Organizational Culture (OC) Vocabulary

Overview and Definition of Organizational Culture (OC)

• Definition of Organizational Culture: OC is defined as a set of guiding values and beliefs, understandings, and ways of thinking shared by most organizational members.
• Nature of Culture: Culture is embedded in daily organizational lives and operations. It is often invisible or taken for granted during normal functioning and is typically only noticed when an organizational member violates an important cultural value.
• The "Iceberg" Analogy of Culture: This analogy illustrates the two primary levels of organizational culture:     * Visible Level: This refers to observable symbols, formally termed "cultural artifacts."     * Invisible Level: This consists of underlying beliefs and attitudes, as well as the mental orientation regarding "what is correct." This deeper level is the driving force behind the visible artifacts.     * Example: The flag of any nation serves as a symbol representing these deeper underlying values and identity.

Critical Functions of Organizational Culture

• Internal Integration: This function builds a collective organizational identity. It provides a commonly shared mindset that significantly increases the ease of organizational interactions among members.
• External Adaptation: This function influences how the organization responds to entities residing outside the organization's boundaries. It determines how the firm adjusts to external environmental pressures.

Interpretation of OC via Cultural Artifacts

• Evaluating and interpreting organizational culture is usually performed through the observation and interpretation of cultural artifacts. Artifacts are used by managers to instill and shape culture by rewarding or punishing behavior and re-affirming values.
• Category I: Rites and Ceremonies: These are planned activities, which are not necessarily formal, that constitute a special organizational event. They are designed to demonstrate and reinforce specific values.     * Rites of Passage: These help new members transition from being "outsiders" to becoming "members." They are a key component of socialization. Note: Includes "unfreeing" and "replacement."     * Rites of Enhancement: These activities enhance an individual's social identity and status within the organization. They signal to others that "this person is important" and represent a formal bestowing of organizational favor.     * Rites of Renewal: These are held to reconfirm the importance of certain values and activities. They are described as a periodic "re-vaccination" of cultural values.     * Rites of Integration: These are generally social events held to bind members closer together.     * Rites of Degradation: These involve acts of humiliation, often conducted publicly, where a person becomes an organizational outcast. The goal is to demonstrate that the member's personal values are responsible for their deviance, rather than the organization’s values.     * Rites of Conflict Reduction: These events signal what type of intra-organizational conflict is permissible. Note: This is not necessarily the best type of conflict resolution.

Additional Categories of Cultural Artifacts

• Category II: Stories: These are narratives or tales ostensibly based on true events, though often embellished. They convey "the way we do things around here" and keep cherished beliefs fresh.     * Heroes: Individuals who engage in model or ideal behavior from the perspective of the organization.     * Legends: "Old" stories that are historical in nature and important to the organization. They pass along core values and are often supplemented with fictional details.     * Myths: Likely fictional stories that cannot be corroborated with facts. However, they remain believable and consistent with OC values, as they "could have happened."
• Category III: Symbols: Physical artifacts that represent something else. These are objects that hold specific meaning for the organization.
• Category IV: Language: The use of special phrases, words, slogans, or sayings to convey specialized meaning unique to the organization.

Cultural Strength and Adaptation

• Cultural Strength: This refers to the impact of the culture on the performance of the organization and is a part of internal integration. It is measured by the level of agreement among members regarding which values are important and the intensity of that importance.     * Consensus (Strong/Thick Cultures): High level of agreement among members providing strong direction and cohesion.     * Disagreement (Weak/Thin Cultures): Low level of agreement offering little direction to members.
• Cultural Adaptation: The firm's ability to adjust to external demands. A strong culture must also allow for adaptation to respond correctly to the environment.     * Adaptive Characteristics:         * Concern for customers (the root of all strategy).         * Concern for employees.         * Processes are valued primarily for their outcomes.         * Managerial behavior is flexible.         * Legitimate risk is tolerated and encouraged.     * Unadaptive Characteristics:         * Concern for self or a specific "pet" project.         * Values that discourage risk-taking (e.g., all failure is punished).         * The organization is highly "political."         * Bureaucracy is utilized and valued for its own sake rather than for results.

Cultural Diversity within Sub-units

• Definition: Diversity occurs when there are significant differences in core values between organizational members and sub-units (e.g., IT, R&D, HRM). While a clash may occur if a sub-culture is too diverse from the main OC, these differences can be critical for functional subsystems.
• Conditions for Effective Diversity: Diversity enhances effectiveness if:     * It supports a close fit between the characteristics of the individual/subsystem and organizational needs (e.g., "Techies" or "Artistes").     * Value differences do not interfere with internal integration.     * It allows values appropriate for specific sub-tasks to be expressed.
• Requirements for Diverse Processes:     * Must allow coordination with other members.     * Must not significantly add to overhead or delay completion dates.     * Must not overtax other organizational factors.

Cultural Change and Leadership

• Formation: Initially, culture is a reflection of the values system of the firm's founder.
• Shaping: All levels of management use cultural artifacts to influence members and shape the culture over time.
• Change and Transformation: This most often occurs at the level of top management. Transformation frequently requires the replacement of the CEO or even the entire top management team.
• Values-based Leadership: This operates on the principle that "Actions speak louder than words."     * OC cannot be managed solely by issuing directives.     * Employees learn values and goals by observing manager behavior.     * Leaders must internalize OC values and act in accordance with them to build trust among members.