CHAPTER SEVEN

CULTURE AND DIVERSITY

What is organizational culture?
The shared values, principles, traditions, and ways of doing things that influence the way
organizational members act.
– First, culture is a perception.
• It’s not something that can be physically touched or seen, but employees perceive it on the
basis of what they experience within the organization.
– Second, organizational culture is descriptive.
• It’s concerned with how members perceive the culture and describe it, not with whether they
like it.
– Finally, even though individuals may have different backgrounds or work at different
organizational levels, they tend to describe the organization’s culture in similar terms. That’s
the shared aspect of culture.
 Organizational culture is concerned with how employees perceive the characteristics of an
organization’s culture, not with whether or not they like them.
 Individuals with different backgrounds or at different levels in the organization will tend to
describe the organization’s culture in similar terms.
 Organizational culture has common properties do not mean, however, that there cannot be
subcultures within any given culture.
 Most large organizations have a dominant culture and numerous sets of subcultures.
• Dominant culture: Expresses the core values that are shared by a majority of the
organization’s members.
• Subcultures: Mini- cultures within an organization, typically defined by department
designations and geographical separation.
• Core values: The primary or dominant values that are accepted throughout the organization.
• Culture is a liability when:
 Shared values do not agree with those that will improve the organization’s effectiveness
 An environment is undergoing change and members resist changing the culture.
DIMENSIONS OF ORGANIZATIONAL CULTURE
An organization’s culture can often be described in terms of how employees perceive the
following characteristics, not whether they like them:
– Innovation and risk-taking: the degree to which employees are encouraged to be innovative
and take risks.
– Attention to detail: the degree to which employees are expected to exhibit precision,
analysis, and attention to detail.
– Outcome orientation: the degree to which management focuses on results rather than on
processes.

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– People orientation: the degree to which management decisions take into consideration the
effect of outcomes on people within the organization.
– Team orientation: the degree to which work activities are organized around teams rather
than individuals.
– Aggressiveness: the degree to which people are aggressive and competitive rather than
easygoing.
– Stability: the degree to which organizational activities emphasize maintaining the status quo
in contrast to growth.
Organizational culture can also be described in terms of the following;
– Member identity: The degree to which individuals identify with the organization as a whole
rather than some subgroup or specialization.
– Unit integration: The amount of encouragement of coordinated, interdependent activity
among unites.
– Control: the degree to which rules and supervision is used to control employees
– Reward criteria: The extent to which rewards are based on performance rather than seniority
or favoritism
– Conflict tolerance: the degree to which open airing of conflict is encouraged
– Means-end orientation: The extent of managerial focus on outcomes and results rather than
processes
– Open-systems focus: The amount of monitoring of external developments
FUNCTIONS OF CULTURE
– Creates a distinction between one organization and others.
– Conveys a sense of identity for organizational members.
– Generates a commitment to something larger than one’s self-interest.
– Enhances the stability of the organization’s social system (e.g., provides standards for what
employees should say and do).
– Helps shape the attitudes and behavior of employees
CHARACTERISTICS OF A HEALTHY ORGANIZATIONAL CLIMATE
– The integration of organizational goals and personal goals;
– The most appropriate organization structure based on the demands of the socio technical
system;
– Democratic functioning of the organization with full opportunities for participation;
– Justice in treatment with equitable HRM and employment relations policies and practices;
– Mutual trust, consideration and support among different levels of the organization;
– The open discussion of conflict with an attempt to avoid confrontation;
– Managerial behavior and styles of leadership appropriate to the particular work situations;

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– Acceptance of the psychological contract between the individual and the organization;
recognition of people’s needs and expectations at work and individual differences and
attributes;
– Equitable systems of rewards based on positive recognition;
– Concern for the quality of working life and job design;
– Opportunities for personal development and career progression;
– A sense of identity with, and loyalty to, the organization and a feeling of being a valued and
important member
HOW EMPLOYEES LEARN CULTURE?
Employees often learn culture from:
– The substance of public functions or events staged by a group such as
 Rites,
 Ceremonials, And
 Rituals
– The ways that the members of a group or organization typically communicate or express
themselves such as
 Stories,
 Myths,
 Sagas,
 Legends,
 Folktales,
 Symbols, And
 Language.
RITE
– Is a relatively elaborate, dramatic, and planned set of activities that consolidates various
forms of cultural expressions into a single event, which is usually carried out through social
interaction for the benefit of an audience
 Wedding ceremony
 Awarding the salesperson of the year at the annual company banquet
STORIES
– Are accounts of true events, but they often contain both truth and fiction.
Organizational members often tell stories repeatedly about:
 Organization’s founders
 Consequences of rule breaking
 Rags-to-riches successes
 Reductions in the workforce
 Relocation of employees
 Reactions to past mistakes

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  Organizational coping
MYTHS
– Can be a type of story (dramatic narrative of imagined events used to explain the origins or
transformations of something) or a type of belief (an unquestioned belief about the practical
benefits of certain techniques or behaviors that is not supported by facts).
 Differ from stories in that they lack a factual basis
SAGAS
– Are another category of stories that consist of historical narratives describing the unique
accomplishments of a group or its leaders
LEGENDS
– Are stories about some event that has actually occurred, but has been embellished with
fictional details
FOLKTALES
– Are purely fictional stories.
LANGUAGE
– May be used as a way to identify members of a culture or subculture through the
development of specialized jargon or gestures, which often are not recognizable to outsiders.
 Nick name of office campus
 Nickname of division or person’s position
 Unique names to describe equipment, offices, key personnel, suppliers, customers, or
products related to the organization’s functions
 Organizations, over time, often develop unique terms to describe equipment, offices, key
personnel, suppliers, customers, or products that relate to its business.
SYMBOLS
– Are any object, act, event, quality, or relation that serves for conveying meaning.
– They can also express the degree of egalitarianism desired by top management as well as
desirable behaviors (e.g., degree of risk taking, frugality, authoritarianism, participative,
individualistic, social, and conservative, etc.)
CEREMONIALS
– are a system of several rites connected to a single occasion or event
 A university’s graduation ceremony
 A company banquet where several awards are made to recognize performance
 The Oscars
RITUALS
– Repetitive sequences of activities that express and reinforce the key values of the
organization, what goals are most important, which people are important and which are
expendable.

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MANAGERIAL DECISIONS AFFECTED BY CULTURE
An organization’s culture, especially a strong one, influences and constrains the way managers’
plan, organize, lead, and control.
• Planning
– The degree of risk that plans should contain.
– Whether plans should be developed by individuals or teams.
– The degree of environmental scanning in which management will engage.
• Organizing
– How much autonomy should be designed into employees’ jobs?
– Whether tasks should be done by individuals or in teams?
– The degree to which department managers interact with each other?
• Leading
– The degree to which managers are concerned with increasing employee job
satisfaction
– What leadership styles are appropriate?
– Whether all disagreements—even constructive ones—should be eliminated.
• Controlling
– Whether to impose external controls or to allow employees to control their own
actions?
– What criteria should be emphasized in employee performance evaluations?
– What repercussions will occur from exceeding one’s budget?
MANAGING CULTURAL CHANGE
Changing an organization’s culture is difficult because it is made up of relatively stable
characteristics that developed over a long period of time or can be difficult to change such as:
– Written statements about an organization’s mission or philosophy
– Design of physical spaces and buildings
– Dominant leadership style
– Historical selection criteria
– Past promotion practices
– Entrenched rituals
– Popular stories about key people or events
– Past performance evaluation criteria
– Formal structure of the organization
• Cultural change is more likely to occur when the following conditions exist
– A dramatic crisis exists or is created
– Turnover in leadership
– Young and small organizations
– The culture that currently exists is relatively weak.

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CREATING AN ETHICAL CULTURE
To encourage the development of a more ethical culture management should:
– Be a visible role model
– Communicate ethical expectations
– Provide ethical training
– Visibly reward ethical acts and punish unethical ones
– Provide protective mechanisms so employees can discuss ethical dilemmas.