culture to new
employees
Exhibit 9-5
A Socialization Model
Socialization Process
Outcomes
Productivity
Prearrival
Encounter
Metamorphosis
Commitment
Turnover
Entry Socialization Options
• Formal vs. Informal
• Individual vs. Collective
• Fixed vs. Variable
• Serial vs. Random
• Investiture vs. Divestiture
Sociability
Exhibit 9-7
Culture Typology
High
Networked
Communal
Low
Fragmented
Mercenary
Low
High
Solidarity
Culture’s Functions
• Social glue that helps hold an organization
together
• Provides appropriate standards for what
employees should say or do
• Boundary-defining
• Conveys a sense of identity for organization
members
Culture’s Functions
• Facilitates commitment to something larger
than one’s individual self-interest
• Enhances social system stability
• Serves as a “sense-making” and control
mechanism
• Guides and shapes the attitudes and behaviour
of employees
Culture as a Liability
• Culture can have dysfunctional aspects in some
instances
• Culture as a Barrier to Change
• When organization is undergoing change, culture may impede
change
• Culture as a Barrier to Diversity
• Strong cultures put considerable pressure on employees to
conform
• Culture as a Barrier to Mergers and Acquisitions
• Merging the cultures of two organizations can be difficult, if
not impossible
How to Change Culture
• Have top-management people become positive
role models, setting the tone through their
behaviour.
• Create new stories, symbols, and rituals to replace
those currently in vogue.
• Select, promote, and support employees who
espouse the new values that are sought.
• Redesign socialization processes to align with the
new values.
How to Change Culture
• Change the reward system to encourage
acceptance of a new set of values.
• Replace unwritten norms with formal rules and
regulations that are tightly enforced.
• Shake up current subcultures through transfers,
job rotation, and/or terminations.
• Work to get peer group consensus through
utilization of employee participation and creation
of a climate with a high level of trust.
Summary and Implications
• Employees form an overall subjective perception of the
organization based on such factors as degree of risk
tolerance, team emphasis, and support of people.
• This overall perception becomes, in effect, the organization’s
culture or personality.
• These favourable or unfavourable perceptions then affect
employee performance and satisfaction, with the impact being
greater for stronger cultures.
• Just as people’s personalities tend to be stable over time,
so too do strong cultures.
• This makes strong cultures difficult for managers to change.
Summary and Implications
• One of the more important managerial implications of
organizational culture relates to selection decisions.
• Hiring individuals whose values don't align with those of the
organization is not good.
• An employee's performance depends to a considerable
degree on knowing what he should or should not do.
Point-CounterPoint
• Why Culture Doesn’t
Change
Culture develops over many
years, and becomes part of
how the organization thinks
and feels
Selection and promotion
policies guarantee survival
of culture
Top management chooses
managers likely to maintain
culture
• When Culture Can
Change
There is a dramatic crisis
There is a turnover in
leadership
The organization is young
and small
There is a weak culture
Organizational Culture Theory
Move from systemic and structural issues to . . .
Culture Theory
Understanding organizations through a cultural lens with a
focus on values, attitudes and beliefs of members
“Organizational Culture”
FOCUS
•
•
•
•
Changes in Global Marketplace
Intense Competition
Reconsider Traditional Management Practices
Shift from traditional, highly rationale theories to
more fluid and irrational
• Societal consciousness-raising regarding
oppressive atmosphere in organizations for
workers, women, and minorities
• Inequities and Oppressive Circumstances
Organizational Culture Theory
•
•
•
•
Fenerbahce vs. GS
Attempts to explain behavior within organizations
Attempts to account for differences among organizations
Description of how members of a group live and make sense
of their world together
• Culture provides a lens through which its members interpret,
interact with, and make sense of reality
• Culture helps to explain patterns of behavior and thought that
characterize individuals and the groups with which they are
associated
• Focus on VALUES, ATTITUDES, and BELIEFS of
members
Organizational Culture Theory
• Different concepts of culture, stemming from
two distinct disciplines (anthropology and
sociology), have been applied to
organizational studies since the early 1980s.
• These two underlying disciplines represent
different paradigms in Burrell and Morgan’s
(1979) framework, and have contributed to
the emergence of the different theories and
frameworks of organizational culture in the
academic literature.
Organizational Culture Theory
• Anthropology takes the interpretivist view and
sees culture as a metaphor for organizations,
defining organizations as being cultures.
• On the other hand, sociology takes on the
functionalist view and defines culture, as
something an organization possesses.
• Despite the separate definitions of
organizational culture, there seems to be a
movement towards a general consensus.
Organizational Culture Theory
• The most widely used organizational culture
framework is that of Edgar Schein (1988), who
adopts the functionalist view and described
culture as
• a pattern of basic assumptions, invented, discovered,
or developed by a given group, as it learns to cope
with its problems of external adaptation and internal
integration, that has worked well enough to be
considered valid and, therefore is to be taught to new
members as the correct way to perceive, think, and
feel in relation to those problems.
Organizational Culture Theory
In Schein’s (1988) model, culture exists on three
levels:
•1. Artifacts – Artifacts are difficult to measure
and they deal with organizational attributes that
can be observed, felt and heard as an individual
enters a new culture.
•2. Values – This level deals with the espoused
goals, ideals, norms, standards, and moral
principles and is usually the level that is usually
measured through survey questionnaires.
Organizational Culture Theory
• 3. Underlying assumptions – This level deals
with phenomena that remain unexplained when
insiders are asked about the values of the
organizational culture. Information is gathered
in this level by observing behavior carefully to
gather underlying assumptions because they are
sometimes taken for granted and not
recognized. According to Schein, the essence of
organizational culture lies in this level.
Diagram/schematic of theory
Organizational Culture Theory
• Organizational culture provides
meanings for routine organizational
events, thereby reducing the amount of
cognitive processing and energy
members need to expend throughout the
day.
Misunderstandings and
Organizational Culture
• Cultural variations are often the cause of major and minor
misunderstandings as groups come into contact with one
another
• Value of cultural perspective is in illustrating the
misunderstandings that occur within an organization
• Culture may hinder organizations from progress in the future
• Organizations consist of “subcultures”
• Mergers and International Mergers are also a source of
misunderstandings
Two Competing Perspectives on
Organizational Culture
• Culture as Variable
•
•
•
•
•
•
•
•
•
Something an organization “has”
By-product of organizational activities
Stories, rites, rituals, and heroes
Culture is changeable by management
Organizational “tool” for enhancing organizational effectiveness
In Search of Excellence (Peters and Waterman)
Corporate Cultures: The Rites and Rituals of Corporate Life (Deal & Kennedy)
Strong cultures have four key components
• Values - basic beliefs and concepts (concrete guidelines for success)
• Heroes - personify cultural values
• Rites and rituals - public performances that display and enact values
• Cultural network - primary carrier of cultural information (stories, myths, legends,
jokes, and gossip)
Criticisms: shortsighted, more than strategy, not just a skill; culture is a complex,
communicative phenomenon rooted in the history of the organizations events.
Two Competing Perspectives on
Organizational Culture
• Culture as Root Metaphor
•
•
•
•
•
•
•
Something an organization “is” as opposed to something it “has”
Organizations as expressive forms, manifestations of human consciousness
Culture is the process of sense-making created and sustained through communication
and interactions
Rituals and stories are ‘generative processes’ the yield and shape meanings
Provides deep understanding of the way members of a particular organization make
sense of the world around them
The essence of an organization is culture
Three Primary Elements
• Complex (multi-level construction of values, beliefs and attitudes)
• Communicative Construction (constructed and reconstructed through interaction)
• Subcultures and Countercultures
• Differential interaction
• Shared experiences
• Similar personal characteristics
Comparison of Two Competing
Perspectives on Organizational Culture
• VARIABLE
• Something the
organization “has”; a
tool, skill, or lever
• Inform workplace of
values
• Change occurs through
management directive
and intervention
• ROOT METAPHOR
• Something the
organization “is”;
expressive form
• Create sustain and
influence culture
• Change occurs through
natural evolution; all
members influence
culture
Multi-level Perspective on Culture
• Schein’s Model of Organizational Culture
• Three Interrelated Levels of Culture
• Artifacts and Creations
• tangible, physical, or hearable things in the environment of the organization
• Important to connect artifacts to values
• Values
• Sense of what “ought” to be, as distinct from what is
• Common basis for operating together
• Cognitive constructions
• Basic Assumptions - represent the essence of culture
FIVE BASIC ASSUMPTIONS
•
•
•
•
•
Humanity’s relationship to nature
The nature of reality and truth - is truth real or discovered?
The nature of human nature
The nature of human activity
The nature of human relationships
Critical Perspectives on Culture
• Critical Perspectives . . .
• Reject the notion that organizations are value-free sites
• Organizations are sites of struggle between management and workers resulting
in domination and oppression of the powerless by the powerful.
• Critical Theory
• Roots in the Institute for Social Research in Frankfurt (Frankfurt School)
• Knowledge is not objective; tainted by personal interests and the power structure
• Involvement in the inner workings of society to reveal contradictions associated
with the imbalance of power
• Provide critique that allows for the reversal of oppressive conditions in the future
• Research goal: reveal how social and technological structures within the
organization serve to oppress workers
• Researchers must engage in consciousness-raising among organizational
members