Transcript Slide 1

OC & Climate
• OC is the accepted and followed way of life or manner of performing
day to day activities in an organization.
• The basics of OC are core values, assumptions, norms and procedures
that are followed in an organization.
• Sometimes an organization forms sub-culture due to the presence of
individuals from different cultures and backgrounds.
• Sub-culture is valuable to an organization because it leads to
deviations from the norms and thereby give rise to alternatives to the
existing practice, which in turn may be found to be useful for the
organization.
• For survival of the organization, the new culture should be adapted
smoothly.
• But if the organization go beyond its core beliefs, it may have
negative effect on organization.
• The intensity of core values of an organization determines the
strength of an organizational culture.
• The major objective of organizational culture are internalization of
the core values and norms and strengthen bonds between the
members of the organization.
CHARACTERISTICS OF OC
• There are 7 primary characteristics that an
organization should cultivate. They are:
1. Outcome orientation
2. Innovation and risk taking
3. People orientation
4. Aggressiveness
5. Attention to detail
6. Stability
7. Team orientation
Seven Primary Characteristics
1- OUTCOME ORIENTATION
 The business model of any organization should
decide whether thrust should be given on the
outcome or the processes.
 This defines outcome orientation of the business
2- INNOVATION AND RISK TAKING
 Risk and returns are two elements that always go
hand in hand.
 Risk also depends upon innovation which brings
better results.
 Therefore innovation and risk taking are one of the
main characteristics of organizational culture.
3- PEOPLE ORIENTATION
 Some organizations are employee oriented while
others are production oriented.
4- AGGRESSIVENESS
 When there is fierce competition, then
aggressiveness is visible among the employees of
an organization
5- ATTENTION TO DETAIL
 Attention to detail defines the amount of
importance a company allots to accuracy and
details in the workplace.
 The management defines the degree of attention
to be given to details
6-STABILITY
 Organization that have to deal with stabilizing
operations and other needs are more focused on
making themselves and their operations more
stable.
 Ensuring stable growth is the objective of such
companies
7-TEAM ORIENTATION
 Synergistic teams help give better results as
compared to individual efforts.
 So the company lay more emphasis on synergy
between different teams and in forming a well
balanced team for results.
DEVELOPING & CHANGING OC
• An OC is formed over years of interaction between the
participants in the organization
• The organizational culture is formed due to the following
reason:
• The current OC could match the style and comfort zone of
the current leaders. Culture echoes the prevailing
management style. Since managers tend to hire people
like themselves, the establishment of OC get reinforced by
new hires also.
• People consider cultural change only when some
significant event occur in the organization. Eg. Bankruptcy,
loss etc.
• Such events force people to realize and recognize that their
current OC needs to transform to support the organization.
• Culture change is possible and this requires understanding,
commitment and tools.
STEPS IN OC CHANGE
 There are three steps involved in this.
 Understand the current culture or the way
things are now.
 What organizational culture needed to
support success and what vision does the
organization should have for its future.
 Decision by the staff to change their behavior
to create the desired OC.
ACTION REQUIRED FOR CREATING
DESIRED CULTURE
• We cannot change the organizational cutlure
without knowing:
– Where we are now and where we want to be
– What elements of the organization supports
success and what is not
PROCES OF CHANGING OC
• It is more difficult to change culture than creating a
culture to a new organization
• For changing the existing culture, people should unlearn
old values, assumptions and behaviors before they learn
new ones.
• TWO IMPORTANT ELEMENTS FOR CREATING OC CHANGE
 Executive Support
 Executives must show behavioral support for cultural
change. They must lead the change.
 Training
 Cultural change depends on behavioral change. Members
of the organization must clearly understand what is
expected of them, and must know how to do the new
behaviors and for this training should be given to the staff
ADDITIONAL WAYS OF CHANGING OC
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Creating value and belief statements
Use employee focus group, by department, to put the mission, vision
and values into words that state their impact on each employee’s job
This exercise will give all employees a common understanding of the
desired culture that actually reflect the actions they must commit to
their own jobs.
By practicing effective communication
Keep all employees about the OC change process that ensures
commitment and success.
By reviewing the organizational structure
Changing the physical structure of the organization to align it with the
desired cultural change is necessary.
Redesign the approach towards rewards and recognition
There may be a need to change the reward system to encourage the
behaviors that is vital for OC
By reviewing all work systems
Work systems such as employee promotions, pay practices,
performance management and employee selection etc should be
reviewed to make sure that they are aligned with the desired culture.
OC ASSESSMENT
• Robert Quinn and Kim Cameron researched about the factors that
makes an organization effective and successful.
• Based on the Competing Value Framework, they developed the
Organizational Culture Assessment Instrument (OCAI)
• OCAI distinguishes four culture types. They are:
• Control (Hierarchy)
• Compete (Market)
• Collaborate (Clan)
• Create (Adhocracy)
• Each organization or team will have its unique mix of culture types.
• By assessing the current culture and preferred culture, the gap and
direction to change can be made visible.
• These different types reflect the range across two dimensions given
above.
• Each of these four types represents those features which a company
feels is the most suitable way to operate.
• None of the regions is intrinsically better than another.
THE COMPETING VALUES FRAMEWORK
FLEXIBILITY
DISCRETION
DYNAMIS
INTERNAL FOCUS
INTEGRATION
UNITY
EXTERNAL FOCUS
DIFFERENTIATION
RIVALRY
STABILITY
ORDER
CONTROL
1. CONTROL (HIERARCHY)
• For those companies which put lot of emphasis
on control, are defined by SOLIDITY & CONTROL
and INTERNAL FOCUS & INTEGRATION.
• They value SET PROCESSES, STANDARDIZATION,
CONTROL and a well defined STRUCTURE FOR
AUTHORITY, POWER and DECISION MAKING.
• Effective leaders in hierarchical structures are
those that can organize, coordinate and monitor
people and processes.
• Example: McDonalds, Ford Motor Company (17
levels)
II. COMPETE (MARKET) Q4
• Compete (Market) is similar to control (hierarchy) where
stability and control is emphasized but with external orientation
and value differentiation over integration.
• This is mainly because of the competitive challenges from
overseas
• With outward focus, these organizations are focused on
relationships – more specifically, transactions – with suppliers,
customers, contractors, unions, legislators, consultants,
regulators etc.
• Through effective external relations, they feel that they can best
achieve success
• While control organizations optimize stability and control
through rules, standard operating procedures, and specialized
job functions, Compete (Market) organizations are concerned
with competitiveness and productivity through emphasis on
partnership and positioning.
• Their corporate culture was highly competitive where
performance results speak louder than process.
III- COLLABORATE (CLAN)
 This is similar to Control (Hierarchy) in that there is an
inward focus with concern for integration.
 However, Collaborate (Clan) emphasize flexibility and
discretion rather than the stability and control of Control
(Hierarchy) and Compete (Market) Organizations.
 The classical example of such organizations are Japanese
firms in the late 1970s and 1980s where their Collaborate
(Clan) organizations operated more like families.
 They valued cohesion, a humane working environment,
group, commitment, and loyalty.
 Example: Tom’s of Maine. The founder Tom Chappell, grew
the company to respect relationship with co-workers,
customers, owners, agents , supplier, the community and
the environment. It is like an extended family.
IV-CREATE (ADHOCRACY)
• It is similar to Collaborate (Clan) in aspects like
emphasizing on flexibility and discretion. But
they do not share the same inward focus. They
are like Create (Adhocracy) in their external
focus and concern for differentiation.
• This is a new approach based on Information
Age to meet fast paced and volatile business
environment.
• Social, economic and technological change has
made older corporate attitudes and tactics less
efficient.
• Success depends upon innovation and creativity
TYPES OF OC
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Researcher Jeffrey Sonnenfeld identified four types of cultures:
Baseball Team Culture
Employees are “free agents” who have highly prized skills
They are high in 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.
Employees start at the bottom and stay with the organization
The organization promotes staff purely on the basis of
seniority
3. 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. Eg. Universities, hospitals etc
4. Fortress Culture
 This explains a culture where opportunities for
timely, organized and specialized capabilities are
used appropriately. Eg. Car manufacturers
OC & EFFECTIVENESS
• OC contributes to organizational effectiveness
• Ways of effectiveness are displayed in popular
theories like TQM, Continuous Quality
Improvement (CQI) and Organizational
Efficiency.
FOUR ACADEMIC MODELS FOR OE
• There are various models developed to explain
organizational effectiveness (OE)
• One of the models uses production, commitment,
leadership and interpersonal conflicts to measure
OE.
• Production is defined as flow of output from
organization, Commitment was established as a
component to measure the degree of attachment to
the organization, Leadership was defined as a
degree of influence and personal ability and
interpersonal conflict refers to the degree of
misunderstanding between supervisors and
subordinates.
• Another model explains interrelated organizational
process and was developed as a tool for management
consultants.
• This model uses organizational survival and maximizing
returns as key variables of effectiveness along with self
regulation which is responsible for making a balance
between eight other minor variables such as including
internal-external boundary permeability, sensitivity to
status and change, contribution to constituents,
transformation, promoting advantageous transactions,
flexibility, adaptability and efficiency.
• A third model chose six selected indicators of
OE including management experience,
organizational structure, political impact, BOD
involvement, volunteer involvement and
internet communications.
• A fourth model was used to compare profit
and non-profit OE and is termed the
competing values framework.
• This model used four quadrants representing
(i)human relations (ii)open systems (iii)
rational goals and (iv)internal process.
1. The human relations side stressed participation,
discussion and openness as ways to improve
morale and achieve commitment
2. The open system side relates insight, innovation
and adaptation as a path towards external
recognition, support, acquisition and growth.
3. The internal process side sees internal
processes as measurement, documentation,
and information management as methods to
achieve stability, control and continuity.
4. The rational goal side seeks profit and
productivity through direction and goals.
DEAL & KENNEDY’S MODEL OF CULTURE
• This model is based on four types of
organizations
• These organizations are characterized based
on how quickly they provide FEEDBACK and
REWARD to employees after they have done
something and the LEVEL OF RISK that
employees take.
DEAL & KENNEDY’S MODEL OF CULTURE
• Deal and Kennedy’s model is based four
characteristics type of organizations.
• This characterization is based on how quickly
they provide feedback and reward employees
after they have done some thing which is
risky.
• So risk and feedback are the two dimensions
used in this categorization.
DEAL & KENNEDY’S MODEL OF CULTURE
• Feedback and Reward
• A major driver in any company is feedback and rewards
that tell the employees are that they are doing a good
or bad job.
• If feedback is immediate or frequent, it will quickly
correct any ineffective behavior which leads to a
consistent culture
• If it is delayed or infrequent, it leaves mistakes
uncorrected, but people look further out into future.
• In either way, there can be some substitute activity to
keep things on track
DEAL & KENNEDY’S MODEL OF CULTURE
• Risk
• Uncertainty and risk are something that some
people hate and some people like.
• It can be a motivating force that that leads
people to focus on managing it.
• High risk companies more likely to include
people who enjoy the friction of taking a
gamble.
DEAL & KENNEDY’S MODEL OF CULTURE
RISK
RAPID
LOW
WORK-HARD.
PLAY-HARD
CULTURE
TOUGH-GUY
MACHO
CULTURE
PROCESS
CULTURE
BET-THE-CO
CULTURE
FEEDBACK &
REWARD
SLOW
HIGH
DEAL & KENNEDY’S MODEL OF CULTURE
• WORK-HARD, PLAY HARD-CUTLURE
• Does not take lot of risks, but if does, will
receive fast feedback.
• This is seen in big companies that depends on
strong customer service
• This OC is characterized by multiple team
meetings, specialized jargon, buzzwords etc
• Rapid feedback/reward and low risk leads to:
– Stress come from quantity of work than uncertainty
– High speed action lead to high-speed recreation
– Eg: Restaurants, software companies
DEAL & KENNEDY’S MODEL OF CULTURE
• Tough-Guy Macho Culture or Macho Culture
• Quick feedback and high rewards/ Risk high
• Applicable in finance sector such as currency
trading, brokerage etc
• This leads to:
– Stress coming from high risk and potential
loss/gain of rewards
– Focus on present than on longer future
– Eg. Police, surgeons, sports etc
DEAL & KENNEDY’S MODEL OF CULTURE
• Process Culture
• No feedback or very slow feedback
• People are so obsessed with the process of how
things are done and the focus is lost on goal
• This is synonymous with bureaucracy and seen in
public sector
• This leads to:
– Low stress, plodding work, comfort and security. Stress
can occur from internal politics and stupidity of system.
– Bureaucracy develops to maintain status quo.
– Focus on security – past and future
– Eg. Banks and insurance companies
DEAL & KENNEDY’S MODEL OF CULTURE
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Bet-The-Company Culture
Feedback/rewards slow and risk is high
Huge decisions are taken over high stake endeavors
End result will not be available sometimes in near future
Companies that engage in experimental projects or
researches
• This leads to:
– Stress comes from high risk and delay in feedback
– Long view is taken and major part of the work is done to make
sure things to happen
– Eg. Aircraft manufactures, oil companies