Organizational culture

1. Organizational Culture
In any organization, there are the ropes
to skip and the ropes to know.
-- R. Ritti and
G. Funkhouser

2. Environment and Corporate Culture
GENERAL
ENVIRONMENT
OPERATING
ENVIRONMENT
INTERNAL
ENVIRONMENT
SOCIAL
ECONOMIC
POLITICAL
LEGAL
TECHNOLOGY
NEW ENTRANTS
SUPPLIER
SUBSTITUTES
CUSTOMER
COMPETITION
PRODUCTION
TECHNOLOGY
STRUCTURE
INPUTS
CULTURE

3. What is Organizational Culture?
A system of meaning shared by the
organization’s members
Cultural values are collective beliefs,
assumptions, and feelings about what things are
good, normal, rational, valuable, etc.

4. Characteristics of Organizational Culture
Organizational
Culture
Observed
behavioral
regularities
Norms
Philosophy
on treatment
of employees/
customers
Rules of
employee
behavior
Organizational
climate
Dominant
values

5. Physical Structures
Rituals/ Ceremonies
Stories
Language
Beliefs
Values
Assumptions
Artifacts of
Organizational
Culture
Organizational
Culture
Elements of Organizational Culture

6. Artifacts: Organizational Stories
Social prescriptions of desired behavior
Demonstrate that organizational objectives
are attainable
Most effective stories:
Describe real people
Assumed to be true
Known throughout the organization
Are prescriptive

7. Artifacts: Rituals and Ceremonies
Rituals
programmed routines
e.g., conducting meetings, employee forums, x-mas parties
Ceremonies
planned activities for an audience
e.g., award ceremonies
Heroes
Figure who exemplifies character and deed
E.g. founders as Tom Watson of IBM, Bill Gates of Microsoft

8. Artifacts: Organizational Language
Words used to address people, describe clients,
etc.
e.g. sir/ma’am, first name calling
Leaders use phrases and metaphors as cultural
symbols
e.g.. General Electric’s “grocery store”
Language also found in subcultures
e.g.. Whirlpool’s “PowerPoint culture”
Slogans
E.g. Nokia Connecting People

9. Organizational Subcultures
Located throughout the
organization
Can support or oppose
(countercultures) firm’s
dominant culture
Two functions of
countercultures:
provide surveillance and evaluation
source of emerging values E. M. Samelson/Orlando Sentinel

10. Courtesy of Oakley, Inc.
Artifacts: Physical Structures/Space
Oakley, Inc.’s protective and competitive
corporate culture is apparent in its building
design and workspace. The building looks
like a vault to protect its cherished product
designs (eyewear, footwear, apparel and
watches).
Courtesy of Oakley, Inc.

11. Artifacts - Industry
Information technology Advertising and Media Call Centers

12. How Organizational Cultures Form
Philosophy
of the
Organization’s
Founders:
Bill Hewlett &
Dave Packard
John Gokongwei
Bill Gates
Organizational
Culture
Selection
Top
Management
Socialization

13. Do Organizations Have Uniform
Cultures?
Core
Values
SubculturesDominant
Culture

14. How Employees
Learn Culture/
How it is “reinforced”
Material
Symbols
Language
Stories Rituals

15. Benefits of Strong Corporate Cultures
Strong
Organizational
Culture
Social
Control
Aids
Sense-Making
Social
Glue

16.  Controlling behavior
 Defining boundaries
 Conveying identity
 Promoting commitment
 Blocking mergers
 Inhibiting diversity
 Inhibiting change
 Blocking acquisitions
Functions Liabilities
Organizational Culture

17. Managing, Changing, and
Merging Cultures
Managing through stories, heroes, symbols and
ceremonies
Culture often need to be changed to ensure
organizational success
Merging cultures through symbolic leaders

18. Adaptive Organizational Cultures
External focus -- firm’s
success depends on
continuous change
Focus on processes more
than goals
Strong sense of ownership
Proactive --seek out
opportunities
AP/Wide World

19. Bicultural Audit
Part of “due diligence” in merger
Minimizes risk of cultural collision by diagnosing
companies before merger
Three steps in bicultural audit:
1. Collect artifacts
2. Analyze data for cultural conflict/compatibility
3. Recommend solutions

20. Merging Organizational Cultures
Assimilation
Deculturation
Acquired company embraces
acquiring firm’s culture
Acquiring firm imposes its culture on
unwilling acquired firm
Integration
Both cultures combined into a new
composite culture
Separation
Merging companies remain
separate with their own culture

21. Strengthening
Organizational
Culture
Founders
and leaders
Culturally
consistent
rewards
Stable
workforce
Selection
and
socialization
Managing the
cultural
network
Strengthening Organizational Culture

22. Low Employee
Turnover
High Behavioral
Control
Strong Versus
Weak Cultures
Commitment to
Core Values
(widely shared)
Intensity of
Core Values

23. Studies show that culture is closely
related to the effectiveness of
organizations.

24. Effectiveness depends on . . .
the core values and beliefs of the members of
the organization.
the policies and practices used by the
organization.
the success in translating the core values and
beliefs into policies and practices.
the match between values, beliefs, policies,
practices, and the organization’s environment.

25. Effectiveness is related to . . .
involvement = participation.
consistency = shared beliefs and values.
adaptability = ability to recognize the need for
change and the willingness to change
mission = shared purpose.

26. Model of Organizational Culture Types

28. Four Culture Types

29. Studies on Culture Types
Deshpande, Farley, and Webster (1993) found
that competing values of the market culture
outperform those of the clan culture.
Those of the adhocracy culture outperformed
those of the diagonally opposing hierarchy
culture.
The speed of response to environmental
changes which determine a higher performance
is thus culturally dependent.

30. EXERCISE-
Organizational Culture Assessment
Instrument (OCAI)

31. Clan Adhocracy
Hierarchy
Market
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32. Case Study: Organizational Culture and
Performance
Clan Adhocracy
Hierarchy Market
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Clan Adhocracy
Hierarchy Market
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33. Case Study: Organizational Culture
and Performance
•Started GSM 1999
•5000+ cellsites
•25 Million subscribers
•58% market share
•Net Income 2003 – P16.1B
•Net Income 2002 – P6.2B
•Started GSM 1994
•3000+ cellsites
•14 Million subscribers
•40% market share
•Net Income 2003 – P10.3B
•Net Income 2002 – P6.9B
•Started GSM 2002
• 2 million subscribers
Clan Adhocracy
Hierarchy Market
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Clan Adhocracy
Hierarchy Market
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Clan Adhocracy
Hierarchy Market
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34. Case Study: Organizational Culture
and Performance
Clan Adhocracy
Hierarchy Market
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Clan Adhocracy
Hierarchy Market
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35. Case Study: Merging Cultures
Clan Adhocracy
Hierarchy Market
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Clan Adhocracy
Hierarchy Market
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Clan Adhocracy
Hierarchy Market
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37. Leadership Practices and Culture Types

38. The Learning Organization:
Management Approach in New Millenium
The learning organization approach to management
is the management approach based on an
organization anticipating change faster than its
counterparts to have an advantage in the market
over its competitors.
Environment in the millenium
•Information and electronic age
•Information and knowledge is going to be readily
available to us all
•Information speed through Internet
•The future is going to be dominated by our need to
understand systems.

39. Learning Organization Culture
Has a culture that values sharing knowledge to
adapt to the changing environment and
continuously improve
» From “Management Fundamentals” by Lussier
Clan Adhocracy
Hierarchy Market
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EXTERNALINTERNAL

40. When Companies Seek to Foster Certain
Culture Types
Clan culture needs the five leadership practices
Adhocrarcy culture needs enabling others to act and
encouraging the heart
Hierarchy culture should not use enabling others to act
and encouraging the heart;
Market culture should consider alternatives to leadership
practices.

41. What is the Organizational Culture in
the Philippines?

44. Philippine Organizational Culture
Espouses a reorientation in the organization to three
values, namely:
kaugnayan (identity),
karangalan (pride)
katapatan (commitment).
To accentuate these core values, corporate
leaders emphasize
paternalism (pagbabahala and pananagutan),
personalism or pakikipagkapwa (treating a person as a fellow
human being),
familism (giving importance to the family as a social unit).
Clan Adhocracy
Hierarchy Market
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