OB ASSIGNMENT

BY: RIYA KHATTAR

ROLL NO: 1226

Q. What is organizational culture? Discuss kinds of cultures in organizations and their

implications.

Interests in organisational culture from the human resource management and performance
point of views stems from the fact that organisational culture was perceived to be offering a
non-mechanistic, flexible and imaginative approach to understanding how organisations work
(Brown, 1998). Organizational culture refers to a system of shared meaning held by
members that distinguishes the organization from other organizations. Organizational culture
represents the collective values, beliefs and principles of organizational members and is a
product of factors such as history, product, market, technology, strategy, type of
employees, management style, and national culture; culture includes the
organization's vision, values, norms, systems, symbols, language, assumptions, environment,
location, beliefs and habits. Ravasi and Schultz (2006) characterise organizational culture as
a set of shared assumptions that guide behaviors. It is also the pattern of such collective
behaviors and assumptions that are taught to new organizational members as a way of
perceiving and, even thinking and feeling. Seven primary characteristics seem to capture the
essence of an organization’s culture:

1. Innovation and risk taking: The degree to which employees are encouraged to be
innovative and take risks. 

2. Attention to detail: The degree to which employees are expected to exhibit precision,
analysis, and attention to detail. 

3. Outcome orientation: The degree to which management focuses on results or
outcomes rather than on the techniques and processes used to achieve them. 

4. People orientation: The degree to which management decisions take into
consideration the effect of outcomes on people within the organization. 

5. Team orientation: The degree to which work activities are organized around teams
rather than individuals. 

6. Aggressiveness: The degree to which people are aggressive and competitive rather
than easy going. 

7. Stability: The degree to which organizational activities emphasize maintaining the
status quo in contrast to growth. 


Each of these characteristics exists on a continuum from low to high. Appraising the
organization on them, then, gives a composite picture of its culture and a basis for the shared
understanding members have about the organization, how things are done in it, and the way
they are supposed to behave.
A review of 94 studies found that job attitudes were especially positive in clan-based
cultures, innovation was especially strong in market cultures, and financial performance was
especially good in market cultures.
Organizational culture shows how employees perceive the characteristics of an organization’s
culture, not whether they like them that is, it’s a descriptive term. This is important because it
differentiates culture from job satisfaction. Most large organizations have a dominant culture
and numerous subcultures. A dominant culture expresses the core values a majority of
members share and that give the organization its distinct personality. Subcultures tend to
develop in large organizations to reflect common problems or experiences members face in
the same department or location. The purchasing department can have a subculture that
includes the core values of the dominant culture plus additional values unique to members of
that department.

Strong Versus Weak Cultures

In a strong culture, the organization’s core values are both intensely held and widely shared.
The more members who accept the core values and the greater their commitment, the
stronger the culture and the greater its influence on member behavior, because the high
degree of sharedness and intensity creates a climate of high behavioral control.
A strong culture should reduce employee turnover because it demonstrates high agreement
about what the organization represents. Such unanimity of purpose builds cohesiveness,
loyalty, and organizational commitment. These qualities, in turn, lessen employees
propensity to leave. One study found that the more employees agreed on customer orientation
in a service organization, the higher the profitability of the business unit.

KINDS OF CULTURES & THEIR IMPLICATIONS

Every organization is different, and all of them have a unique culture to organize groups of
people. Yet few people know that every organization actually combines a mix of four
different types of organizational culture under one leading cultural style, according to
research by business professors Robert E. Quinn and Kim S. Cameron at the University of
Michigan. The framework explains how the four organizational cultures compete with one
another. The four parameters of the framework include internal focus and integration vs.
external focus and differentiation, and stability and control vs. flexibility and discretion.
Based on these parameters, the framework breaks organizational cultures into four distinct
quadrants or cultural types: The Clan Culture, the Adhocracy Culture, the Market Culture,
and the Hierarchy Culture. Quinn and Cameron discovered that flexible organizations are
more successful than rigid ones because the best organizations are able to manage the
competition between cultures while activating each of the four value sets when needed.
To determine what type of organizational culture you belong to, here is a summary of the
four types and their specific qualities:
 The Clan Culture: This culture is rooted in collaboration. Members share
commonalities and see themselves are part of one big family who are active and
involved. Leadership takes the form of mentorship, and the organization is bound by
commitments and traditions. The main values are rooted in teamwork, communication
and consensus. A prominent clan culture is Tom’s of Maine, the maker of all-natural
hygiene products. To build the brand, founder Tom Chappell focused on building
respectful relationships with employees, customers, suppliers and the environment
itself. This working environment is a friendly one. People have a lot in common, and
it’s similar to a large family. The leaders or the executives are seen as mentors or
maybe even as father figures. The organization is held together by loyalty and
tradition. There is great involvement. The organization emphasizes long-term Human
Resource development and bonds colleagues by morals. Success is defined within the
framework of addressing the needs of the clients and caring for the people. The
organization promotes teamwork, participation, and consensus.

 The Adhocracy Culture: This culture is based on energy and creativity. Employees
are encouraged to take risks, and leaders are seen as innovators or entrepreneurs. The
organization is held together by experimentation, with an emphasis on individual
ingenuity and freedom. The core values are based on change and agility. Facebook
can be seen as a prototypical adhocracy organization, based on CEO Mark
Zuckerberg’s famous admonition to, “Move fast and break things – unless you are
breaking stuff, you are not moving fast enough.” This is a dynamic and creative
working environment. Employees take risks. Leaders are seen as innovators and risk
takers. Experiments and innovation are the bonding materials within the organization.
Prominence is emphasized. The long-term goal is to grow and create new resources.
The availability of new products or services is seen as success. The organization
promotes individual initiative and freedom.

 The Market Culture: This culture is built upon the dynamics of competition and
achieving concrete results. The focus is goal-oriented, with leaders who are tough and
demanding. The organization is united by a common goal to succeed and beat all
rivals. The main value drivers are market share and profitability. General Electric
under ex-CEO Jack Welch is a good example of this culture. Welch vowed that every
 G.E. business unit must rank first or second in its respective market or face being sold
off. Another example of the market culture is software giant Oracle under hard-
driving Executive Chairman Larry Ellison. This is a results-based organization that
emphasizes finishing work and getting things done. People are competitive and
focused on goals. Leaders are hard drivers, producers, and rivals at the same time.
They are tough and have high expectations. The emphasis on winning keeps the
organization together. Reputation and success are the most important. Long-term
focus is on rival activities and reaching goals. Market penetration and stock are the
definitions of success. Competitive prices and market leadership are important. The
organizational style is based on competition.

 The Hierarchy Culture: This culture is founded on structure and control. The work
environment is formal, with strict institutional procedures in place for guidance.
Leadership is based on organized coordination and monitoring, with a culture
emphasizing efficiency and predictability. The values include consistency and
uniformity. Think of stereotypical large, bureaucratic organizations such as
McDonald’s, the military, or the Department of Motor Vehicles. This is a formalized
and structured work environment. Procedures decide what people do. Leaders are
proud of their efficiency-based coordination and organization. Keeping the
organization functioning smoothly is most crucial. Formal rules and policy keep the
organization together. The long-term goals are stability and results, paired with
efficient and smooth execution of tasks. Trustful delivery, smooth planning, and low
costs define success. The personnel management has to guarantee work and
predictability.

When an organization does not possess a healthy culture or requires some kind of
organizational culture change, the change process can be daunting. Organizational culture can
hinder new change efforts, especially where employees know their expectations and the roles
that they are supposed to play in the organization. Culture change may be necessary to reduce
employee turnover, influence employee behavior, make improvements to the company,
refocus the company objectives and/or rescale the organization, provide better customer
service, and/or achieve specific company goals and results. Culture change is affected by a
number of elements, including the external environment and industry competitors, change in
industry standards, technology changes, the size and nature of the workforce, and the
organization's history and management.

Ex: Google has been synonymous with culture for years, and sets the tone for many of the
perks and benefits startups are now known for. Free meals, employee trips and parties,
financial bonuses, open presentations by high-level executives, gyms, a dog-friendly
environment and so on. Googlers are known to be driven, talented and among the
best of the best. As Google has grown and the organization has expanded and spread out,
keeping a uniform culture has proven difficult between headquarters and satellite offices, as
well as among the different departments within the company. The larger a company becomes,
the more that culture has to reinvent itself to accommodate more employees and the need for
management.