Organizational Culture Overview 14 ADMN2220

Organizational Culture

• Organizational culture is defined as the shared values and assumptions within an organization.
• It provides direction for "right way" of doing things.
• A company's DNA, it is invisible yet shapes employee behavior.

Learning Objectives

• Describe aspects of organizational culture, and the significance of subcultures.
• Compare and contrast strategies for merging organizational cultures.
• Detail five strategies to alter and strengthen an organization's culture, and how attraction-selection-attrition theory relates.
• Detail the organizational socialization process and how to improve it.

Organizational Culture Defined

• The values and assumptions within an organization are shared.
• This provides direction towards the correct method of conducting business.
• A company's "DNA" functions as a powerful, but invisible, template for employee behaviour.

Elements of Organizational Culture

• Artifacts: Physical structures, language, rituals, ceremonies, stories, legends.
  • Represents observed aspects and visible symbols of culture.
• Shared Values: Conscious beliefs, evaluating what's good and bad, right and wrong.
  • Are the publicly-stated principles, values.
• Shared Assumptions: Nonconscious beliefs; taken-for-granted concepts, implicit mental models, prototypes of behaviour.
  • These are deeply ingrained, unstated norms in a culture.

Organizational Culture Profile

• Dimensions: Innovation, stability, respect for people, outcome orientation, attention to detail, team orientation, aggressiveness.
• Each dimension is related to specific characteristics and behaviours within the culture.

Organizational Subcultures

• Dominant Culture: Values/assumptions most commonly shared.
• Subcultures: Exist throughout the organization; distinct from the dominant culture.
• Countercultures: Subcultures that oppose elements of the dominant culture.
  • Plays a key role as a source of feedback and new values.

Organizational Culture Artifacts

• Observable symbols and signs of culture, such as physical structures, ceremonies, language, and stories.
• Contribute to maintaining and transmitting the organization's culture.

Artifacts: Stories and Legends

• Provide social prescriptions for desired (or dysfunctional) behavior.
• Legends/stories portray the human side of the organization, fostering expectations and understanding of how to operate within it.
• Effective stories/legends depict real people, are widely accepted as truth within the organization, and function as a guide for behaviour.

Artifacts: Language, Rituals, Ceremonies

• Language: How employees communicate and address each other, expressing emotions, and describing stakeholders.
• Rituals: Repetitive routines, showing organizational values and procedures, e.g., how visitors are greeted.
• Ceremonies: Planned, public activities, often with an audience, e.g., award ceremonies, emphasizing culture and values.

Artifacts: Physical Structures/Symbols

• Building structures, office layouts, furniture, wall hangings, convey meaning that relates to culture and values.

Organizational Culture Strength

• The extent to which employees share and uphold the organization's values and assumptions.
• Characterized by employees understanding and embracing the culture, institutionalized through artifacts, with lasting impact, possibly from founders of the organization.

Organizational Culture and Effectiveness

• Culture strength impacts organizational outcomes (performance, employee well-being).
• The fit with the environment is essential, a strong culture that doesn't appropriately reflect their environment will not be successful.

Contingencies of Culture Strength

• Culture content alignment with the environment is crucial.
  • Misaligned culture leads to wrong decisions and poor behaviours in relationships with stakeholders.
• Culture strength should not be cult-like, preventing dissenting values and suppressing subcultures.
• Adaptive capabilities and continuous change are essential for success in a dynamic environment.

Merging Cultures: Bicultural Audit

• Part of the due diligence in mergers; identifying companies' cultures.
• Steps:
  • Identifying cultural artifacts
  • Analyzing data for culture conflict or compatibility
  • Developing strategies and action plans to bridge cultures

Merging Organizational Cultures

• Assimilation: Acquired firm adopts acquiring firm's culture.
• Deculturation: Acquiring firm's culture is imposed on acquired firm.
• Integration: Composite culture containing elements from both organizations.
• Separation: Each organization maintains its original culture.

How to Change/Strengthen Organizational Culture

• Strategies for changing or strengthening organizational culture.

Changing/Strengthening Organizational Culture

• Use attraction, selection and socialization to ensure cultural "fit"
• Model desired culture from founders and leaders.
• Support workforce stability and communications.
• Align artifacts to desired outcome.
• Introduce culturally consistent rewards/recognition

Attraction-Selection-Attrition Theory

• Culture strength is increased via:
  • Attraction: Applicants choose companies commensurate with their values.
  • Selection: Companies choose applicants based on compatibility with organizational values.
  • Attrition: Employees with differing values leave, strengthening cultural coherence

Organizational Socialization

• The process by which individuals learn the values, behaviours, and knowledge expected in an organization.

Learning Process (in Organizational Socialization)

• Newcomers develop organizational comprehension.
• Newcomers learn expectations, power dynamics, culture, and jargon.
• Social relationships are formed.

Adjustment Process (in Organizational Socialization)

• Newcomers adapt to the new work environment.
• Newcomers develop new work roles and social identities.
• Newcomers adopt team norms.

Stages of Organizational Socialization

• Pre-employment socialization: Learning about the organization and role.
• Encounter: Testing pre-conceived thoughts about the organization against realities.
• Role Management: Strengthening work relationships, new role behaviours, work-nonwork conflicts resolved.

Improving Organizational Socialization

• Realistic job previews (RJPs): Balanced view of job and its context.
• Socialization agents: Supervisors and co-workers who provide information, feedback, and support.

Edgar Schein

• Known for his work on organizational culture and leadership.