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DEPARTMENT OF MANAGEMENT STUDIES
Originated in 1940s
• organizational climate studies, was prominent during the
1960s and 1970s
• Popularized in early 1980s
• viewed the
of cooperation and commitment as perhaps more important
Organizational culture became a business phenomenon
in the early 1980s, triggered by four seminal books:
♦ Ouchi’s (1981) Theory Z: How American Business Can Meet the Japanese
♦ Pascale and Athos’s (1982) The Art of Japanese Management: Applications
for American Executives
♦ Deal and Kennedy’s (1982) Corporate Cultures: The Rites and Rituals of
♦ Peters and Waterman’s (1982) In Search of Excellence: Lessons from
America’s Best Run Companies.
A system of shared meaning held by members that
distinguishes the organizations.
Set of key behaviors, beliefs and shared understandings
that are shared by members of the organization.
Defines basic organizational values and communicates
to new members the correct way to think and act.
• Innovation and Risk Taking
• Attention to detail
• Outcome Orientation
• People Orientation
• Team Orientation
Why we learn Culture in OB
To Defines the boundary between one
organization and others.
To Convey a sense of identity for its
To Facilitate the generation of commitment
to something larger than self-interest.
To Enhance the stability of the social
Organizational Culture & the Bottom Line
- Dr. Kathleen Miller, 1992
1. an environment where people felt that they were all part of
the company team
2. consultants on a weekly basis to address their interpersonal
and relationship issues
3. owners committed to spending time on the shop floor each
day listening to employees about their vision for the company
and how the employees fit into that vision
4. daily communications meetings for discussing their opinions
and differences behind closed doors rather than in public
How Organizational Cultures Have an Impact on
Performance and Satisfaction
Objective Factors Performance
• Innovation and risk taking
• Attention to details Perceived Hi
• Outcome orientation Organizational
•People orientation as culture
Do Organizations Have Uniform Cultures
How Organization Cultures Form
Organization’s Selection Organizational
Keeping Culture Alive
• Concerned with how well the candidates
Selection will fit into the organization.
• Provides information to candidates
about the organization.
Top • Senior executives help establish
behavioral norms that are adopted
Management by the organization.
• The process that helps new
Socialization employees adapt to the
Entry Socialization Options
Contrasting Organization Cultures
Organization A Organization B
• Managers must fully document all • Management encourages and
decisions rewards risk-taking and change.
• Creative decisions, change, and risks • Employees are encouraged to
are not encouraged. “ run with ” ideas, and failures are
treated as “ learning experiences.”
• Extensive rules and regulations exist • Employees have few rules and
for all employees. regulations to follow.
• Productivity is valued over employee • Productivity is balanced with treating
morale. its people right.
• Employees are encouraged to stay • Team members are encouraged to interact
within their own department. with people at all levels and functions.
• Individual effort is encouraged. • Many rewards are team based.
How we “reinforce” it
Creating an Ethical Organizational Culture
Organizational Characteristics – Maintaining High Ethical Standards
High in risk tolerance
Low to moderate in aggressiveness
Focus on means as well as outcomes
Ethical Culture can be Created by the following Steps
Being a visible role model
Communicating ethical expectations
Providing ethical training
Visibly rewarding ethical acts and punishing unethical ones
Provide Protective Mechanism
Creating a Positive Organizational Culture
Positive Organizational Culture
Builds on employee strengths
Rewards more than it punishes
Emphasizes individual vitality and growth
Case Study 2
Creating Innovative Organizational Culture
- Business Week Magazine, 2007
1. Recruiting and Retaining Talent
2. Creating a Challenging Environment
3. Knowledge Sharing
4. Rewarding Innovation
5. Mentors, Sponsors and Champions