Organizational Culture and Climate

Organizational Culture
Definitions and Core Characteristics
• Organizational culture is the pattern of values, norms, beliefs, attitudes and
assumptions that may not have been articulated but shape the ways in which people
behave and things get done.
The following are some of the definitions of culture:
• The culture of an organization refers to the unique configuration of norms, values,
beliefs and ways of behaving that characterize the manner in which groups and
individuals combine to get things done (Eldridge and Crombie, 1974).
• Culture is the commonly held beliefs, attitudes and values that exist in an
organization.
• Culture is the way we do things around here.
• A system of shared values and beliefs about what is important, what behaviors are
important and about feelings and relationships internally and externally
Summing up the various definitions of culture, Furnham and Gunter (1993)
list, amongst others, the following areas of agreement on the concept:
• It is multi-dimensional, with many different components at different levels.

● It is not particularly dynamic, and ever changing (being relatively stable over short periods of
time).
● It takes time to establish and therefore time to change a corporate culture.

• At the root of any organization's culture is a set of core characteristics that are collectively
valued by members of an organization

Several such characteristics are especially important.

 Organizations may be distinguished with respect to their basic values, such as the very
fundamental ones summarized here.
 Sensitivity to needs of customers and employees
 Freedom to initiate new ideas
 Willingness to tolerate taking risks
 Openness to communication options
How Organizational Culture Develops?

The values and norms that are the basis of culture are formed in four ways.
• First, culture is formed by the leaders in the organization, especially those who
have shaped it in the past. Schein (1990) indicates that people identify how they
behave and what they expect. They note what such leaders pay attention to and
treat them as role models.
• Second, as Schein also points out, culture is formed around critical incidents –
important events from which lessons are learnt about desirable or undesirable
behavior.
• Third, as proposed by Furnham and Gunter (1993), culture develops from the
need to maintain effective working relationships among organization members,
and this establishes values and expectations.
• Finally, culture is influenced by the organization‘s environment. The external
environment may be relatively dynamic or unchanging.
• Culture is learned over a period of time. Schein (1984) stated that there are two
ways in which this learning takes place.

• First, the trauma model, in which members of the organization learns to cope
with some threat by the erection of defense mechanisms.

• Second, the positive reinforcement model; where things that seem to work
become embedded and entrenched. Learning takes place as people adapt to and
cope with external pressures, and as they develop successful approaches and
mechanisms to handle the internal challenges, processes and technologies in their
organization.
• Where culture has developed over long periods of time and has become firmly
embedded, it may be difficult to change quickly, if at all, unless a traumatic event
occurs.
How Organizational Culture Creates?

• Why do many individuals within an organization share basic attitudes, values, and
expectations?
• Several factors contribute to this state of affairs, and hence, to the emergence of
organizational culture.
• Company Founders: First, 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 their organizations 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-founders Bill Gates has always done.
• Sometimes, founders' values can continue to drive an organization's culture even
after that individual is no longer around.
• Experience with the Environment:
Second, organizational culture often develops out of an organization's experience
with the external environment.
Every organization must find a position 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 prefer it to competing businesses. As a result, the
organization may gradually acquire a deep, shared commitment to high 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 on price leadership takes shape. In these
and countless other ways, an organization's culture is shaped by its interaction
with the external environment.
• Contact with Others:
• Third, organizational culture develops out of contact between groups of individuals within an organization.
• To a large extent, culture involves shared interpretations of events and actions on the part of organization members.
• In short, organizational culture reflects the fact that people assign similar meaning to various events and actions – that they come
to perceive the key aspects of the world, those relevant to the organization's work, in a similar manner.
The Diversity of Culture

• Our discussion thus far has implied that each organization has only a single, uniform culture - one set of shared
values, beliefs, and expectations.

• In fact, this is rarely the case. Instead, organizations, particularly large ones, typically have several cultures
operating within them.

• In general, people tend to have more attitudes and values in common with others in their own fields or work units
than they do with those in other fields or other parts of the organization. These various groups may be said to have
several different subcultures—cultures existing within parts of organizations rather than entirely through them.
These typically are distinguished with respect to either functional differences (i.e., the type of work done) or
geographic distances (i.e., the physical separation between people).

• Indeed, research suggests that several subcultures based on occupational, professional, or functional divisions
usually exist within any large organization.
Culture's Role in Organizations
Culture plays several important roles in organizations.

• Most obviously, an organization's culture provides a sense of identity for its members.

• The more clearly an organization's shared perceptions and values are defined, the more strongly people can
associate themselves with their organization's mission, and feel a vital part of it.

• A second important function of culture is to generate commitment to the organization's mission. Sometimes it's
difficult for people to go beyond thinking of their own interests, questioning how everything that is done might
affect themselves.

• However, when there is a strong, overarching culture, people feel that they are part of that larger, well-defined
whole, and are involved in the entire organization's work. Bigger than any one individual's interests, culture
reminds people of what their organization is all about.

• The third important function of culture is that it serves to clarify and reinforce standards of behavior. While this is
essential for newcomers, it also is beneficial for seasoned experts. In essence, culture guides employees' words and
deeds, making it clear what they should do or say in a given situation. In this sense, it provides stability to
behavior, both with respect to what one individual might do at different times, but also what different individuals
Classifying Organizational Culture

• There have been many attempts to classify or categorize organizational culture as a basis for the analysis of cultures in
organizations and for taking action to support or change them. Most of these classifications are expressed in four
dimensions and some of the best-known ones are summarized below.

1. Harrison:- Harrison (1972) categorized what he called ‗organization ideologies‘. These are:
● Power-orientated – competitive, responsive to personality rather than expertise;
● People-orientated – consensual, management control rejected;
● Task-orientated – focus on competency, dynamic;
● Role-orientated – focus on legality, legitimacy and bureaucracy.
2. Handy: His four types of culture are:

The power culture is one with a central power source that exercises control. There are few rules or procedures and the
atmosphere is competitive, power- orientated and political.

The role culture is one in which work is controlled by procedures and rules and the role, or job description, is more
important than the person who fills it. Power is associated with positions, not people.

The task culture is one in which the aim is to bring together the right people and let them get on with it. Influence is
based more on expert power than on position or personal power. The culture is adaptable and teamwork is important.

The person culture is one in which the individual is the central point. The organization exists only to serve and assist the
individuals in it.
3. Schein
Schein (1985) identified the following four cultures:

• The power culture is one in which leadership resides in a few and rests on their ability and which tends to
be entrepreneurial.

• The role culture is one in which power is balanced between the leader and the bureaucratic structure. The
environment is likely to be stable and roles and rules are clearly defined.
 The achievement culture is one in which personal motivation and commitment are stressed and action,
excitement and impact are valued.
 The support culture is one in which people contribute out of a sense of commitment and solidarity.
Relationships are characterized by mutuality and trust.
4. Williams, Dobson and Walters redefined the four categories listed by Harrison and Handy as follows:
Power orientation - organizations try to dominate their environment and those exercising power strive to maintain absolute
control over subordinates.
 Role orientation - emphasizes legality, legitimacy and responsibility. Hierarchy and status are important.

 Task orientation - focuses on task accomplishment. Authority is based on appropriate knowledge and competence.
 People orientation - the organization exists primarily to serve the needs of its members. Individuals are
expected to influence each other through example and helpfulness.
Assessing Organizational Culture

• A number of instruments exist for assessing organizational culture. This is not easy because culture
is concerned with both subjective beliefs and unconscious assumptions (which might be difficult to
measure), and with observed phenomena such as behavioral norms and artifacts.
• Two of the better-known instruments are summarized below.
1. Organizational ideology questionnaire (Harrison, 1972)
This questionnaire deals with the four orientations referred to earlier (power, role, task, self). The questionnaire is
completed by ranking statements according to views on what is closest to the organization‘s actual position.
Statements include:
 A good boss is strong, decisive and firm but fair.
 A good subordinate is compliant, hard-working and loyal.

 People who do well in the organization are smart and competitive, with a strong need for power.
 The basis of task assignment is the personal needs and judgments of those in authority.
 Decisions are made by people with the most knowledge and expertise about the problem.
2. Organizational culture inventory (Cooke and Lafferty, 1989)
• This instrument assesses organizational culture under 12 headings:

1. Humanistic-helpful – organizations managed in a participative and person-centered way.

2. Affiliative – organizations that place a high priority on constructive relationships.

3. Approval – organizations in which conflicts are avoided and interpersonal relationship are pleasant – at least superficially.

4. Conventional – conservative, traditional and bureaucratically controlled organizations.

5. Dependent – hierarchically controlled and non-participative organizations.

6. Avoidance – organizations that fail to reward success but punish mistakes.

7. Oppositional – organizations in which confrontation prevails and negativism is rewarded.

8. Power – organizations structured on the basis of the authority inherent in members‘ positions.

9. Competitive – a culture in which winning is valued and members are rewarded for out-performing one another.

10. Competence/perfectionist – organizations in which perfectionism, persistence and hard work are valued.

11. Achievement – organizations that do things well and value members who set and accomplish challenging but realistic
goals.

12. Self-actualization – organizations that value creativity, quality over quantity, and both task accomplishment and individual
growth.
Appropriate Cultures
It could be argued that a ‗good‘ culture applies a positive influence on organizational behavior.
It could help to create a ‗high-performance‘ culture, one that will produce a high level of business
performance.
As described by Furnham and Gunter (1993), ‗a good culture is consistent in its components and shared
amongst organizational members, and it makes the organization unique, thus differentiating it from other
organizations‘.
• However, a high-performance culture means any culture that will produce a high level of
business performance.
• The attributes of cultures vary tremendously by context.
• Further, in addition to context differences, all cultures change over time. Cultures that are ‗good‘
in one set of circumstances or period of time may be dysfunctional in different circumstances or
different times.
• Because culture is developed and manifests itself in different ways in different organizations, it is
not possible to say that one culture is better than another, only that it is dissimilar in certain
ways. There is no such thing as an ideal culture, only an appropriate culture. This means that
there can be no universal prescription for managing culture, although there are certain
approaches that can be helpful, as described in the next section.
Read:-
• Supporting and Changing Cultures
• Culture analysis
• Culture support and reinforcement
• Culture Change Focus
• Levers for change
•
Why and How Does Organizational Culture Change?

Why does organizational culture change?

1. The world which all organizations operate is constantly changing.
External events such as shifts in market conditions, new technology,
altered government policies, and many other factors change over time,
necessitating changes in an organization's mode of doing business –and
hence, in its culture.
2. Composition of the Workforce: Over time, the people entering an
organization may differ in important ways from those already in it, and
these differences may impose on the existing culture of the organization.
• For example, people from different ethnic or cultural backgrounds may
have contrasting views about various aspects of behavior at work.
• In other words, as people with different backgrounds and values enter the
workplace, changes in organizational culture may be expected to follow.
3. Mergers and Acquisitions:
• In many cases, the larger, more powerful, acquiring company attempts
to dominate the smaller, acquired company, based on the mistaken
belief that it knows best.
• In such instances, clashes can result when the two merging
organizations have certain combinations of cultures.
• For example, when each is heavily autocratic, neither group will be
interested in giving up its ways, resulting in considerable conflict.
• Similarly, when the dominant culture is highly autocratic and the
culture of the acquired organization is highly person-oriented, neither
side may see the wisdom of the other's approach.
4. Planned Organizational Change:

• Even if an organization doesn't change by acquiring another, cultural change

still may result from other planned changes, such as conscious decisions to
alter the internal structure or the basic operations of an organization.

• To conclude, it is clear that although organizational culture is generally

stable, it is not immutable. In fact, culture often evolves in response to
outside forces (e.g., changes in workforce composition) as well as deliberate
attempts to change the design of organizations (e.g., through mergers, and
corporate restructuring).