Organizational culture refers to the shared values, beliefs, and assumptions that guide how employees should behave within an organization. It is shaped by artifacts like language and stories, as well as deeper levels like beliefs and assumptions. Culture can be functional when it provides social cohesion and guides employee behavior, but dysfunctional when it impedes change or diversity. Employees learn the culture through socialization and it is reinforced by top management, selection criteria, and rewards. Leaders must understand their organization's culture to effectively manage employees.

1. Organizational Culture

2. Objectives
What is organizational culture?
When is organizational culture functional?
Dysfunctional?
How do employees learn about the culture of their
organization?
Why organization culture is important to
organizational leaders?

3. What is organizational culture?
Henry Mintzberg on Culture
“Culture is the soul of the organization - the
beliefs and values, and how they are
manifested. I think of the structure as the
skeleton, and as the flesh and blood. And
culture is the soul that holds the thing together
and gives it life force.”

4. What is organizational culture?
The pattern of shared values, beliefs and
assumptions considered to be the appropriate way
to think and act within an organization.
◦ Culture is shared
◦ Culture helps members solve problems
◦ Culture is taught to newcomers
◦ Culture strongly influences behavior

5. What is organizational culture?
Layers of Culture
Artifacts of
Organizational
Culture
Material Symbols
Language
Rituals
Stories
Organizational
Culture
Beliefs
Values
Assumptions

6. Levels of Culture
Artifacts
◦ Aspects of an organization’s culture that you see, hear, and feel
Beliefs
◦ The understandings of how objects and ideas relate to each other
Values
◦ The stable, long-lasting beliefs about what is important
Assumptions
◦ The taken-for-granted notions of how something should be in an
organization

7. Characteristics of
Organizational Culture
Innovation and risk-taking
◦ The degree to which employees are encouraged to be innovative and take
risks.
Attention to detail
◦ The degree to which employees are expected to exhibit precision, analysis,
and attention to detail.
Outcome orientation
◦ The degree to which management focuses on results or outcomes rather
than on technique and process.
People orientation
◦ The degree to which management decisions take into consideration the
effect of outcomes on people within the organization.

8. Characteristics of
Organizational Culture
Team orientation
◦ The degree to which work activities are organized around teams rather
than individuals.
Aggressiveness
◦ The degree to which people are aggressive and competitive rather than
easygoing.
Stability
◦ The degree to which organizational activities emphasize maintaining the
status quo in contrast to growth.

9. Do Organizations Have Uniform
Cultures?
Organizational culture represents a common
perception held by the organization members.
Core values or dominant (primary) values are
accepted throughout the organization.
◦ Dominant culture
◦ Expresses the core values that are shared by a majority of the
organization’s members.
◦ Subcultures
◦ Tend to develop in large organizations to reflect common problems,
situations, or experiences.

10. Exhibit 10-3 How
Organizational Culture Forms
Selection
criteria
Socialization
Organization's
culture
Philosophy
of
organization's
founders
Top
management

11. Keeping a Culture Alive
Selection
◦ Identify and hire individuals who will fit in with the
culture
Top Management
◦ Senior executives establish and communicate the norms
of the organization
Socialization
◦ Organizations need to teach the culture to new
employees

12. Culture’s Functions
 Social glue that helps hold an organization together
◦ Provides appropriate standards for what employees should say or do
 Boundary-defining
 Conveys a sense of identity for organization members

13. Culture’s Functions
 Facilitates commitment to something larger than one’s individual
self-interest
 Enhances social system stability
 Serves as a “sense-making” and control mechanism
◦ Guides and shapes the attitudes and behavior of employees

14. Culture as a Liability
Culture can have dysfunctional aspects in some instances
◦ Culture as a Barrier to Change
◦ When organization is undergoing change, culture may impede change
◦ Culture as a Barrier to Diversity
◦ Strong cultures put considerable pressure on employees to conform
◦ Culture as a Barrier to Mergers and Acquisitions
◦ Merging the cultures of two organizations can be difficult, if not impossible

15. Conditions for Culture Change
oA dramatic crisis
oTurnover in leadership
oYoung and small organizations
oWeak culture

16. Suggestions for Changing Culture
Have top-management people become positive role
models, setting the tone through their behavior.
Create new stories, symbols, and rituals to replace those
currently in vogue.
Select, promote, and support employees who espouse the
new values that are sought.
Redesign socialization processes to align with the new
values.

17. Suggestions for Changing Culture
(cont’d)
Change the reward system to encourage acceptance of
a new set of values.
Replace unwritten norms with formal rules and
regulations that are tightly enforced.
Shake up current subcultures through transfers, job
rotation, and/or terminations.
Work to get peer group consensus through utilization of
employee participation and creation of a climate with a
high level of trust.

19. Thank you