Assignment of Organization behaviour subject

Transcript 6.1 Organisational Culture.docx

Organisational Culture

Hi, and welcome to Organisational Behaviour. I’m Dr Jennifer Spoor. In this video we will discuss organisational culture.

What is Organisational Culture?

In this module, we return to the organisation or macro level of analysis in organisational behaviour. Organisational culture is a key variable at this level of analysis.

Organisational culture is a descriptive term. One common definition of organisational culture was provided by O’Reilly and Chatman, who described the term ‘organisational culture’ as a system of norms and values that are widely shared and strongly held throughout the organisation. Organisational culture reflects a system of shared meaning among organisation members. Organisational culture helps to distinguish organisations, as two organisations in the same industry can be very different, based on the organisation culture.

A second definition by Stace and Dunphy is also useful because it helps to outline some of the key functions of organisational culture, and why organisational culture is a powerful variable and predictor of organisational behaviour. Organisational culture gives meaning and predictability to organisational behaviours, and organisational culture helps to control member behaviour.

Note that organisational culture is a descriptive term. Organisational culture is concerned with employees’ perceptions of the characteristics of the culture, not whether they like those characteristics, or whether those characteristics are good or bad. For example, organizational culture is about whether the culture encourages teamwork, rewards innovation, stifles initiative and so forth.

What is Organisational Culture?

Most organizations have a dominant culture and numerous subcultures, but the definition of organizational culture typically focuses on the core values, which refer to the primary or dominant values that are accepted by the majority of members throughout the organization.

Organisational culture strength refers to how widely and deeply employees hold the company’s dominant values and assumptions. Strong organisational cultures generally occur when most of the employees understand or embrace the dominant values, and the organisation’s values and assumptions are institutionalised through well-established artefacts, as well as when the culture is long lasting, often traced back to the founder. Strong organisational cultures tend to have a more powerful and consistent effect on employee behaviour. The stronger an organization’s culture, the less that management needs to develop formal rules and regulations. Strong organisational culture serves as a behavior and a belief guide that is internalized. Today’s trend toward decentralized organizations makes organizational culture more important than ever, but ironically it also makes establishing a strong culture difficult.

Subcultures tend to develop in large organizations and reflect common problems, situations, or experiences among the members. Subcultures are unique patterns of values and philosophies within a group that is embedded within the organisation. The values and philosophies of the subcultures are consistent with the dominant culture of the larger organisation or social system, but they tend to be more specific to the group or occupational task. For example, hospitals have many subcultures based around professional identity, but they all focus on doing things better and providing the best possible care. Thus, the subculture’s values reinforce and support the values of the larger organisational culture.

If organizations were composed only of numerous subcultures, organizational culture as an independent variable would be significantly less powerful. Organisational culture reflects “shared meaning” and a system that is widely accepted within the organization. This aspect of organization culture is why it so powerfully shapes and guides employee behavior. For example, the online company Zappos is widely recognized for a culture that values customer care and dedication over speed and efficiency. We can use this information about organizational culture to better understand the behavior of Zappos’ employees from the boardroom to the ‘shop floor’.

It is also important to note that there may sometimes be explicit resistance to the dominant culture. Countercultures refer to patterns of values and philosophies that outwardly reject those of the larger organisation or social system. These counterculture values compete for dominance with the organisationally-endorsed cultural values. Countercultures can be an important source of critique and surveillance on the dominant culture. Countercultures are also a source of emerging values for the organisation.

Organisational Culture as an Asset

Organisational culture takes on distinct functions, but broadly speaking organizational culture helps to encourage integration within the organization, and to help the organization to adapt to the external environment.

Organisational cultures are boundary defining, helping to distinguish organisations. They also convey a sense of identity and meaning for the members of the organization. Strong organizational cultures can facilitate ongoing commitment to the organization, its mission and values, over self-interest. Organisational cultures also help employees make sense of events in the organization, and know what to expect from the organization and from fellow employees. Thus, organizational cultures help to enhance the stability of the social system and control employee behavior and attitudes.

Organisational Culture as a Liability

Organisational culture can also be a hindrance to an organization. A company can become institutionalized when people value the organization for itself, rather than for what the organization provides in goods and services.

Strong organizational culture can be a barrier to change when the values in the organization do not align with the values needed for the organization to be effective. Strong and entrenched organizational culture can make it difficult to embrace the necessary change. Organisational culture can represent the ‘way we do things around here’, and it can be hard to acknowledge that this is no longer useful.

Strong organizational cultures are likely to diminish and discourage diversity. Indeed, one of the reasons that organizational culture develops the way that it does is due to self-selected person-organization fit. Employees are attracted to organisations whose values and beliefs align with their own, and they tend to self-select out of organisations where fit is poor. Where people do stay, they may attempt to fit in with the existing culture, thus diverse behaviors and strengths may diminish. Strong organizational cultures can be liabilities when they discourage or eliminate the unique strengths that people of different backgrounds bring to the organization. Strong cultures can also sometimes support institutional bias or become insensitive to people who are different.

Finally, strong organizational culture can be a liability in a merger and acquisition. It is commonly estimated that over half of these joint ventures fail to meet their long-term objectives, even when there is an apparently strong strategic fit between the two organisations. It is now widely recognized that a clash of organizational cultures is an important contributing factor to this very high failure rate of mergers and acquisitions.

Dimensions of Organisational Culture

Several dimensions and types of organizational culture have been identified. O’Reilly and colleagues proposed several dimensions of organizational culture. Organisations within the same industry can be high, low, or somewhere in between on these dimensions. Innovation refers to the degree to which employees are encouraged to be innovative and risk-taking. And stability refers to the extent to which employees focus on status quo, rather than growth. The respect for people dimension reflects the degree of concern for its people and customers, and the effect of organizational activities on them. The outcomes dimension is the extent to which the organization is focused on results rather than on processes or techniques used to achieve those results. The attention to detail dimension is the extent to which employees are expected to exhibit precision, analysis, planning and attention to detail. The team dimension refers to the extent to which activities are organised around teams rather than individuals. And the aggressiveness dimension refers to the extent to which employees are competitive, and possibly even ruthless, and in their actions.

Organisational Culture Types – Competing Values Framework

The competing values framework is another important model that is meant to describe typical organizational cultures. The competing values framework argues for two principal dimensions of organizational culture: flexibility versus control and external versus internal focus. The Flexibility – control dimension represents how the organisation handles internal components while meeting external challenges of competition, growth and adaptation. High control organisations tend to be more highly regimented. The Internal – external dimension represents how the organisations manage demands for change while maintaining continuity. Externally focused organisations tend to be more concerned with markets, new customers, and competitors, whereas internally focused organisations tend to be more concerned with employee morale and how work is accomplished. This leads to four quadrants or primary value orientations of organisations: The clan or human relations type is collaborative and cohesive, with an emphasis on participation, teamwork, empowerment, and concern for ideas. The hierarchy or internal processes type focusses on achieving stable and predictable performance outcomes, with an emphasis on centralization, control, routinisation and formalization. The adhocracy or open systems type focusses on flexibility, growth, innovation, and creativity. And the market or rational goal type is competitive and customer focused. There is strong task focus, emphasis on goal clarity, efficiency and performance.

Whether dimensions of culture or the competing values framework is used to define organizational cultures and to describe organizational cultures, the main point is that organizational culture has an important effect on organizational behavior.

Organisational Culture

This is the end of the video. I’m Dr Jennifer Spoor, and thanks for listening.