Lecture 3

Organizational Culture
Organizational culture is the set of values, beliefs, attitudes, systems, and rules that outline and
influence employee behavior within an organization. The culture reflects how employees,
customers, vendors, and stakeholders experience the organization and its brand. It defines the
proper way to behave within the organization. This culture consists of shared beliefs and values
established by leaders and then communicated and reinforced through various methods,
ultimately shaping employee perceptions, behaviors and understanding.
Organizational culture sets the context for everything an enterprise does. Because industries
and situations vary significantly, there is not a one-size-fits-all culture template that meets the
needs of all organizations. Organizational culture includes an organization’s expectations,
experiences, philosophy, and values that hold it together and is expressed in its self-image,
inner workings, interactions with the outside world, and future expectations.

• According to Robbie Katanga, “Organizational Culture is how organizations do

things.”
• According to Bruce Perron, “Organizational culture defines a jointly shared
description of an organization from within.”

Characteristics of organization culture

Innovation (Risk Orientation)

➢ Companies with cultures that place a high value on innovation encourage their
employees to take risks and innovate in the performance of their jobs.

➢ Companies with cultures that place a low value on innovation expect their
employees to do their jobs the same way they have been trained, without
looking for ways to improve their performance.

Attention to Detail (Precision Orientation)

This characteristic of organizational culture dictates the degree to which employees are
expected to be accurate in their work.

A culture that places a high value on attention to detail expects its employees to perform
their work with precision, and a culture that places a low value on this characteristic
does not.
Emphasis on Outcome (Achievement Orientation)

➢ Companies that focus on results but not on how the results are achieved
emphasize this value of organizational culture.

➢ A company that instructs its sales force to do whatever it takes to get sales
orders has a culture that places a high value on the emphasis on outcome
characteristics.
Emphasis on People (Fairness Orientation)

➢ Companies that place a high value on this characteristic of organizational

culture place great importance on how their decisions will affect the people in
their organizations.

For these companies, it is important to treat their employees with respect and dignity.’

Teamwork (Collaboration Orientation)

➢ Companies that organize work activities around teams instead of individuals

place a high value on this characteristic of the organizational culture.

People who work for these types of companies tend to have a positive relationship with
their coworkers and managers.

Aggressiveness (Competitive Orientation)

This characteristic of organizational culture dictates whether group members are

expected to be assertive or easygoing when dealing with companies they compete with
within the marketplace.

Companies with an aggressive culture place a high value on competitiveness and

outperform the competition at all costs.

Stability (Rule Orientation)

A company whose culture places a high value on stability is rule-oriented, predictable,

and bureaucratic in nature. These types of companies typically provide consistent and
predictable levels of output and operate best in non-changing market conditions.

These are the seven characteristics that are common in the context of organizational
culture. Of course, it is true that the characteristics are not the same in all times and
spheres.
 Roles of Organizational Culture

Culture plays an important role in organizations. Some organizations that developed a

strong corporate culture increased their goodwill and got a good position in the market.

The various roles of organizational culture are given below:

• Culture unites (brings together) employees by providing a sense of identity

with the organization An informal control mechanism.
• Facilitation of open communication.
• Culture enables organizations to differentiate themselves from one another.
• Culture often generates commitment, superseding personal interests.
• Culture sets organization norms, rules, and standards. Thereby,
culture enables employees to function in an organization, by teaching them
how to behave.
• A shared understanding.
• Culture becomes especially important in a program/project-based
organization. In such an organization, the hierarchy is flat and decision-making
is moved to the project/program purpose units and departments. In this
context, culture provides the guiding light towards the achievement of goals
and objectives.
• Enhanced mutual trust and cooperation.
• Fewer disagreements and more efficient decision-making processes.
• A strong sense of identification.
• Assisting employees in making sense of their behaviors by providing
justification for behaviors.

Types of Organization Culture

The practices, principles, policies, and values of an organization form its culture. The
culture of an organization decides the way employees behave amongst themselves and
the people outside the organization.

Several types of organizational culture:

1. Normative Culture
2. Pragmatic Culture
3. Academy Culture
4. Tough Guy Culture
5. Bet your Company Culture
Normative Culture

In such a culture, the norms and procedures of the organization are predefined, and the rules and
regulations are set as per the existing guidelines.

The employees behave in an ideal way and strictly adhere to the policies of the
organization. No employee dares to break the rules and sticks to the already laid policies.

Pragmatic Culture

In a pragmatic culture, more emphasis is placed on the clients and the external parties.
Customer satisfaction is the main motive of the employees in a pragmatic culture.

Such organizations treat their clients as Gods and do not follow any set rules. Every
employee strives hard to satisfy his clients to expect maximum business from their side.
‘

Academy Culture
Organizations following academy culture and hire skilled individuals.

The roles and responsibilities are delegated according to the employees’ background,
educational qualification, and work experience. Organizations following academy
culture are very particular about training the existing employees.

They ensure that various training programs are being conducted at the workplace to
hone the employees’ skills.

The management makes sincere efforts to upgrade the knowledge of the employees to
improve their professional competence. The employees in an academy culture stick to
the organization for a longer duration and also grow within it.

Educational institutions, universities, hospitals, etc., practice such types of culture.

Tough Guy Culture

In a tough-guy culture, feedbacks are essential. The performance of the employees is

reviewed from time to time, and their work is thoroughly monitored.

Team managers are appointed to discuss queries with the team members and guide
them whenever required. The employees are under constant watch in such a culture.
Bet your Company Culture

Organizations that follow bet your company culture take decisions that involve a huge amount
of risk and the consequences are also unforeseen.

The principles and policies of such an organization are formulated to address sensitive
issues, and it takes time to get the results.

Charles Handy, a leading authority on organizational culture, defined four different

kinds of culture:

• Power culture
• Role culture
• Task culture
• Person culture

How to Keep the Culture Alive in your Organization?

Selection

The first such practice is the careful selection of candidates.

Standardized procedures should be used to hire the right people for the right jobs.
Trained personnel interview the candidates and attempt to screen out those whose
personal styles and values do not fit with the organization’s culture.

By identifying the candidates who can culturally match the organizational culture,
selection helps sustain culture to a large extent.

Additionally, the selection process provides the applicants’ information about the
organizational culture.

If the applicants perceive a conflict between their values and the organization’s values,
they can themselves decide not to join the organization.
Top Management

The actions of top management also have a major impact on the organization’s culture.

Through what they say, how do they behave, senior executives, establish norms that
filter through the organization as to whether risk-taking is desirable, how much freedom
managers should give to their subordinates, what is the appropriate dress code, what
actions will pay off in terms of pay raise, promotions, and other rewards and the like.

Socialization

The organization may have done a very good job in recruiting and selecting the
employees, but sometimes the employees are still not indoctrinated in the organization’s
culture.

Since these persons are not familiar with the organization’s culture, they are most
likely to disturb the existing beliefs and customs of the organization. Therefore, the
organization needs to help new employees adapt to its culture. This adaptation process
is called ‘Socialization.’