Organizational culture

What is organizational culture?

The shared social knowledge within an organization regarding the rules, norms, and values that shape the attitudes and behaviors of its employees "how we do things around here"

- culture is a perception that is shared. It is a descriptive term

Dimensions of Organizational Culture (organization cultural profile)

detail orientation, outcome orientation, people orientation, team orientation, aggressiveness, stability, innovation and risk taking

The source of culture

Usually (not always) reflects the vision/mission of the founder

How do employees learn culture?

stories (narrative of significant events or people),

rituals (repetitive sequences of activities),

material symbols (essential to create an organizations personality), language (jargon/slang)

Strong cultures

key values are deeply held and widely shared, have strong influence on organizational members

Key factors influencing strength of culture

Size of orgo, age of orgo, rate of employee turnover, strength of original culture, clarity of cultural values and beliefs

Benefits of Strong Culture

Creates stronger employee commitment

Aids in recruitment and socialization of new employees

Fosters higher performance by instilling and promoting employee initiative

Reinforces favourable behaviour

Gets everyone on the same page

Downside of strong culture

The culture might not help the business

Culture Creation

Founder values and preferences + Industry demands = early values, goals, assumptions

Cultural Maintenance

Cultural creation expands to cultural maintenance

Attraction-selection attrition + new employee on-boarding + leadership + reward systems = organizational culture

The socialization model

Prearrival --> Encounter --> Metamorphosis --> Outcomes (Productivity, Commitment, Turnover)

innovative cultures

Cultures that include challenge & involvement, freedom, trust & openness, encouragement of playfulness, debates, risk-taking, conflict resolution, idea time for employees

How to build an ethical culture

Be a visible role model, communicate ethical expectations, provide ethics training, visibly reward ethical acts and punish unethical ones, provide protective mechanisms for employees to discuss ethical dilemmas and report unethical behaviour

Johnson & Johnson Credo

has guided the firm since it was written in the firm since the 40s. Essential part of their culture.

Liabilities of Culture

Barrier to change

Barrier to diversity

Barrier to mergers and acquisitions (merging cultures of multiple organizations can be difficult or impossible)

Key Work Behaviors

job performance, organizational citizenship, absenteeism, turnover

Job Performance

Effectiveness in fulfilling job responsibilities

Increases when employee has a positive work attitude, conscientiousness/personality (modest predictor), is being treated well at work, and has strong general mental abilities

Decreases when employee is stressed (45% of respondents to a survey say financial stress impacts work)

Organizational citizenship

the behavior of individuals that makes a positive overall contribution to the organization

Increases with age, positive work attitudes, personality (high predictor of citizenship), and most importantly with positive treatment while at work

absenteeism

the failure to show up for work

Increases with health problems and work/life balance issues

Decreases with positive work attitudes and age of the employee (young people are absent more)

Employee turnover

loss of employees who voluntarily choose to leave the company

Increases with poor performance, stress, and personality (people who have are less conscientious, agreeable, and emotionally stable are more likely to quit their jobs)

Decreases with positive work attitudes and age/tenure of the employee

Attraction-Selection-Attrition (ASA) Framework

holds that potential employees will be attracted to organizations whose cultures match their own personality