Organizational Culture

What is Organizational Culture?

• Refers to the shared values, beliefs, and practices that shape how members of an organization interact and work.

Importance of Organizational Culture

1. Influences Employee Behaviour: Shapes how employees act and cooperate with one another.
2. Guides Decision Making: Helps in making consistent and aligned decisions within the organization.
3. Drives Organizational Performance: A strong culture can lead to better overall performance and success.

Demonstration of Organizational Culture

1. Stories: Narratives about past employees or significant events that shape the culture.
2. Rituals: Repeated actions, such as weekly meetings, that reinforce cultural values.
3. Reward System: Mechanisms that recognize and incentivize desired behaviours.
4. Physical Environment: The layout and design of the workspace can reflect and influence culture.

Types of Organizational Culture

1. Role Culture:
   • Emphasizes rules and procedures.
   • Hierarchical structure with well-defined roles.
   • Drawbacks: Can be inflexible and slow to adapt to change; may stifle innovation.
2. Task Culture:
   • Team-based approach with a focus on collaboration.
   • Drawbacks: May struggle with long-term planning; coordination can be challenging.
3. Power Culture:
   • Quick decisions by strong leadership; centralized decision-making.
   • Drawbacks: Inefficiency as the organization grows; potential over-reliance on leaders.
4. Person Culture:
   • Collaboration occurs as needed; prioritizes individual autonomy.
   • Drawbacks: Lack of consistency; difficult to manage in larger organizations.

Schein's Model of Organizational Culture

• Artifacts: Visible elements like office design, dress code, and employee behaviour.
• Norms and Values: Guiding principles influencing employee actions.
• Underlying Assumptions: Deep-rooted beliefs affecting organizational culture.

Formation and Evolution of Organizational Culture

• Influencer Factors:
  1. Leadership influence
  2. Employee behaviours
  3. Company policies
  4. External factors

Cultural Clashes in Organizations

• Occur during:
  1. Mergers and acquisitions
  2. Rapid growth
  3. Change in leadership
• Consequences of Cultural Clashes:
  1. Resistance to change
  2. Poor performance
  3. Increased costs
  4. Decline in business performance
  5. Divided workforce.

Changing Organizational Culture

• Steps for successful cultural shift:
  1. Identify the problem.
  2. Lead by example.
  3. Reinforce new behaviours.
  4. Communicate continuously.

Hofstede's Six Cultural Dimensions

1. Individualism vs. Collectivism
2. Power Distance
3. Short-term vs. Long-term Orientation
4. Masculinity vs. Femininity
5. Uncertainty Avoidance
6. Indulgence vs. Restraint

Strategies to Mitigate Cultural Clashes

1. Effective communication
2. Employee involvement
3. Leadership alignment
4. Cultural audits (assessing the existing culture)