Term Paper Organizational Behavior

Meaning of Organizational Culture: Culture is the soul of the organization the beliefs and values, 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. --- Henry Mintzberg on Culture

.Culture is the set of values, guiding beliefs and understandings that is shared by members of an organization and is taught to new members. It represents the unwritten, feeling part of the organization. ---Richard L.Daft

The corporate culture consists of the norms, values and unwritten rules of conduct of an organization as well as management styles, priorities, beliefs and inter-personal behavior that prevail. Together they create a climate that influences how well people communicate, plan and make decisions --- Larry Senn

Organizational culture comprises pattern of shared values, beliefs and assumptions considered to be the appropriate way to think and act within an organization. The set of values that help the organizations employees understand which actions are considered acceptable and which actions are considered unacceptable. Basically, organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artifacts) of organizations members and their behaviors. Members of an organization soon come to sense the particular culture of an organization. Culture is one of those terms that are difficult to express distinctly, but everyone knows it when they sense it. A person can tell about the culture of an organization by looking at the arrangement of furniture, what they brag about, what members wear, etc. -similar to what any individual use to get a feeling about someone's personality.

Term Paper Organizational Behavior

The founders of an organization generally tend to have a large impact on establishing the early culture. The organizations culture results from the interaction between the founder(s) from biases and assumptions and what the original members of the organization learn from their own experiences.

Culture is learned. It is both a product of action and a conditioning element of future action, an input and an output. Thus c culture is the socio-technical systems. It consist of the decision decisionmaking, planning and control procedures of the organization, its technology, and the procedures for recruitment, selection and training and is influenced by the common beliefs, uitment, attitudes and values of the members of the organization.

FIG: The Creation of Organizational Culture Corporate culture can be looked at as a system. Inputs include feedback from society, . professions, laws, stories, heroes, values on competition or service, etc. The process is based on general assumptions, values and norms Outputs or effects of culture are organizational norms. behaviors, technologies, strategies, image, products, services, appearance, etc. s,

Term Paper Organizational Behavior

Objective of Organizational Culture: 1. Cooperation: By providing shared values and assumptions, culture may enhance goodwill and mutual trust, encouraging cooperation. 2. Decision Making: Shared beliefs give members a consistent set of basic assumptions. It may lead to a more efficient decision-making process due to fewer disagreements. 3. Control: Control is provided by three mechanisms a) Market control mechanism: relies on price. If results fall short of goals, prices are

adjusted to stimulate necessary change

b) Bureaucratic control mechanism: relies on formal authority. The control process

consists of adjusting rules and regulations and issuing directives

c) Clan control mechanism: relies on shared beliefs and values. Provide a map that

members can rely on to choose appropriate course of action. 4. Communication: Culture reduces communication problems in two ways:
a) No need to communicate in matters for which shared assumptions already exist

(things go without saying)

b) Shared assumptions provide guidelines and cues to help interpret messages that are

received 5. Commitment: Strong cultures foster strong identification which causes commitment 6. Perception: What an individual sees is conditioned by what others sharing the same experience say they are seeing 7. Justification of behavior: Culture helps organization members make sense of their behavior by providing justification for it.

Term Paper Organizational Behavior

Importance of Organizational Culture: Employees should to be engaged in their work. They yearn for work that is enjoyable, meaningful and engaging. When they are engaged they are safer on the job, more productive and more willing and able to delight customers. It is for these basic reasons that organizational culture matters. Talent-attractor Talent-retainer Engages people Creates energy and momentum Changes the view of work Creates greater synergy Makes everyone more successful Talent-attractor - The organizational culture is part of the package that prospective employees look at when assessing the organization. Gone are the days of selecting the person you want from a large eager pool. The talent market is tighter and those looking for a new organization are more selective than ever. The best people want more than a salary and good benefits. They want an environment they can enjoy and succeed in. Talent-retainer - How likely are people to stay if they have other options and dont love where they are? The organizational culture is a key component of a persons desire to stay. Engages people - People want to be engaged in their work. The culture can engage people. Engagement creates greater productivity, which can impact profitability. Creates energy and momentum - Build a culture that is vibrant and allows people to be valued and express themselves and it will create a very real energy. That positive energy will permeate the organization and create a new momentum for success. Energy is contagious and will build on itself, reinforcing the culture and the attractiveness of the organization.

Term Paper Organizational Behavior

Changes the view of work - Most people have a negative connotation of the word work. When the organization creates a culture that is attractive, peoples view of going to work will change. Creates greater synergy - A strong culture brings people together. When people have the opportunity to (and are expected to) communicate and get to know each other better, they will find new connections. These connections will lead to new ideas and greater productivity - in other words, it will be creating synergy. Literally, 1 + 1 + right culture = more than 10. Makes everyone more successful - Any one of the other six reasons should be reason enough to focus on organizational culture. But the bottom line is that an investment of time, talent and focus on organizational culture will give all of the above benefits. Not only is creating a better culture a good thing to do for the human capital in the business, it makes good business sense too.

Components of Organizational Culture: Language: the oldest human institution and the most sophisticated medium of expression. Arts & Sciences: the most advanced and refined forms of human expression. Thought: the ways in which people perceive, interpret, and understand the world around them. Spirituality: the value system transmitted through generations for the inner well-being of human beings, expressed through language and actions. Social activity: the shared pursuits within a cultural community, demonstrated in a variety of festivities and life-celebrating events. Interaction: the social aspects of human contact, including the give-and-take of socialization, negotiation, protocol, and conventions.

Term Paper Organizational Behavior

Factors Affecting Organizational Culture: There are several factors which affect the organization culture: 1. Individual working with the organization: The first and the foremost factor affecting culture is the Individual working with the organization. The employees in their own way contribute to the culture of the workplace. The attitudes, mentalities, interests, perception and even the thought process of the employees affect the organization culture. Example Organizations which hire individuals from army or defense background tend to follow a strict culture where all the employees abide by the set guidelines and policies. The employees are hardly late to work. It is the mindset of the employees which forms the culture of the place. Organizations with majority of youngsters encourage healthy competition at the workplace and employees are always on the toes to perform better than the fellow workers. 2. The sex of the employee: It also affects the organization culture. Organizations where male employees dominate the female counterparts follow a culture where late sitting is a normal feature. The male employees are more aggressive than the females who instead would be caring and softhearted. 3. The nature of the business: Stock broking industries, financial services, banking industry are all dependent on external factors like demand and supply, market cap, earning per share and so on. When the market crashes, these industries have no other option than to terminate the employees and eventually affect the culture of the place. Market fluctuations lead to unrest, tensions and severely demotivate the individuals. The management also feels helpless when circumstances can be controlled by none. Individuals are unsure about their career as well as growth in such organizations. 4. Organizations goals and objectives: The strategies and procedures designed to achieve the targets of the organization also contribute to its culture. Individuals working with government organizations adhere to the set guidelines but do not follow a procedure of feedback thus forming its culture. Fast paced industries

Term Paper Organizational Behavior

like advertising, event management companies expect the employees to be attentive, aggressive and hyper active. 5. The clients and the external parties: These parties to some extent also affect the work culture of the place. Organizations catering to UK and US Clients have no other option but to work in shifts to match their timings, thus forming the culture. 6. The management and its style of handling the employees: There are certain organizations where the management allows the employees to take their own decisions and let them participate in strategy making. In such a culture, employees get attached to their management and look forward to a long term association with the organization. The management must respect the employees to avoid a culture where the employees just work for money and nothing else. They treat the organization as a mere source of earning money and look for a change in a short span of time.

Learning Organizational Culture: Culture is transmitted to employees in a number of ways. The most significant are Stories Rituals Symbols and Language Stories: Organizational stories typically contain a narrative of significant events or people including such things as the organizations founders, rules breaking, reactions to past mistakes, and so forth. Lavinson and Rosenthal suggest that stories and myths about organizations heroes are powerful tools to reinforce cultural values throughout the organization and specially in orienting new employees. These stories provide prime examples that people can learn from. Stories and myths are often filtered through a cultural network and remind employees as to why we do things in a certain way. To help employees learn the culture, organizational stories anchor the present in the past, provide explanations and legitimacy for current practices, and exemplify what is important to the organization.

Term Paper Organizational Behavior

Rituals and Ceremonies: Corporate rituals are repetitive sequences of activates that express and reinforce the values of the organization, what goals are most important, and which people are important and which ones are superfluous. Ceremonies and rituals reflect such activities that are enacted repeatedly on important occasions. Members of the organization who have achieved success are recognized and rewarded on such occasions. For example, awards given to employees on founders day, Gold medals given to students on graduation day are reflections of culture of that institution.

Material / Cultural Symbols: Symbols communicate organizational culture by unspoken messages. When you walk into different businesses, do you get a feel for the place formal, casual, fun, serious, and so forth? These feelings you get demonstrate the power of material symbols in creating an organizations personality. Material artifacts created by an organization also speak of its cultural orientation and make a statement about the company. These material symbols convey to employees who is important, the degree of equality desired by top management and the kind of behavior that are expected and appropriate. Examples: - assigned parking space for senior executives in the company premises, large offices given to senior managers, luxury automobiles given to senior or successful officers of the organization.

Organizational Heroes: Top Management and prominent leaders of the organization become the role models and a personification of an organizations culture. Their behavior and example become a reflection of the organizations philosophy and helps to mould the behavior of organizational members.

Language: Many organizations and units within organizations use language as a way to identify members of a culture. By learning this language, members attest to their acceptance of the culture and their willingness to help to preserve it.

Term Paper Organizational Behavior

Customer Responsive Organizational Culture: Key Variables Shaping Customer-Responsive Cultures : 1. The types of employees hired by the organization. 2. Low formalization: the freedom to meet customer service requirements. 3. Empowering employees with decision-making discretion to please the customer. 4. Good listening skills to understand customer messages. 5. Role clarity that allows service employees to act as boundary spanners. 6. Employees who engage in organizational citizenship behaviors.

Managerial Actions : 1. Select new employees with personality and attitudes consistent with high service orientation. 2. Train and socialize current employees to be more customers focused. 3. Change organizational structure to give employees more control. 4. Empower employees to make decision about their jobs. 5. Lead by conveying a customer-focused vision and demonstrating commitment to customers. 6. Conduct performance appraisals based on customer-focused employee behaviors. 7. Provide ongoing recognition for employees who make special efforts to please customers.

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Characteristics of Organizational Culture: Norms: Relates to the standards of the behavior & guidelines on the expected quality & quantum. Adherence is required to preserve the culture of the organization. Innovation & risk taking: Degree to which employees are encouraged to take risks. Places where taken a calculated risk, the chances of returns are higher. Innovation has its share of risks, but at times it can also have a breakthrough outcome for the organization. Attention to detail Extent to which employees are expected to develop precision, analysis & attention to detail. This is also a universal value to the success of any business. The management defines the degree of attention to be given to details. Outcome orientation The extent to which an organization pays more attention whether the focus should be on the outcome or the processes. Over emphasize may encourage unethical behavior. People orientation Degree of people participation in the organization Number of facilities to take care of need of employees Ex. Mandatory leave

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Team orientation It is a well established fact today that synergistic teams help give better results as compared to individual efforts The degree to which work activities are organized around teams rather than individuals. Level of importance laid on effective team work Aggressiveness: Level of aggressiveness with which organizations employees work. Ex. Microsoft is known for their aggression and market dominating strategies. Dominant values Commonly accepted & adopted values expected to be followed being in the organization Ex High productivity, low absenteeism Philosophy Refers to general policy & guidelines Ex Wipros philosophy- Develop leaders within the organization Organizational Climate The overall impression an employee experiences. Stability: The degree to which organizational activities emphasize maintaining the status quo in contrast to growth Some organizations believe that constant change and innovation is the key to their growth, others are more focused on making themselves and their operations stable. The managements of these organizations are looking at ensuring stability of the company rather than looking at indiscriminate growth.

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FIG: Characteristics of Organizational Culture

Functions of Organizational Culture: 1. Boundary defining Role Values, traditions & rituals

2. Sense of Identity: Enhances employee commitment towards organizational goals.

3. Collective Commitment Common values, assumptions & ideologies upheld by the members.

4. Stability of social System Acts as social bond among the members of the organization Brings uniformity in the behavior of the employees.

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5. Shared meaning & control mechanism Core set of assumptions, values, & norms govern routine activities & employee behavior at work place. Not obeying the norms deprives the members from rewards & promotions. Act as a control mechanism for the benefit of the organization

Measuring Organizational Culture: There are many different ways to measure a company's organizational culture. There are exceptional corporate cultures, as well as disastrously bad ones, and obviously most companies are going to fall somewhere in the middle of these two extremes. There are many characteristics that make up a healthy corporation, and here is a ten point list of some of the most common factors that will be found in virtually all healthy organizational cultures:

Organizational pride: Employees who are embarrassed to mention where they work are obviously not in a good environment. Employees who work for a company that they are will defend against slander, libel, or just plain criticism are a good sign of a company doing something right with their culture.

Ambition towards being better: The difference between ambition for the sake of power or respect and ambition to keep improving for the sake of improving is the difference between night and day. Strong company culture focuses on improving and getting better at every level.

Obvious teamwork and communication: The more open discussion there is the more open exchange of ideas, the more competitive and cutting edge that company is capable of becoming, Period, end of statement.

Quality leadership: This is not just at the very top. A brilliant CEO can have his greatest plans destroyed by a few low level managers who alienate employees and cannot lead by example. Good managers are really interested in the problems that others are having, and are happy to offer help when asked.

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Constant review of profits and costs: Nothing is assumed as Gospel truth from year to year. All financial records are studied, and especially expenses. Are expenses justified? Are they really effective in making the company stronger and more profitable? If not, they look for alternatives.

Employee relationships: A cut throat environment does not bring out the best in a company. The corporations with employees who work together are far more likely to succeed than a company where it's every man for them. Are employees willing to sacrifice their co-workers and advance themselves over other people's blunders, or do they aim for promotion through improvement or huge difference? The team players will help a company out far more in the long run.

Client and consumer relations: The customer is always right. As annoying as this can be at times (and anyone who started at the very bottom of the service sector is gritting their teeth right now) the company that takes customer service as their true motto and keeps that focus will succeed and create great organizational culture.

Honesty and safety: No one should ever be asked to do anything unsafe or blatantly dangerous. Likewise, there are no five finger discounts from employees: they don't even think about stealing from an employer who is treating them so well.

Education and developmental programs: The Company is heavily invested in training its employees and providing whatever education is necessary for them to succeed.

Cutting edge thinking: Companies with healthy organizational culture are innovative and can think outside of common trends to move ahead of the pack. New ideas are always considered, and employee participation in brain storming is encouraged.

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Creating Ethical Culture: Creating a culture that encourages ethical behavior: 1. Be realistic in setting values and goals regarding employee relationship. 2. Encourage input from organization members regarding appropriate values and practices for implementing the culture. 3. Opt for a strong culture that encourages the rewards diversity and principled dissent. 4. Provide training on adopting and implementing the organization's value.
Characteristics of Organizations that Develop High Ethical Standards

1. High tolerance for risk 2. Low to moderate in aggressiveness 3. Focus on means as well as outcomes
Managerial Practices Promoting an Ethical Culture

1. Being a visible role model. 2. Communicating ethical expectations. 3. Providing ethical training. 4. Rewarding ethical acts and punishing unethical ones. 5. Providing protective mechanisms.
Employee role on changing unethical behavior:

1. Secretly or publicly reporting unethical actions to a higher level authority within the organization. 2. Secretly or publicly reporting unethical actions to someone outside the organization. 3. Secretly or publicly threatening an offender or responsible manager with reporting unethical actions.
4. Quietly or publicly refusing to implement an unethical order or policy.

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Types of Organizational Culture: Market Culture 1. Organizational stability is given importance 2. Focus on interaction with the external environment & gaining competitive advantage. 3. Tends to be an achievement oriented culture 4. Performance is evaluated based on output generated. 5. Directive style of leadership is followed

Adhocracy 1. Establishment of informal organization. 2. Away from formal rules & regulation. 3. Flexibility & adaptability to changes 4. Led by charismatic leaders 5. Creative, risk taking managers 6. Employees are growth oriented 7. The performance is judged on the basis of commitment to the values & norms of the organization

Clan Culture 1. Emphasizes informal governance & group maintenance. 2. Leadership style shows concern for people 3. Participative decision making 4. Members are directed by the values & norms of the organization

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5. Performance is based on the extent to which employees uphold the values 6. Quality of relationship maintained among the members.

Hierarchical Culture 1. Conservative style of leadership 2. Employees behavior is judged on the basis of formally established performance criteria. 3. Characterized by formal organizational processes & norms of the organizational culture

Researcher Jeffrey Sonnenfeld identified the following four types of cultures. Academy Culture Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The organization provides a stable environment in which employees can develop and exercise their skills. Examples are universities, hospitals, large corporations, etc.

Baseball Team Culture Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as investment banking, advertising, etc.

Club Culture The most important requirement for employees in this culture is to fit into the group. Usually employees start at the bottom and stay with the organization. The organization promotes from within and highly values seniority. Examples are the military, some law firms, etc.

Fortress Culture Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc.

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There are also many different types of culture just like there are different types of personality.

Authoritarian Culture There is centralization of power with the leader and obedience to orders and discipline are stressed. Any disobedience is punished severely to set an example to others. The basic assumption is that the leader always acts in the interests of the organization.

Participative Culture Participative culture tends to emerge where most organizational members see themselves as equals and take part in decision-making.

Mechanistic Culture The mechanistic culture exhibits the values of bureaucracy. Organizational jobs are created around narrow specializations and people think of their careers mainly within these specializations. There is a great deal of departmental loyalty and inter-departmental animosity. This sort of culture resists change and innovation.

Organic Culture In this case, authority hierarchy, departmental boundaries, rules and regulations, etc. are all frowned up. The main emphasis is on task accomplishment, team work and free flow of communication. The culture stresses flexibility, consultation, change and innovation.

Sub-cultures and Dominant culture Each department of an organization may have its own culture representing a sub-culture of the system. An organizational culture emerges when there is integration of all the departments into a unified whole.

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Why people are reluctant to their own culture? : 1. The existing organizational cultures itself resist change. 2. Organizational culture has a deep influence on individual personality. So for changing organizational culture, there is also a corresponding impact on personal behavior. 3. Small modifications does not alter the whole organizational culture, while creating small groups within the organization with their different taste, and forms the subculture within the main culture. 4. Cultural change models, like Lewins three step change model, these are heavy work process and needs long time effort from managers, employees to change an element of culture and stabilize it within the organization.

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References: 1. Organizational Behavior Stephen P. Robbins 11th Edition

2. Edgar H. Schein Organizational Culture and Leadership, Jossey Bass, (1992). 2nd Ed

3. Organizational Behavior Keith Davis, John W Newstrom 12th Edition

4. Redefining Culture John R. Baldwin, Sandra L. Faulkner 2nd Edition

5. Wikipedia Encyclopedia