Organizational culture is a complex and deep aspect of organizations that can strongly affect organization members. It defines the content of what a new employee needs to learn to be accepted as a members of the organization.
Every organization has its own unique culture or value set. The culture of the organization is typically created unconsciously, based on the values of the top management or the founders of an organization.
“Organisational culture is concerned with how employees perceive the basic characteristics like individual autonomy, structure, reward, conflict and consideration.
Every organisation has a unique and distinct culture of its own. Therefore, one organisation can be distinguished from others in terms of culture.” — J.P. Campbell
Learn about:- 1. Introduction to Organisational Culture 2. Definitions of Organisational Culture 3. Concept 4. Origin 5. Nature 6. Significance 7. Features 8. Types and Functions 9. Elements 10. Role
11. Mechanisms 12. Levels 13. Maintaining Organisational Culture 14. Developing Sound Organizational Culture 15. Consequences.
Organisational Culture: Definitions, Concept, Nature, Significance, Role, Mechanisms, Consequences, Features, Types and Levels
- Introduction to Organisational Culture
- Definitions of Organisational Culture
- Concept of Organisational Culture
- Origin of Organisational Culture
- Nature of Organisational Culture
- Significance of Organisational Culture
- Features of Organisational Culture
- Types and Functions of Organisational Culture
- Elements of Organisational Culture
- Role of Organisational Culture
- Mechanisms of Organisational Culture
- Levels of Organisational Culture
- Maintaining Organisational Culture
- Developing Sound Organizational Culture
- Consequences of Organisational Culture
Organisational Culture – Introduction
Organizational culture, also known as corporate culture, represents the common perception shared by the employees of an organization. In other words, organizational culture consists of norms, values, and unwritten codes of conduct of an organization. The culture of each organization is unique and distinct. It guides the behavior of organization’s employees by defining the standards of acceptable behavior.
Since, organizational culture helps in shaping the behavior of employees working in the organization; therefore, it becomes important to understand the relationship that exists between organizational culture and organizational behavior.
The relationship between organizational culture and organizational behavior:
Relationship between Organizational Culture and Organizational Behavior:
1. Definition – It refers to the study of an organization’s values, beliefs, attitudes, psychology, behavior, and experiences.
2. Purpose – It communicates the ethical expectations, builds the strengths of employees, and lays emphasis on growth.
3. Interdependence – It guides the behavior of employees through its shared actions, beliefs, and values.
1. Definition – It helps in understanding the perception, learning capabilities, values, and beliefs of an individual in an organization.
2. Purpose – It helps in improving quality, productivity, and customer service; manages workforce diversity; improves ethical behavior of employees and their interpersonal skills; and balances the work-life by minimizing conflicts.
3. Interdependence – It studies the behavioral pattern of employees in an organization, which contributes to the creation and updation of the organizational culture to a great extent.
Organisational Culture – Definitions
There are many definitions to OC which are similar and cover many of the same aspects. However, OC refers to “the set of values beliefs and norms together with symbols like dramatised events and personalities that represent the unique character of an organisation”.
Norms describe tradition, structure of authority or routines of the organisation, shared values, beliefs, language, etc. and create a common identity and sense of community.
Thus, organisational culture is a group’s general reaction to stimulus (information). This reaction of group is the outcome of training or learning by individuals on their own by observing others around them of how to act in any given situation. Thus, organisational culture functions just as any social learning does.
“Culture is the set of important understandings that members of a community share in common. It consists of patterned ways of thinking, feeling, and reacting that are acquired by language and symbols that create a distinctiveness among human groups. A system of shared values is the building block of culture.” — Vijay Sathe
“Organisational culture is concerned with how employees perceive the basic characteristics like individual autonomy, structure, reward, conflict and consideration. Every organisation has a unique and distinct culture of its own. Therefore, one organisation can be distinguished from others in terms of culture.” — J.P. Campbell
“Organisational culture can be defined 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 valuable and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.” — Edgar Schein
The above definitions of organisational culture stress on the sharing of norms and values that guide the organisational members’ behaviour. These norms and values are clear guidelines as to how employees are to behave within the organisation and their expected code of conduct outside the organisation.
Organisational Culture – Concept
Culture implies a pattern of beliefs and behaviour. It is cultivated behaviour in the sense that it is learnt from the other members of the society. Organisational culture is the totality of beliefs, customs, traditions and values shared by the members of the organisation. The cultural characteristics of an organisation are relatively enduring over time and relatively static in their propensity to change.
Maintaining a Culture:
Once a culture has been created, there are practices within the organisation that help keep it alive. Three such practices are selection process, actions of top management, and socialisation.
These are discussed as under:
i. Selection of Employees:
The main purpose of selection process is to procure right type of people for right jobs. When, for a given job, two or more candidates, with identical skills and abilities, are available, final selection is influenced by how well the candidate fits into the organisation. It is by selecting the candidates who can culturally match the organisational culture, the management can think of maintaining the organisational culture. Such types of employees will perpetuate the traditions, common beliefs and values of the organisation.
ii. Actions of Top Management:
Besides managerial vision and philosophy, the actions of top executives also have a major impact on the organisational culture. Through what they say and how they behave, senior executives establish norms that filter down through the organisation as to whether risk taking is desirable ; how much freedom managers should allow their subordinates ; what actions will pay off in terms of pay raises-promotions, and other rewards ; and the like.
The process through which the employees are indoctrinated about the customs and traditions of the organisation is known as socialisation. It is the process of adaptation by which new employees are to understand the basic values and norms for becoming ‘accepted’ members of the organisation. However, the process continues throughout the career of an employee.
Organisation socialises all the employees to ensure perpetuation of traditions and to maintain uniformity. The people who do not learn to adjust to the culture of the organisation are called ‘rebels’ or ‘nonconformists’. They face criticism and are often turned out of the organisation.
Thus, socialisation process performs two major functions.
First, it creates uniform behaviour thereby increasing mutual understanding and reducing conflicts.
Secondly, it reduces ambiguity among the employees as they know what is expected of them.
There are three stages in the process of socialization – i. Pre-arrival, ii. Encounter and iii. Metamorphosis or transformation.
These are briefly discussed below:
i. Prearrival Stage:
It denotes the period of learning in the socialisation process that occurs before a new worker joins the organisation. The new worker has a set of values, beliefs, attitudes and expectations. Such factors must be taken care of at the selection stage.
Those types of people should be selected who might be able to fit into the organisation’s culture. The candidates must be made aware of the organisation’s values and expectations during the selection process so that the chances of wrong selection are reduced to the minimum.
ii. Encounter Stage:
The new employee enters this stage when he joins the organisation. He comes to know what the organisation is really like and may find divergence between his expectations and those of the organisation. If this is so, the new employee must undergo socialisation that will detach him from his previous notions and assumptions about the organisation and make him learn new set of beliefs and values the organisation deems desirable. This induction process is helpful in many of the cases. But if the employee is not able to learn organisational values and beliefs, he will feel uncomfortable in the organisation.
iii. Metamorphosis or Transformation Stage:
Under this stage, real transformation in the new employee takes place. He adjusts to his work group’s values and norms and becomes comfortable with the organisation and his job. His internalisation of organisation’s culture wins him acceptability among his colleagues and creates confidence in him. This makes him a contented employee and he likes the place of work and enjoys the company of his colleagues.
As a result, he will feel committed to the organisation and his productivity will increase. His search for job elsewhere will also come to an end. If, in any case, the employee is not able to adapt himself to the organisational culture, the result will be low productivity, lack of commitment and even exit from the organisation.
Organisational Culture – Origin
Organizational culture may be traced, at least in part, to the founders of the company. These individuals often possess dynamic personalities, strong values, and a clear vision of how the organization should operate. Since they are on the scene first, and play a key role in hiring initial staff, their attitudes and values are readily transmitted to new employees.
The result- these views become the accepted ones in the organization, and persist as long as the founders are on the scene. For example- the culture at Microsoft calls for working exceptionally long hours, in large part because that’s what co-founder Bill Gates has always done. These individuals’ values continue to permeate their entire companies and are central parts of their dominant cultures.
Second, organizational culture often develops out of an organization’s experience with the external environment. Every organization must find a niche for itself in its industry and in the marketplace. As it struggles to do so in its early days, it may find that some values and practices work better than others.
For example- one company may determine that delivering defect-free products is its unique market niche; by doing so, it can build a core of customers who would prefer it to competing businesses. As a result, the organization would acquire a commitment for quality. In contrast, another company may find that selling products of moderate quality, but at attractive prices, works best. The result: a dominant value centering around product leadership takes shape.
Third, organizational culture develops out of contact between groups of individuals within an organization. To large extent, culture involves shared interpretations of events and actions on the part of organization members.
Organisational Culture – Nature
(i) Like an individual, every organisation has its own personality.
(ii) The personality of the organisation defines the internal environment of an organisation.
(iii) It differentiates an organisation from the others.
(iv) It is relatively enduring or stable over time.
(v) It is perceived by the members and the outsiders.
(vi) It exercises a significant influence on the attitudes, behaviour and performance of organisational members.
Schein observed that at least six popular meanings could be ascribed to organisational culture.
i. The observed behavioural regularities in the interactions, language and rituals of the organisational members.
ii. The norms which evolve over a period of time in working groups.
iii. The dominant values which are espoused by the organisation (or by the dominant members of the organisation).
iv. The philosophy which guides the decisions and policies of an organisation.
v. The rules of the game one must learn in order to be accepted in the organisation.
vi. The climate that pervades and gets conveyed in the day-to-day functioning of the organisation.
One can, thus, understand organisational culture as a pervasive underlying set of beliefs, assumptions, values, shared feelings and perceptions, which influence the actions and decisions taken by the organisational members. This constellation, not only shapes the overt behaviour, but also determines the manner in which people normally interpret and respond to any given organisational situation.
For instance, if the culture encourages innovativeness, any problem will stimulate people to take initiative and risks, and try out new ways of doing things. On the other hand, if the organisational culture is security-oriented, the same problem-situation would cause people to start looking for rules, procedures and precedences as a mode of response.
The concept of “Organisational Climate” is different from that of “Organisational Culture”. According to Stephen P. Robbins – “Organisational culture is a relatively uniform perception held by the organisation, it has common characteristics, it is descriptive, it can distinguish one organisation from another and it integrates individual, group and organisation system variables.”
It should be observed that the abstract concept of culture and operational concept of climate basically refer to the perceived personality of an organisation in very much the same sense as individuals have personality. Each and every organisation has a culture that influences the behaviour of employees toward colleagues, supervisors, subordinates, clients, competitors etc.
This relatively stable perceived internal environment of an organisation is often referred to organisational climate. This perceived aspect of organisation makes one organisation unique, also such differences are perceivable among various kinds of employees in terms of personal characteristics of members such as their values, needs, attitudes, expectations, stay in organisation, etc.
When considered collectively, the actions of the individuals become more meaningful for viewing the total impact upon the climate and determining the stability of the work environment. It should be marked that the climate is to be viewed from a total system perspective. While there may be differences in climates within sub-systems (departments), these will be integrated to a certain extent to denote overall organisational climate.
Organisational Culture – Significance
Each organisation is recognised by its culture. Whenever people name an organisation, the culture attached to the organisation is immediately recalled. An organisation is distinctively different from other organisations by virtue of its cultural values, beliefs and norms.
i. Organisational culture creates the boundary beyond which no employees are permitted to go. They automatically observe the organisational standards and norms of behaviour.
ii. An organisation is well recognised by its culture. The culture of an organisation provides its stability. People prefer to continue with the organisation. Employees, customers, financiers and other related persons prefer to remain with the organisation.
iii. The social recognition of the organisational culture makes the organisation grow and develop in all dimensions.
iv. Organisational culture acts as a motivator that guides and controls the employees. Satisfied employees get more spirit and enthusiasm for performing their respective jobs.
v. The attitude and behaviour of the employees are directed towards the achievement of goals through a sound culture. Disciplined employees make other employees disciplined and well- behaved.
vi. Culture gives rise to a positive attitude and behaviour which are again an addition to culture. It refers to the various cycles of a positive behaviour, i.e., culture leads to good behaviour and good behaviour makes a good culture which is instrumental for better behaviour. This cycle goes on. Both the employees and the organisation enjoy the culture.
vii. The implicit rules developed under the organisational culture make people development- oriented. These rules are more effective than explicit rules or written instructions. Conformity of implicit rules make the employees self-disciplined.
The advantages of a sound organisational culture are ultimately reflected in employee performance and satisfaction. The image of an organisation is increased and people are satisfied with the performance of the organisation. People’s satisfaction lies in the employees’ smile.
It is instrumental to increased production and satisfaction. A strong culture ensures better performance. Culture enhances organisational commitment and increases the consistency of employee behaviour. It reduces ambiguity and tells implicitly what to do and how to do.
Organisational Culture – 9 Important Features
The analysis of the above definitions indicate the following features of organisational culture:
Feature # 1. Innovation and Risk Taking:
‘Innovation is the way of life in Microsoft.’ ‘Innovation is the key characteristic of Gillette Company.’ Companies encourage the employees to be innovative and risk takers at different degrees.
Feature # 2. Attention to Detail:
‘Employees in the Boston Consultancy Group are expected to be precise, analytical and pay attention to even the minor details.’ Thus, organisations require their employees to be precise, analytical and pay attention to the minute details at different degrees.
Feature # 3. Outcome Orientation:
‘Coromandal Cements expects its employees to improve their performance at least by 5% every year irrespective of the approaches they follow.’ Thus, the organisations require their employees to pay attention or the results.
Feature # 4. People Orientation:
‘Hewlett and Packard announced one day unpaid holiday for every nine working days and avoided lay-off.’ Thus, the organisations take the effect of its decisions on the employees.
Feature # 5. Team Orientation:
“Global Solutions repeats: “We Work.” It does mean that the activities are designed around teams but not individuals. Thus, we today find team jobs rather than individual jobs.
Feature # 6. Aggressiveness:
The employees of State Bank of India were not allowed to be aggressive whereas the employees of IDBI Bank are expected to be aggressive and competitive. Thus, aggressiveness is the level to which the employees are expected to be competitive rather than easygoing.
Feature # 7. Stability:
Most of the Indian Universities still have the status quo strategy of maintaining the traditional values and beliefs of ‘Guru and Shishya’ parampara of Gurukulas.
Feature # 8. Radical Change:
In contrast to the stability strategy, most of the organisations after 1991 have the growth, diversification and conglomerate diversification strategies. It is the degree at which the organisational activities emphasise growth and diversification.
Feature # 9. Customer Orientation:
Pizza Huts build up relationship with the customers and then adapt aggressive marketing strategies. It is the degree to which the management decisions take into consideration the effect of outcomes on customers of the organisation.
An organization is an entity, which has its own values, beliefs, roles, and relationships. It reflects the collective philosophy, perceptions, and behavior of the employees working in it.
There are various types of organizational cultures, which are explained as follows:
a. Strong Culture – Refers to a culture that holds and shares the core values of the organization deeply and extensively.
b. Dominant Culture – Expresses the core values accepted and followed by the majority of the employees of the organization.
c. Sub-Culture – Refers to the mini-cultures or small cultures within an organization. For example, the culture prevalent in a particular department of an organization is sub-culture.
d. Counter Culture – Refers to the culture, which does not match with the values of the organization. Counter culture can be seen at the time of mergers and acquisitions when the employees of acquired organization may have cultural values that are conflicting with that of acquiring organization.
Organizational culture performs a number of functions to make the employees feel at ease and increase the credibility of the organization.
Following points explain the functions of organizational culture briefly:
a. Providing Sense of Identity to its Employees – Indicates that organizational culture is based on a unique collection of norms that gives the employees a feeling of belonging with the organization.
b. Enhancing Commitment towards Organization – Indicates that when the employees relate well with the values, beliefs, and philosophies of an organization, their commitment towards the organization increases.
c. Defining the Standard of Behavior – Indicates that various norms, processes, procedures, rules, and regulations define the acceptable and unacceptable behavior of employees. Thus, organizational cultural defines the standard behavior of its employees.
d. Acting as a Binding Force – Indicates that the organizational culture acts as a bond between the employee and the organization. Thus, it acts as a force that joins the two with one set of goals and purposes.
Organisational Culture – 10 Main Elements
The basis of organisational culture lies in the following elements:
i. Individual Autonomy – The degree of responsibility, freedom and opportunities of exercising initiative that individuals have in the organisation.
ii. Structure – The degree to which the organisation creates clear objectives, performance expectations and authority relationships.
iii. Management Support – The degree to which managers provide clear communication, assistance, warmth and support to their subordinates.
iv. Identity – The degree to which members identify with the organisation as a whole rather than with their particular work-group or field of professional expertise.
v. Performance Reward System – The degree to which reward system in the organisation like increase in salary, promotions etc. is based on employee performance rather than on seniority, favouritism and so on.
vi. Risk Tolerance – The degree to which employees are encouraged to be innovative, aggressive and risk-taking.
vii. Conflict Tolerance – The degree of conflict present in relationships between colleagues and work-groups as well as the degree to which employees are encouraged to air conflict and criticisms openly.
viii. Communication Patterns – The degree to which organisational communications are restricted to the formal hierarchy of authority.
ix. Outcome Orientation – The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve these outcomes.
x. People Orientation – The degree to which management decisions take into consideration the impact of outcomes on people within the organisation.
Organisational Culture – Role
Organization culture is an intangible force, but it has far reaching consequences. Most obviously-
1. The organization’s culture provides a sense of identity to its members. The more clearly organization’s shared perceptions and values are defined, the more strongly people can associate themselves with their organization and feel a part of it.
2. Second important function of culture is generating commitment to the organization’s mission. Sometimes it is difficult for the people to go beyond thinking of their own interests. However, when there is strong culture, people feel that they are part of the larger, well defined whole, and that interest of the overall organization are bigger than their personal interests.
3. A third important function of culture is that it serves to clarify and reinforce standards of behaviour. While this is essential for newcomers, it is also beneficial for old employees.
In essence, culture guides employee’s words and deeds, making it clear what they should say and do in a given situation. For example- in a company with a culture that strongly supports customer satisfaction, employees will have clear guidance as to how they are expected to behave- doing whatever it takes to please the customer.
Cultures may be strong, or weak, or somewhere in between. Strong cultures have a greater influence on employees than do weak cultures. Whether an organization’s culture is strong, weak, or somewhere in between depends on the factors such as the size of the organization, how long it has been around, how much turnover there has been among employees, and the intensity with which the culture was originated.
Organisational Culture – How are Cultural Values Transmitted between People?
How are cultural values transmitted between people? In other words, how do employees come to learn about their organization’s culture? Research has shown that there are several key mechanisms involved—most importantly, symbols, stories, jargon, ceremonies, and principles.
First, organizations often rely on symbols—material objects that connote meanings that extend beyond their intrinsic content. For example- some companies use impressive buildings to convey the organization’s strength and significance, signifying that it is a large, stable place. Other companies rely on slogans, such as “Quality is job” to symbolize their values.
Stories typically reflect the important implications of values in a firm’s culture. Often they develop a life of their own. As they are told and retold, shaped and reshaped, their relationship to what actually occurred becomes less important than the powerful impact the stories have on the way that people behave every day.
For example- MD of ‘Computer Corporation’ asked a young Raman on his staff to prepare a paper on a rather technical topic. The young man was new and, wanting to impress his boss, sweated over the paper for a full two weeks. However, two days after he submitted it, MD returned the paper with a note scrawled across the top- “This is awful, do it again.”
The young man was shattered. But after a lot of hard thought he recognized he could do a better job. Slaving away on the paper for another week, he sent a new version to MD. It was quickly returned with the note, “This is worse than the first version. Can’t you do better?”
After a few more days, and a third rewrite, the young man turned in the paper with a note that said, It may not be good enough and I’m sorry for wasting your time. But this is the best I can possibly do on this subject. In response came MD’s note- “I’ll read it now.”
This episode conveyed to the young man a message about working at the corporation- never give anything to your superior unless it represents your best effort. Even after 20 years, this story makes the rounds in the corporation.
Over time, as organizations—or departments within them—develop unique language to describe their work, their terms, although strange to newcomers, serve as a common factor that brings together individuals belonging to a corporate culture or subculture. Even without telling stories, the everyday language used in companies helps sustain culture. For example- the slang or jargon that is used in a company helps its employees define their identities as members of an organization.
Organizations also do a great deal to sustain their cultures by conducting various types of ceremonies. Indeed, ceremonies may be seen as celebrations of an organization’s basic values and assumptions. Just as a wedding ceremony symbolizes a couple’s mutual commitment and a presidential inauguration ceremony marks the beginning of a new presidential term, various organizational ceremonies also celebrate some important accomplishment.
For example- one accounting firm celebrated its move to much better facilities by throwing a party, a celebration signifying that it “has arrived” or “made it to the big time”.
A fifth way in which culture is transmitted is via the direct statements of principle. Some organizations have explicitly written their principles for all to see. For example- McDonald’s Raykroc built the franchise on four basic concepts; quality, cleanliness, service, and price. However, in some organisations principles are implicit.
Organisational Culture – 3 Levels: Artifacts, Beliefs and Values and Assumptions
Organisation culture provides the members with a sense of organisational identity and generates a commitment to beliefs and values that are larger than themselves. Though ideas that become part of culture can come from anywhere within the organisation, an organisation’s culture generally begins with the 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 institutionalised and give shape to an organisational culture.
Creation of an organisation culture is a very lengthy and complicated process. According to a noted social psychologist, Edgar Schein, evolution of common assumptions of the organisational members is the starting stage of creation of culture. These assumptions act as the basis of creation of shared values. Both assumptions and values are non-observable elements of the culture.
At the last stage, observable artifacts of the culture are developed. Thus, according to Edgar Schein, culture exists on three levels – on the surface we find artefacts, underneath artifacts lie values and behavioural norms, and at the deepest level lies a core of beliefs and assumptions.
Schein’s model of culture is shown in Fig. 31.1 and the three levels it depicts are described below:
1. Observable Artefacts (Surface Elements):
These are the symbols of culture in the physical and social work environment and are most visible and accessible.
Among the artefacts of culture are the following:
(i) Organisational Heroes:
As a reflection of the organisation’s philosophy, this dimension concerns the behaviour of top executives and their leadership styles. These leaders become the role models and a personification of an organisation’s culture. They represent what the company stands for and reinforce the values of the culture. Modeled behaviour is a powerful learning tool and such cultural aspects permeate throughout the entire organisation.
(ii) Ceremonies and Rites:
Ceremonies and rites reflect such activities that are enacted repeatedly on important occasions. Members of the organisation who have achieved success are recognized and rewarded on such occasions. Annual convocations at colleges and universities where degrees, diplomas and other symbols of recognition such as medals are distributed to students are reflections of culture in educational institutions.
These ceremonies bond organisation members together. Such ceremonies as company picnics, retirement dinners, annual conventions and so on, encourage inter-personal communication and togetherness and thus bring about a common culture bondage.
Stories and myths about organisation’s heroes are powerful tools to reinforce cultural values throughout the organisation and specially in orienting new employees. These stories and myths are often filtered through a “cultural network” and remind employees as to “why we do things in a certain way”.
(iv) Cultural Symbols:
Symbols communicate organisational culture by unspoken messages. Certain code of dress or company’s logo can reflect its values and orientations. Some of the material artifacts created by an organisation might also speak of its cultural orientation.
2. Shared Values:
Values are the second and deeper level of culture and are reflected in the way individuals actually behave. Values reflect an organisation’s underlying beliefs as to what should be and what should not be. Values are those principles and qualities that shape our thinking and behaviour.
Values can be classified into “instrumental values” and “terminal values”. Instrumental values define such enduring beliefs that certain behaviours are appropriate at all times irrespective of the objectives or outcomes. On the other hand, terminal values are beliefs that certain more tangible objectives are worth striving for and the objectives become more important than the appropriateness of the behaviour in achieving such objectives.
Values are emotionally charged priorities. These are learned during the process of socialisation, through family environment of upbringing and through religious influences where values are given a holy tinge. Every culture has defined priorities for every aspect of social life. Values are invoked to justify beliefs and actions that are emotionally prioritized.
For example, Mahatma Gandhi, in promoting hand-woven “khadi” as against textiles produced by technologically sophisticated machinery, expressed values of human survival as more important than economic progress which would cost many jobs.
Contrary to this belief, Pandit Nehru, India’s first Prime Minister remarked, “You can’t get hold of a modern tool and have an ancient mind. It won’t work”. Pandit Nehru was aware that religiously sanctioned beliefs and values generally act as obstacles and inhibitions to technological advancement and economic development.
Assumptions are at the deepest and most fundamental level of an organisation’s culture. These are deeply held beliefs which are not objectively observable but manifest themselves in the behaviour of people so strongly that any violation of such beliefs would be unthinkable. For example, an organisation may establish values based on three basic assumptions.
The first assumption is that people are basically good. This assumption is reflected in the company’s emphasis on trust.
The second assumption is that people are willing to learn, grow and achieve if they are afforded proper opportunities. This assumption is reflected in the company’s extensive training programmes.
The third assumption rests on the belief that people are motivated by challenging work and this assumption is reflected by the process of common goal setting and goal achievement by participation of members.
These common assumptions, though expressed at the organisational level, can be traced to larger social and cultural values held by a particular society or nation.
Mr. Prasanth Koul tells his father- “It is not the way of doing the business.”
He did his MBA from the Warwick School of Business and joined his father’s business recently. His father has been producing petrochemicals since 1976. He follows authoritarian style and pushes his decisions down the line.
Mr. Prasanth Koul, after joining his father’s business, observed various aspects and concluded that his father’s authoritarian style is the main reason for lack of creativity and slow growth of business.
He convinced his father and assumed an active role in the business. Immediately, he adopted participative style and slowly encouraged most of the employees to be creative, aggressive and to take risks.
Thus, he introduced new strategic values of participative approach and created the new culture in his organisation.
Business people normally, do not concentrate on creation of culture during the early days of their business; rather they concentrate on manufacturing and marketing. Later, they concentrate on culture creation with a view to develop the business along with the new strides.
But, undesirable cultures are created by some employees during such period when the entrepreneur concentrates on manufacturing and marketing. An entrepreneur, at the later stage, has to spend a lot of resources to erase the undesirable cultures. As such, it would be better to concentrate on culture creation at early stage of the business in order to prevent the creation of undesirable cultures.
Thus, the culture is linked to the strategic values.’ Culture creation is based on the strategy as ‘culture follows strategy.’ Culture creation is linking the strategic values to culture values.
Establish Strategic Values:
Management determines organisation’s strengths, weaknesses, opportunities and threats based on environmental analysis. Subsequently, the management formulates strategies to achieve goals. Management decides the values to achieve the strategies. These values are called strategic values.
Strategic values are the basic beliefs about an organisation’s environment those shape its strategy. For example, adopting the participative management style to grow at a faster rate. The strategic values can be acquired only when the employees acquire necessary cultural values. For example, the employees should acquire the involvement characteristic to make participative style of management successful. Thus, this characteristic is cultural value for the strategic value of participative management style.
Cultural values are the values that employees need to have and act on for the organization to act on the strategic values.
Combining Strategic and Cultural Values:
The next logical step, after acquiring strategic values and cultural values is appropriately combining these two values. Management should encourage the employees to involve in the decision-making process, appreciate their ideas and considering them when the strategic values are participative styles on the part of the management. This combination makes the employees to be creative, risk taking and aggressive in order to exploit the business opportunities.
The next logical step is implementing the strategies. After the appropriate culture is created and implemented, it contributes for the proper implementation of strategy. The participative style of management and involvement character of the employees makes the employees creative. Employees with creative ideas invent new products, add now functions to the existing products, find new markets and new customers. These, in turn, enable the company to achieve its growth strategy.
Organisational Culture – Maintaining Organisational Culture: Factors Involved and the Process Followed
After the organisational culture is created and developed, the next step is to maintain it.
Infosys Technologies India Limited believes in creating and maintaining desirable culture. Organisational culture is a part of the organisational strategy of the company. The company takes utmost care for maintaining the culture by selecting the right personnel at the entry level, placing the employees on the appropriate job, encourage employees to excel on their jobs, rewarding the employees based on their performance, adherence to the core values, reinforcing the stories and folklore and recognition and promotion.
Now, we shall discuss each of these factors below:
i. Selection of Entry-Level Personnel:
Gujarat Gas Company has special recruiters to screen the candidates at the entry level based on the organisation’s norms, values and beliefs in addition to the technical knowledge and skills. They do this type of screening in order to make a match with the existing organisational culture of the company.
ii. Placement on the Job:
Information Technologies Limited normally assigns the work to the new employees more than their abilities in order to judge the employee’s placement on the job. The objective is to teach the employee the importance of humility in the process of maintaining the culture. This process also makes the new employees emotionally close to the colleagues and intensifies group cohesiveness.
iii. Job Mastery:
Most of the emerging organisations like HCL Technologies and Hughes Software Systems believe that the suitability of a candidate to an organisation should be judged based on emotional balance rather than intelligence or technical competence.
The emotionally balanced employees easily adjust and encounter the initial cultural shock and concentrate on mastery of their jobs.
Superiors and trainers help the employees in this process:
i. Measuring and Rewarding Performance:
Hindustan Beverages Limited set three performance areas viz., sales/profit, adherence to the cultural values and team building. Employee’s performance is measured and rewarded based on performance. Thus, steps are taken to maintain the culture by rewarding the employees.
ii. Adherence to Core Values:
At this stage, the employees are inspired and encouraged to adhere to the company’s core values even by sacrificing their personal comforts like missing weekends, working long hours and taking up inconvenient job assignments. Employees who sacrifice their personal comforts are rewarded by connecting the costs of sacrifices to higher human values. For example, Honda Motors Company took American Technical Specialists and their families to Japan for a holiday trip.
iii. Reinforcing the Stories and Folklore:
At this stage, companies reinforce organisational folklore. The best way of folklore is stories with morals that the company wants to reinforce in its cultural values. Procter & Gamble reinforces the cultural value that ethical claims are more important than money by spreading the story that it fixed an outstanding brand manager for overstating the features of a product.
In contrast, the weak cultural values of Indian Public Sector organisations are reinforced through the stories that the managements could not fire corrupted, unethical and insincere employees. In the lighter vein, it is said that the government employees are viewed as “sons-in-law of the government.”
There are numerous stories about field employees of telecommunications industry, who had undergone physical sufferings in discharging their primary responsibility.
iv. Recognition and Promotion:
Management maintains culture by recognising and promoting the employees who serve as role models in implementing the cultural values. Procter and Gamble recognises the role models with motivational skills, energy and tough-mindedness while Morgan Stanley prefers energy, aggressiveness and team play as the features of role models.
Organisational Culture – Developing Sound Organisational Culture
Organizational culture is a long-term proposition which must satisfy the members’ needs values and match with the cultural requirements of the society at large of which the organization is a part. Therefore, the organization has to develop a value system which is conductive to both individuals in it and social values. In fact, this phenomenon has been realised worldwide. For example, Sumantra Choshal states that-
“Worldwide, managers are recognising that while process reengineering, financial restructuring and strategic repositioning are important means to corporate renewal, the bedrock of competitiveness ultimately lies in the behaviour of people. To stimulate initiative, trust, commitment and cooperation within the organization and in its external relationship, top-level managers are increasingly recognising that the shaping and embedding of or sub-organizational values are perhaps their most important challenges”.
Based on researches, Collins and Poras have provided following guidelines for developing suitable organizational culture-
1. Preserve core ideologies while allowing for change;
2. Stimulate progress through challenging objectives, purposeful evolution and continuous self- improvement;
3. Encourage experimentation and accept mistakes;
4. Accept paradox while rejecting ‘either or thinking’;
5. Create alignment by translating core values into goals, strategies and practices; and
6. Grow new managers internally by promotion from within.
Organisational Culture – Consequences
Organizational culture influences the organization in a variety of ways but this section highlights four of the more notable consequences:
a. Culture influences how an organization analyses and solves problems. It is more important that in the promotion policy merits of the employee has weightage or organization politics work there.
While handling any sort of conflict or dispute amongst the employee whether the management favours a particular employee or group of employees? This is really the starting points for developing a particular culture.
b. Culture impacts the quantity and quality of innovations within the organization. Quantity and quality of output is not totally dependent on application of technology and skills and intellectuals of employee, rather it is more dependent on mental status and attitude of employees.
The organization that motivates the employee for innovative and creative ideas as far as quantity and quality of output is concern, such organization definitely reap good quality fruits.
c. Culture influences how the organizations will respond to change. Change is a continuous process whether to accept it or not. It is always there but to have a change with the pace of change itself shows a particular type of culture on the other hand resistance to any change reflects another type of culture.
d. Culture impacts employee motivation. The attitude of organization allowing the participation of employee at every level, acceptance of change with high speed motivates the employee. It creates a better culture.