Read the attachment and review the rubric.

Utilize the attached references (minimum of 3).

The paper will be minimum of 7 pages. No more than 8 (excluding title and reference pages)

Final Project Part 1: Culture Analysis Paper

This assignment allows you to demonstrate mastery of course outcomes:

1. apply knowledge of the levels, components, and development of culture to inform decision making about organizational practices

2. analyze and describe the impact of organizational culture on performance

You will be asked to analyze an organizational culture. This could be the organization you work with, or it could be some other organization to which you have access. Remember that clubs, associations, and churches can be considered organizations.

Research (data gathering) should include (but does not need to be limited to)  mainly primary sources.

Primary data is the data collected by the researcher themselves, i.e.

1. interview

2. observation

3. action research

4. case studies

5. life histories

6. questionnaires

7. ethnographic research

Secondary sources are data that already exists

1. Previous research

2. Official statistics

3. Mass media products

4. Diaries

5. Letters

6. Government reports

7. Web information

8. Historical data and information

Collect your data and analyze it. Describe how you collected the data (observation, interviews, surveys).

Then, analyze the organizational culture along three dimensions: artifacts, values, and underlying assumptions. Give examples of behavior, speech, or symbols that illustrate your findings. This paper should be 7-8 pages in length. Any data used (interviews, surveys, websites, etc.) should be attached as appendices. You should use at least 3 course resources. 

COURSE RESOURCES TO CONSIDER:

https://sourcepov.com/2010/04/10/org-culture-intervention/

http://www.cavanaughleahy.com/NewFiles/culturerefs2.htm

https://www.quinnassociation.com/en/robert_e_quinns_competing_values_framework

https://www.thebalancecareers.com/how-to-understand-your-current-culture-1918811

https://www.grovewell.com/wp-content/uploads/pub-GLOBE-intro

http://www.thercfgroup.com/files/resources/Defining-Culture-and-Organizationa-Culture_5

http://www.businessmanagementib.com/uploads/1/1/7/5/11758934/________types_of_organisational_culture

https://learn.umuc.edu/content/enforced/450475-005294-01-2202-OL1-6383/Organizational Culture Chapter ?_&d2lSessionVal=JRXhjgBQQJF33nUFPFSeAfaUy

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Defining and Assessing Organizational Culture

Jennifer Bellot PhD, RN, MHSA

Thomas Jefferson University

, bellot.jennifer@gmail.com

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Organizational Culture 1

As submitted to:

Nursing Forum

And later published as:

Defining and Assessing Organizational Culture

Volume 46, Issue 1, pages 29–37, January-March 2011

DOI: 10.1111/j.1744-6198.2010.00207.x

The target of much debate, organizational culture has occupied a prominent

position in multidisciplinary publications since the early 1980s. Fraught with

inconsistencies, the early research and literature addressing organizational culture was

often conflicting and recursive. As one researcher stated, culture is “one of the two or

three most complicated words in the English language” (Williams, 1983). Years of

conceptualization, comparison and assessment have led to an emerging consensus on the

appropriate definition and role for organizational culture. This manuscript documents the

historical development of organizational culture as a construct and its ensuing

assessment, comparing and contrasting prominent theories and methods of understanding

organizational culture. Subsequently, a brief review of the health care literature

illustrates the applicability of organizational culture to the health care setting.

Development

Organizational Culture 2

Most researchers agree that the notion of studying work environments first

emerged with the work of a social psychologist, Kurt Lewin. Lewin, Lippitt and White

(1939) first coined the term organizational climate in the study “Patterns of Aggressive

Behavior in Experimentally Created ‘Social Climates.’” This term was used

inconsistently for the next two decades until the 1960s. By this point, research on

organizational climate research was flourishing.

Climate research represented a convergence of psychological and sociological

epistemologies. During the 1960s and 1970s, climate research generally addressed

professional socialization and the orientation or integration of the new employee. The

terms climate and culture were often used interchangeably or within quotation marks, and

were not well defined conceptually (Reichers & Schneider, 1990). In the mid-1970s the

emergence of symbolic framing introduced anthropologic epistemology to the study of

organizational climate. Among climate researchers, the sense that the climate construct

was not capturing the holism of the work environment led to the development of

organizational culture. Hence, this represented the beginning of defining culture,

acknowledging its intangibility and integrating psychologic, sociologic and anthropologic

methods and philosophies (Ashkanasy, Wilderom, & Peterson, 2000).

Pettigrew (1979) was the first to introduce formally the term organizational

culture, incorporating a distinct anthropologic base. Shortly thereafter, an explosion of

literature was produced regarding organizational culture and its ideal management. Texts

by Deal and Kennedy (1988), Ouchi (1981) and Peters and Waterman (1982), in

particular, were responsible for the widespread popularity of this concept. These works,

however, were prescriptive, solutions-based, largely atheoretical and non-academic. This

Organizational Culture 3

early writing was marketed to managers within a typical corporate structure and was

designed to provide a quick fix and competitive edge.

Meanwhile, academia struggled to keep up with the commercial sector. The

central issue behind an academic rise of interest in organizational culture was that “a hard

‘scientific’ management of institutions could and should be augmented with, or even

displaced by, an approach that stressed a softer, more humane understanding of human

values and culture” (Parker, 2000, p. 1). The organizational culture perspective was the

“counter culture” of organizational theory, as it challenged much of the contemporary

organizational behavior theory (Shafritz & Ott, 1987). Until this point, organization

studies were dominated by a positivist paradigm. The introduction of anthropological

epistemology propagated the notion that the organizational environment (specifically,

culture) should be studied using qualitative methods.

During the 1980s, the conceptual base for organizational culture was developed

further. As previously mentioned, there was much disagreement among scholars and

disciplines regarding appropriate definition and assessment. The next sections provide a

review of the prevailing themes and controversies surrounding the definition of

organizational culture.

Prevailing Themes

Drawing from the traditions of three different disciplines, the definition of

organizational culture is complicated by disagreements regarding what it should and

should not include and the best to assessment method. Although many theorists in the

1980s advanced the conceptual understanding of organizational culture, a select group

has dominated the majority of culture research (Table 1). Further, it is widely accepted

Organizational Culture 4

that there is no singular, correct definition of culture. Van Maanen (1985) states, “The

term ‘culture’ is powerfully evocative, but it does not come from anthropology as an

intact structural package ready to serve as a paradigmatic foundation on which to build

the analysis of organizations” (p. 57).

Through the continued work and conceptual development from such scholars as

Edgar Schein, Mats Alvesson and Benjamin Schneider, some consistency of thought has

arisen. This loose consensus of principles has guided much inquiry about organizational

culture (Siehl & Martin, 1983; Druckman, Singer, & Van Cott, 1997).

1. Organizational culture exists.

Although it may seem simplistic, it took years of inquiry and theory to conclude that

organizational culture exists. This debate is intimately related to the next tenet of culture.

2. Cultures are inherently fuzzy in that they incorporate contradictions, paradoxes,

ambiguities and confusion.

Throughout the development of organizational culture, it has been recognized that

culture is not a “surface” phenomena. Rather, it is “infused with symbols and

symbolism” (Druckman, Singer, & Van Cott, 1997, p. 69) and is “undetectable most of

the time” (Cameron & Quinn, 1999). The lack of tangibility and potential for confusion

and inconsistency lend to complex assessment of the concept. This thought paradigm is

more involved than the positivist tradition of business research, thus necessitating greater

conceptual development.

3. Organizational culture is socially constructed, the product of groups, not individuals,

and based on shared experiences.

Organizational Culture 5

A core tenet regarding organizational culture is the group nature of the concept.

Theorists have used this property to distinguish organizational culture from other, similar

constructs, and to differentiate methods from previous work in organizational climate.

Culture provides an organization’s members with a framework for understanding and

making sense of their work environment and

experiences (

Siehl & Martin, 1983).

4. Each organization’s culture is relatively unique, malleable and subject to continual

change.

Central to this tenet was the debate over whether culture is something an organization

has or something that an organization is. Originally, anthropological scholars relied

on their disciplinary traditions and asserted that organizations were cultures in

themselves (Rousseau, 1990). Further research, however, has led to relative

consensus that culture is a property that the organization possesses. Further, since

culture is a possession, there is the sense that it can be controlled, or at the very least

influenced and changed, by its members. Culture, therefore, is developed over time

and is not a static property. The assertion that culture is unique has led to some debate

over how it is assessed. Generally, academic researchers believe that each

organization’s culture is distinct, although some instruments have demonstrated the

ability to group separate cultures into broad categories. The notion that culture was

malleable was an attractive attribute to corporate managers. Those that subscribed

to this theory believed that molding organizational culture to an ideal form would thereby

improve organizational output.

Organizational Culture 6

Several accepted definitions of organizational culture are used in the literature, a

reflection of the epistemologic backgrounds or interests of the researcher. Most recent

research on culture either cites Schein’s (1987) definition or uses a derivation of his

work. Schein’s roots as a sociologist and his interests in the integration of new

employees are apparent in his definition:

Organizational culture is the pattern of basic assumptions which a given group has

invented, discovered or developed in learning to cope with its problems of external

adaptation and internal integration, which have worked well enough to be considered

valid, and therefore to be taught to new members as the correct way to perceive, think

and feel in relation to those problems…it is the assumptions which lie behind values

and which determine the behavior patterns and the visible artifacts such as

architecture, office layout, dress codes, and so on (1987, p. 383).

Controversies

Despite the growing consensus among researchers interested in organizational

culture, there is also considerable disagreement. This does not necessarily mean that

organizational culture is a weak or ill-defined concept. Rather, this divergence is

indicative of a continually developing body of research (Ashkanasy, Wilderom, &

Peterson, 2000). Several controversies surrounded the definition and operationalization

of organizational culture. Therefore, this paper will limit discussion to the three most

frequently cited.

Singular versus plural

Is there one, single culture per organization or are there several different cultures

found within an organization? Early researchers of organizational culture, particularly

Organizational Culture 7

those from the anthropologic perspective, posited that in order to be defined as a unique

culture, each organization possessed a singular, universal culture. More recent research,

however, has revealed the presence of subcultures, also known as “nested” cultures

(Parker, 2000). This is an important quality to consider when conceptualizing culture

management or change. Additionally, recent cultural research has addressed the duality

of perceived versus actual culture. More research is warranted to determine the

implications of perceived and actual culture within an organization.

Consensus versus dissensus

In the same vein as the preceding controversy, a body of research on

organizational culture has focused on the consistency of culture throughout an

organization. This often places administrative perceptions in opposition to the lived

experience of an organization’s employees. Meyerson’s (1991) research has focused on

the framing of culture within three paradigms: Integration, ambiguity and fragmentation.

Meyerson asserts that it is appropriate, when characterizing an organization’s

culture, to classify it within the bounds of its actual implementation. Based on her

qualitative study of hospital social workers, she states that an integrated culture is one

that “shares common and clear understandings and identities” (p. 131). Fragmentation

and ambiguity, in turn, account for differences in perceptions and experiences among

organization members. Many researchers, in an attempt to account for these differences,

have used Meyerson’s classification when assessing culture.

There is considerable disagreement regarding this method of classification.

Schein states:

If there is no consensus or if there is conflict or if things are ambiguous, then, by

Organizational Culture 8

definition, that group does not have a culture in regard to those things. It may have

subcultures, smaller groups that have a shared … consensus about

something, but the concept of sharing or consensus is core to the definition (1991, p.

248).

Meyerson (1991) later argues that ambiguities may be viewed as normal or abnormal

within an organization’s culture and that most cultural assessments consciously exclude

ambiguities, since organizational researchers usually study objective and concrete

phenomena.

Culture versus climate: The same or different?

Much research has been devoted to the differentiation of culture from climate. As

culture was being developed into a separate field of inquiry in the early 1980s, a common

justification for its study was its unique qualities, separate from organizational climate.

Many articles, books and chapters have been written on this subject. Rather than present

this debate in its entirety, this paper will attempt to highlight the major elements of this

controversy.

In an early, simplistic attempt to delineate the two concepts, Schwartz & Davis

(1981) stated, “Whatever culture is, it is not climate” (p. 32). This distinction, although

not terribly sophisticated, formed the basis of much conceptual development in the 1980s.

The disciplinary origins of climate and culture overlap, with both sharing common

sociological threads. Climate research is grounded in Lewin’s Gestalt psychology,

whereas culture embodies references to anthropology (Schneider, 2000). Traditionally,

climate has been measured with quantitative measurements and is often compared across

Organizational Culture 9

settings. Generally, climate is classified by its purpose (e.g., climate for service, climate

for productivity).

The most accepted definition of climate is “the relatively enduring organizational

environment that a) is experienced by the occupants, b) influences their behavior and c)

can be described in terms of the values of a particular set of characteristics or attributes of

the environment” (Tagiuri & Litwin, 1968, p. 25). This definition is quite similar to that

of organizational culture. In fact, several researchers have propagated the idea that

climate is a manifestation of culture (e.g., Schein, 1984; Reichers & Schneider, 1990;

Hatch, 1993) and that the “inadequacies of one approach become the justification for the

other” (Denison, 1996, p. 6).

During the emergence of culture as a distinct organizational quality, a central

issue was differentiating it from organizational climate. As the culture construct was

further developed, and methods for assessment were determined, these two areas

approached convergence. Meyerson, in fact, retrospectively asserted that the

development of culture “represented an ontological rebellion against the dominant

functionalist or ‘scientific’ paradigm” (1991, p. 256). Is the distinction between climate

and culture simply a divergence of methods or disciplines?

Recent research indicates that, while not exactly the same, culture and climate are

not as different as originally conceptualized. Denison has written in-depth on this

controversy. He begins a lengthy essay on this topic by stating:

Although it is clear that culture and climate are, in fact, very different perspectives on

organizational environments, it is far less clear that they actually examine distinct

organizational phenomena…or whether they represent closely related phenomena that

Organizational Culture 10

are examined from different perspectives (1996, p. 3).

In fact, it is clear that both culture and climate attempt to address the interplay between

individuals and their surroundings, but it becomes a circular debate to determine which

produces and/or affects the other.

Denison (1996) noted that the development of culture wreaked havoc with climate

researchers, introducing new methods and allowing for variation of assessment.

Although many acknowledge that climate is a more superficial manifestation of culture, it

is less clear if this overlap is indicative of different concepts or simply two aspects of the

same construct. With the introduction of quantitative and mixed methods for study of

organizational culture in the 1990s, this distinction became even more blurred. As the

conceptualization and assessment of culture have advanced, it is increasingly apparent to

many organizational researchers that the two concepts differ more in interpretation rather

than within the phenomena themselves (Denison 1996).

Assessment Methods

Qualitative Approach

It can be concluded from the literature on organizational culture that most

conceptualizations are of deep, intangible phenomena not easily objectified. For these

reasons, and because culture was initially differentiated from climate by its

anthropological influence, initial scholarly inquiry about culture employed qualitative

methods. Early studies of organizational culture largely used ethnography or participant

observation to describe cultures, one institution at a time (Druckman, Singer, & Van Cott,

1997). The development of cultural study, as distinct from climate study, used the

applicability of qualitative methods as justification for differentiation. Additionally, early

Organizational Culture 11

researchers believed that standardized, quantitative instruments were inappropriate for

cultural assessment because they would be unable to capture the subjective and unique

aspects of each culture. Opponents of a strictly qualitative approach, however, asserted

that comparison between cultures is not possible using this technique.

Quantitative Tools

Frustration with the limited generalizability and time intensiveness of qualitative

methods led to the development of quantitative tools to assess culture. Rousseau (1990)

advocates for quantitative instruments, stating that cultural assessment would benefit in

strength and validity from the testing of psychometric properties in these instruments. In

order to support quantitative methods, however, the underlying conception of culture

must be that it is something an organization possesses, rather than embodies,

contradictory to some anthropological theory.

Cameron & Quinn (1999) argue that it is crucial, if using quantitative instruments,

that these be validated to ensure the reporting of underlying values and assumptions,

rather than climate. Further, many theorists argue that questionnaires or survey

instruments are inappropriate for measuring culture in that they “measure the dimensions

of culture determined in advance by the researcher, thus potentially missing or distorting

the actual dimensions of cultures existing a priori in the organization itself” (Druckman,

Singer, & Van Cott, 1997, p. 72). Taken together, the weaknesses of using qualitative or

quantitative methods alone leave potential for omission of crucial elements of culture.

Mixed Methods

In 1983, Siehl and Martin attempted to bridge this gap by using mixed methods.

Since then, mixed methods have emerged as the preferred method for assessing

Organizational Culture 12

organizational culture. Most recent studies involve some combination of participant

observation, interview, focus group, survey and/or questionnaire. It is believed that

mixed methods allow the most explanation of error variance, greater depth in elaboration

of culture as a construct (Alvesson & Berg, 1992) and more opportunity for data analysis

(Fleeger, 1993). A great deal of writing has been devoted to promoting and employing

mixed methods (Siehl & Martin, 1990; Rousseau, 1990; Ashkanasy, Wilderom, &

Peterson, 2000; Alvesson & Berg, 1992; Smith, Francovich, & Gieselman, 2000;

Hofstede, Neuijen, Ohayv, & Sanders, 1990; Fleeger, 1993; Goodridge & Hack, 1996;

Siehl & Martin, 1983).

Assessment Tools

As the assessment of organizational culture evolved and quantitative methods

gained popularity and acceptance, various questionnaires and surveys were developed. It

is important to note that some of these tools were developed in order to be marketed to

managers and were therefore not subject to theoretical development by academic

researchers. Discussion in this paper will be limited to those tools developed by trained

researchers.

Unfortunately, most tools assessing organizational culture were never subjected to

psychometric evaluation. It is recognized that there is no ideal instrument as each tool

has limitations for use or scope (Scott, Mannion, Davies, & Marshall, 2003). That being

said, the two most cited and scientifically rigorous instruments are the Organizational

Culture Assessment Instrument (OCAI; Cameron & Quinn, 1999) and the Organizational

Culture Inventory (OCI; Cooke & Lafferty, 1986).

Organizational Culture Assessment Instrument (OCAI)

Organizational Culture 13

The OCAI uses ipsative scoring scales to categorize organizational culture. In

ipsative scoring, respondents assign points to their answers and all answers must sum to a

predetermined total. The OCAI is based upon the Competing Values Framework,

originally conceptualized by Campbell in 1974. Derived from this framework, the OCAI

has undergone several revisions and, through factor analysis, has a well developed

classification system. Quinn refined Campbell’s work in 1983 to create four

organizational “types”: Clan, Adhocracy, Hierarchy and Market. Ultimately, these types

became the basis for the OCAI. Cameron and Quinn (1999) emphasize that there is no

one “correct” typology for an organization. The OCAI assesses the degree of each type

represented in an organization and presents an individualized assessment of

appropriateness of that typology, given the organization’s goals.

The OCAI was deliberately designed to be simple, so as to facilitate maximum

participation at all levels of an organization. Additionally, it contains generalized

questions, in order to appeal to many different kinds of organizations. The OCAI, or

versions of it also based on the Competing Values Framework, have been used in several

studies of organizational culture (e. g., Denison, 1990; Cameron & Freeman, 1991; Jones,

DeBaca, & Yarbrough, 1997). Its reliability and validity were established in a series of

studies (Quinn & Spreitzer 1991; Yeung, Brockbank, & Ulrich, 1991; Zammuto &

Krakower, 1991).

Critics of the OCAI maintain that it does not precisely measure culture, instead

“pigeon holing” organizations into a priori diagnostic categories created by researchers

(Druckman, Singer, & Van Cott, 1997). Strict qualitative methodologists object on the

grounds that this does not reveal the unique aspects of an organization’s culture, instead

Organizational Culture 14

lumping results into generic categories. Cameron and Quinn, however, readily admit that

the OCAI is intended to be both diagnostic and prescriptive in function. Further, ipsative

scoring inherently creates a situation where respondents’ answers are dependent upon

each other, since they must sum to a pre-determined total. This can obscure the

interpretation and clarity of results. Proponents of the OCAI point to its ease in

implementation and its low cost.

Organizational Culture Inventory (OCI)

Similarly, the Organizational Culture Inventory (OCI; Cooke & Lafferty, 1986)

classifies organizations into three general types of cultures: Constructive,

Passive/Defensive and Aggressive/Defensive. Additionally, it evaluates twelve sets of

behavioral norms within an organization. The OCI has been used for many purposes and

is the most widely used industry tool for assessing organizational culture, completed by

over 2 million respondents worldwide as of the year 2000 (Cooke & Szumal, 2000).

Since this tool has been used so widely, a large information base exists on the behavior of

cultures.

The conceptual framework for the OCI was developed by Cooke and colleagues

and is based upon distinguishing between an organization’s concern for people versus its

concern for task. The OCI tool is built upon the Human Synergistics circumplex

conceptual framework, derived via factor analysis from many cultural studies. Sub-

constructs of the OCI have been empirically supported and validated by numerous

sources (Cooke & Rousseau, 1988; Cooke & Szumal, 1993; Xenikou & Furnham, 1996).

Similar to the OCAI, organizations are typed and classified into three predetermined

categories based on the degree of strength to which they represent each category. In

Organizational Culture 15

addition to assessing the current culture of an organization, the OCI has the capacity to

determine the ideal culture for an organization, allowing for comparison between actual

and ideal cultures. This feature has led to the use of the OCI as the basis for planning

culture change.

A quantitative instrument with similar predetermined categories, the OCI shares

the same criticisms as the OCAI. Additionally, it is not as user-friendly and simple as the

OCAI. The OCI is a lengthier survey and is subject to proprietary analysis, eliminating

the possibility of internal organizational evaluation. Its widespread use and extensive

psychometric testing make it an attractive option for researchers. Cooke and Szumal

(2000) list more international testing (Asia, Africa, Latin America) as a next step in the

development of the OCI.

Applicability to Health Care

Most work on organizational culture concerns the traditional corporation.

Therefore, some adaptation to the central goals and focus of a human services

organization are necessary before application to a health care setting. Although not

always explicit, it appears that Schein’s conceptual work and theory have most

influenced the study of organizational culture in health care. Schein is frequently cited as

the conceptual reference for this inquiry. Sovie (1993) emphasizes that health care

organizations should be particularly concerned with organizational culture because “the

shared beliefs, values, and feelings that exist within an institution direct the perception of

and the approach to the work that is to be done” (p. 72).

Two teams of researchers (Gershon, Stone, Bakken, & Larson, 2004; Scott,

Mannion, Davies & Marshall, 2003) have completed in-depth searches and evaluated

Organizational Culture 16

tools used to measure organizational culture in the health care setting. Both teams

reviewed biomedical literature via online databases and consulted with experts in the

behavioral research field. Although most instruments were developed and published in

the mid-1980s, Gershon and colleagues (2004) found that their application to health care

was largely limited to the previous five years. Additionally, most studies were completed

in hospitals and targeted nurses in their evaluations. They surmise that this could be in

response to a 1999 Institute of Medicine report, To Err is Human: Building a Safer

Health Care System, which advocated culture change in order to decrease medical error

rates.

Gershon and colleagues also found, predictably, that terminology differed across

instruments. Potentially, this contributes to the further confounding of assessment of

organizational culture. Reflecting frustration with the inconsistency of terms, the team

stated:

If aspects of the organizational culture are ill-defined, frequently shifting, poorly

communicated, not reinforced, and/or poorly supported administratively, both the

employees’ collective perceptions and their behaviors (i.e., delivery of care, safe work

practices, and teamwork) will be inconsistent (2004, p. 37, emphasis in original).

Gershon and team conclude, on the basis of reliability and validity, that the

Organizational Culture Inventory (Cooke & Lafferty, 1986) is most appropriate for use in

the health care setting.

A year previous to Gershon’s article, Scott and colleagues (2003) performed a

similar analysis of organizational culture instruments in health care. They identified

thirteen tools designed specifically to measure culture only (without reference to climate).

Organizational Culture 17

Nine of these thirteen were used in studies of health care environments. Schein’s

conceptualization of organizational culture was used when analyzing each tool, only

quantitative measures were evaluated.

Rather than choosing one “best” instrument for cultural assessment, the team

concluded that “the choice of instrument should be determined by how organizational

culture is conceptualized by the research team, the purpose of the investigation, intended

use of the results and availability of resources” (Scott, Mannion, Davies, & Marshall,

2003, p. 923). In this way, the team’s recommendations are appropriate to a wider set of

applications for cultural assessment. Overall, however, Scott and colleagues devote a

large portion of their concluding thoughts to advocating mixed methods. Citing their

earlier work, Scott’s team deemed it appropriate to study surface manifestations of

culture with quantitative methods and follow up with assessment of underlying

assumptions with qualitative techniques. The team then provides examples of studies

using mixed methods in different order (e.g., Qual-quant, Quant-qual). They determined

that either order could be appropriate, depending on the goals of the study.

Conclusion

After 25 years of development, the construct of organizational culture has finally

reached some consensus. Although research does not universally subscribe to one

definition of organizational culture, there is relative agreement on major elements of its

definition. Organizational culture exists. It can be ambiguous, but it is unique to each

institution and malleable. Organizational culture is socially constructed, arising from

group interactions.

Organizational Culture 18

As the construct has developed, so have methods for assessing it. Beginning with

the assertion that organizational culture can be evaluated using qualitative techniques,

researchers have moved on to consider broader methods. Quantitative measurement tools

have been developed and psychometrically tested, and, most recently, mixed methods

have been employed to provide a richer assessment of organizational culture. Although

most of the conceptual and measurement work regarding organizational culture has been

based upon the traditional corporate structure, research has shown that it is adaptable to

the health care sector. The recognition and assessment of organizational culture is

particularly valuable in health care, as it addresses the therapeutic milieu, thereby

creating the potential to maximize service, quality and outcomes for both health care

providers and recipients of care.

Organizational Culture 19

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Berlin: Walter de Gruyter.

Alvesson, M. (2002). Understanding organizational culture. London: Sage

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Ashkanasy, N. M., Broadfoot, L. E. & Falkus, S. (2000). Questionnaire measures of

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(Eds.) Handbook of organizational culture and climate (pp. 131-147).

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Cameron, K. M. & Freeman, S. J. (1991). Cultural congruence, strength, and type:

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Organizational Culture 25

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Defining and Assessing Organizational Culture
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Chapter 15
Organizational Culture

L E A R N I N G O B J E C T I V E S

After reading this chapter, you should be able to do the following:

1. Describe organizational culture and why it is important for an organization.

2. Understand the dimensions that make up a company’s culture.

3. Distinguish between weak and strong cultures.

4. Understand factors that create culture.

5. Understand how to change culture.

6. Understand how organizational culture and ethics relate.

7. Understand cross-cultural differences in

organizational culture.

Customer Service Culture: The Case of Nordstrom
Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks

Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of

Fame member of Fortune Magazine’s “100 Best Companies to Work for” list,

including being ranked 34th in 2008. Nordstrom is known for its quality

apparel, upscale environment, and generous employee rewards. However,

what Nordstrom is most famous for is its delivery of customer service above

and beyond the norms of the retail industry. Stories about Nordstrom service

abound. For example, according to one story the company confirms, in 1975

Nordstrom moved into a new location that had formerly been a tire store. A

customer brought a set of tires into the store to return them. Without a word

http://creativecommons.org/licenses/by-nc-sa/3.0/

http://creativecommons.org/licenses/by-nc-sa/3.0/

about the mix-up, the tires were accepted and the customer was fully refunded

the purchase price. In a different story, a customer tried on several pairs of

shoes but failed to find the right combination of size and color. As she was

about to leave, the clerk called other Nordstrom stores, but could only locate

the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the

shoes to the customer’s home at Nordstrom’s expense. In a third story, a

customer describes wandering into a Portland, Oregon Nordstrom looking for

an Armani tuxedo for his daughter’s wedding. The sales associate took his

measurements just in case one was found. The next day, the customer got a

phone call, informing him that the tux was available. When pressed, she

revealed that using her connections she found one in New York, had it put on

a truck destined to Chicago, and dispatched someone to meet the truck in

Chicago at a rest stop. The next day she shipped the tux to the customer’s

address, and the customer found that the tux had already been altered for his

measurements and was ready to wear. What is even more impressive about

this story is that Nordstrom does not sell Armani tuxedos.

How does Nordstrom persist in creating these stories? If you guessed that they

have a large number of rules and regulations designed to emphasize quality in

customer service, you’d be wrong. In fact, the company gives employees a 5½-

inch by 7½-inch card as the employee handbook. On one side of the card, the

company welcomes employees to Nordstrom, states that their number one

goal is to provide outstanding customer service, and for this they have only

one rule. On the other side of the card, the single rule is stated: “Use good

judgment in all situations.” By leaving it in the hands of Nordstrom associates,

the company seems to have managed to empower employees who deliver

customer service heroics every day.

Sources: Adapted from information in Chatman, J. A., & Eunyoung Cha, S.

(2003). Leading by leveraging culture. California Management Review, 45,

19–34; McCarthy, P. D., & Spector, R. (2005). The Nordstrom way to customer

service excellence: A handbook for implementing great service in your

organization. Hoboken, NJ: John Wiley; Pfeffer, J. (2005). Producing

sustainable competitive advantage through the effective management of

people. Academy of Management Executive, 19, 95–106.

Just like individuals, you can think of organizations as having their own

personalities, more typically known as organizational cultures. The opening

case illustrates that Nordstrom is a retailer with the foremost value of

making customers happy. At Nordstrom, when a customer is unhappy,

employees are expected to identify what would make the person satisfied,

and then act on it, without necessarily checking with a superior or

consulting a lengthy policy book. If they do not, they receive peer pressure

and may be made to feel that they let the company down. In other words,

this organization seems to have successfully created a service culture.

Understanding how culture is created, communicated, and changed will

help you be more effective in your organizational life. But first, let’s define

organizational culture.

15.1 Understanding Organizational Culture

L E A R N I N G O B J E C T I V E S

1. Define organizational culture.

2. Understand why organizational culture is important.

3. Understand the different levels of organizational culture.

What Is Organizational Culture?

Organizational culture refers to a system of shared assumptions, values, and

beliefs that show employees what is appropriate and inappropriate

behavior. [1] These values have a strong influence on employee behavior as well

as organizational performance. In fact, the term organizational culture was made

popular in the 1980s when Peters and Waterman’s best-selling book In Search of

Excellence made the argument that company success could be attributed to an

organizational culture that was decisive, customer oriented, empowering, and

people oriented. Since then, organizational culture has become the subject of

numerous research studies, books, and articles. However, organizational

culture is still a relatively new concept. In contrast to a topic such as

leadership, which has a history spanning several centuries, organizational

culture is a young but fast-growing area within organizational behavior.

Culture is by and large invisible to individuals. Even though it affects all

employee behaviors, thinking, and behavioral patterns, individuals tend to

become more aware of their organization’s culture when they have the

opportunity to compare it to other organizations. If you have worked in

multiple organizations, you can attest to this. Maybe the first organization you

worked was a place where employees dressed formally. It was completely

inappropriate to question your boss in a meeting; such behaviors would only

be acceptable in private. It was important to check your e-mail at night as well

as during weekends or else you would face questions on Monday about where

you were and whether you were sick. Contrast this company to a second

organization where employees dress more casually. You are encouraged to

raise issues and question your boss or peers, even in front of clients. What is

more important is not to maintain impressions but to arrive at the best

solution to any problem. It is widely known that family life is very important,

so it is acceptable to leave work a bit early to go to a family event. Additionally,

you are not expected to do work at night or over the weekends unless there is a

deadline. These two hypothetical organizations illustrate that organizations

have different cultures, and culture dictates what is right and what is

acceptable behavior as well as what is wrong and unacceptable.

Why Does Organizational Culture Matter?

An organization’s culture may be one of its strongest assets, as well as its

biggest liability. In fact, it has been argued that organizations that have a rare

and hard-to-imitate organizational culture benefit from it as a competitive

advantage. [2] In a survey conducted by the management consulting firm Bain

& Company in 2007, worldwide business leaders identified corporate culture

as important as corporate strategy for business success. [3]This comes as no

surprise to many leaders of successful businesses, who are quick to attribute

their company’s success to their organization’s culture.

Culture, or shared values within the organization, may be related to increased

performance. Researchers found a relationship between organizational

cultures and company performance, with respect to success indicators such as

revenues, sales volume, market share, and stock prices. [4] At the same time, it

is important to have a culture that fits with the demands of the company’s

environment. To the extent shared values are proper for the company in

question, company performance may benefit from culture. [5]For example, if a

company is in the high-tech industry, having a culture that encourages

innovativeness and adaptability will support its performance. However, if a

company in the same industry has a culture characterized by stability, a high

respect for tradition, and a strong preference for upholding rules and

procedures, the company may suffer as a result of its culture. In other words,

just as having the “right” culture may be a competitive advantage for an

organization, having the “wrong” culture may lead to performance difficulties,

may be responsible for organizational failure, and may act as a barrier

preventing the company from changing and taking risks.

In addition to having implications for organizational performance, organizational

culture is an effective control mechanism for dictating employee behavior. Culture is in fact a

more powerful way of controlling and managing employee behaviors than

organizational rules and regulations. When problems are unique, rules tend to

be less helpful. Instead, creating a culture of customer service achieves the

same result by encouraging employees to think like customers, knowing that

the company priorities in this case are clear: Keeping the customer happy is

preferable to other concerns such as saving the cost of a refund.

Levels of Organizational Culture

Organizational culture consists of some aspects that are relatively more

visible, as well as aspects that may lie below one’s conscious awareness.

Organizational culture can be thought of as consisting of three interrelated

levels. [6]

At the deepest level, below our awareness lie basic assumptions. Assumptions

are taken for granted, and they reflect beliefs about human nature and reality.

At the second level, values exist. Values are shared principles, standards, and

goals. Finally, at the surface we have artifacts, or visible, tangible aspects of

organizational culture. For example, in an organization one of the basic

assumptions employees and managers share might be that happy employees

benefit their organizations. This assumption could translate into values such

as social equality, high quality relationships, and having fun. The artifacts

reflecting such values might be an executive “open door” policy, an office

layout that includes open spaces and gathering areas equipped with pool

tables, and frequent company picnics in the workplace. For example, Alcoa

Inc. designed their headquarters to reflect the values of making people more

visible and accessible, and to promote collaboration. [7] In other words,

understanding the organization’s culture may start from observing its

artifacts: the physical environment, employee interactions, company policies,

reward systems, and other observable characteristics. When you are

interviewing for a position, observing the physical environment, how people

dress, where they relax, and how they talk to others is definitely a good start to

understanding the company’s culture. However, simply looking at these

tangible aspects is unlikely to give a full picture of the organization. An

important chunk of what makes up culture exists below one’s degree of

awareness. The values and, at a deeper level, the assumptions that shape the

organization’s culture can be uncovered by observing how employees interact

and the choices they make, as well as by inquiring about their beliefs and

perceptions regarding what is right and appropriate behavior.

K E Y T A K E A W A Y

Organizational culture is a system of shared assumptions, values, and beliefs that

help individuals within an organization understand which behaviors are and are not

appropriate within an organization. Cultures can be a source of competitive

advantage for organizations. Strong organizational cultures can be an organizing as

well as a controlling mechanism for organizations. And finally, organizational culture

consists of three levels: assumptions, which are below the surface, values, and

artifacts.

E X E R C I S E S

1. Why do companies need culture?

2. Give an example of an aspect of company culture that is a strength and one that is a

weakness.

3. In what ways does culture serve as a controlling mechanism?

4. If assumptions are below the surface, why do they matter?

5. Share examples of artifacts you have noticed at different organizations.

15.2 Characteristics of Organizational Culture

L E A R N I N G O B J E C T I V E S

1. Understand different dimensions of organizational culture.

2. Understand the role of culture strength.

3. Explore subcultures within organizations.

Dimensions of Culture

Which values characterize an organization’s culture? Even though culture may

not be immediately observable, identifying a set of values that might be used

to describe an organization’s culture helps us identify, measure, and manage

culture more effectively. For this purpose, several researchers have proposed

various culture typologies. One typology that has received a lot of research

attention is the organizational culture profile (OCP), in which culture is represented

by seven distinct values. [1] We will describe the OCP as well as two additional

dimensions of organizational culture that are not represented in that

framework but are important dimensions to consider: service culture and

safety culture.

Figure 15.4 Dimensions of Organizational Culture Profile (OCP)

Source: Adapted from information in O’Reilly, C. A., III, Chatman, J. A., &

Caldwell, D. F. (1991). People and organizational culture: A profile

comparison approach to assessing person-organization fit. Academy of

Management Journal, 34, 487–516.

Innovative Cultures

According to the OCP framework, companies that have innovative cultures are

flexible and adaptable, and experiment with new ideas. These companies are

characterized by a flat hierarchy in which titles and other status distinctions

tend to be downplayed. For example, W. L. Gore & Associates Inc. is a

company with innovative products such as GORE-TEX® (the breathable

fabric that is windproof and waterproof), Glide dental floss, and Elixir guitar

strings, earning the company the distinction of being elected as the most

innovative company in the United States by Fast Company magazine in 2004. W.

L. Gore consistently manages to innovate and capture the majority of market

share in a wide variety of industries, in large part due to its unique culture. In

this company, employees do not have bosses in the traditional sense, and risk

taking is encouraged by celebrating failures as well as successes. [2] Companies

such as W. L. Gore, Genentech Inc., and Google also encourage their

employees to take risks by allowing engineers to devote 20% of their time to

projects of their own choosing. [3]

Aggressive Cultures

Companies with aggressive cultures value competitiveness and outperforming

competitors: By emphasizing this, they may fall short in the area of corporate

social responsibility. For example, Microsoft Corporation is often identified as

a company with an aggressive culture. The company has faced a number of

antitrust lawsuits and disputes with competitors over the years. In aggressive

companies, people may use language such as “We will kill our competition.” In

the past, Microsoft executives often made statements such as “We are going to

cut off Netscape’s air supply.…Everything they are selling, we are going to give

away.” Its aggressive culture is cited as a reason for getting into new legal

troubles before old ones are resolved. [4] Recently, Microsoft founder Bill Gates

established the Bill & Melinda Gates foundation and is planning to devote his

time to reducing poverty around the world. [5] It will be interesting to see

whether he will bring the same competitive approach to the world of

philanthropy.

Outcome-Oriented Cultures

The OCP framework describes outcome-oriented cultures as those that

emphasize achievement, results, and action as important values. A good

example of an outcome-oriented culture may be Best Buy Co. Inc. Having a

culture emphasizing sales performance, Best Buy tallies revenues and other

relevant figures daily by department. Employees are trained and mentored to

sell company products effectively, and they learn how much money their

department made every day. [6] In 2005, the company implemented a results

oriented work environment (ROWE) program that allows employees to work

anywhere and anytime; they are evaluated based on results and fulfillment of

clearly outlined objectives. [7] Outcome-oriented cultures hold employees as

well as managers accountable for success and utilize systems that reward

employee and group output. In these companies, it is more common to see

rewards tied to performance indicators as opposed to seniority or loyalty.

Research indicates that organizations that have a performance-oriented

culture tend to outperform companies that are lacking such a culture. [8] At the

same time, some outcome-oriented companies may have such a high drive for

outcomes and measurable performance objectives that they may suffer

negative consequences. Companies over rewarding employee performance

such as Enron Corporation and WorldCom experienced well-publicized

business and ethical failures. When performance pressures lead to a culture

where unethical behaviors become the norm, individuals see their peers as

rivals and short-term results are rewarded; the resulting unhealthy work

environment serves as a liability. [9]

Stable Cultures

Stable cultures are predictable, rule-oriented, and bureaucratic. These

organizations aim to coordinate and align individual effort for greatest levels

of efficiency. When the environment is stable and certain, these cultures may

help the organization be effective by providing stable and constant levels of

output. [10] These cultures prevent quick action, and as a result may be a misfit

to a changing and dynamic environment. Public sector institutions may be

viewed as stable cultures. In the private sector, Kraft Foods Inc. is an example

of a company with centralized decision making and rule orientation that

suffered as a result of the culture-environment mismatch. [11] Its bureaucratic

culture is blamed for killing good ideas in early stages and preventing the

company from innovating. When the company started a change program to

increase the agility of its culture, one of their first actions was to fight

bureaucracy with more bureaucracy: They created the new position of VP of

business process simplification, which was later eliminated. [12]

People-Oriented Cultures

People-oriented cultures value fairness, supportiveness, and respect for

individual rights. These organizations truly live the mantra that “people are

their greatest asset.” In addition to having fair procedures and management

styles, these companies create an atmosphere where work is fun and

employees do not feel required to choose between work and other aspects of

their lives. In these organizations, there is a greater emphasis on and

expectation of treating people with respect and dignity. [13] One study of new

employees in accounting companies found that employees, on average, stayed

14 months longer in companies with people-oriented cultures. [14] Starbucks

Corporation is an example of a people-oriented culture. The company pays

employees above minimum wage, offers health care and tuition

reimbursement benefits to its part-time as well as full-time employees, and

has creative perks such as weekly free coffee for all associates. As a result of

these policies, the company benefits from a turnover rate lower than the

industry average. [15]The company is routinely ranked as one of the best places

to work by Fortune magazine.

Team-Oriented Cultures

Companies with team-oriented cultures are collaborative and emphasize

cooperation among

employees.

For example, Southwest Airlines Company

facilitates a team-oriented culture by cross-training its employees so that they

are capable of helping each other when needed. The company also places

emphasis on training intact work teams. [16]Employees participate in twice

daily meetings named “morning overview meetings” (MOM) and daily

afternoon discussions (DAD) where they collaborate to understand sources of

problems and determine future courses of action. In Southwest’s selection

system, applicants who are not viewed as team players are not hired as

employees. [17] In team-oriented organizations, members tend to have more

positive relationships with their coworkers and particularly with their

managers. [18]

Detail-Oriented Cultures

Organizations with detail-oriented cultures are characterized in the OCP

framework as emphasizing precision and paying attention to details. Such a

culture gives a competitive advantage to companies in the hospitality industry

by helping them differentiate themselves from others. For example, Four

Seasons Hotels Ltd. and the Ritz-Carlton Company LLC are among hotels who

keep records of all customer requests, such as which newspaper the guest

prefers or what type of pillow the customer uses. This information is put into a

computer system and used to provide better service to returning customers.

Any requests hotel employees receive, as well as overhear, might be entered

into the database to serve customers better. Recent guests to Four Seasons

Paris who were celebrating their 21st anniversary were greeted with a bouquet

of 21 roses on their bed. Such clear attention to detail is an effective way of

impressing customers and ensuring repeat visits. McDonald’s Corporation is

another company that specifies in detail how employees should perform their

jobs by including photos of exactly how French fries and hamburgers should

look when prepared properly. [19]

Service Culture

Service culture is not one of the dimensions of OCP, but given the importance

of the retail industry in the overall economy, having a service culture can make

or break an organization. Some of the organizations we have illustrated in this

section, such as Nordstrom, Southwest Airlines, Ritz-Carlton, and Four

Seasons are also famous for their service culture. In these organizations,

employees are trained to serve the customer well, and cross-training is the

norm. Employees are empowered to resolve customer problems in ways they

see fit. Because employees with direct customer contact are in the best

position to resolve any issues, employee empowerment is truly valued in these

companies. For example, Umpqua Bank, operating in the northwestern United

States, is known for its service culture. All employees are trained in all tasks to

enable any employee to help customers when needed. Branch employees may

come up with unique ways in which they serve customers better, such as

opening their lobby for community events or keeping bowls full of water for

customers’ pets. The branches feature coffee for customers, Internet kiosks,

and withdrawn funds are given on a tray along with a piece of chocolate. They

also reward employee service performance through bonuses and incentives. [20]

What differentiates companies with service culture from those without such a

culture may be the desire to solve customer-related problems proactively. In

other words, in these cultures employees are engaged in their jobs and

personally invested in improving customer experience such that they identify

issues and come up with solutions without necessarily being told what to do.

For example, a British Airways baggage handler noticed that first-class

passengers were waiting a long time for their baggage, whereas stand-by

passengers often received their luggage first. Noticing this tendency, a baggage

handler notified his superiors about this problem, along with the suggestion to

load first-class passenger luggage last. [21] This solution was successful in

cutting down the wait time by half. Such proactive behavior on the part of

employees who share company values is likely to emerge frequently in

companies with a service culture.

Figure 15.6

The growth in the number of passengers flying with Southwest Airlines from

1973 until 2007. In 2007, Southwest surpassed American Airlines as the most

flown domestic airline. While price has played a role in this, their emphasis on

service has been a key piece of their culture and competitive

advantage.

Source: Adapted from

http://upload.wikimedia.org/wikipedia/commons/6/69/Southwest-

airlines-passengers .

Safety Culture

Some jobs are safety sensitive. For example, logger, aircraft pilot, fishing

worker, steel worker, and roofer are among the top ten most dangerous jobs in

the United States. [22] In organizations where safety-sensitive jobs are

performed, creating and maintaining a safety culture provides a competitive

advantage, because the organization can reduce accidents, maintain high

levels of morale and employee retention, and increase profitability by cutting

workers’ compensation insurance costs. Some companies suffer severe

consequences when they are unable to develop such a culture. For example,

http://upload.wikimedia.org/wikipedia/commons/6/69/Southwest-airlines-passengers

http://upload.wikimedia.org/wikipedia/commons/6/69/Southwest-airlines-passengers

British Petroleum experienced an explosion in their Texas City, Texas, refinery

in 2005, which led to the death of 15 workers while injuring 170. In December

2007, the company announced that it had already depleted the $1.6-billion

fund to be used in claims for this explosion. [23] A safety review panel

concluded that the development of a safety culture was essential to avoid such

occurrences in the future. [24] In companies that have a safety culture, there is a

strong commitment to safety starting at management level and trickling down

to lower levels. M. B. Herzog Electric Inc. of California, selected as one of

America’s safest companies by Occupational Hazards magazine in 2007, had a zero

accident rate for the past 3 years. The company uses safety training programs

tailored to specific jobs within the company, and all employees are encouraged

to identify all safety hazards they come across when they are performing their

jobs. They are also asked to play the role of an OSHA (Occupational Safety and

Health Administration) inspector for a day to become more aware of the

hidden dangers in the workplace. Managers play a key role in increasing the

level of safe behaviors in the workplace, because they can motivate employees

day-to-day to demonstrate safe behaviors and act as safety role models. A

recent study has shown that in organizations with a safety culture, leaders

encourage employees to demonstrate behaviors such as volunteering for safety

committees, making recommendations to increase safety, protecting

coworkers from hazards, whistleblowing, and in general trying to make their

jobs safer. [25]

Strength of Culture

A strong culture is one that is shared by organizational members. [26] In other

words, if most employees in the organization show consensus regarding the

values of the company, it is possible to talk about the existence of a strong

culture. A culture’s content is more likely to affect the way employees think

and behave when the culture in question is strong. For example, cultural

values emphasizing customer service will lead to higher quality customer

service if there is widespread agreement among employees on the importance

of customer service-related values. [27]

It is important to realize that a strong culture may act as an asset or liability

for the organization, depending on the types of values that are shared. For

example, imagine a company with a culture that is strongly outcome oriented.

If this value system matches the organizational environment, the company

outperforms its competitors. On the other hand, a strong outcome-oriented

culture coupled with unethical behaviors and an obsession with quantitative

performance indicators may be detrimental to an organization’s effectiveness.

An extreme example of this dysfunctional type of strong culture is Enron.

A strong culture may sometimes outperform a weak culture because of the

consistency of expectations. In a strong culture, members know what is

expected of them, and the culture serves as an effective control mechanism on

member behaviors. Research shows that strong cultures lead to more stable

corporate performance in stable environments. However, in volatile

environments, the advantages of culture strength disappear. [28]

One limitation of a strong culture is the difficulty of changing a strong culture.

If an organization with widely shared beliefs decides to adopt a different set of

values, unlearning the old values and learning the new ones will be a

challenge, because employees will need to adopt new ways of thinking,

behaving, and responding to critical events. For example, the Home Depot

Inc. had a decentralized, autonomous culture where many business decisions

were made using “gut feeling” while ignoring the available data. When Robert

Nardelli became CEO of the company in 2000, he decided to change its

culture, starting with centralizing many of the decisions that were previously

left to individual stores. This initiative met with substantial resistance, and

many high-level employees left during his first year. Despite getting financial

results such as doubling the sales of the company, many of the changes he

made were criticized. He left the company in January 2007. [29]

A strong culture may also be a liability during a merger. During mergers and

acquisitions, companies inevitably experience a clash of cultures, as well as a

clash of structures and operating systems. Culture clash becomes more

problematic if both parties have unique and strong cultures. For example,

during the merger of Daimler AG with Chrysler Motors LLC to create

DaimlerChrysler AG, the differing strong cultures of each company acted as a

barrier to effective integration. Daimler had a strong engineering culture that

was more hierarchical and emphasized routinely working long hours. Daimler

employees were used to being part of an elite organization, evidenced by flying

first class on all business trips. On the other hand, Chrysler had a sales culture

where employees and managers were used to autonomy, working shorter

hours, and adhering to budget limits that meant only the elite flew first class.

The different ways of thinking and behaving in these two companies

introduced a number of unanticipated problems during the integration

process. [30] Differences in culture may be part of the reason that, in the end,

the merger didn’t work out.

Do Organizations Have a Single Culture?

So far, we have assumed that a company has a single culture that is shared

throughout the organization. However, you may have realized that this is an

oversimplification. In reality there might be multiple cultures within any given

organization. For example, people working on the sales floor may experience a

different culture from that experienced by people working in the warehouse. A

culture that emerges within different departments, branches, or geographic

locations is called a subculture. Subcultures may arise from the personal

characteristics of employees and managers, as well as the different conditions

under which work is performed. Within the same organization, marketing and

manufacturing departments often have different cultures such that the

marketing department may emphasize innovativeness, whereas the

manufacturing department may have a shared emphasis on detail orientation.

In an interesting study, researchers uncovered five different subcultures

within a single police organization. These subcultures differed depending on

the level of danger involved and the type of background experience the

individuals held, including “crime-fighting street professionals” who did what

their job required without rigidly following protocol and “anti-military social

workers” who felt that most problems could be resolved by talking to the

parties involved. [31] Research has shown that employee perceptions regarding

subcultures were related to employee commitment to the

organization. [32] Therefore, in addition to understanding the broader

organization’s values, managers will need to make an effort to understand

subculture values to see its impact on workforce behavior and attitudes.

Moreover, as an employee, you need to understand the type of subculture in

the department where you will work in addition to understanding the

company’s overall culture.

Sometimes, a subculture may take the form of a counterculture. Defined as

shared values and beliefs that are in direct opposition to the values of the

broader organizational culture, [33] countercultures are often shaped around a

charismatic leader. For example, within a largely bureaucratic organization,

an enclave of innovativeness and risk taking may emerge within a single

department. A counterculture may be tolerated by the organization as long as

it is bringing in results and contributing positively to the effectiveness of the

organization. However, its existence may be perceived as a threat to the

broader organizational culture. In some cases this may lead to actions that

would take away the autonomy of the managers and eliminate the

counterculture.

K E Y T A K E A W A Y

Culture can be understood in terms of seven different culture dimensions, depending

on what is most emphasized within the organization. For example, innovative

cultures are flexible and adaptable, and they experiment with new ideas, while

stable cultures are predictable, rule-oriented, and bureaucratic. Strong cultures can

be an asset or a liability for an organization but can be challenging to

change.

Organizations may have subcultures and countercultures, which can be challenging

to manage.

E X E R C I S E S

1. Think about an organization you are familiar with. Based on the dimensions of OCP,

how would you characterize its culture?

2. Out of the culture dimensions described, which dimension do you think would lead

to higher levels of employee satisfaction and retention? Which one would be related

to company performance?

3. What are the pros and cons of an outcome-oriented culture?

4. When bureaucracies were first invented they were considered quite innovative. Do

you think that different cultures are more or less effective at different points in time

and in different industries? Why or why not?

5. Can you imagine an effective use of subcultures within an organization?

15.3 Creating and Maintaining Organizational Culture

L E A R N I N G O B J E C T I V E S

1. Understand how cultures are created.

2. Learn how to maintain a culture.

3. Recognize organizational culture signs.

How Are Cultures Created?

Where do cultures come from? Understanding this question is important so

that you know how they can be changed. An organization’s culture is shaped as

the organization faces external and internal challenges and learns how to deal

with them. When the organization’s way of doing business provides a

successful adaptation to environmental challenges and ensures success, those

values are retained. These values and ways of doing business are taught to new

members as the way to do business. [1]

Figure 15.8 Culture Creation and Maintenance

The factors that are most important in the creation of an organization’s culture

include founders’ values, preferences, and industry demands.

Founder’s Values

A company’s culture, particularly during its early years, is inevitably tied to the

personality, background, and values of its founder or founders, as well as their

vision for the future of the organization. This explains one reason why culture

is so hard to change: It is shaped in the early days of a company’s history.

When entrepreneurs establish their own businesses, the way they want to do

business determines the organization’s rules, the structure set-up in the

company, and the people they hire to work with them. As a case in point, some

of the existing corporate values of the ice cream company Ben & Jerry’s

Homemade Holdings Inc. can easily be traced to the personalities of its

founders Ben Cohen and Jerry Greenfield. In 1978, the two ex-hippie high

school friends opened up their first ice-cream shop in a renovated gas station

in Burlington, Vermont. Their strong social convictions led them to buy only

from the local farmers and devote a certain percentage of their profits to

charities. The core values they instilled in their business can still be observed

in the current company’s devotion to social activism and sustainability, its

continuous contributions to charities, use of environmentally friendly

materials, and dedication to creating jobs in low-income areas. Even though

the company was acquired by Unilever PLC in 2000, the social activism

component remains unchanged and Unilever has expressed its commitment to

maintaining it. [2] There are many other examples of founders’ instilling their

own strongly held beliefs or personalities to the businesses they found. For

example, as mentioned earlier, Microsoft’s aggressive nature is often traced

back to Bill Gates and his competitiveness. According to one anecdote, his

competitive nature even extends to his personal life such that one of his

pastimes is to compete with his wife in solving identical jigsaw puzzles to see

who can finish faster. [3]Similarly, Joseph Pratt, a history and management

professor, notes, “There definitely is an Exxon way. This is John D.

Rockefeller’s company, this is Standard Oil of New Jersey, this is the one that

is most closely shaped by Rockefeller’s traditions. Their values are very clear.

They are deeply embedded. They have roots in 100 years of corporate

history.” [4]

Founder values become part of the corporate culture to the degree they help

the company be successful. For example, the social activism of Ben & Jerry’s

was instilled in the company because founders strongly believed in these

issues. However, these values probably would not be surviving three decades

later if they had not helped the company in its initial stages. In the case of Ben

& Jerry’s, these charitable values helped distinguish their brand from larger

corporate brands and attracted a loyal customer base. Thus, by providing a

competitive advantage, these values were retained as part of the corporate

culture and were taught to new members as the right way to do business.

Similarly, the early success of Microsoft may be attributed to its relatively

aggressive corporate culture, which provided a source of competitive

advantage.

Industry Demands

While founders undoubtedly exert a powerful influence over corporate

cultures, the industry characteristics also play a role. Industry characteristics

and demands act as a force to create similarities among organizational

cultures. For example, despite some differences, many companies in the

insurance and banking industries are stable and rule oriented, many

companies in the high-tech industry have innovative cultures, and companies

in the nonprofit industry tend to be people oriented. If the industry is one with

a large number of regulatory requirements—for example, banking, health care,

and nuclear power plant industries—then we might expect the presence of a

large number of rules and regulations, a bureaucratic company structure, and

a stable culture. Similarly, the high-tech industry requires agility, taking quick

action, and low concern for rules and authority, which may create a relatively

more innovative culture. [5] The industry influence over culture is also

important to know, because this shows that it may not be possible to imitate

the culture of a company in a different industry, even though it may seem

admirable to outsiders.

How Are Cultures Maintained?

As a company matures, its cultural values are refined and strengthened. The

early values of a company’s culture exert influence over its future values. It is

possible to think of organizational culture as an organism that protects itself

from external forces. Organizational culture determines what types of people

are hired by an organization and what types are left out. Moreover, once new

employees are hired, the company assimilates new employees and teaches

them the way things are done in the organization. We call these attraction-

selection-attrition and onboarding processes. We will also examine the role

of leaders and reward systems in shaping and maintaining an organization’s

culture. It is important to remember two points: The process of culture

creation is in fact more complex and less clean than the name implies.

Additionally, the influence of each factor on culture creation is reciprocal. For

example, just as leaders may influence what type of values the company has,

the culture may also determine what types of behaviors leaders demonstrate.

Attraction-Selection-Attrition (ASA)

Organizational culture is maintained through a process known as attraction-

selection-attrition. First, employees are attracted to organizations where they

will fit in. In other words, different job applicants will find different cultures to

be attractive. Someone who has a competitive nature may feel comfortable and

prefer to work in a company where interpersonal competition is the norm.

Others may prefer to work in a team-oriented workplace. Research shows that

employees with different personality traits find different cultures attractive.

For example, out of the Big Five personality traits, employees who

demonstrate neurotic personalities were less likely to be attracted to

innovative cultures, whereas those who had openness to experience were more

likely to be attracted to innovative cultures.[6] As a result, individuals will self-

select the companies they work for and may stay away from companies that

have core values that are radically different from their own.

Of course this process is imperfect, and value similarity is only one reason a

candidate might be attracted to a company. There may be other, more

powerful attractions such as good benefits. For example, candidates who are

potential misfits may still be attracted to Google because of the cool perks

associated with being a Google employee. At this point in the process, the

second component of the ASA framework prevents them from getting in:

Selection. Just as candidates are looking for places where they will fit in,

companies are also looking for people who will fit into their current corporate

culture. Many companies are hiring people for fit with their culture, as

opposed to fit with a certain job. For example, Southwest Airlines prides itself

for hiring employees based on personality and attitude rather than specific

job-related skills, which are learned after being hired. This is important for job

applicants to know, because in addition to highlighting your job-relevant

skills, you will need to discuss why your personality and values match those of

the company. Companies use different techniques to weed out candidates who

do not fit with corporate values. For example, Google relies on multiple

interviews with future peers. By introducing the candidate to several future

coworkers and learning what these coworkers think of the candidate, it

becomes easier to assess the level of fit. The Container Store Inc. ensures

culture fit by hiring among their customers. [7] This way, they can make sure

that job candidates are already interested in organizing their lives and

understand the company’s commitment to helping customers organize theirs.

Companies may also use employee referrals in their recruitment process. By

using their current employees as a source of future employees, companies may

make sure that the newly hired employees go through a screening process to

avoid potential person-culture mismatch.

Even after a company selects people for person-organization fit, there may be

new employees who do not fit in. Some candidates may be skillful in

impressing recruiters and signal high levels of culture fit even though they do

not necessarily share the company’s values. Moreover, recruiters may suffer

from perceptual biases and hire some candidates thinking that they fit with

the culture even though the actual fit is low. In any event, the organization is

going to eventually eliminate candidates who do not fit in through attrition.

Attrition refers to the natural process in which the candidates who do not fit in

will leave the company. Research indicates that person-organization misfit is

one of the important reasons for employee turnover. [8]

Click and Learn More
Texas Instruments Inc. includes a Workplace and Values Check on its Web

page for potential applicants to see if they fit Texas Instrument’s culture.

To view this Web site, go

to http://focus.ti.com/careers/docs/fitchecktool.tsp?sectionId=152&tabId=1

678

As a result of the ASA process, the company attracts, selects, and retains

people who share its core values. On the other hand, those people who are

different in core values will be excluded from the organization either during

the hiring process or later on through naturally occurring turnover. Thus,

http://focus.ti.com/careers/docs/fitchecktool.tsp?sectionId=152&tabId=1678

http://focus.ti.com/careers/docs/fitchecktool.tsp?sectionId=152&tabId=1678

organizational culture will act as a self-defending organism where intrusive

elements are kept out. Supporting the existence of such self-protective

mechanisms, research shows that organizations demonstrate a certain level of

homogeneity regarding personalities and values of organizational members. [9]

New Employee Onboarding

Another way in which an organization’s values, norms, and behavioral

patterns are transmitted to employees is through onboarding (also referred to

as the organizational socialization process). Onboarding refers to the

process through which new employees learn the attitudes, knowledge, skills,

and behaviors required to function effectively within an organization. If an

organization can successfully socialize new employees into becoming

organizational insiders, new employees feel confident regarding their ability to

perform, sense that they will feel accepted by their peers, and understand and

share the assumptions, norms, and values that are part of the organization’s

culture. This understanding and confidence in turn translate into more

effective new employees who perform better and have higher job satisfaction,

stronger organizational commitment, and longer tenure within the

company. [10]

There are many factors that play a role in the successful adjustment of new

employees. New employees can engage in several activities to help increase

their own chances of success at a new organization. Organizations also engage

in different activities, such as implementing orientation programs or matching

new employees with mentors, which may facilitate onboarding.

What Can Employees Do During Onboarding?

New employees who are proactive, seek feedback, and build strong

relationships tend to be more successful than those who do not. [11] for

example, feedback seeking helps new employees. Especially on a first job, a new

employee can make mistakes or gaffes and may find it hard to understand and

interpret the ambiguous reactions of coworkers. New hires may not know

whether they are performing up to standards, whether it was a good idea to

mention a company mistake in front of a client, or why other employees are

asking if they were sick over the weekend because of not responding to work-

related e-mails. By actively seeking feedback, new employees may find out

sooner rather than later any behaviors that need to be changed and gain a

better understanding of whether their behavior fits with the company culture

and expectations. Several studies show the benefits of feedback seeking for

new employee adjustment.

Relationship building, or networking, is another important behavior new

employees may demonstrate. Particularly when a company does not have a

systematic approach to onboarding, it becomes more important for new

employees to facilitate their own onboarding by actively building

relationships. According to one estimate, 35% of managers who start a new job

fail in the new job and either voluntarily leave or are fired within 1.5 years. Of

these, over 60% report not being able to form effective relationships with

colleagues as the primary reason for their failure. [12] New employees may take

an active role in building relations by seeking opportunities to have a

conversation with their new colleagues, arranging lunches or coffee with them,

participating in company functions, and making the effort to build a

relationship with their new supervisor. [13]

OB Toolbox: You’ve Got a New Job! Now How Do You Get
on Board?
 Gather information. Try to find as much about the company and the job as

you can before your first day. After you start working, be a good observer,

gather information, and read as much as you can to understand your job and

the company. Examine how people are interacting, how they dress, and how

they act to avoid behaviors that might indicate to others that you are a misfit.

 Manage your first impression. First impressions may endure, so make sure

that you dress appropriately, are friendly, and communicate your excitement

to be a part of the team. Be on your best behavior!

 Invest in relationship development. The relationships you develop with your

manager and with coworkers will be essential for you to adjust to your new

job. Take the time to strike up conversations with them. If there are work

functions during your early days, make sure not to miss them!

 Seek feedback. Ask your manager or coworkers how well you are doing and

whether you are meeting expectations. Listen to what they are telling you and

also listen to what they are not saying. Then, make sure to act upon any

suggestions for improvement. Be aware that after seeking feedback, you may

create a negative impression if you consistently ignore the feedback you

receive.

 Show success early on. In order to gain the trust of your new manager and

colleagues, you may want to establish a history of success early. Volunteer for

high-profile projects where you will be able to demonstrate your skills.

Alternatively, volunteer for projects that may serve as learning opportunities

or that may put you in touch with the key people in the company.

Sources: Adapted from ideas in Couzins, M., & Beagrie, S. (2005, March 1).

How to…survive the first six months of a new job. Personnel Today, 27;

Wahlgreen, E. (2002, December 5). Getting up to speed at a new job. Business

Week Online. Retrieved January 29, 2009, from

http://www.businessweek.com/careers/content/dec2002/ca2002123_2774.h

tm.

http://www.businessweek.com/careers/content/dec2002/ca2002123_2774.htm

http://www.businessweek.com/careers/content/dec2002/ca2002123_2774.htm

What Can Organizations Do During Onboarding?

Many organizations, including Microsoft, Kellogg Company, and Bank of

America, take a more structured and systematic approach to new employee

onboarding, while others follow a “sink or swim” approach in which new

employees struggle to figure out what is expected of them and what the norms

are.

A formal orientation program indoctrinates new employees to the company

culture, as well as introduces them to their new jobs and colleagues. An

orientation program is important, because it has a role in making new

employees feel welcome in addition to imparting information that may help

new employees be successful on their new jobs. Many large organizations have

formal orientation programs consisting of lectures, videotapes, and written

material, while some may follow more unusual approaches. According to one

estimate, most orientations last anywhere from one to five days, and some

companies are currently switching to a computer-based orientation. Ritz-

Carlton, the company ranked number 1 in Training magazine’s 2007 top 125 list,

uses a very systematic approach to employee orientation and views orientation

as the key to retention. In the two-day classroom orientation, employees

spend time with management, dine in the hotel’s finest restaurant, and

witness the attention to customer service detail firsthand. For example, they

receive hand-written welcome notes and their favorite snacks during the

break. During these two days, they are introduced to the company’s intensive

service standards, team orientation, and its own language. Later, on their 21st

day, they are tested on the company’s service standards and are

certified. [14] Research shows that formal orientation programs are helpful in

teaching employees about the goals and history of the company, as well as

communicating the power structure. Moreover, these programs may also help

with a new employee’s integration into the team. However, these benefits may

not be realized to the same extent in computer-based orientations. In fact,

compared to those taking part in a regular, face-to-face orientation,

individuals undergoing a computer-based orientation were shown to have

lower understanding of their job and the company, indicating that different

formats of orientations may not substitute for each other. [15]

What Can Organizational Insiders Do During Onboarding?

One of the most important ways in which organizations can help new

employees adjust to a company and a new job is through organizational insiders—

namely supervisors, coworkers, and mentors. Research shows that leaders

have a key influence over onboarding, and the information and support

leaders provide determine how quickly employees learn about the company

politics and culture. Coworker influence determines the degree to which

employees adjust to their teams. Mentors can be crucial to helping new

employees adjust by teaching them the ins and outs of their jobs and how the

company really operates. A mentor is a trusted person who provides an

employee with advice and support regarding career-related matters. Although

a mentor can be any employee or manager who has insights that are valuable

to the new employee, mentors tend to be relatively more experienced than

their protégés. Mentoring can occur naturally between two interested

individuals, or organizations can facilitate this process by having formal

mentoring programs. These programs may successfully bring together

mentors and protégés who would not come together otherwise. Research

indicates that the existence of these programs does not guarantee their

success, and there are certain program characteristics that may make these

programs more effective. For example, when mentors and protégés feel that

they had input in the mentor-protégé matching process, they tend to be more

satisfied with the arrangement. Moreover, when mentors receive training

beforehand, the outcomes of the program tend to be more positive. [16] Because

mentors may help new employees interpret and understand the company’s

culture, organizations may benefit from selecting mentors who personify the

company’s values. Thus, organizations may need to design these programs

carefully to increase their chance of success.

Leadership

Leaders are instrumental in creating and changing an organization’s culture.

There is a direct correspondence between a leader’s style and an organization’s

culture. For example, when leaders motivate employees through inspiration,

corporate culture tends to be more supportive and people oriented. When

leaders motivate by making rewards contingent on performance, the corporate

culture tends to be more performance oriented and competitive.[17] In these

and many other ways, what leaders do directly influences the cultures their

organizations have.

Part of the leader’s influence over culture is through role modeling. Many

studies have suggested that leader behavior, the consistency between

organizational policy and leader actions, and leader role modeling determine

the degree to which the organization’s culture emphasizes ethics. [18] The

leader’s own behaviors will signal to employees what is acceptable behavior

and what is unacceptable. In an organization in which high-level managers

make the effort to involve others in decision making and seek opinions of

others, a team-oriented culture is more likely to evolve. By acting as role

models, leaders send signals to the organization about the norms and values

that are expected to guide the actions of organizational members.

Leaders also shape culture by their reactions to the actions of others around

them. For example, do they praise a job well done, or do they praise a favored

employee regardless of what was accomplished? How do they react when

someone admits to making an honest mistake? What are their priorities? In

meetings, what types of questions do they ask? Do they want to know what

caused accidents so that they can be prevented, or do they seem more

concerned about how much money was lost as a result of an accident? Do they

seem outraged when an employee is disrespectful to a coworker, or does their

reaction depend on whether they like the harasser? Through their day-to-day

actions, leaders shape and maintain an organization’s culture.

Reward Systems

Finally, the company culture is shaped by the type of reward systems used in

the organization, and the kinds of behaviors and outcomes it chooses to

reward and punish. One relevant element of the reward system is whether the

organization rewards behaviors or results. Some companies have reward

systems that emphasize intangible elements of performance as well as more

easily observable metrics. In these companies, supervisors and peers may

evaluate an employee’s performance by assessing the person’s behaviors as

well as the results. In such companies, we may expect a culture that is

relatively people or team oriented, and employees act as part of a

family. [19] On the other hand, in companies that purely reward goal

achievement, there is a focus on measuring only the results without much

regard to the process. In these companies, we might observe outcome-oriented

and competitive cultures. Another categorization of reward systems might be

whether the organization uses rankings or ratings. In a company where the

reward system pits members against one another, where employees are

ranked against each other and the lower performers receive long-term or

short-term punishments, it would be hard to develop a culture of people

orientation and may lead to a competitive culture. On the other hand,

evaluation systems that reward employee behavior by comparing them to

absolute standards as opposed to comparing employees to each other may

pave the way to a team-oriented culture. Whether the organization rewards

performance or seniority would also make a difference in culture. When

promotions are based on seniority, it would be difficult to establish a culture

of outcome orientation. Finally, the types of behaviors that are rewarded or

ignored set the tone for the culture. Service-oriented cultures reward,

recognize, and publicize exceptional service on the part of their employees. In

safety cultures, safety metrics are emphasized and the organization is proud of

its low accident ratings. What behaviors are rewarded, which ones are

punished, and which are ignored will determine how a company’s culture

evolves.

OB Toolbox: Best Practices
How to Maximize Onboarding Success

Onboarding plans should have the following characteristics:

 Written down. If your organization does not have a formal plan, write one

yourself. It may not make sense to share it with others, but at least you will

have a roadmap. If your organization does have one, refer to it on a monthly

basis.

 Participatory. The power of onboarding programs is in the interaction. Try to

get participation from others to the extent possible and engage in onboarding

activities offered to you by the organization.

 Tracked over time. Keep in mind that research shows onboarding has a

rhythm of 30-, 60-, 90-, and 180-day milestones. Be sure to track your

progress.

 Clear on objectives, timeline, roles, and responsibilities. This will help ensure

that role conflict and ambiguity doesn’t detour your onboarding process.

 Clear on scheduled key stakeholder meetings with managers and mentors.

Include a plan for

1. going over strengths and development areas;

2. hearing about potential problems and critical advice to help you be successful.

 Be sure to include a list of your key questions and things you need to help you

do your job better.

Source: Adapted from Bauer, T. N., & Elder, E. (2006). Onboarding

newcomers into an organization. 58th Annual Society for Human Resource

Management (SHRM) Conference & Exposition. Washington, DC.

Visual Elements of Organizational Culture

How do you find out about a company’s culture? We emphasized earlier that

culture influences the way members of the organization think, behave, and

interact with one another. Thus, one way of finding out about a company’s

culture is by observing employees or interviewing them. At the same time,

culture manifests itself in some visible aspects of the organization’s

environment. In this section, we discuss five ways in which culture shows itself

to observers and employees.

Mission Statement

A mission statement is a statement of purpose, describing who the company is

and what it does. Many companies have mission statements, but they do not

always reflect the company’s values and its purpose. An effective mission

statement is well known by employees, is transmitted to all employees starting

from their first day at work, and influences employee behavior.

Not all mission statements are effective, because some are written by public

relations specialists and can be found in a company’s Web site, but it does not

affect how employees act or behave. In fact, some mission statements reflect

who the company wants to be as opposed to who they actually are. If the

mission statement does not affect employee behavior on a day-to-day basis, it

has little usefulness as a tool for understanding the company’s culture. An oft-

cited example of a mission statement that had little impact on how a company

operates belongs to Enron. Their missions and values statement began, “As a

partner in the communities in which we operate, Enron believes it has a

responsibility to conduct itself according to certain basic principles.” Their

values statement included such ironic declarations as “We do not tolerate

abusive or disrespectful treatment. Ruthlessness, callousness and arrogance

don’t belong here.” [20]

A mission statement that is taken seriously and widely communicated may

provide insights into the corporate culture. For example, the Mayo Clinic’s

mission statement is “The needs of the patient come first.” This mission

statement evolved from the founders who are quoted as saying, “The best

interest of the patient is the only interest to be considered.” Mayo Clinics have

a corporate culture that puts patients first. For example, no incentives are

given to physicians based on the number of patients they see. Because doctors

are salaried, they have no interest in retaining a patient for themselves and

they refer the patient to other doctors when needed. [21] Wal-Mart Stores Inc.

may be another example of a company who lives its mission statement, and

therefore its mission statement may give hints about its culture: “Saving

people money so they can live better.”[22] In fact, their culture emphasizes

thrift and cost control in everything they do. For example, even though most

CEOs of large companies in the United States have lavish salaries and showy

offices, Wal-Mart’s CEO Michael Duke and other high-level corporate officers

work out of modest offices in the company’s headquarters.

Figure 15.10 Visual Elements of Culture

Rituals

Rituals refer to repetitive activities within an organization that have symbolic

meaning. [23] Usually rituals have their roots in the history of a company’s

culture. They create camaraderie and a sense of belonging among employees.

They also serve to teach employees corporate values and create identification

with the organization. For example, at the cosmetics firm Mary Kay Inc.,

employees attend award ceremonies recognizing their top salespeople with an

award of a new car—traditionally a pink Cadillac. These ceremonies are

conducted in large auditoriums where participants wear elaborate evening

gowns and sing company songs that create emotional excitement. During this

ritual, employees feel a connection to the company culture and its values, such

as self-determination, will power, and enthusiasm. [24] Another example of

rituals is the Saturday morning meetings of Wal-Mart. This ritual was first

created by the company founder Sam Walton, who used these meetings to

discuss which products and practices were doing well and which required

adjustment. He was able to use this information to make changes in Wal-

Mart’s stores before the start of the week, which gave him a competitive

advantage over rival stores who would make their adjustments based on

weekly sales figures during the middle of the following week. Today, hundreds

of Wal-Mart associates attend the Saturday morning meetings in the

Bentonville, Arkansas, headquarters. The meetings, which run from 7:00 to

9:30 a.m., start and end with the Wal-Mart cheer; the agenda includes a

discussion of weekly sales figures and merchandising tactics. As a ritual, the

meetings help maintain a small-company atmosphere, ensure employee

involvement and accountability, communicate a performance orientation, and

demonstrate taking quick action. [25]

Rules and Policies

Another way in which an observer may find out about a company’s culture is

to examine its rules and policies. Companies create rules to determine

acceptable and unacceptable behavior, and thus the rules that exist in a

company will signal the type of values it has. Policies about issues such as

decision making, human resources, and employee privacy reveal what the

company values and emphasizes. For example, a company that has a policy

such as “all pricing decisions of merchandise will be made at corporate

headquarters” is likely to have a centralized culture that is hierarchical, as

opposed to decentralized and empowering. Similarly, a company that extends

benefits to both part-time and full-time employees, as well as to spouses and

domestic partners, signals to employees and observers that it cares about its

employees and shows concern for their well-being. By offering employees

flexible work hours, sabbaticals, and telecommuting opportunities, a company

may communicate its emphasis on work-life balance. The presence or absence

of policies on sensitive issues such as English-only rules, bullying or unfair

treatment of others, workplace surveillance, open-door policies, sexual

harassment, workplace romances, and corporate social responsibility all

provide pieces of the puzzle that make up a company’s culture.

Physical Layout

A company’s building, including the layout of employee offices and other work

spaces, communicates important messages about a company’s culture. The

building architecture may indicate the core values of an organization’s culture.

For example, visitors walking into the Nike Inc. campus in Beaverton, Oregon,

can witness firsthand some of the distinguishing characteristics of the

company’s culture. The campus is set on 74 acres and boasts an artificial lake,

walking trails, soccer fields, and cutting-edge fitness centers. The campus

functions as a symbol of Nike’s values such as energy, physical fitness, an

emphasis on quality, and a competitive orientation. In addition, at fitness

centers on the Nike headquarters, only those wearing Nike shoes and apparel

are allowed in. This sends a strong signal that loyalty is expected. The

company’s devotion to athletes and their winning spirits is manifested in

campus buildings named after famous athletes, photos of athletes hanging on

the walls, and honorary statues dotting the campus. [26] A very different tone

awaits visitors to Wal-Mart headquarters, where managers have gray and

windowless offices. [27] By putting its managers in small offices and avoiding

outward signs of flashiness, Wal-Mart does a good job of highlighting its

values of economy.

The layout of the office space also is a strong indicator of a company’s culture.

A company that has an open layout where high-level managers interact with

employees may have a culture of team orientation and egalitarianism, whereas

a company where high-level managers have their own floor may indicate a

higher level of hierarchy. Microsoft employees tend to have offices with walls

and a door, because the culture emphasizes solitude, concentration, and

privacy. In contrast, Intel Corporation is famous for its standard cubicles,

which reflect its culture of equality. The same value can also be observed in its

avoidance of private and reserved parking spots. [28] The degree to which

playfulness, humor, and fun is part of a company’s culture may be indicated in

the office environment. For example, Jive Software boasts a colorful, modern,

and comfortable office design. Their break room is equipped with a keg of

beer, free snacks and sodas, an XBOX 360, and Nintendo Wii. A casual

observation of their work environment sends the message that employees who

work there see their work as fun. [29]

Stories

Perhaps the most colorful and effective way in which organizations

communicate their culture to new employees and organizational members is

through the skillful use of stories. A story can highlight a critical event an

organization faced and the collective response to it, or can emphasize a heroic

effort of a single employee illustrating the company’s values. The stories

usually engage employee emotions and generate employee identification with

the company or the heroes of the tale. A compelling story may be a key

mechanism through which managers motivate employees by giving their

behavior direction and energizing them toward a certain goal. [30] Moreover,

stories shared with new employees communicate the company’s history, its

values and priorities, and serve the purpose of creating a bond between the

new employee and the organization. For example, you may already be familiar

with the story of how a scientist at 3M invented Post-it notes. Arthur Fry, a 3M

scientist, was using slips of paper to mark the pages of hymns in his church

choir, but they kept falling off. He remembered a super-weak adhesive that

had been invented in 3M’s labs, and he coated the markers with this adhesive.

Thus, the Post-it notes were born. However, marketing surveys for the interest

in such a product were weak, and the distributors were not convinced that it

had a market. Instead of giving up, Fry distributed samples of the small yellow

sticky notes to secretaries throughout his company. Once they tried them,

people loved them and asked for more. Word spread, and this led to the

ultimate success of the product. As you can see, this story does a great job of

describing the core values of a 3M employee: Being innovative by finding

unexpected uses for objects, persevering, and being proactive in the face of

negative feedback. [31]

OB Toolbox: As a Job Candidate, How Would You Find
Out If You Are a Good Fit?
 Do your research. Talking to friends and family members who are familiar

with the company, doing an online search for news articles about the

company, browsing the company’s Web site, and reading their mission

statement would be a good start.

 Observe the physical environment. Do people work in cubicles or in offices?

What is the dress code? What is the building structure? Do employees look

happy, tired, or stressed? The answers to these questions are all pieces of the

puzzle.

 Read between the lines. For example, the absence of a lengthy employee

handbook or detailed procedures might mean that the company is more

flexible and less bureaucratic.

 How are you treated? The recruitment process is your first connection to the

company. Were you treated with respect? Do they maintain contact with you,

or are you being ignored for long stretches at a time?

 Ask questions. What happened to the previous incumbent of this job? What

does it take to be successful in this firm? What would their ideal candidate for

the job look like? The answers to these questions will reveal a lot about the

way they do business.

 Listen to your gut. Your feelings about the place in general, and your future

manager and coworkers in particular, are important signs that you should not

ignore.

Sources: Adapted from ideas in Daniel, L., & Brandon, C. (2006). Finding

the right job fit. HR Magazine, 51, 62–67; Sacks, D. (2005). Cracking your next

company’s culture. Fast Company, 99, 85–87.

K E Y T A K E A W A Y

Organization cultures are created by a variety of factors, including founders’ values

and preferences, industry demands, and early values, goals, and assumptions.

Culture is maintained through attraction-selection-attrition, new employee

onboarding, leadership, and organizational reward systems. Signs of a company’s

culture include the organization’s mission statement, stories, physical layout, rules

and policies, and rituals.

E X E R C I S E S

1. Do you think it is a good idea for companies to emphasize person-organization fit

when hiring new employees? What advantages and disadvantages do you see when

hiring people who fit with company values?

2. What is the influence of company founders on company culture? Give examples

based on your personal knowledge.

3. What are the methods companies use to aid with employee onboarding? What is the

importance of onboarding for organizations?

4. What type of a company do you feel would be a good fit for you? What type of a

culture would be a misfit for you? In your past work experience, were there any

moments when you felt that you did not fit with the organization? Why?

5. What is the role of physical layout as an indicator of company culture? What type of

a physical layout would you expect from a company that is people oriented? Team

oriented? Stable?

15.4 Creating Culture Change

L E A R N I N G O B J E C T I V E S

1. Explain why culture change may be necessary.

2. Understand the process of culture change.

How Do Cultures Change?

Culture is part of a company’s DNA and is resistant to change efforts.

Unfortunately, many organizations may not even realize that their current

culture constitutes a barrier against organizational productivity and

performance. Changing company culture may be the key to the company

turnaround when there is a mismatch between an organization’s values and

the demands of its environment.

Certain conditions may help with culture change. For example, if an

organization is experiencing failure in the short run or is under threat of

bankruptcy or an imminent loss of market share, it would be easier to

convince managers and employees that culture change is necessary. A

company can use such downturns to generate employee commitment to the

change effort. However, if the organization has been successful in the past,

and if employees do not perceive an urgency necessitating culture change, the

change effort will be more challenging. Sometimes the external environment

may force an organization to undergo culture change. Mergers and acquisitions are

another example of an event that changes a company’s culture. In fact, the

ability of the two merging companies to harmonize their corporate cultures is

often what makes or breaks a merger effort. When Ben & Jerry’s was acquired

by Unilever, Ben & Jerry’s had to change parts of its culture while attempting

to retain some of its unique aspects. Corporate social responsibility, creativity,

and fun remained as parts of the culture. In fact, when Unilever appointed a

veteran French executive as the CEO of Ben & Jerry’s in 2000, he was greeted

by an Eiffel tower made out of ice cream pints, Edith Piaf songs, and

employees wearing berets and dark glasses. At the same time, the company

had to become more performance oriented in response to the acquisition. All

employees had to keep an eye on the bottom line. For this purpose, they took

an accounting and finance course for which they had to operate a lemonade

stand. [1] Achieving culture change is challenging, and many companies

ultimately fail in this mission. Research and case studies of companies that

successfully changed their culture indicate that the following six steps increase

the chances of success. [2]

Figure 15.12 Six Steps to Culture Change

Creating a Sense of Urgency

In order for the change effort to be successful, it is important to communicate

the need for change to employees. One way of doing this is to create a sense of

urgency on the part of employees and explain to them why changing the

fundamental way in which business is done is so important. In successful

culture change efforts, leaders communicate with employees and present a

case for culture change as the essential element that will lead the company to

eventual success. As an example, consider the situation at IBM Corporation in

1993 when Lou Gerstner was brought in as CEO and chairman. After decades

of dominating the market for mainframe computers, IBM was rapidly losing

market share to competitors, and its efforts to sell personal computers—the

original “PC”—were seriously undercut by cheaper “clones.” In the public’s

estimation, the name IBM had become associated with obsolescence. Gerstner

recalls that the crisis IBM was facing became his ally in changing the

organization’s culture. Instead of spreading optimism about the company’s

future, he used the crisis at every opportunity to get buy-in from employees. [3]

Changing Leaders and Other Key Players

A leader’s vision is an important factor that influences how things are done in

an organization. Thus, culture change often follows changes at the highest

levels of the organization. Moreover, in order to implement the change effort

quickly and efficiently, a company may find it helpful to remove managers and

other powerful employees who are acting as a barrier to change. Because of

political reasons, self interest, or habits, managers may create powerful

resistance to change efforts. In such cases, replacing these positions with

employees and managers giving visible support to the change effort may

increase the likelihood that the change effort succeeds. For example, when

Robert Iger replaced Michael Eisner as CEO of the Walt Disney Company, one

of the first things he did was to abolish the central planning unit, which was

staffed by people close to ex-CEO Eisner. This department was viewed as a

barrier to creativity at Disney, and its removal from the company was helpful

in ensuring the innovativeness of the company culture. [4]

Role Modeling

Role modeling is the process by which employees modify their own beliefs and

behaviors to reflect those of the leader. [5] CEOs can model the behaviors that

are expected of employees to change the culture. The ultimate goal is that

these behaviors will trickle down to lower level employees. For example, when

Robert Iger took over Disney, in order to show his commitment to innovation,

he personally became involved in the process of game creation, attended

summits of developers, and gave feedback to programmers about the games.

Thus, he modeled his engagement in the idea creation process. In contrast,

modeling of inappropriate behavior from the top will lead to the same

behavior trickling down to lower levels. A recent example of this type of role

modeling is the scandal involving Hewlett-Packard Development Company LP

board members. In 2006, when board members were suspected of leaking

confidential company information to the press, the company’s top-level

executives hired a team of security experts to find the source of the leak. The

investigators sought the phone records of board members, linking them to

journalists. For this purpose, they posed as board members and called phone

companies to obtain the itemized home phone records of board members and

journalists. When the investigators’ methods came to light, HP’s chairman and

four other top executives faced criminal and civil charges. When such behavior

is modeled at top levels, it is likely to have an adverse impact on the company

culture. [6]

Training

Well-crafted training programs may be instrumental in bringing about culture

change by teaching employees the new norms and behavioral styles. For

example, after the space shuttle Columbia disintegrated upon reentry from a

February 2003 mission, NASA decided to change its culture to become more

safety sensitive and minimize decision-making errors leading to unsafe

behaviors. The change effort included training programs in team processes

and cognitive bias awareness. Similarly, when auto repairer Midas

International Corporation felt the need to change its culture to be more

committed to customers, they developed a training program making

employees familiar with customer emotions and helping form better

connections with them. Customer reports have been overwhelmingly positive

in stores that underwent this training. [7]

Changing the Reward System

The criteria with which employees are rewarded and punished have a powerful

role in determining the cultural values in existence. Switching from a

commission-based incentive structure to a straight salary system may be

instrumental in bringing about customer focus among sales employees.

Moreover, by rewarding employees who embrace the company’s new values

and even promoting these employees, organizations can make sure that

changes in culture have a lasting impact. If a company wants to develop a

team-oriented culture where employees collaborate with each other, methods

such as using individual-based incentives may backfire. Instead, distributing

bonuses to intact teams might be more successful in bringing about culture

change.

Creating New Symbols and Stories

Finally, the success of the culture change effort may be increased by

developing new rituals, symbols, and stories. Continental Airlines Inc. is a

company that successfully changed its culture to be less bureaucratic and

more team oriented in the 1990s. One of the first things management did to

show employees that they really meant to abolish many of the detailed

procedures the company had and create a culture of empowerment was to

burn the heavy 800-page company policy manual in their parking lot. The new

manual was only 80 pages. This action symbolized the upcoming changes in

the culture and served as a powerful story that circulated among employees.

Another early action was the redecorating of waiting areas and repainting of

all their planes, again symbolizing the new order of things. [8] By replacing the

old symbols and stories, the new symbols and stories will help enable the

culture change and ensure that the new values are communicated.

K E Y T A K E A W A Y

Organizations need to change their culture to respond to changing conditions in the

environment, to remain competitive, and to avoid complacency or stagnation.

Culture change often begins by the creation of a sense of urgency. Next, a change of

leaders and other key players may enact change and serve as effective role models

of new behavior. Training can also be targeted toward fostering these new

behaviors. Reward systems are changed within the organization. Finally, the

organization creates new stories and symbols.

E X E R C I S E S

1. Can new employees change a company’s culture? If so, how?

2. Are there conditions under which change is not possible? If so, what would such

conditions be?

3. Have you ever observed a change process at an organization you were involved

with? If so, what worked well and what didn’t?

4. What recommendations would you have for someone considering a major change of

culture within their own organization?

15.5 The Role of Ethics and National Culture

L E A R N I N G O B J E C T I V E S

1. Consider the role of culture in ethical behavior.

2. Consider the role of national culture on organizational culture.

Organizational Culture and Ethics

A recent study of 3,000 employees and managers in the United States

confirms that the degree to which employees in an organization behave

ethically depends on the culture of the organization. [1] Without a culture

emphasizing the importance of integrity, honesty, and trust, mandatory ethics

training programs are often doomed to fail. Thus, creating such a culture is

essential to avoiding the failures of organizations such as WorldCom and

Enron. How is such a culture created?

The factors we highlighted in this chapter will play a role in creating an ethical

culture. Among all factors affecting ethical culture creation, leadership may be

the most influential. Leaders, by demonstrating high levels of honesty and

integrity in their actions, can model the behaviors that are demanded in an

organization. If their actions contradict their words, establishing a culture of

ethics will be extremely difficult. As an example, former chairman and CEO of

Enron Kenneth Lay forced all his employees to use his sister’s travel agency,

even though the agency did not provide high-quality service or better

prices. [2] Such behavior at the top is sure to trickle down. Leaders also have a

role in creating a culture of ethics, because they establish the reward systems

being used in a company. There is a relationship between setting very difficult

goals for employees and unethical behavior. [3] When leaders create an

extremely performance-oriented culture where only results matter and there is

no tolerance for missing one’s targets, the culture may start rewarding

unethical behaviors. Instead, in organizations such as General Electric

Company where managers are evaluated partly based on metrics assessing

ethics, behaving in an ethical manner becomes part of the core company

values. [4]

Organizational Culture Around the Globe

The values, norms, and beliefs of a company may also be at least partially

imposed by the national culture. When an entrepreneur establishes an

organization, the values transmitted to the organization may be because of the

cultural values of the founder and the overall society. If the national culture in

general emphasizes competitiveness, a large number of the companies

operating in this context may also be competitive. In countries emphasizing

harmony and conflict resolution, a team-oriented culture may more easily take

root. For example, one study comparing universities in Arab countries and

Japan found that the Japanese universities were characterized by modesty and

frugality, potentially reflecting elements of the Japanese culture. The study

also found that the Arab universities had buildings that were designed to

impress and had restricted access, which may be a reflection of the relatively

high power distance of the Arab cultures. Similarly, another study found that

elements of Brazilian culture such as relationships being more important than

jobs, tendency toward hierarchy, and flexibility were reflected in

organizational culture values such as being hierarchical and emphasizing

relational networks. [5] It is important for managers to know the relationship

between national culture and company culture, because the relationship

explains why it would sometimes be challenging to create the same company

culture globally.

K E Y T A K E A W A Y

Without a culture emphasizing the importance of integrity, honesty, and trust, the

mandatory ethics training programs are often doomed to fail. The values, norms, and

beliefs of a company may also be at least partially imposed by the national culture.

E X E R C I S E S

1. Have you seen examples of ethical or unethical organizational cultures? Describe

what you observed.

2. Have you seen examples of national culture affecting an organization’s culture?

3. What advice would you give to someone who was interested in starting a new

division of a company in another culture?

15.6 Conclusion
To summarize, in this chapter we have reviewed what defines organizational

culture, how it is created, and how it can be changed. Corporate culture may

be the greatest strength or a serious limitation for a company, depending on

whether the values held are in line with corporate strategy and environmental

demands. Even though changing an organization’s culture is difficult, success

of the organization may require the change. Leaders, through their actions,

role modeling, rule making, and story creation, serve as instrumental change

agents.

15.7 Exercises

E T H I C A L D I L E M M A

Your company is in the process of hiring a benefits specialist. As a future peer of the

person to be hired, you will be one of the interviewers and will talk to all candidates.

The company you are working for is a small organization that was acquired. The job

advertisement for the position talks about the high level of autonomy that will be

available to the job incumbent. Moreover, your manager wants you to sell the

position by highlighting the opportunities that come from being a part of

a Fortune 500, such as career growth and the opportunity to gain global expertise.

The problem is that you do not believe being part of a larger company is such a

benefit. In fact, since the company has been acquired by the Fortune 500, the way

business is being conducted has changed dramatically. Now there are many rules and

regulations that prevent employees from making important decisions autonomously.

Moreover, no one from this branch was ever considered for a position in the

headquarters or for any global openings. In other words, the picture being painted

by the hiring managers and the company’s HR department in the job advertisements

is inflated and not realistic. Your manager feels you should sell the job and the

company because your competitors are doing the same thing, and being honest

might mean losing great candidates. You know that you and your manager will

interview several candidates together.

Is this unethical? Why or why not? What would you do before and during the

interview to address this dilemma?

I N D I V I D U A L E X E R C I S E

Impact of HR Practices on Organizational Culture

Below are scenarios of critical decisions you may need to make as a manager. Read

each question and select one from each pair of statements. Then, think about the

impact your choice would have on the company’s culture.

1. You need to lay off 10 people. Would you

o lay off the newest 10 people?

o lay off the 10 people who have the lowest performance evaluations?

2. You need to establish a dress code. Would you

o ask employees to use their best judgment?

o create a detailed dress code highlighting what is proper and improper?

3. You need to monitor employees during work hours. Would you

o not monitor them because they are professionals and you trust them?

o install a program monitoring their Web usage to ensure that they are spending work

hours actually doing work?

4. You need to conduct performance appraisals. Would you

o evaluate people on the basis of their behaviors?

o evaluate people on the basis of their results (numerical sales figures and so on)?

5. You need to promote individuals. Would you promote individuals based on

o seniority?

o objective performance?

G R O U P E X E R C I S E

Recruiting Employees Who Fit the Culture

You are an employee of a local bookstore. The store currently employs 50 employees

and is growing. This is a family-owned business, and employees feel a sense of

belonging to this company. Business is conducted in an informal manner, there are

not many rules, and people feel like they are part of a family. There are many

friendships at work, and employees feel that they have a lot of autonomy regarding

how they perform their jobs. Customer service is also very important in this

company. Employees on the sales floor often chat with their customers about books

and recommend readings they might like. Because the company is growing, they will

need to hire several employees over the next months. They want to establish

recruitment and selection practices so that they can hire people who have a high

degree of fit with the current culture.

Working within groups, discuss the effectiveness of the following recruitment tools.

Evaluate each recruitment source. Which ones would yield candidates with a high

degree of fit with the company’s current culture?

1. Newspaper advertisements

2. Magazine advertisements

3. Radio advertisements

4. Hiring customers

5. Hiring walk-ins

6. Employee referrals

7. Using the state unemployment agency

Next, create interview questions for a person who will work on the sales floor. What

types of questions would you ask during the interview to assess person-organization

fit? How would you conduct the interview (who would be involved in the

interviewing process, where would you conduct the interview, and so on) to

maximize the chances of someone with a high person-organization fit?

E N D O F C H A P T E R C A S E — G O O G L E

Google is one of the best-known and most admired companies around the

world. [1] So much so that googling is the term many use to refer to searching

information on the Web. Founded in 1998 by two Stanford university graduates,

Larry Page and Sergey Brin, Google is responsible for creating the most frequently

used Web search engine on the Internet, as well as other innovative applications

such as Gmail, Google Earth, Google Maps, and Picasa. The envy of other Silicon

Valley companies, Google grew from 10 employees working in a garage in Palo Alto

to 10,000 employees operating around the world. What is the formula behind this

success? Can it be traced to any single concept such as effective leadership, reward

systems, or open communication?

It seems that Google has always operated based on solid principles that may be

traced back to its founders. In a world crowded with search engines, they were

probably the first company that put users first. Their mission statement summarizes

their commitment to end user needs: “To organize the world’s information and to

make it universally accessible and useful.” While other companies were focused on

marketing their sites and increasing advertising revenues, Google stripped the search

page of all distractions and presented Internet users with a blank page consisting

only of a company logo and a search box. Google resisted pop-up advertising,

because the company felt that it was annoying to end users. They insisted that all

their advertisements would be clearly marked as “sponsored links.” Improving user

experience and always putting it before making money in the short term seem to

have been critical to Google’s success.

Keeping employees happy is also a value they take to heart. Google created a unique

work environment that attracts, motivates, and retains the best players in the field.

Google was ranked as the number 1 place to work for by Fortune magazine in 2008.

This is no surprise if one looks closer at how Google treats employees. In its

Mountain View, California, campus called the “Googleplex,” employees are treated

to free gourmet food including sushi bars and espresso stations. In fact, many

employees complain that once they started working for Google, they gained 10 to 15

pounds. Employees have access to gyms, shower facilities, video games, on-site child

care, and doctors. A truly family friendly place, Google offers 12 weeks of maternity

or paternity leave with 75% of full pay, and offers $500 for take-out meals for the

entire family with a newborn. All these perks and more create a place where

employees feel that they are treated well and their needs are taken care of.

Moreover, these perks contribute to the feeling that employees are working at a

unique, cool place that is different from everywhere else they have ever worked.

In addition to offering many perks to employees, thereby encouraging employees to

actually want to spend time at work rather than someplace else, Google encourages

employee risk taking and innovativeness. How is this done? When a vice president in

charge of the company’s advertising system made a mistake that cost the company

millions of dollars and apologized for the mistake, she was commended by Larry

Page, who congratulated her for making the mistake and noting that he would rather

run a company where people are moving quickly and doing too much, as opposed to

being too cautious and doing too little. This attitude toward acting fast and accepting

the cost of resulting mistakes as a natural consequence of moving fast may explain

why the company is outperforming competitors such as Microsoft and Yahoo! Inc.

One of the current challenges for Google is to expand into new fields outside their

Web search engine business. To promote new ideas, Google encourages all

engineers to spend 20% of their time working on individual projects.

Decisions at Google are made in teams. Even the company management is in the

hands of a triad: Larry Page and Sergey Brin hired Eric Schmidt to act as the CEO of

the company, and they are reportedly leading the company by consensus. In other

words, this is not a company where decisions are made by the most senior person

and then implemented top down. It is common for several small teams to attack

each problem and for employees to try to influence each other using rational

persuasion and data. Gut feeling has little impact on how decisions are made. In

some meetings, people reportedly are not allowed to say, “I think…” and instead

they must say, “The data suggests…” To facilitate teamwork, employees work in

open office environments where private offices are assigned only to a select few.

Even Kai-Fu Lee, the famous employee whose defection from Microsoft was the

target of a lawsuit, did not get his own office and shared a cubicle with two other

employees.

How do they maintain these unique values? In a company emphasizing hiring the

smartest people, it is very likely that they will attract big egos that are difficult to

work with. Google realizes that its strength comes from its small-company values

emphasizing risk taking, agility, and cooperation. Therefore, Google employees take

their hiring process very seriously. Hiring is extremely competitive and getting to

work at Google is not unlike applying to a college. Candidates may be asked to write

essays about how they will perform their future jobs. Recently, they targeted

potential new employees using billboards featuring brain teasers directing potential

candidates to a Web site where they were subjected to more brain teasers.

Candidates who figure out the answers to the brain teasers would then be invited to

submit resumes. Each candidate may be interviewed by as many as eight people on

several occasions. Through this scrutiny, hiring personnel are trying to select

“Googley” employees who will share the company’s values, perform their jobs well,

and be liked by others within the company. By attracting kindred spirits, selecting

those who will fit in, and keeping potential misfits out, the company perpetuates its

own values that have made it successful.

Will this culture survive in the long run? It may be too early to tell, given that the

company is only a little over a decade old. The founders emphasized that becoming a

publicly traded company would not change their culture, and they would not

introduce more rules or change the way things are done at Google to please Wall

Street. But can a public corporation really act like a start-up? Can a global giant

facing scrutiny on issues including privacy, copyright, and censorship maintain its

culture rooted in its days in a Palo Alto garage? Larry Page is quoted as saying, “We

have a mantra: don’t be evil, which is to do the best things we know how for our

users, for our customers, for everyone. So I think if we were known for that, it would

be a wonderful thing.” As long as this mantra continues to guide the company’s

actions, we might expect the company to retain its distinctive personality, regardless

of what the future holds.

Discussion Questions

1. Describe Google’s culture using the OCP typology presented in this chapter.

2. What are the factors responsible for the specific culture that exists in Google?

3. Do you think Google’s culture is responsible for its performance? Or does Google

have this particular culture because it is so successful?

4. How does Google protect its culture?

5. Do you see any challenges Google may face in the future because of its culture?

To Accelerate Change8Steps

©

2

017 Kotter International

2017 will mark the 21st

anniversary of John Kotter’s

Leading Change, a book that’s been

widely recognized as the seminal work in

the field of change management. It

introduced the 8-Step Process for Leading

Change with a message to the reader:

“You can lead change.

Here is how to do it.”

©2017 Kotter International

Six years ago,

Dr. Kotter began

observing organizations

as they implemented

the 8-Step Process

with help from his firm.

He saw proof that our

world is moving a great

deal faster than it was in

the early 1990s.

©2017 Kotter International

No matter how

you look at it,

the world is

moving faster…

©2017 Kotter International

Dr. Kotter also

observed that the rate

at which our world is

changing is increasing,

but our ability to keep

up with it is not.

©2017 Kotter International

What has remained the same?

The two fundamental reasons behind most
transformations are still the need…

To increase revenues/profits or decrease costs

To become more effective or more efficient

Or both.

1

2

©2017 Kotter International

Do your leaders and workforce present
obstacles? Are they…

• Disengaged from their roles, colleagues, managers,
customers

• Falsely urgent: consumed by constant activity and
firefighting

• Complacent: lulled into thinking that what got you here will
get you there

• Lopsided: focused more on management
than on leadership

• Siloed: known more for boundaries
than gateways

©2017 Kotter International

We at Kotter International have expanded our

thinking and work

– have enhanced our 8-Step Process –

to give organizations additional capabilities to lead

change under the particular conditions of today’s world.

The breakthrough is in Accelerate, our book length
study published by Harvard in 2014. We have increased

the scope of the 8-Step Process from its original version

to give it reach and potency in 2015 and beyond…

©2017 Kotter International

Both versions are relevant and effective today, but
they are designed to serve different contexts and
objectives

Leading Change’s
8-Step Process (1996)

Accelerate’s
8-Step Process (2014)

Respond to or affect episodic change
in finite and sequential ways.

Run the steps concurrently and
continuously.

Drive change with a small, powerful
core group.

Form a large volunteer army from up,
down, and across the organization to
be the change engine.

Function within a traditional
hierarchy.

Function in a network flexibly and
agilely outside of, but in conjunction
with, a traditional hierarchy.

Focus on doing one thing very well in
a linear fashion over time.

Constantly seek opportunities,
identify initiatives to capitalize on
them, and complete them quickly.

©2017 Kotter International

The purpose of this
eBook is to introduce
you to the enhanced
8-Step Process

©2017 Kotter International

STEP 1

Your top leaders must describe an opportunity that will appeal to
individuals’ heads and hearts and use this statement to raise a large,
urgent army of volunteers.

Create a Sense of Urgency

71% of the workforce is actively disengaged.
Annually, this costs U.S. organizations

3 0 0 BILLION

You have a breadth of focused readiness across the
workforce that is unprecedented in your organization.

RESULTS

5X

Companies
with engaged

employees have

higher
shareholder
returns

©2017 Kotter International

What is your Big Opportunity?

• Do you see a Big Opportunity that could ignite the hearts
and minds of your people?

• Do you know how to identify, articulate and communicate it?
• Are you able to connect an external change factor with a

special capability of your organization?

• What are the stakes if you succeed?
Consequences if you fail?

Windows of opportunity are appearing, opening, and closing more quickly
than ever before. If you are able to identify even a glimmer of a Big
Opportunity, it’s important to quickly and urgently engage and mobilize
around it before competitors seize the window.

©2017 Kotter International
RESULTS

STEP 2

A volunteer army needs a coalition of effective people — coming from
its own ranks — to guide it, coordinate it and communicate its
activities.

Build a Guiding Coalition

Real collaboration is about stepping

outside of traditional institutional structures

to focus on results. In fact, there is an

81%

correlation between collaboration and
innovation.

81%

The linchpin of your entire transformation is in place: an
accountable, diverse group bound by opportunity,
strategy and action.

©2017 Kotter International

Is your organization capable of
coordinating and sustaining change?

• Can you get buy-in from 50% of the organization to drive
large-scale change?

• Do you have a way to engage a formalized network to take
on innovative change initiatives?

• Is work on strategic initiatives seen as “Have to” or
“Want to”?

• Do current hierarchical and silo-based
structures stifle communication and
engagement?

Consider establishing a Guiding Coalition of engaged individuals from across
your organization to help you institute the specific attitudes and practices
necessary to launch, drive and — most importantly — sustain change.

©2017 Kotter International

STEP 3

Dr. Kotter defines strategic initiatives as targeted and coordinated
“activities that, if designed and executed fast enough and well enough,
will make your vision a reality.”

For a Strategic Vision and Initiatives

higher return on several key

measures for companies with
well-crafted mission statements

describing why the business exists

and its optimal desired future state.

Business Week
attributes

30%

You have a single vision of the future with a credibility and
authority that comes from being crafted by a diverse set
of employees and validated by senior leaders.

RESULTS

©2017 Kotter International

Is your organization aligned under
a Vision and how to act on it?

• Where in your organization are people aligned around a
single idea that inspires them to do things that move ideas
forward?

• Do people within the organization speak about the goals in
the same way with the same priority? If not, how can these
be aligned?

• If you asked people around the organization
about the Change Vision, how many different
answers would you get?

The better people can envision where they are going, the more they can
focus on specific initiatives that will make that vision a reality. The strategic
initiatives best positioned to capitalize on the Big Opportunity should be
prioritized and staffed. With whom? That leads us to our next step…

©2017 Kotter International

STEP 4

Large-scale change can only occur when very significant numbers
of employees amass under a common opportunity and drive in the
same direction.

Enlist a

Volunteer Army

Organizations with a high number
of actively engaged employees
have an average of 147% higher

earnings per share than the norm.147%

You have a sizable body of employees excited and able to
take action on critically important initiatives linked to your
business strategy.

RESULTS

©2017 Kotter International

Is it possible to create and tap a
volunteer network at your organization?

• What are examples of people in your organization who “step
forward and act”? If there are few examples, what is
stopping them?

• Are employees invited and encouraged to help your
organization implement its strategies? If yes, what are
the successes?

• How do you ensure that the successes are repeatable? How
do you keep the volunteers engaged?

Accelerate explains that “history has demonstrated that it is possible to find
many change agents … but only if people are given a choice and feel they
truly have permission to step forward and act.” You must build excitement
around the Big Opportunity and develop a feeling that one “Wants To” (not
“Has To”) contribute.

©2017 Kotter International

STEP 5

By removing barriers such as inefficient processes or hierarchies,
leaders provide the freedom necessary for employees to work across
boundaries and create real impact.

Enable Action by Removing Barriers

44%

of leaders agree that
their own management

strategies are too
bureaucratic and
are a nuisance

“Innovation is less about generating
brand-new ideas and more about
knocking down barriers to making

those ideas a reality.”

~John Kotter, Accelerate

You have tangible evidence of employee innovations
stemming from collapsed silos and new ways of working
together.

RESULTS

©2017 Kotter International

Do you know where your
organization’s barriers are?

• Have past change initiatives in your organization failed? If so,
what barriers stopped them from succeeding?

• Which of the most common barriers do you have — silo
parochialism, pressure to make quarterly numbers, complacency,
rules and procedures, or a limited number of change leaders?

• Barriers can be commonly stated and accepted statements that,
while appearing helpful, can deter attempts to get past legacy
obstacles. These are statements like, “It’s just not done that way,”
or, “We tried that before — it didn’t work.”

Over time, the hierarchies that serve organizations so well in terms of
efficiency and order can limit transformation. The cross-functional Guiding
Coalition can work in tandem with hierarchical management to help
change leaders over come barriers.

©2017 Kotter International

STEP 6

Wins are the molecules of results. They must be collected, categorized,
and communicated — early and often — to track progress and
energize your volunteers to drive change.

Generate Short-Term Wins

It takes about six years
of hard work to become
an overnight success.

~Seth Godin

A body of wins data that tells the story of your
transformation is validated, quantifiable and qualifiable
terms.

RESULTS

©2017 Kotter International

Do you generate and celebrate wins?

• What are some examples of initiatives in your organization
that were successful and part of a sustained effort? Why did
they work?

• How often do you hear about successes in your
organization? If rarely, is it because there aren’t any, or
because they aren’t shared and celebrated?

• Does your organization have what it takes to collect,
correlate and celebrate wins?

A change vision can take a long time to achieve. Dr. Kotter’s research has
shown that generating and celebrating wins along the way is vital to
acceleration towards and focus on the goal.

©2017 Kotter International

STEP 7

Change leaders must adapt quickly in order to maintain their speed.
Whether it’s a new way of finding talent or removing misaligned processes,
they must determine what can be done — every day — to stay the course
towards the vision.

Sustain Acceleration

Agile firms
see a

in revenue when they employ leaders
who strategically adapt to any situation.

37%
increase

You have confirmation of organizational fitness and stamina
that enable the reinvigoration of your mission and help you
and your employees stay the course of change over time.

RESULTS

©2017 Kotter International

Are you balancing change
management with change leadership?

Balance is the essential factor in sustaining acceleration. How do
you counterweight the tendency to over-manage? Where are the
opportunities for people up and down your organization to
behave more like leaders?

Management Leadership

• Planning
• Budgeting
• Organizing
• Staffing
• Problem Solving
• Measuring
• Doing What We

Know How To Do

• Producing
Dependable,
Reliable

Results

• Establishing
Direction

• Aligning People
• Motivating
• Inspiring
• Mobilizing

People to
Achieve
Astonishing
Results

• Propelling Us
Into The Future

©2017 Kotter International

STEP 8

To ensure new behaviors are repeated over the long-term, it’s important
that you define and communicate the connections between these
behaviors and the organization’s success.

Institute Change

When surveyed, 90% of
managers and employees said the

importance of agility and speed
has increased in the last 5 years.

You have collective recognition that your organization
has a new way of working with speed, agility and
innovation that directly contributes to strategically
important business results.

RESULTS

©2017 Kotter International

How can you institute the change?

How do you use the persistent celebration of Big Opportunity wins to maintain the
engagement of the volunteer army and embed these new ways of working in the organization?

The Big Opportunity

Volunteer Army
Results

©2017 Kotter International

How can you balance
reliability and agility?

There must be clear communication and synchronization between the
traditional hierarchical structure (on the left side) and the innovation
network of volunteers (on the right side). How will you achieve this?

©2017 Kotter International

The need to transform is critical
If you know you need to transform but aren’t sure where to start, call us:
We will teach you how to execute the 8 Steps yourselves.

Us You

We help clients
transform into fast,
agile organizations

We are the
world’s only firm capable of

combining our empirical research
and proprietary process to help your

organization truly transform itself. Learn
to lead your large-scale transformation

by working with our Advisory Services.
Build your change leadership skills

through our Center for Leaders. Or work
with both to create sustainable change

capacity and capability across all levels
of your organization. Regardless of the

approach, tangible business
impact is the result.

CONTACT US

Phone: (855) 400.4712
Email: Info@Kotterinternational.com
Website: Kotterinternational.com
Twitter: @KotterIntl