2 ORGANISATIONAL CULTURE Amanda Werner
Learning outcomes • Explain the concept of organisational culture. • Distinguish between espoused and enacted values. • Debate the importance of culture with reference to the Shangri-La case study. • Discuss various methods used to assess organisational culture. • Identify key factors used to assess organisational culture. • Identify and describe various types of culture.
Learning outcomes • Suggest a strategy and techniques for establishing a performance culture in an organisation. • Discuss the socialisation process and how it can be manipulated to ensure that a new employee internalises the organisational culture. • Discuss the importance of ethics in a global environment and explain how an ethical culture can be reinforced in the organisation. • Discuss the merits of a culture that endorses the appreciation of diversity.
Introduction • Scientific management approach vs. perceiving the organisation as a social entity • Organisational leaders need to determine what type of culture will reflect the organisation’s values and vision and then instil this behaviour across the organisation
Organisational culture • A system of shared assumptions held by members that distinguishes one organisation from another. • Culture as a three-layered entity: • Basic assumptions people in the organisation hold • which give rise to shared feelings, beliefs and values, and • manifest in symbols, processes and forms and some aspects of group behaviour.
Espoused versus enacted values “We value people. We share information and encourage creativity. We collaborate and learn from each other.” Espoused values Enacted values
The importance of organisational culture • Creates a corporate identity • Creates greater commitment to organisational goals and objectives • Guides employees in terms of acceptable behaviours and attitudes • Creates social stability with associated emotional security • Serves as a yardstick for evaluating and correcting deviant behaviours and for rewarding desired behaviours • Is a barrier to mergers and acquisitions: Shangri-La
The importance of organisational culture • Leaders are interested in understanding how the organisational culture influences employees’ behaviour and performance. • Managers should be aware of cultural differences in the company because culture influences the organisation’s performance.
Measuring culture • Degree of objectivity with which one can measure the assumptions on which culture is based is questionable • Quantitative measurements • Qualitative methods • Culture is not concrete • Visionary companies vs. less visionary companies
Dominant culture and subcultures • A dominant culture reflects the core values of an organisation that are shared by most members. • A subculture develops from the dominant culture and reflects the common problems, experiences and situations with which members are confronted.
Key characteristics of culture • Innovation and risk-taking • Attention to detail • Outcome orientation • People focus • Team approach • Aggressiveness vs. supportiveness • Stability versus growth and change
Hofstede’s dimensions • Power distance • Uncertainty avoidance • Individualism/Collectivism • Masculinity/Femininity
Types of culture • Kreitner and Kinicki (2001: 75): - Constructive cultures - Passive-defensive cultures • Aggressive-defensive cultures • A leadership culture is formed by the shared beliefs, views, feelings, interpretations and behaviours of those in the leadership community and subsequently affects leadership processes, roles, modes, styles and interactions in the organisation.
Trompenaar and Hampton-Turner • Family cultures • Eiffel Tower cultures • Guided missile cultures • Incubator cultures
Leadership cultures • The pioneering pattern • The clan pattern • The heritage pattern • The doomsday pattern
How are cultures established, changed and reinforced in organisations? • An organisation's initial culture sprouts from its founder’s business philosophy. • Senior leadership is responsible for establishing a culture that will contribute to the attainments of the organisational goals.
How are cultures established, changed and reinforced in organisations? 1. Define the optimum culture. 2. Assess the current culture. 3. Do a gap analysis. • Engineer cultural change by using specific strategies. • Review the organisational culture annually. (Miller 2004)
Strategies for organisational change(Collins & Porras, 1998: 136)) • Commitment of senior leadership • Orientation and training programmes • Internal “universities” and training centres • On-the-job socialisation • Mentoring • Rigorous policies of up-through-the-ranks promotion
Mechanisms to establish and reinforce culture (Collins & Porras, 1998: 136) • Legendary stories • Unique language • Corporate songs, cheers, affirmations and pledges • Tight screening processes • Incentive and advancement criteria
Mechanisms to establish and reinforce culture (Collins & Porras, 1998: 136) • Awards, contests and public recognition • Tolerance for honest mistakes • Financial and time investments to create “buy-in” • Celebrations • Plant and office layout • Constant verbal and written emphasis on corporate values
Socialisation • Process through which newcomers learn the values, norms and beliefs of an organisation in order to become an integral part of it. • As a mechanism to indoctrinate new members into the organisational culture, socialisation should be managed carefully.
Ethics • The study of moral principles or values that determine whether conduct or actions are right or wrong. • Every organisation has an ethical duty to shareholders, employees, customers, suppliers and the community. • Senior leadership is ultimately responsible for the ethics of an organisation. • The second King Report on Corporate Governance has formulated ethical principles.
Characteristics of corporate governance • Discipline • Transparency • Independence • Accountability • Responsibility • Fairness • Social responsibility
Creating an ethical culture in an organisation (Mey, 2004)
A cultural diversity model for corporate South Africa Managing diversity Cornerstone 3 Team building Networking Transformation Cornerstone 1 Ubuntu Cultural synergy Shared values Cornerstone 2 Training and development Multiskilling Empowerment Mentoring
Modelling the way by personal value commitment of leaders Team work and team development Challenging the process Change and innovation Participative decision making Empowering and enabling others to act Creating vision People development and empowerment Defining and managing organisational culture Diversity Competencies of leaders
Conclusion Management should determine which values are most imperative for long-term business success and then consciously manage the integration of these values into the product, processes and behaviour of the organisation.