pmculture 1

Organizational Culture

pmculture 2

Organizational CultureOrganizational Culture

pmculture3

The organizational wayThe organizational way

What Corporate culture stands for !!!!!What Corporate culture stands for !!!!!

pmculture 4

Organizational CultureOrganizational Culture

What can you readily identify, but can’t accurately define?

What does every great business have that other competitors do not?

What is it makes a business into a cult?

It’s the culture

pmculture 5

Organizational CultureOrganizational Culture

““The way we do The way we do things around things around

here”here”

pmculture 6

The way we do things around hereThe way we do things around here

pmculture 7

Organizational CultureOrganizational Culture

The shared values and norms in an organization that are taught to incoming employees.

It involves common beliefs and feelings, regularities in behavior, historical process for transmitting values and norm.

There are three ways to do things around here:1. The right way.2. The wrong way3. Our way (the company way). The way we do

things around here

pmculture 8

The company wayThe company way

Organizational Culture is the collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted form one generation of employees to another.

pmculture 9

The company wayThe company way

The beliefs and values shared by people who work in an organization How people behave with

each other How people behave with

customers/clients How people view their

relationship with stakeholders

People’s responses to energy use, community involvement, absence, work ethic, etc.

How the organisation behaves to its employees – training, professional development, etc.

pmculture 10

Organizational CultureOrganizational Culture

May be driven by: Vision – where the organization wants to go in the

future Mission Statement – summary of the beliefs of the

organization and where it is now

pmculture 11

Organizational CultureOrganizational Culture

May be reflected in: Attitude and behaviour of the leadership Attitude to the role of individuals in the workplace –

open plan offices, team based working, etc. Logo of the organization The image it presents to the outside world Its attitude to change

pmculture 12

Organizational CultureOrganizational Culture

What corporate culture do you think the following businesses have managed to develop?

Virgin GroupCopyright: Joshua2150, http://www.sxc.hu

The Body ShopCopyright: fadaquiqa, http://www.sxc.hu

McDonaldsCopyright: alexalliedhttp://www.sxc.hu

NikeCopyright: alexbolhttp://www/sxc.hu

pmculture 13

The company wayThe company way

The organizational culture generally reflects the values of the founder(s) and the mission of the firm.

Cultural Intensity: Is the degree to which members of a unit accept the norms, values, or other culture content associated with the unit. (Depth)

Cultural Integration: Is the extent to which units throughout an organization share a common culture. (Breadth)

pmculture 14

Creation of Organizational CultureCreation of Organizational Culture

Beliefs and values of the organization’s founder Societal norms of firm’s native/host country Problems of external adaptation and survival Problems of internal integration

pmculture 15

Managing Performance Managing Performance

through culturethrough culture

pmculture 16

Enhancing performance through culture drivers

The trick that many organizations have missed is that shared behavior in organizations (culture) does not come because they teach people how to behave in a particular way. The behavior comes as a consequence of a number of different drivers.

These drivers include:1. Reward systems;2. The way that winners and losers are

defined and treated;3. The examples that are provided by

influential managers, and where they place their emphasis;

4. The nature of the work, and the degree to which tasks are mechanized;

5. The structure.

pmculture 17

Enhancing performance through culture drivers

Working with behavior alone is unlikely to produce any sustainable change.

It is the drivers that influence behavior. If you want to change behavior, change the

drivers. As a part of the strategic planning process, it is

essential to understand how the organizational culture influences results today, and what limits it might put on your capacity to change the future.

There are two characteristics that have a big impact on culture: Fear and Freedom

pmculture 18

FearFear Fear is a primary driver of human behavior. To a greater or lesser extent we are all defined

by our fear. Add a little fear into an organization and people

stop taking chances, spend more time diluting responsibility in meetings, and introduce lots of checking steps.

If the fear persists for years, then people become increasingly uncomfortable with even minor change.

Build an organization with low levels of fear and you will see the opposite.

Here you will find creativity, limited use of hierarchy to get things done, all kinds of attempts to make changes, and probably some genuine breakthroughs.

pmculture 19

FearFear

You can measure the fear level using the following questions:1. What are people afraid of in this organization (losing

their jobs, making mistakes, not getting pay increase, their managers. etc)?

2. How rational is that fear?3. How does that fear affect their behavior?4. To what extent have the current managers developed

this fear?

pmculture 20

FreedomFreedom People need to have freedom to work within

fairly broad guidelines so that they can get the required outcomes.

To be able to confer this freedom, an organization needs to be confident it has the right people, the right information systems to support their decision making process and the right feedback system to ensure that every thing does not go of the rails.

When people have this freedom, then the organization finds ways around day-to-day problems and it is able to cater for new challenges and opportunities.

pmculture 21

Fear-freedom MatrixFear-freedom Matrix

Fear

freedom

Low

Low High

High

pmculture 22

Fear-freedom MatrixFear-freedom Matrix

Low fear + High freedom = innovative, accepting of change, experimental.

Low fear + Low freedom = frustration, challenge of authority, rules will be broken.

High fear + High freedom = upward delegation, meetings to share decisions, low innovation.

High fear + Low freedom = dependence on rules and precedents, resistance to change.

pmculture 23

Organizational Culture Organizational Culture DimensionsDimensions

pmculture24

pmculture 25

Artifacts/SymbolsArtifacts/Symbols

- Visible objects, actions, stories that represent the culture

- Most easily changed- Rites, rituals, ceremonies- Stories, myths, legends- Symbols- Language/jargon/gestures

pmculture 26

Behavior PatternsBehavior Patterns

- Shared ways of interacting, approaching a task

- Shared ways of responding to something new

pmculture 27

NormsNorms

- Socially constructed preferences

- Group expectations about how things should be done

pmculture 28

ValuesValues

- Preferred states- Feelings & beliefs about

what’s good or right

pmculture 29

Shared AssumptionsShared Assumptions

- Taken for granted- Not conscious- Hard to change

pmculture 30

Culture DifferencesCulture Differences

pmculture 31

Cultural Differences

Research on pace of life in various countries suggest that Westerners have fairly precise measures of time and a stronger concern for punctuality than most other people Mono-chronic style individuals focus on one thing

at a time; characteristic of USA Poly-chronic style individuals focus on several

things at one time; characteristics of Latin American countries

pmculture 32

Dimensions of Cultural Differences

Research has shown that countries differ significantly in Interpersonal trust Power-distance Avoidance of uncertainty Individualism vs. Collectivism Men vs. women. Long term Vs. short term orientation

pmculture 33

Doing Business in Latin America

Few people rush into business Men and women congregate into

separate groups at social functions Latin Americans stand more closely to

each other than North Americans when in conversation

Men may embrace

pmculture 34

Doing Business in Latin America (Cont.)

Guests are expected to arrive late, with exception of American guests

Little concern about deadlines Machismo - expectation that

businessmen will display forcefulness, self-confidence, leadership with flourish

Fatalism

pmculture 35

Doing Business in East Asia

Japan, Korea, China Meetings devoted to pleasantries;

serving tea, engaging in chitchat Seniors and elders command

respect Consciously use slow down

techniques as bargaining ploys Business cards should be bilingual

pmculture 36

Doing Business in Russia

Protocol-conscious Do business only with highest

ranking executives Appear stiff and dull More expressive in private than

in public Hard to draw up contracts due to

language barriers Have no advertising experience

pmculture 37

Doing Business in the Doing Business in the Middle EastMiddle East

Prefer to act through trusted third parties

Personal honor given high premium

Fatalism Emotionally expressive Intense eye contact Guests should avoid discussing

politics, religion, host’s family and personal professions

pmculture 38

Some important culture differencesSome important culture differences

Rose Knotts summarized important cultural differences between U.S. and foreign managers as follow:

1. Americans place an exceptionally high priority on time, viewing time as an asset. Many foreigners place more worth on relationships. This difference results in foreign mangers often viewing U.S. managers as “more interested in business than people”.

2. Personal touching and distance norms differ around the world. Americans generally stand three feet from each other in carrying on business conversations, but Arabs and Africans stand about one foot apart. Touching another person with the left hand in business dealings is taboo in some countries. Americans managers need to learn personal rules of foreign managers with whom they interact in business.

pmculture 39

Some important culture differencesSome important culture differences

3. People in some cultures do not place the same significance on material wealth as Americans often do. Lists of the “largest corporations” and “highest paid” executives abound in the untied states. “More is better” and “Bigger is better” in the united states, but not everywhere else. This can be a consideration in trying to motivate individuals in other countries.

4. Family roles and relationships vary in different countries. For example, males are viewed more than females in some cultures, and peer pressure, work situations, and business interactions reinforce this phenomenon.

5. Language differs dramatically across countries, even countries where people speak the language. Words and expressions commonly used in one country may be greedy or disrespectful in another.

pmculture 40

Some important culture differencesSome important culture differences

6 Business and daily life in some societies is governed by religious factors. Prayer times, holidays, daily events, and dietary restrictions, for example, need to be respected by American managers not familiar with these practices in some countries.

7. Time spent with family and quality of relationships are more important in some cultures than the personal achievement and accomplishments espoused by the traditional American managers. For example, where a person is in the hierarchy of a firm’s organizational structure, how large the firm is, and where the firm is located are much more important factors to American managers than to many foreign managers.

pmculture 41