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Organizational Psychology (PSY510)

LESSON 08

ORGANIZATIONAL CULTURE

As national culture affects human psychology, so does organizational culture i.e. it is the belief, systems,

values, and the behaviors of people in organizations.

The term organizational culture refers to the basic assumptions and beliefs shared by members of an

organization. These beliefs operate unconsciously and "taken for granted".

The key elements of organizational culture are:

· Observed behavioral regularities when people interact, such as the language used and the ritual surrounding

deference and demeanor.

· The norms that evolve in working groups, such as the norm of a fair day's work for a fair day's pay.

· The dominant values espoused by an organization, such a product quality or low prices.

· The philosophy that guides an organization's policy toward employees and customers.

· The rules of the game for getting along in the organization--"the ropes" that a newcomer must learn to

become an accepted member.

· The feeling or climate that is conveyed in an organization by the physical layout and the way in which

member of the organization interact with one another, customers, and outsiders.

Firms that make cultural adjustments to keep up with environmental changes are likely to outperform those

whose culture is rigid and unresponsive to external jolts. IBM's bureaucratic culture--with its emphasis on

hierarchy, centralization of decisions, permanent employment, and strict promotion played a large role in its

difficulties earlier in the 1990s. In contrast, Hewlett-Packard, named one of the best-managed new

companies more than a decade ago, retained its strong position through the 2000s. Many attribute Hewlett

Packard's continued success to the fact that the corporation divided into smaller sections in the mid-1980s,

making it more nimble and able to bring new products to market quickly.

Basically, organizational culture is the personality of the organization. Culture is comprised of the

assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors.

Members of an organization soon come to sense the particular culture of an organization. Culture is one of

those terms that's difficult to express distinctly, but everyone knows it when they sense it. For example, the

culture of a large, for-profit corporation is quite different than that of a hospital which is quite different that

that of a university. You can tell the culture of an organization by looking at the arrangement of furniture,

what they brag about, what members wear, etc. -- similar to what you can use to get a feeling about

someone's personality.

Corporate culture can be looked at as a system. Inputs include feedback from, e.g., society, professions,

laws, stories, heroes, values on competition or service, etc. The process is based on our assumptions, values

and norms, e.g., our values on money, time, facilities, space and people. Outputs or effects of our culture

are, e.g., organizational behaviors, technologies, strategies, image, products, services, appearance, etc.

The concept of culture is particularly important when attempting to manage organization-wide change.

Practitioners are coming to realize that, despite the best-laid plans, organizational change must include not

only changing structures and processes, but also changing the corporate culture as well.

There's been a great deal of literature generated over the past decade about the concept of organizational

culture -- particularly in regard to learning how to change organizational culture. Organizational change

efforts are rumoured to fail the vast majority of the time. Usually, this failure is credited to lack of

understanding about the strong role of culture and the role it plays in organizations. That's one of the

reasons that many strategic planners now place as much emphasis on identifying strategic values as they do

mission and vision.

Types of Culture

There are different types of culture just like there are different types of personality. Researcher Jeffrey

Sonnenfeld identified the following four types of cultures.

Academy Culture

Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The

organization provides a stable environment in which employees can develop and exercise their skills.

Examples are universities, hospitals, large corporations, etc.

Organizational Psychology (PSY510)

Baseball Team Culture

Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily

get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as investment

banking, advertising, etc.

Club Culture

The most important requirement for employees in this culture is to fit into the group. Usually employees

start at the bottom and stay with the organization. The organization promotes from within and highly

values seniority. Examples are the military, some law firms, etc.

Fortress Culture

Employees don't know if they'll be laid off or not. These organizations often undergo massive

reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings

and loans, large car companies, etc.

Strong/Weak Cultures

Simply put, when the staff responds to stimuli because of their alignment to organizational values, it is said

to be a strong culture.

On the other hand, where there is little alignment with organizational values and control must be exercised

through extensive procedures and bureaucracy, the culture is said to be weak.

Where culture is strong--people do things because they believe it is the right thing to do--there is a risk of

another phenomenon, Groupthink. Groupthink was described by Irving L. Janis. He defined it as "...a

quick and easy way to refer to a mode of thinking that people engage when they are deeply involved in a

cohesive in-group, when members' strivings for unanimity override their motivation to realistically appraise

alternatives of action." This is a state where people, even if they have different ideas, do not challenge

organizational thinking, and therefore there is a reduced capacity for innovative thoughts. This could occur,

for example, where there is heavy reliance on a central charismatic figure in the organization, or where there

is an evangelical belief in the organization's values, or also in groups where a friendly climate is at the base

of their identity (avoidance of conflict). In fact groupthink is very common, it happens all the time, in

almost every group. Members that are defiant are often turned down or seen as a negative influence by the

rest of the group, because they bring conflict (conflicting ideas) and disturb the central culture. In cultural

studies, culture is seen as ethnocentric (Barone, J.T, Switzer, J.Y), or culturo-centric, meaning that we tend

to think that our culture/subculture is the best. The stronger the culture, the greater the risks of groupthink.

By contrast, bureaucratic organizations may miss opportunities for innovation, through reliance on

established procedures. Innovative organizations need individuals who are prepared to challenge the status

quo--be it groupthink or bureaucracy, and also need procedures to implement new ideas effectively.

Creating Culture

Organizational culture can be created by means of concerted efforts on part of the founders of the

organization. Although the organizational culture can be developed in a number of ways, the common steps

involved in creating an organizational culture are as follows:

· A person has an idea for a new enterprise. The person is usually the founder of the organization. He

develops certain rules, norms and regulation informally and comes up with the basic theme of the

culture.

· In the second step, the conceiver collects key people whom he deems suitable to implement his or her

ideas by converting them into organizational rules, norms and procedures.

· The key people and the conceiver work together to get things of the ground and develop them into laid

down rules and regulations.

· Finally the organization takes its shape and other members are incorporated into the organization.

· A culture emerges based on the conceptions of the founder. The culture is then molded by the activities

within the organization.

Maintaining Culture

Once the organizational culture is established, the organization adopts some measure to ensure that the

culture is maintained and its core values accepted and adopted by the employees. This is done through the

following steps of socialization:

· Selection/rejection

Organizational Psychology (PSY510)

This is the first step which ensures the persistence of the culture. At the entry level, i.e. hiring and

recruitment, employees are selected based on their ability to adhere to the culture.

Placement in a job

After the selection of the fit person for the organization, the new recruit is made to perform certain

tasks in the organization that may acquaint him with the culture. In other words, it is a process of giving

hands on experience to the new employee.

Job Mastery

One the selection and employment procedures are over, the employee is subject to training and gains

experience at the job. Ultimately he or she becomes an expert in not just the job but also becomes the

carrier of the organizational culture.

Measuring and rewarding performance

The performance of the employee is measured using suitable techniques and he or she is rewarded as

deemed right.

Adherence to important values

This refers to the employee's commitment to sacrifice his or her own interests for the organization. He

or she would then show full commitment towards the organization and its values.

Reinforcing stories and folklore

In this step, organizational stories and folklore is related in a manner that it presents the culture to the

employees as the basic and the core distinction and competitive advantage for the organization.

Recognition and promotion

Finally deserving individuals are recognized and promoted within the organization.

REFERENCES

Mejia, Gomez. Balkin, David & Cardy, Rober. (2006). Managing Human Resources (Fourth Edition). India:

Dorling Kidersley Pvt. Ltd., licensee of Pearson Education in South Asia.

Seven Ways to Enhance Organizational Culture, by Kevin Eikenberry. Retrieved from:

http://ezinearticles.com/?Seven-Ways-to-Enhance-Organizational-Culture&id=164376

Creating Strong Organizational Culture. Retrieved from:

http://www.csupomona.edu/~wcweber/301/301slide/ch09301/sld019.htm

The role of the founder in creating organizational culture. Organizational Dynamics, 12(1), 13-28.

Schein, E. H. (1990). Retrieved from: http://www.iew3.technion.ac.il/Home/Users/anatr/symbol.html

Leading Questions: How to create an organizational culture. Asheville Citizen-Times, Retrieved from:

http://www.edbrenegar.typepad.com/leading_questions/2005/02/how_to_create_a.html

FURTHER READING

'Corporate / Organizational Culture' Effect Culture Change and Create a Positive Organizational

Culture With Ideas From Our TGIM Newsletter Effect Culture:

www.communicationideas.com/corporate-culture.html

Organizational Culture and the Necessity of its Influence. Europian and Japaness organizational culture.

http://www.my.csb.ge/e/htm/research/publication/intas/Shalva%20Machavariani%20-

%20%20Organizational%20Culture.pdf -

Creating culture in your organization.

http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db=PubMed&list_uids=12602061&d

opt=Abstract

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