Chapter 18: Organizational Culture


What are you expected to learn?



What is Institutionalization? What is Organizational Culture?

Institutionalization = when an organization takes on a life of its own, apart from any of its members, and acquires immortality.  The org is valued for itself, not just for what it produces or sells.  (Ex: Disney, McDonalds, Sony)


Organizational culture = A system of shared meaning held by members that distinguishes the organization from other organizations.


Key Characteristics of an Organizational Culture:


*Culture is a descriptive term, that is, it is not evaluative. Organizational culture is concerned with how the characteristics of the company/organization are perceived – NOT if they are liked or disliked.*  It is not about job satisfaction.


Do Organizations Have Uniform Cultures?

Organizational culture represents a common perception held by the organization members.


Strong vs. Weak Cultures

            Strong = cultures in which the core values are intensely held and widely shared


Culture vs. Formalization

·        Often, rules and regulations re: performance are transmitted through culture – they do NOT need to be formally (explicitly) written in order to function.  Thus, culture can act like formalization in some ways.


Org Culture vs. National Culture

·        National culture has more influence on employees than org culture – so, for multinational orgs, the goal could be to hire applicants who fit the organizational (dominant) culture


What do Cultures “Do”?.....Culture’s Functions

Culture is the social glue that helps hold an organization together by providing appropriate standards for what employees should say or do.

·        It has a boundary-defining role.

·        It conveys a sense of identity for organization members.

·        It facilitates the generation of commitment to something larger than one’s individual self-interest.

·        It enhances social system stability.

·        It serves as a "sense-making" and control mechanism that guides and shapes the attitudes and behavior of employees.


Culture as a Liability

·        Barrier to change

·        Barrier to diversity

·        Barrier to acquisitions and mergers


Creating & Sustaining Culture


How Employees Learn Culture


Matching People With Cultures


Creating an Ethical Organizational Culture



Creating a Customer-Responsive Culture



Spirituality and Organizational Culture

Workplace spirituality:          The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community. Ex) strong sense of purpose, individual development, trust and openness, employee empowerment, tolerance of expression.


Summary and Implications for Managers