Organizational culture refers to the shared values, shared beliefs and shared expectations of employees. The culture is passed from one generation to another generation of employees.
Usually the corporate culture reflects the values of the founder and provides an identity to the employees, stability to the organization as a social system. It differentiates one organization from another and serves as a glue to integrate the employees.
Organizational culture is very important to stud because it conveys some important assumptions and norms governing values, attitudes, and goals of the members of an Organisation. It also tells employees who to do things, and in what fashion. It also allows. Members to know what are important and what is not. It, thus, specifies what acceptable behaviours are, and what are not.
Learn about: 1. Meaning of Organisation Culture 2. Definitions of Organisation Culture 3. Concept 4. Characteristics 5. Components 6. Elements 7. Types 8. Factors Determining 9. Elements
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10. Dimensions of National Culture 11. Different Modes of Culture Learnt by Employees 12. Methods of Maintaining Corporate Culture 13. Impacts 14. Transmission 15. Kinds of Culture and Values
16. Process of Inducting Human Factor into the Organisation 17. Development 18. Measures 19. Cultural Change 20. Outcomes 21. Elements that Make Organisation Healthier 22. Consequences.
Organizational Culture: Meaning, Definitions, Concept, Characteristics, Types, Elements, Factors, Development and More..
Organizational Culture – Meaning
Culture means refinement or civilization. Organisation culture defines how refined or civilized an organisation is. It is a set of values that defines what the organisation stands for, how it works and what things or activities it considers important. It provides foundation to organisation’s internal environment and shapes the behaviour of its managers.
Organisation culture differentiates one organisation from the other. White shirt and black trousers signify one organisation while sky blue shirts and navy blue trousers signify another organisation. A cap with uniform can indicate production department and a tie can indicate sales department in the same organisation. When we enter a Government office, we can make out the difference than when we enter a private office. What highlights this image of an organisation? It is the culture of an organisation.
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Organisation culture provides a ‘feel’ about the organisation to those who deal with it. It represents a common perception held by its members. People at different levels in different departments hold common opinion about the organisation. They define organisation culture in similar terms. It is a force that determines effectiveness and long-term success of an organisation.
Organisation culture is the personality of an organisation that differentiates it from other organisations. “Organisation culture refers to a system of shared meaning held by members that distinguishes the organisation from other organisations.” What makes Airtel different from Essar and Reliance though all of them deal in the same product. It is the organisation culture of these companies.
Companies with strong culture (Proctor & Gamble, Reliance Industries) are more effective than those that have weak culture. Strong cultures have greater impact on employees’ motivation, behaviour and productivity. There is high degree of agreement amongst members about the organisation’s purpose, goals, norms, values and activities. This increases their loyalty and commitment towards the organisation and reduces the rate of labour turnover and absenteeism.
Organizational culture refers to the shared values, shared beliefs and shared expectations of employees. The culture is passed from one generation to another generation of employees. Usually the corporate culture reflects the values of the founder and provides an identity to the employees, stability to the organization as a social system. It differentiates one organization from another and serves as a glue to integrate the employees.
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Corporate culture influences the behavior of people in the organization. A strong culture promotes survival and serves as a competitive advantage. The extent to which the culture is intense and deep, employees tend to show consistent behavior, i.e., their behavior will be similar over a period of time. It is imperative that organization culture is compatible with a new strategy so as to be an internal strength or else it will be a serious weakness.
Organizational Culture – Definitions
Organisational culture is a system of shared meaning held by members that distinguishes an organisation from other organisations.
J. C. Spender defines organisational culture as “a belief system shared by an organisation’s members.”
According to Kouzes, Caldwell and Posner organisational culture is “a set of shared, enduring beliefs communicated through a variety of symbolic media creating meaning in people’s work lives.”
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Organisational culture is the set of values that helps the organisation’s employees understand which actions are considered acceptable and which are unacceptable.
An organization culture is a combination of values, attitudes, belief, norms of individuals who are working together in an organization.
Organization culture is an important aspect in organization design because it determines how the organization actually function.
According to Charles, “organization culture is the set of assumptions, belief, values and norms that are shared by an organization’s members.”
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According to Stephen P. Robbins, “organization culture is a relatively uniform perception held by the organization, it has common characteristics, it is descriptive, it can distinguish one organization from another and it integrates individual group and organization system variables.”
On the basis of culture one can differentiate organizations. Some organizations are believed to be aggressive, innovative and others believed it to be trustworthiness, authoritative etc. For example, Infosys has a culture of innovation, Tata has a culture of trustworthiness, Reliance has a culture of risk taking and aggressiveness etc.
Organizational Culture – Concept
The concept of organisational culture (OC) within business has emerged from the application of culture to the organisational activities. Sociology and Anthropology have given much to the concept of culture.
“Culture” as a concept is interpreted as a pattern of shared basic assumptions and beliefs that an individual or a group learns and practices them. These beliefs when applied to a problem would provide some decisive thoughts to solve the problem. Those beliefs and assumptions that worked well to solve problems, were passed on to new comers to have continuity of adapted culture. These are extended to an organisation to evolve an organisational culture over a period of time.
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Organisational culture represents a common perception shared by the members of an Organisation Individuals with altogether different backgrounds or at different levels in the Organisation have a tendency to describe the Organisational culture in almost similar terms. Actually Organisational culture is a descriptive term. According to Campbell, it is concerned with how employees perceive the six basic characteristics- individual, autonomy, structure, reward, consideration, and conflict.
Further, Organisational cultures are unique and distinct. That is to say, we can distinguish one Organisation from another in terms of culture. According to Forehand and Glimmer’ the cultural characteristics of an Organisation are relatively enduring over time and. relatively static in their propensity to change.
Organisational culture is very important to stud because it conveys some important assumptions and norms governing values, attitudes, and goals of the members of an Organisation. It also tells employees who to do things, and in what fashion. It also allows. Members to know what are important and what is not. It, thus, specifies what acceptable behaviours are, and what are not.
According to Hofstede, culture determines the identity of a human group in the same way as personality determines the identity of an individual. Individuals in organizations comes from different cultures having different mindset, customs, languages, preferences etc. In Indian organizations we are having different cultural diversities.
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Sathe says, culture is a set of important understandings that members of a community share in common.
Organizational Culture – Top 12 Characteristics
On the basis of concept and definitions of Organizational culture one can describe determinants, features and characteristics of Organizational culture as follows:
1. Attitude towards risk – It is the tolerance against risk. Some organizations believe in entering into new activities and take high risk. Risk tolerance deals with if mistakes are to be punished or they can be treated as new learning. For example, Reliance industries has a culture of risk taking and always tries to venture into new areas and recently they introduced JIO scheme to its customers which provides free unlimited data and talk-time to its customers.
2. Perfection/mistake tolerance – It depends whether the organization expects perfection from the employees or it has a mistake tolerance attitude towards employees and accordingly the organizational culture will be developed. Individuals in mistake tolerance organizations are motivated to show creativity and innovation which is not expected in organizations with high amount of perfection oriented employees.
3. Outcome and result orientation – It is the degree to which the outcomes and rewards i.e. salary, promotion etc. in the organization are based on efforts and work performance of an employee. If performance appraised is based on work performance, then employees put sincere efforts otherwise not.
4. Concern for human – It is the degree of concern and care an organization shows towards their employees, customers and management teams. If an organization has a culture of human concern and care then it has a culture of belongingness, democracy otherwise if organizations don’t care about employees then culture of authoritativeness is developed.
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5. Aggressiveness – It is the degree to which an organization encourages cut throat competition or it facilitates relaxed interpersonal relations. Accordingly, the organization culture develops.
6. Team orientation – It is the degree to which an organization encourages collectivism or individualism. In American organization culture more focus is on individualism but in Japanese organization culture more focus is on collectivism i.e. collective decision making and responsibility.
7. Power differences – It is the extent to which an organization expects and encourages the difference in power of individuals that will shape up the culture of organization. If there are huge power differences creating huge power distance then it will create an authoritative culture.
8. Change orientation – It is the degree to which an organization promotes and welcome changes or not. If an organization adopts not to change strategy, then culture of rigidity and stagnancy develops. It doesn’t provide new methods, ways and values.
9. Commitment – It is the Willingness of employees to work towards goals continuously. If an organization promotes the culture of achieving targets on a timely basis than culture of commitment is developed.
10. Conflict tolerance – It is the degree of conflict present in relationships between co-workers and different groups and the willingness towards resolution of differences among employee. If conflicts are resolved, then culture of belongingness is developed otherwise not.
11. Quality – It is the value the organization provides to the quality of goods and services produced in the organization along with the quality of work life of its employees. The culture of quality decision making, quality workers, quality products and services is developed in organization.
12. Identity – It is the degree to which employees in an organization identify with the organization as a whole entity rather than their personal or individual entity or group entity. The culture of whole identity is developed.
Therefore, it can be seen from above that these are the aspects which collectively shape up the culture of the organization and provide a unique identity to that organization.
Organizational Culture – Top 8 Components
Organisational culture or climate consists of the following components or dimensions:
1. Individual Autonomy, i.e., the degree to which employees are free to manage themselves or are not accountable to others.
2. Position structure, i.e., the extent of formalisation, centralisation and direct supervision.
3. Reward Orientation, i.e. the extent to which rewards are related to performance and the required system of behaviour in the organisation.
4. Consideration, i.e., the extent to which people in the organisation offer socio- emotional support to each other and work as a team whether the supervision is production-oriented or people-oriented.
5. Conflict, i.e., the extent of differences present between individuals and departments and the way in which they are resolved.
6. Growth and Development, i.e., the scope for self-development and growth in the organisation.
7. Risk-taking, i.e., the degree of freedom to experiment with new ideas, takes risks and correct honest mistakes without fear of punishment.
8. Control, i.e., the extent to which people are formally controlled whether the organisation is rule-oriented or result-oriented. Whether informal groups are opposed by management or are supported.
Organizational Culture – Elements
1. Social Organization:
Organizing its members into small units to meet basic needs and creates social structure.
i. Family Patterns – Family is the most important unit of social organization, children learn how they are expected to act and what to believe.
ii. Nuclear family – wife, husband, children. This is a typical family in an industrial society.
iii. Extended family – Several generations living in one household, working and living together: grandparents, aunts and uncles, cousins. Respect for elders is strong.
iv. Social classes – rank people in order of status, depending on what is important to the culture (money, job, education, ancestry, etc.)
2. Customs and Traditions:
Union of behaviour me enforced ideas of right and wrong. They can be customs, traditions, rules or written laws.
3. Religion:
Answers basic questions about the meaning of life. Supports values Mint groups of people feel are Important. Religion is often a source of conflict between cultures. Monotheism is a belief in one god. Polytheism is a belief in many gods. Atheism is a belief in no gods.
4. Language:
Language is the cornerstone of culture. All cultures have a spoken language (even if there are no developed forms of writing). People who speak the same language often share the same culture. Many societies include a large number of people who speak different languages. Each language can have several different dialects.
5. Arts and Literature:
They are the products of the human imagination. They help us pass on the culture’s basic beliefs. Examples- art, music, literature and folk tales.
6. Forms of Government:
People form governments to provide for their common needs, Keep order within society and protect their society from outside threats.
i. Definition of government – 1. Person/people who hold power in a society; 2. Society laws and political institutions.
ii. Democracy – people have supreme power, government acts by and with consent.
iii. Republic – people choose leaders who represent them.
iv. Dictatorship – ruler/group holds power by force usually relying on military support for power.
7. Economic Systems:
How people use limited resources to satisfy their wants and needs.
Answers the basic questions – what to produce, how to produce it and for whom.
i. Traditional Economy – people produce most of what they need to survive (hunting, gathering, farming, herding cattle, make own clothes/tools).
ii. Market Economy – buying and selling goods and services.
iii. Command Economy – Government controls what/how goods are produced and what they cost. Individuals have little economic power.
iv. Mixed Economy – Individuals make some economic decisions and the government makes others.
Organizational Culture – 4 Types: Control (Hierarchy) Culture, Compete (Market Culture), Collaborate (Clan) Culture and Create (Adhocracy) Culture
An overview of four organizational culture types:
Type # 1. Control (Hierarchy) Culture:
A highly structured and formal place to work. Rules and procedures govern behaviour. Leaders strive to be good coordinators and organizers who are efficiency-minded. Maintaining a smooth-running organization is most critical.
Formal policies are what hold the group together. Stability, performance and efficient operations are the long-term goals. Success means dependable delivery, smooth scheduling and low cost. Management wants security and predictability.
Type # 2. Compete (Market Culture):
A results-driven organization focused on job completion. People are competitive and goal-oriented. Leaders are demanding, hard-driving and productive. The emphasis on winning unifies the organization. Reputation and success are common concerns.
Long-term focus is on competitive action and achievement of measurable goals and targets. Success means market share and penetration. Competitive pricing and market leadership are important.
Type # 3. Collaborate (Clan) Culture:
An open and friendly place to work where people share a lot of themselves. It is like an extended family. Leaders are considered to be mentors or even parental figures. Croup loyalty and sense of tradition arc strong.
There is an emphasis on the long-term benefits of human resources development and great importance is given to group cohesion. There is a strong concern for people. The organization places a premium on teamwork, participation and consensus.
Type # 4. Create (Adhocracy) Culture:
A dynamic, entrepreneurial and creative place to work. Innovation and risk-taking are embraced by employees and leaders. A commitment to experimentation and thinking differently are what unify the organization.
They strive to be on the leading edge. The long-term emphasis is on growth and acquiring new resources. Success means gaining unique and new products or services. Being an industry leader in important. Individual initiative and freedom are encouraged.
Organizational Culture – Factors
The following factors determine the organisation culture:
1. Organisation’s founder – To begin with, organisation culture develops through its founders. Whatever impression founders create about the organisation continues and develops for a long period of time. If the founders believe in treating employees at par with managers, this value system permeates all over the organisation for times to come. If employees are called associates in a company to develop a feeling of partnership amongst, they will always be called associates by all for all times to come.
2. Corporate success and shared experiences – Corporate success for a long period develops a strong culture about its name and way of working. Its members share common experiences about its success which remain embedded in their minds for long times to come.
3. Innovation and risk-taking – Organisation culture is determined by the degree to which its employees are innovative and have the capability of taking risks. Innovative and risk-taking employees develop a strong culture.
4. Outcomes rather than techniques – Organisation whose managers focus on outcomes or results rather than ways or techniques of achieving the outcomes develop a strong culture.
5. People and team orientation – Organisation where managers take into account the results of their decisions or outcomes on people as individuals and teams develop a strong culture.
6. Competitiveness – Organisations whose employees are competitive are culturally stronger than those whose employees are easygoing or non-competitive.
7. Shared interpretations – Organisations whose members have common perceptions and thinking about organisational values, norms and ways of functioning have a strong culture.
8. Market standing – Organisation culture is determined by the way it develops its market standing. Some companies are known for quality while others for price. People don’t mind paying high price for quality or compromising with quality for a suitable price. Tupper ware, for example, is known for its quality. Customers are ready to pay a high price for its quality. The company’s culture develops through the way it has developed its market standing (quality).’
Organizational Culture – Elements of the Process
The elements of the process can be explained as:
1. Philosophy of founder – Founders or creators of the organization always have some core values and belief which they want to inculcate in the organization. For example, the philosophy of Dhirubhai Ambani, the founder of Reliance industries is still carried on.
2. Selection criteria – In order to sustain values of founders organization makes certain efforts through proper selection criteria and the organization culture are selected. For example, Hindustan Petroleum (H.P.) has a team culture and at the selection stage they use group task as a selection device.
3. Socialization – During this stage some important aspects of organization culture are told to new employees through socialization process. It is a sort of training in culture where the implied rules of behaviour are taught to the new employees. For example, probation period of generally one year, orientation programme etc.
4. Behaviour of top management – It is also a method of socialization where top management depicts through their behaviour the values, belief and behavioural patterns for employees to follow the same. For example, the support i.e. the degree of assistances and warmth managers provide to their subordinates.
5. Reinforcement of culture – Once the culture of the organization is established it to be reinforcement for long term stability. In order to sustain the organization culture in the same degree it should be reinforced from time to time in the form of rewards or punishment. The behaviour matching the organization culture is encouraged and rewarded. Contrary the behaviour which is not suited with organization culture should be discouraged with penalties.
Organizational Culture – 6 Dimensions of National Culture
Hofstede and his research team, based on the analysis of database of IBM employees across 70 countries could identify six dimensions of national culture and could observe that workplace values are influenced by culture. Based on this study, Hofstede (1980) defined culture as “the collective programming of the mind distinguishing the members of one group or category of people from others”.
Based on this analogy organizational identity is established through their culture. Even though initially Hofstede and his team members could get data of IBM from 70 countries, the scope of the study limited later to 50 countries, covering three regions, as large number of responses were received from the IBM employees of these countries.
Six dimensions of national culture are mentioned below:
1. Power Distance Index (PDI)
2. Individualism versus Collectivism (IDV)
3. Masculinity versus Femininity (MAS)
4. Uncertainty Avoidance Index (UAI)
5. Long-Term Orientation versus Short-Term Normative Orientation (LTO)
6. Indulgence versus Restraint (IND)
Power distance as the name goes primarily embeds in unequal distribution of power. In organizations, power distance is acceptance of hierarchical order. High power distance indicates strong hierarchical barrier between managerial and non-managerial employees, while low power distance represents less or zero hierarchical barrier. This cultural construct has strong influence on organizational structure. Characteristically, such organizations are machine bureaucratic.
Individualism dimension of culture are devoid from social framework, as individuals only think about themselves creating silos. People with high individualism culture prefer to work in isolation, takes their own decisions, and apparently become misfit in a team. Collectivism on the other hand indicates a tightly-knit social framework, where people like to work in a group and collaborative. We represent syndrome of individualism as ‘I’ and collectivism as ‘we’.
The Masculinity dimension of culture indicates preference for heroism, achievement, and assertiveness. People who belong to this culture group show their preference for material gains for achievement. Femininity dimension of culture, on the contrary, indicates propensity to cooperate, concern for the weak and caring them, improved quality of life. People belonging to this group believe in a consensus-oriented work environment.
People belonging to uncertainty avoidance cultural dimension tries to avoid uncertainty and ambiguity. With high uncertainty avoidance people tend to control their future with rigid code of behaviour and principles. With low uncertainty avoidance, people tend to be less concerned about future and feel relaxed in their way of work. In other words this group of people counts practice than principles.
Long-term orientation of culture dimension indicates more legacy bound, i.e., linkage with the past, while one deals with the present and future. With lower long- term orientation, individuals prefer prevalent traditions and norms. With short-term normative orientation, people take more pragmatic approach. One way to define it is normative versus pragmatic, or monumentalism versus flex humility.
People with indulgence orientation are prone to enjoy life and have fun while they work. While on the contrary, people with restraint orientation suppress their natural way of working and regulate with social norms.
When we study the implication of Hofstede’s culture dimension model in relation with the culture of organizations, we observe each cultural dimension has significant influence on the way people work in organizations. Most important cultural dimensions influence all functional areas of human resource management, like performance management systems, compensation and benefits plan, talent management practices, humanization of work, etc.
In cross border mergers and acquisitions cases, inputs of Hofstede’s cultural dimensions model can be applied to study the difference in the cultural dimensions of two organizations, based on which effective plan for achieving cultural synergy can be made by HR.
Based on these cultural dimensions, in line with Hofstede (1997), we can understand six independent dimensions of practices: process-orientated versus results-orientated; job-orientated versus employee-orientated; professional versus parochial; open systems versus closed systems; tightly versus loosely controlled; and pragmatic versus normative. HR can measure the score of each dimension and accordingly can prepare the integration plan.
Organizational Culture – Top 4 Ways used for Transmission of Culture to Employees: Stories, Rituals, Material Symbol and Language
Employees learn culture through different modes viz., stories, rituals, material symbols and language.
Way # 1. Stories:
It is very hard to find an employee who does not know the following story in Housing Development Finance Corporation of India Limited.
One day a customer came to the Hyderabad branch of the Corporation along with his pass- book and complained to the clerk that he paid the 25th installment of his housing loan and the bank entered only up to 24 installments and asked the clerk to make the entry for the 25th installment also. The clerk at the counter checked in his computer and hard copies of ledger and cash book. But the company’s records failed to confirm the payment of the 25th installment.
The branch manager was observing the incident and the facial expressions of the clerk and confirmed for himself that the customer was wrong. But he did not want the clerk to say to the customer that he is wrong.
The branch manager told the customer- “we are sorry for not making the entry for your payment of the 25th installment and we shall do it now.”
The branch manager asked the clerk to make the entry in his pass book and then come to his chamber. When the clerk met him, the branch manager said, “I am sorry, I know the customer is wrong. But I did not want to disappoint our valuable customer.”
In fact, the customer after recollecting the truth that he did not pay the 25th installment came to the branch and tendered his apology. Since then he became a very loyal customer and also a main source for spreading of the company policy.
Such stories are circulated among the employees and customers of the organisation. Employees learn the organisational culture through such stories. These stories anchor the present in the past and provide explanations and legitimacy for current practices. Normally, such stories develop spontaneously. However, some organisations have an employee in-charge of culture who records such events and stories and communicate them to the new employees.
Way # 2. Rituals:
Reliance Industries conducts company foundation day every year, where the CEO of the company rewards the employees for their best performance, best customer relations, etc. This helps to reinforce company values, goals and future benchmarks. All the family members of all employees participate in the events and interact with each other in the whole day celebrations. It is one of the important occasions for Reliance employees to learn organisational culture. Such activities are called ‘rituals.’
Rituals are repetitive sequences of activities which express and reinforce the key values of the organisation, which goals are most important and which people are important and which are expendable.
Way # 3. Material Symbols:
Employees in Maruti Udyog Limited (MUL) do not have individual offices – rather they have cubicles, common areas and common eating and meeting rooms. Employees in MUL learn from this kind of office accommodation the organisational values of openness, equality, interaction, creativity and flexibility.
Some companies provide various facilities to the employees like cars, telephone, elegant furniture, executive perks, etc. These facilities are called material symbols which make the employees learn as to how the organisation should treat the employees and who are important to the company.
Way # 4. Language:
Language refers to the technical jargon used by the business to denote people, equipment, customers, etc. New employees know these technical jargons and their meanings. For example, the staff dealing with cash in foreign companies is called ‘bursers.’ People working in the production department in foreign companies are called ‘operators.’ Employees after assimilating this terminology become part of the culture. Thus, this terminology acts as a common denominator that unites members of a given culture or sub-culture.
Organizational Culture – Methods Used for Maintaining Corporate Culture
After understanding the organisation culture, managers decide whether they wish to maintain it or change it. If they wish to maintain it, they must value it and transmit it to the employees (old and new) so that all of them direct their activities in the same direction. They should institute reward system whereby they reward and promote people whose behaviour is consistent with the culture. The ways in which an organization functions and is managed may have both intended and unintended consequences for maintaining and changing organizational culture.
Methods of Maintaining Corporate Culture:
1. What Mangers and Teams Pay Attention to:
One of the most powerful methods of maintaining organizational culture involves processes and behaviours that managers, individual employees and teams pay attention to; that is, the events that get noticed and commented on. The ways of dealing with these events send strong messages to the employees on expected behaviours and important approaches.
2. Reactions to Incidents and Crises:
When an organization faces crises, the handling of those crises by managers and employees reveals a great deal about its culture. The manner in which the crises are dealt with can either reinforce the existing culture or bring new values and norms that change the culture in some way.
3. Role Modeling, Teaching and Coaching:
Organizational culture is communicated to employees by the way managers fulfill their roles. In addition, managers and teams may specifically incorporate important cultural messages into training programmes and day-to-day coaching on the job.
4. Allocation of Rewards and Status:
Employees also lean about the organizational culture through its reward systems. What is rewarded and what is punished conveys the priorities and values of both individual managers and the organization.
5. Recruitment, Selection, Promotion and Removal:
One of the fundamental ways in which the organization maintains its culture is through recruitment. In addition, the criteria used to determine who is assigned to specific jobs or positions, who gets raises and promotions and why, who is removed from the organization by firing or early retirement and so on reinforce and demonstrate important aspects of organizational culture.
6. Rites, Ceremonies and Stories:
Rites and ceremonies and planned activities of rituals have important cultural meaning. Many of the underlying beliefs and values of organisation culture are expressed as stories that become part of its folklore. These stories transmit the existing culture from old to new employees and emphasize important aspects of that culture.
Organizational Culture – Impacts
Organizational culture, being unique and distinctive, leads to adoption of some specific modes of behaviour by organizational members.
These modes of behaviour have impact on the following aspects of organizational functioning:
1. Objective Setting:
Organizational objectives are set by key decision makers in the organization. Since organizational culture moulds people who are the building blocks of the organization, it guides to organizational members to set the objectives which match with organizational culture. Thus, for one organization, profit maximization may be the key objective while for another, it may be unworthy.
2. Work Ethic:
Work ethic is a set of moral principles an employee uses in performing his job. There-are five key elements of work ethic: integrity, sense of responsibility, emphasis on quality, discipline, and sense of teamwork. Organizational culture shapes the work ethic. Depending on the type of organizational culture, degree of these elements may- vary.
3. Motivational Pattern:
Organizational culture leads to development of motivational pattern in the organization, it determines the way people approach their job and even work life in general. If organizational culture is achievement oriented, it develops sense of high achievement among organizational members which is quite motivating to them. As a result, they develop work practices in which their potential is fully actualized.
4. Organizational Practices:
Various organizational practices related to planning, organizing, staffing, directing, and controlling take place in the context of organizational culture. Therefore, these practices differ in high performing or low performing culture.
5. Organizational Performance:
Organization culture has significant impact on organizational performance because of its above impacts. Various research studies and practices of individual companies also support this phenomenon. For example, Quinn and Cameroon have found in their study that performance of companies having adhocracy organizational culture was much better than that of companies having hierarchy organizational culture. Fast growth of companies like Reliance Industries, Hero MotoCorp, Infosys, etc., has been due their high-performing culture.
Organizational Culture – Kinds of Culture and Values
Every organization has its own word or phrase to describe what is means by culture; some of these are- being core, culture, ethos, identity, ideology, manner, patterns, philosophy, purpose, roots, spirit, style, vision, values, norms, rites, rituals, ceremonies, heroes and way.
The outside people (new hires, the consultants or vendors) could see organizations culture more clearly than those working inside. It is better to ask a Keralite to tell you what Kaslimiri are like than ask a Kashmiri.
Culture acts like music for dances. Culture does not create the communication patterns but fosters certain types of interactions. The communication practices of employees contribute to and change the harmonies and rhythms of an organization.
All organizations have some kind of culture such as:
1. The human mind is capable of innumerable ideas and beliefs and in order to function in society people must select a few to live by.
2. Culture is a necessity because it provide an efficient mechanism to co-ordinate the activities of employees.
3. An organizational culture is a necessary because of the limits of managerial power.
All organizations have some sort of culture but this does not mean that all cultures are equally successful. Some organizations implicitly encourage too many conflicting values.
Organizational cultures are revealed by three different but related levels. Artifacts, values and basic assumptions. These levels vary in their visibility to an outsider.
Artifacts are the most visible parts of an organizations culture. It include sounds, architecture, smells, behaviour, attire, language, products and ceremonies. Values tell organization members what they ‘ought’ to do in various situations. Values are hard for the newcomer to see, but one can discover and learn them. It include espoused and in-use-values.
Espoused values guide what veteran members say in a given situation. In-use values really guide the behavior of organization members. Basic assumptions deal with many aspects of human behavior, human relationships within the organization and relationships with elements in the organization’s external environment.
The assumptions are unconscious, veteran members find it hard to describe them to a new employee. Below five points are enough to answer how can the values be discovered?
a. Deep and thoughtful reflection on the type of people in the organization is an excellent starting point. The organization truly values excellence or is the mentality simply could be understand by its people, e.g., you being candidate for recruitment interview, note how you are treated? You are treated as a person about whom the organization cares.
You being directly or indirectly part of the organization. Do the employees come up with new ideas in the interest of organization in general and with their specific job in particular? Do the employees challenges old ways of doing things?
The approach of organization towards these employees, what is the exact culture of the organization. They are rewarded or punish for their act. Whether the management pay attention to the well-being of its employee or it focused on task performance and profit.
b. Being sensitive to organization symbols can provide insight into the organizational culture. Symbols of organization can be utilise by different way e.g., a particular dress code, use of visiting cards, logos, language, identification on uniform, cars, particular residential area, etc.
By use of various symbol organization people could develop their culture. But it is more important that this is accepted by society or not. Because civilian still are not friendly with the employee of particular organization those have particular dress code, highly secured by government etc.
c. Organizational slogans may be quite revealing. Organizations normally use slogans to build up their images and project identity. Maharashtra State Road Transport Corporation (MSRTC) has a slogan “Bahujan Hitaya Bahujan Sukhaya”. The employees of MSRTC could not understand the meaning of this slogan till services opened for private sector too.
The attitude of the employee was quite rough and neglectful towards passengers. The passengers were treated as unwanted part of the business. Provisions during journey of better convenience and environment to the passenger were out of questions for MSRTC employee.
The overall behaviour with majority of their passenger very uncommon in terms of seller-buyers relations. The MSRTC employee were under impression that they obliged passengers by providing bus transport services.
Taking care of passengers was a sort of taxation for them. With the entry of private bus operators for road passenger a common passenger got a better option to the MSRTC bus.
Within a very short period MSRTC lost its business as all busy routes were captured by private bus operators. Passengers preferred private bus services for long route as well as short route journey at more cost compared to MSRTC.
The employees of MSRTC were quick to realise that passengers are part of their business. If passenger are not there, they would not get their salary regularly. Now the MSRTC employees have come to know the meaning of Bahujan Hitaya Bahujan Sukhaya.
d. Organizational philosophies can also be a clue for organizational values. The route of percolations of organizational philosophies from top to bottom is very important. Life Insurance Corporation of India says Yogakshema Vahamyaham. The basic business objective of LIC is to cover the risk of uncertainty of human life, it is a common understanding.
But the experience of policy holders are quite different. In majority cases employee/representative/agents of LIC talk about death of to be insured person instead of his/her security for compensation against death.
It is experienced that development officers or insurance agents in their first couple of meetings with potential customer talk about the difficulties, uncertainty to be raised before family members or visualises the worst quality of living of his/her family member after the death of non-policy holder, instead of telling him importance of asking for policy in terms of money as well as uncertainty of life.
In most cases agents/development officers tries to project and visualise that after your death your family will have to definitely start beginning and thus taking an insurance policy is the ultimate option. Simultaneously they insist on that earning person should purchase insurance policy.
The buyer finds it very puzzling that while an earning person has life, uncertainty, the same is not true for a non-earning person. Through this process, a probable policy holder feels that why insurance company is taking so much care of my family and my death. He starts smelling something different.
Ultimately LIC is not expecting its business through this way but the employee/agents working for organizations making business this way, and it goes totally against philosophy of Life Insurance Corporation of India. The author is unaware about the extent of awareness of these facts at the LIC itself. But such behavior of employee of any organization represents philosophical values of concerned organizations.
There are more suitable indicators of culture as well. An organization has policy that women and men have equal opportunity in promotion. The persons learnt afterwards that only men were promoted to management positions in the last five years.
Performance and Organization Culture:
Organization culture has the potential to enhance organizational effectiveness, individual satisfaction, and sense of certainty about how problems need to be handled and so on. However, if the culture gets out of step with the changing expectations of the internal and external stakeholders, organization’s effectiveness can be hindered.
Organization culture and its performance are directly related. Thus, the rationale for attempting to change the culture is to create a more effective organization. It is experienced that strong and well-developed culture is an important characteristic of organizations that have outstanding performance records. The term strong culture implies that most managers and employees share a set of consistent values and methods of doing business.
1. A strong organization culture facilitates goal alignment. The idea is that because all employees share the same basic assumptions, they can agree not just on what goals to pursue but also on the means by which they should be achieved. As a result, employee initiative, energy and enthusiasm are all channeled in the same direction. In these organizations, there are few problems of coordination and control, communication is quick and effective and resources are not wasted in internal conflicts. Thus, organizational performance is likely to be healthy.
2. A strong culture leads to high levels of employee motivation. This has two main arguments. First, it has been suggested that there is something intrinsically appealing about the strong cultures that encourage people to identify with them. Second, it is sometimes thought that working with strong culture organizations makes the work rewarding. This tends to promote employees’ participation in decision-making and various recognition schemes.
3. A strong culture is better able to learn from its past. The idea is that strong cultures possess agreed norms of behaviour, integrative rituals and ceremonies and well-known stories. These reinforce consensus on interpretation of issues and events based on the past experience and provide precedents from the organization’s history. This helps to decide how to meet new challenges and promote self-understanding and social cohesion.
Organisational Culture and Behavior:
The concept of organisational culture has received increasing attention in recent years.
Culture is what a group learns over a period of time as that group solves its problems of survival in an external environment and its problems of internal integration.
Culture can be defined as “A pattern of basic assumptions, invented, developed by a given group that has worked well enough to be considered valid and is to be taught to new members as the correct way to perceive, think, and feel in relation to those problems”.
“Culture means the set of beliefs, values and attitudes deeply held by people of one country, race or religion which set them apart from other people belonging to different countries, races, and religions”.
An organisation culture motivates people to work hard and stay with the business. This will find behind each leader.
e.g., Ratan Tata of Tata Group, Narayana Murthy of Infosys Technologies Ltd, Bill Gates of Microsoft and founder leaders behind great companies has set an example in their business life. Such great leaders are bringing culture that will produce loyalty and motivation in employees.
Great companies are different from others due to consistency between their professed values and their actions.
GLOBE (Global Leadership and Organizational Behavior Effectiveness) is a large scale research program involving the efforts of a team of 160 scholars. The study explored cultural values and their impact on organizational leadership in 62 cultures.
The GLOBE researchers developed a scale of cultural dimensions based on a survey of 17,000 middle managers in three industries, banking, food processing, and telecommunications.
The culture dimensions are:
i. Collectivism – The degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families.
ii. Gender equality – The degree to which an organization or society minimizes gender role differences and gender favoritism.
iii. Assertiveness – The extent to which individuals are assertive, challenging, and aggressive in social relationships.
iv. Future orientation – The degree to which individuals in societies engage in future oriented behaviors.
v. Performance orientation – The extent to which a society encourages and rewards group members for performance improvement and excellence.
vi. Humane orientation – The extent to which a culture encourages and rewards people for being- lair, unselfish, kind, caring.
Globalisation and Cross Cultural Skills:
As our economies integrate, the diversity of markets and customers requires equivalent diverse workforces.
It is very important to acquire local knowledge about different markets to serve their customer best. Such knowledge can be provided by diverse workforce.
Companies start to make their boards internationally. They need various inputs, different ways of thinking, different attitudes and values to get benefit.
Global economical management is depending on patterns of thinking and behavior. It is about trade agreements, goods and services, and currency exchange rates.
Global business is highly competitive and firms need executives who understand the world and have had experience working in foreign cultures.
In today’s Global economy, a manager can interact with colleagues from several different cultures.
e.g., At Polygram (the British music company), top 33 managers are from 15 different countries.
i. Managers need to develop global skills. Traditional management skills are designed to manage only in local environment .International business environment is highly volatile, and rapidly changing.
ii. The skills meant for local environment will thus be insufficient if one has to manage in an international environment. It can be compared with the example of a person who can swim in a swimming pool but what will happen if the same person is thrown to a deep sea.
iii. Though a few insightful corporate giants such as Intel, Cisco, HP, General Electric, Cisco Systems, and IBM have made strides in developing successful global managers. But in many companies, leaders and senior executives continue to be frustrated with the available skills and resources.
iv. Managing in a global environment means manage people who are separated not only by time and distance but also by cultural, social and language differences.
v. The main challenge here is to integrate and coordinate these individuals in ways that will ensure success.
Today managers need new management skills as per follows which are equally effective for managing both local and international business operations:
i. Comfort with rapid change – global managers must be very comfortable with rapid changes and competent in making futuristic decisions.
ii. Networking skills – ‘It doesn’t matter how much you know-rather it matters who you know’ is extremely relevant in most of the countries.
It is thus extremely important for international business operators to acquire the skill of developing good relations with the influential and effective people in other countries.
Global managers need to build a relationship and have frequent interaction and communication among team (local and abroad) members.
iii. Cross cultural sensitivity – It is the ability to correctly understand, respect and successfully deal with the people of other cultures. Managers need to be sensitive and respect the cultural differences.
iv. Self-motivation – Manager must see things very positively and show flexibility to cope up with disappointments and failures.
v. Learning attitude – Manager must have the desire to learn every day and everywhere and come up with new ideas and solutions.
The global skills will help managers in culturally diverse countries do more effective job on day to day basis.
Individualistic and Collective Cultures:
Individualistic cultures, characterized as “I” and “me” cultures, give priority to individual freedom and choice.
Collective cultures, oppositely called “we” and “us” cultures, rank shared goals higher than individual goals.
How to break barrier in cultural diverse?
a. People on both of the context barriers must be trained to make adjustments.
b. Background information is essential when explaining anything. Include the history and personalities involved.
c. Give explicit instructions to newcomer about objectives and the process involved.
d. High-context workers from abroad need to learn to ask questions outside their department and function.
Tips for Employees for Successful Foreign Assignment:
a. While still in school, pursue foreign study opportunities and become fluent in one or more foreign languages.
b. Starting with very first job interview, clearly state your desire for foreign assignment.
c. Become very knowledgeable about foreign countries where you would like to work.
d. Make sure your family fully supports a foreign assignment opportunities.
e. Stay informed about your companies international strategies and programs.
f. Polish your cross cultural communication skills daily with foreign-born co-workers.
Organizational Culture – Process of Inducting Human Factor into the Organisation
Adopting and maintaining good culture is essential for the organisation. Organisation is like a machine which contains both technology and human resources. Whether an organisation has adopted high degree of good culture, will mainly be decided by rules and regulations followed in such organisation. These rules and regulations are framed by some people and are followed by others. Therefore, if an organisation fails, it is the people who formulated the policies, implemented and monitored are to be blamed and not the organisation.
Thus, organisations are composed of concerned human individuals, who agree to be as a unit and follow the policies and programmers formulated by human beings only. Hence, the focus of maintaining good culture will be on human factor. In order to maintain socially and morally acceptable practices, organisations have to monitor the process of inducting human factor into the organisation.
The process is as follows:
1. Careful Selection:
The selection of people should be such that they humbly and strictly follow the organisational rules and procedures and commit themselves to the tasks assigned to them. Careful selection of people at the entry level goes a long way in practicing good culture.
2. Fixing in the Job:
Carefully selected people should be placed in specific jobs and continuously trained to adopt the organisational culture. Some organisations, in the initial stages make new blood to work more than what they can, to test their patience and tolerance and to develop group cohesiveness and humility in them. Some other firms may make the new entrants to work in a relaxed but controlled atmosphere. Placing them in proper manner to understand and commit to the organisational culture in the entry level itself is an essential aspect of maintaining OC.
3. Training and Development:
From the beginning, the recruiters have to be put under continuous training to have control over their assigned tasks. Job mastery is essential for the maintenance of organisational culture. People who learn their jobs, develop organisational identity and commit to the OC. This facilitates the workers to develop a career plan with continuous training and with the passage of time they move from one level to another and understand the work culture.
This process makes employees happy and motivate them to work hard to achieve the organisational goals. Thorough socialisation provides them an opportunity to occupy new positions. Hence, continuous training and development of personnel ensures them safety and make them to strongly identify with OC.
4. Evaluation and Rewards:
People at work should be subjected to continuous performance appraisal and quality workers should be suitably rewarded. Every organisation adopts performance appraisal programmes which are designed as per its needs and pattern of work. Rewards are given to maintain employee morale. This practice is vital component of good culture. Evaluation and rewarding system focuses on organisational business process and is crucial to corporate values.
5. Practicing Values:
Good culture comprises of socially acceptable and organisationally required values. These values have to be practiced by people in the organisation. The personal values that do not suit to the organisational values are to be set aside. Maintaining organisational culture is more important and values oriented towards good OC are to be strictly practiced by employees.
6. Telling Organisational Stories:
The founders of organisations will have left memorable legacies and highly cultured practices. There may be many incidents which were critical and management will have taken decisions to up hold the values and ethics of the organisations. They are the moral stories which have to be told to future employees to know about the ethical aspects of the organisation. When heard by employees, these stories will have impact on their behaviour. Past stories of the organisation, when told, make employees to uphold and continue good practices. Repeatedly telling the stories, reinforces the workers to practice established OC.
Besides these aspects, organisations should promote the talented persons to key positions. Recognising the employees and promoting them to coveted positions will add to the value of the organisation. It facilitates the maintenance of good culture. Recognition of people in the organisation is a powerful reinforcer. The successful people can guide new comers to maintain and continue the OC.
Organizational Culture – Development (With Guidelines)
In the beginning of a new organization it is the formal structure, systems, procedures and leadership behaviour which may provide a broad framework for its culture. With the passage of time, the official values of the organization and the actual values of the employees in the organization tends to drift further more.
The management’s role in development of sound organizational culture is very vital because it is the management which provides ideal culture which is followed by everyone in the organization. More and more attention has been paid to manager’s role in developing organization culture. The manager first of all asks employees about the values of the organization whether they know or not.
The manager then rewards performance of employees which support organizational values. For example, the development of culture at Wipro company. In 1973 Azim Premji took control from his father with standards of conduct and integrity. Wipro doesn’t compromise on values and beliefs and integrity which represents Wipro culture.
Collins and Porras on the basis of researches provided the following guidelines for development of organization culture:
1. Preserve core ideologies while allowing for change.
2. Stimulate progress through challenging objective, purposeful evolution and constant self-improvement.
3. Encourage experimentation and accept mistakes.
4. Accept paradox while rejecting ‘either or thinking.’
5. Create alignment by translating core values into goals, strategies and practices.
6. Grow new managers internally by promotion from within.
Formulation of culture or development of culture is process which involves various elements i.e. philosophy of founder, selection criteria, socialization, behaviour of top management, reinforcement of culture.
Developing Organizational Culture:
Organization culture forms in response to two major challenges that confront every organization.
These are:
1. External Adaptation and Survival:
It determines how the organization will find a niche in and cope with the constantly changing external environment.
It involves addressing the following issues:
(a) Mission and strategy – Identifying the primary purpose of the organization; selecting strategies to pursue this mission.
(b) Goals – Setting specific targets to achieve.
(c) Means – Determining how to pursue goals including selecting the organization structure and reward systems.
(d) Measurement – Establishing criteria to determine how well individuals and teams are accomplishing their goals.
2. Internal Integration:
It determines the establishment and maintenance of effective working relationships among members of the organizations.
Internal integration involves addressing the following issues:
(a) Language and concepts – Identifying methods of communication and developing shared meaning for important concepts.
(b) Group and team boundaries – Establishing criteria for membership in groups and teams.
(c) Power and status – Determining rules for acquiring, maintaining and losing power and status.
(d) Reward and punishments – Developing systems for encouraging desirable behaviours and discouraging undesirable ones.
Organization culture emerges when members share knowledge and assumptions as they discover or develop ways of coping with issues of external adaptation and internal integration.
The national culture, customs and social norms of the country also shape the culture of the organisations operating in it.
According to David Dreman, twelve key factors which shape a company’s culture are:
1. Influence of a dominant leader
2. Company history and tradition
3. Technology, products and services
4. The industry and its competition
5. Customers
6. Company expectations
7. Information and control systems
8. Legislation and company environment
9. Procedures and policies
10. Reward systems and measurements
11. Organization and resources
12. Goals, values and beliefs
Organizational Culture – Measures to Change Organisational Culture
Though it is difficult to measure exactly the picture of the organisational culture can be obtained by measuring each of these features as given below:
i. Structure a questionnaire using five or seven degree scale on a continuum from very low to very high (+2 to -2 in case of five degree scale and +3 to -3 in case of seven degree scale).
ii. Appraise each of the features of organisational culture (for example +2, +1, 0, -1-, -2)
iii. Give weightages to each of these features. The total weightage of all the features should be equal to +1 (for example 0.01, 0.15…)
iv. Calculate the average appraisal of each feature.
v. Multiply the average appraisal of each feature with the weightage of the feature concerned and obtain the weighted score.
vi. Add the weighted scores of all the features and obtain the total weighted score. This total weighted score is the composite picture of the organisation’s culture.
Though we can calculate the composite picture of the organisation’s culture, it would not represent the beliefs or values of all the organisational members. These varied beliefs of the organisational members can be categorised into different cultural concepts.
Changing Organizational Culture:
If managers feel that organisation culture needs to be changed, they must do so to develop new image of the company in its internal and external environment. The same basic methods used to maintain organization culture can be used to modify it. Changing organization culture is difficult primarily because assessing accurately the existing culture is itself a tough task.
Most large complex organizations actually have more than one culture. General Electric Company, for example, has distinctly different cultures in different parts of its multi divisional, worldwide operations. These multiple cultures are called sub cultures. Every organization has at least three cultures an operating culture (line employees), an engineering culture (technical and professional people) and executive culture (top management) stemming from different views and perceptions held by these groups of people.
Successfully Changing Organization Culture requires:
1. Understanding the old culture first because new culture cannot be developed unless managers and employees understand where they are starting from.
2. Set realistic goals that impact the bottom line.
3. Providing support for employees and teams who have ideas for a better culture and are willing to act on those ideas.
4. Finding the most effective sub culture in the organization and using it as an example from which employees can learn.
5. Make changes from the top down so that constant messages are delivered from all management team members.
6. Include employees in the process – “People support what they help create”.
7. Remove all trappings that remind employees of the old culture.
8. Not attacking culture head on but finding ways to help employees and teams to do their jobs more effectively.
9. Treating the vision of a new culture as a guiding principle for change, not as miracle cure.
10. Recognize that significant changes take time.
11. Living the new culture because actions speak louder than words.
12. Allowing people with different cultural backgrounds to represent their behaviour and attitudes to be followed by others.
13. Allowing culture of one company to preside over the other or create a new culture in case of acquisitions and mergers.
14. Identifying the need for introducing change and doing so through participative efforts of employees. This necessitates the need to bring change in the attitude and behaviour of existing workforce and enforcing new methods of doing work. Indeed, any comprehensive change programme in an organization, in some sense, is an attempt to change the organizational culture. Cultural change involves tremendous amount of efforts and time and needs skillful people to manage this change successfully.
Changing Organisational Culture:
Organisational culture should be allowed to change in order to keep the organisation dynamic. Sometimes the culture has to be changed forcibly. Some of the public sector organisations in India are being privatised consequent upon economic liberalisations by means of divestment or outright sale.
The culture of the public sector, i.e., bureaucracy, uncaring the customer, protecting the inefficient employee, treating efficient and inefficient employees at par, should be changed along with the private sector culture like organic structure, concentrating all organisational operations around the customer, smart sizing the employees, treating the efficient and inefficient employees differently, etc.
Organisational culture can be changed through:
1. Sell the New Strategic Intent:
It is vital that the strategic intent is convincingly sold to all those involved in effecting the changes. In addition to selling the idea of the need for change, it is also important to show that the new direction is the right one. This is difficult as the proposals predicate a future state and therefore allow room for considerable debate on whether the intended actions and directions will lead to the future performance that the organisation thinks it needs to survive and grow.
The effective selling of the strategic intent and the rosier future it will bring to all levels of management is a prerequisite to the successful implementation of change and the achievement of new behaviours among those working for the business. The leaders must ensure that all these involved in change must realise how change is related to the new strategic intent.
2. Interpret the Organisational Culture:
Before changing the culture of an organisation it is necessary to know the present culture. This means identifying values, beliefs and behaviours.
According to Deal and Kennedy, there are four generic cultures:
i. Tough-guy macho culture – A world of individuals who take high risks and get quick feedback on whether their actions were right. This culture prevails in police and personnel of other emergency services, surgeons, management consultancy, movies and entertainment industry.
ii. Work hard/play hard culture – Fun and action are the rule here but employees take few risks. Sales organisations, computer companies, mass consumer sales companies, and retail stores are likely to have this culture.
iii. Bet your company culture – A high-risk feedback organisation. It refers to companies that invest large sums now to recover them over time such as oil companies, airplane manufacturers, capital goods companies, investment banks and the armed forces.
iv. Process culture – Low-risk, slow feedback organisations such as banks, insurance companies, public utilities and highly regulated industries such as pharmaceuticals show this culture.
The usual process of analysis begins by carrying out some form of culture survey and then interpreting the results against some chosen segmentation.
3. Develop Group Decision Making Skills:
Ability to take decisions quickly and effectively during a period of organisational change is the essence of effective change management. This is often because there are few precedents on which to draw when making decisions in a new organisational context. Therefore, staff needs access to other individuals or groups with whom to discuss and develop new decision paradigms.
If this is not achieved, each operating unit will seek to optimise its position within the corporate whole and use its knowledge and political power to win decisions that favour its own survival. In the long run, this may not be too good for them or the company. Committees and working groups tend to further this unit-centred approach to decision making. Their members tend to protect the interests of the group they represent.
This tends to compound the fact that during periods of change the urge to protect each mini- empire within the organisational whole is even greater. Decision making becomes a survival tool and helps people in the system to gain their own security. Unless this is changed and people are made to see the survival of the few, strategy implementation will fail. How this is achieved depends upon the current culture of the organisation.
Very often, change implementation fails because the implementators disagree with the new direction. It is therefore necessary that decisions that have a significant impact on people’s lives and future should be made collectively rather than by a small group.
4. Introduce Innovative Thinking that Welcomes Change:
In the present hurried world people have little time to see the distant horizon. Innovation in the context of change is having the mental agility and willingness to discard old habits and accept new ones. This means that an organisation is willing to move with times and to grasp the challenges as they arise.
5. Develop Skills and Knowledge Base:
If the strategic changes require the staff to learn and display new skills and competencies, it pays to structure the new learning. Faced with the need to learn new skills, the staff will spend time on the activity that demands their attention most. Managers should develop learning tools and initiate projects to ensure that the new tool kit is in place so that the staff will begin to use them and discard their old ways.
Learning tools take many different forms. The most popular is the change workshop that organisations run to introduce their staff to the new concepts and values and to help them begin to behave in the new way.
6. Encourage Staff to Feel Secure:
Strategic transformations usually result in some form of people displacement. In recent years, downsizing has become a common means of achieving corporate results and has broken the psychological contract that exists between staff and the company. This means that during periods of change, staff feels deeply insecure. The sense of insecurity demotivates people, makes them reluctant to try new things and new ways.
Providing confidence in management’s good intentions is a vital condition to achieve successful strategy implementation. There are many ways in which a company can give staff a sense of security. Staff must see that their departing colleagues are being well cared for and the company is helping them secure a new career or happy retirement. This can be achieved by setting up an internal placement register, providing external out-placement support and good redundancy terms.
7. Develop Means of Helping Staff Deliver Consistent Performance:
During periods of transformation and strategy implementation the organisation should help the staff understand and interpret changes in a positive way. Failure to do this will result in performance degradation because of uncertainty or because the staff really do not have clear goal and role definitions.
This help can take the form of information systems and rules that make clear the new routines and processes of the company. By so doing the company removes fear and uncertainty and clarifies each individual’s new position in the changed organisation.
8. Enable Access to Management During Periods of Change:
Power balances shift most dramatically during periods of strategic change. As a result, the decision making process within an organisation is disabled and people feel the need of leadership and guidance. During the period of settling in, most people find it difficult to pinpoint sources of new power and therefore decisions are not made in the timescales that make for efficient operations.
In these circumstances, until new structures and behaviours are established the staff must understand how to get answers to the questions that affect the day-to-day work. Until routine is established, decision-makers will have to be prepared to work harder and be more accessible to their staff.
9. Encourage Thinking that Focuses on the outside World:
Times of change tend to pull people’s attention inward. This is a natural tendency and results from the fact that people are relearning their jobs and this activity absorbs more of their time when they are functioning in routine manner. The danger is that the organisation goes in on itself and becomes desensitised to what is happening outside its immediate sphere.
It is during this time that competitors are able to make inroads into established customer relationships as customers feel that the organisation is more concerned about itself than those it is changing to serve.
Organizational Culture – Cultural Change
Organizations experience change for a variety of reasons, which may include pressures for change within a company as a result of financial needs, external pressures created by government legislation, changes in exchange rates a competition, or there may be development in technology.
One approach to organizational change is through ha process of ‘unfreezing’ and ‘refreezing’. Strategic managers in an organization decide that there is a need to change because of external pressures of one kind or another. A Company’s profitability may have declined or there are clear indications of a falling market share. Senior managers know that changes are needed in order to ensure organizational survival.
The strategic manager’s problem is to convince everybody else in the organization that change is necessary and that the present culture needs ‘unfreezing’-
1. Unfreezing – the need for change is made so obvious that individual and teams can easily recognize this need and accept it.
2. Leadership – managers faster new values, attitudes and behaviours through a process of consultation, retraining and communications
3. Refreezing – the new practices are locked into place by supporting and reinforcing mechanisms so that they become the norm.
Many people will feel that ‘the way we do things around here’ is the best possible way, so that changes will not help. Meetings and other forms of communication may help to explain the need for change and persuade employees to accept change.
External consultants can be introduced in order to provide an objective assessment of the need for change, and because of their distance from the internal culture they may be able to criticize individuals, systems and practices and explain what other organizations have had to do in order to remain competitive.
More direct signs of change, such as the replacement of senior managers, redundancy among employees, changes in location and the introduction of new equipment, may help to convince people that change are happening but may also mean that there is retreat into the familiar culture.
At this stage of culture change there will be strong forces for maintaining the status quo. There will be a fear of change among many employees, who may be worried about their position in the organization or at having to learn new skills, or simply because they are used to the present situation and they are not convinced that any change is necessary.
Managers have to reassure people that they will be able to master the new skills required and also that the change is necessary. Encouragement and support can be backed by training and retraining programmes. The purpose of change is to move an organization from its present point to a different one which is more desirable in meeting its objectives.
The gap between the starting point and the desirable conclusion can be bridged by reminding everybody about the direction of the organization and outlining how the change is to be achieved. Strategic managers have to classify ‘where we are going’ and ‘how we are going to get there’ and then, by monitoring the change, point out ‘this is how far we are now’.
In this process, cultural change in often the most fundamental problem and the most difficult to overcome. Many people may be unable to fully understand the cultural implications of the changes that are being introduced. Possibly because of the vocabulary being used difficulties of putting into words what is required or a resistance to it.
Changes in the public sector in recent years have been radical and the same has been true in the private sector. The development of global competition and new technology has brought about considerable changes within many companies in the way they have provided products and services, and in their structure and composition.
Take overs and mergers bring together two or more cultural traditions with all the difficulties this produces. At-the same time the restructuring of companies has given rise, to a vocabulary of change in such terms are ‘re-engineering’ downsizing’ and out ‘sourcing’.
During the ‘refreezing’ stage of cultural change, individual will look for ways of ending the uncertainty and instability that the changes have brought to their workers life. Individual members of staff start to redefine what is require of them and how they should carry out their work.
Refreezing only occurs when the new culture is understood and accepted, and when the new rules and regulations and the new assumption are accepted as ‘the way we do things around here’.
This may be long process which can take years to be fully this process, strategic management can provide a structure which helps change by providing training programmes and information about the reasons for change and the results of changing, and also the consequences of not changing so that good communication between managers and other employees becomes even more important. For successful change, the new culture must be seen as the factor responsible for solving the initial crisis.
Organizational Culture – Functional Outcomes
The various functional outcomes of organization culture which provides positive changes in individual’s behaviour can be explained as:
1. Boundary defining roles – Organization culture provides a unique identity to the organization on the basis of which one can differentiate the organization from others for e.g., Microsoft has a culture of teamwork, innovation etc.
2. Convey a sense of belongingness and loyalty – Individuals take pride as being part of the organization having likeable culture. This creates a sense of belongingness and loyalty leading to better performance and commitment of employees. For example Sahara has a culture of H.R. orientation through their slogan “Sahara India Pariwar” and star television network has slogan, “Star Pariwar”.
3. Facilitates goal achievement – Culture creates a clear vision of common purpose through which that common purpose is aimed to achieve leaving no ambiguity in employee’s mind about what the organization stands for and what it wants to achieve.
4. Holds the organization in difficult times – Culture is a strong support mechanism for an organization because it can prevent disintegration in an organization and helps the organization in facing different times. For example, if due to recession in the economy, the retrenchment of employees can be avoided due to organization culture where employees are ready to sacrifice their increments for protecting others job.
5. Culture develops strong work ethics – Work ethics are the work norms which guide behaviour in work settings within the organization. By establishing implied rules of behaviour in the form of desired values, culture can serve as inbuilt control mechanism and leads to desirable work ethics.
Does Organization Culture Change?
Organisation culture grows over the years of history and tradition. It is difficult to change in one go, but the fact is that it changes. External events such as shifts in market conditions, new technology, altered Government policies, and many other factors change over time, which necessitates changes in an organization’s mode of doing business – and hence its culture.
Over the period of time, people with different cultural backgrounds and attitudes enter into the organization. If they are influential personalities, they are able to affect the organization culture. Another source of cultural change is mergers and acquisitions, events in which one organization purchases or otherwise absorbs the other. Meeting of two different cultures may emerge in one new culture, or one organization absorbing the culture of the other, or there may be cultural clash.
There may be a planned cultural change also. When an organization recognise that to change the work behaviour of its people, it has to change its culture, it can initiate a planned change. It is not an easy task, but is not unachievable. It can be viewed as a three step process- one, identify the kind of change planned, two, initiate the change, and three, reinforce the changed culture.
Reinforcement may take any form, like participation and recognition of employees for services rendered, supply of information within group settings, symbolic actions like the occasional visit from senior management, award ceremonies for long term staff, excellent performance, etc. Reward systems in their own right are important transmitters of culture as they reward and reinforce accepted and approved behaviour patterns.
For example- when Rarykroc took over McDonald, it was not in a very good shape. Raykroc built the franchise on four basic concepts; quality, cleanliness, service, and price. In order to ensure that each unit offers the customer the best product at the best price, franchisees are required to attend Mcdonald University, where they are taught how to manage their business.
Here they learn the McDonald cultural values and the proper way to run the franchise. This training ensures that franchisees all over the world are operating their units in the same way. Kroc died a few years ago, but the culture he left behind is still very much alive in McDonald’s franchises across the world.
Organizational Culture – Elements that Make an Organisation Healthier
Many organisations practice healthy culture. The concept of “Healthy” can be measured only through the success of the organisations in terms of increasing profit, wealth and high morale of employees. As OC is invisible, exceptional or disastrous corporate culture can only be observed from the point of stability, sustainability and growth of the enterprise. Most of the business and other organisations fall somewhere in the middle between the two extremes (exceptional or disastrous). Healthy firms practice a high degree of good features.
The elements that make an organisation healthier are as follows:
1. Organisational Pride – Employees of organisations which practice high degree of good features always defend their organisation against standard or any other Criticism. They take it as a pride to be in such organisations, on the other hand, people working helplessly in organisations, which are involved in scams, hesitate to say about their workplace. (An employee of Sathyam).
2. Ambition to Improve – The culture of a healthy organisation will be visible in employees’ ambition to continue to work in the same organisation for one’s own growth. Win-win culture is practiced in this organisation.
3. Respect for Teamwork and Communication – The practice (culture) of open discussion, more open exchange of ideas contributes for the development of teamwork which every employee likes. Individually, they became more open and can give healthy suggestions on an issue. People become active and develop positive approach through good communication system and team-work.
4. Quality leadership – A quality top management and with broad outlook and human approach can make an organisation a healthier one. Even the front line and middle managers should have the same outlook and should fully practice the concept of “empathy.”
5. Sound Financial Analysis – Every organisation will be aspiring for the growth of financial status. Although there is growth of wealth and position on year on year basis, CFOs and CEOs should assess the genuinety of financial statements by giving an insight into costs and earnings. Inflated or deflated accounting practices will not exhibit real situation.
A bad financial practice will be disastrous. (Enron, Sathyam etc.) Finance department should find out whether expenses are justified and they really make the company more stronger. Hence, a healthy organisation should adopt sound financial policy.
6. Employee Relationship – A culture which provides an atmosphere to create interpersonal relationship will thrive well. A good understanding between employer and employees can increase productivity through satisfaction of employees. Good employee relationship make employees as team players.
7. External Relationship – A healthy organisation will have good culture of establishing healthy relationship between the company and customers and suppliers. This is very well seen in service organisation. Healthy relationship with outsiders is the capital of service organisations. It is equally essential in other organisations too.
8. Training and Development – Mentoring, training and development of programmers for the growth of employees, positive organisational policies framed and implemented for the all-sided development of personality of workers, are all healthy practices which contribute for developing good culture.
9. Employee Safety – Policies adapted for employee safety prevent employees from having ill will against management and prompts them to develop positive approach towards the organisation.
These elements, when well-practiced, can make an organisation a healthier one. A culturally strong organisation will give priority for all these aspects. If these elements are meticulously adopted, the organisation becomes a benchmark organisation for organisational culture. If they are implemented at a low degree and if some of them are absent, such organisation will become sick. Thus, an organisation to be healthier, should practice a high degree of aforesaid elements. This makes the organisation more competitive in its business.
The characteristic features, elements, indicators etc., are not all-inclusive of organisational culture. In a social system, most admired and least admired companies may exist. Considering the ‘finance’ as a parameter to measure the success of an organisation, a most admired and having a rank-1 in the list of admired companies may be pushed to rank – 3 or 4 after four or five years. Financial policies will have impact on operations of the companies. The change in financial policies are governed by organisational culture.
If the ranking of a company is in an ascending order (like position-3 in one year and acquires the position-2 in next year), besides the sound financial policy, “Retention Policy” (Attraction and retention of talent) also contributes for improving the status of the organisation. When we observe the successful organisations such as century old Tatas and Birlas or even recently established IT giants such as Infosys, TCS etc., besides sound financial management, it is legendary cultures and values that a have made these business houses to be on top. Weak cultural practices make an organisation a weak one.
Organizational Culture – Important Consequences
The consequences of these cultural forms will identify the power of culture. It reveals the strength of culture — whether weak or strong.
Following are some important consequences of forms of culture which measure the strength of an organisation:
i. Individual commitment of people to organisation’s vision and mission
ii. Contribution of each form to organisational stability
iii. Sense of identity for the individual
iv. Organisation should make sense to the individual.
These consequences/shared beliefs/values make an observer to understand the level of culture that the organisation possess. Very many instances can be quoted to testify this. Tata empire was established by JRD, TATA from scratch. The quality factors such as sincerity in service, caring for human factor, providing quality products and services to delight customers have made this group to live for long and still in the frontline of the industrial world.
Like this, many industrial and service organisations have faced challenges through their strong cultural practices. Today people believe “TATA” as a symbol of quality — a form of culture. Thus, the founder is not alive, but his quality values and beliefs are embedded into Tata organisations’ culture to make his thinking and contributions alive.
Similarly, previous notable events and happenings or otherwise called organisational stories or history also reveal the organisational culture. We hear about the personal achievements and stories of many successful organisations. The success has come to them as they faced challenges and walked through the thorny path.
The leading companies such as Tata, Birlas, Singhania, Wipro, Infosys and Navarathnas of PSUs have all have their own stories about the culture they have adopted to succeed. Challenges faced by organisations, make them culturally dynamic. In a competitive environment, external factors influence the organisational activities and may affect the existing practices.
Particularly, when fresh blood is introduced (experienced or freshers) into organisation people bring with them a culture imbibed in them which will not suit to the existing organisational culture. However, the modification needs to certain extent to make them adapt themselves to the practiced culture of the organisation. The process of making new entrants to adapt themselves into existing culture is called “Socialisation Process of OC.”