Organizational Culture and

Development Issues

Your Take

Understand organizational culture and how it influences

the function of an organization
Understand how the national and internal cultures
influence the organizational culture
Understand the steps which are necessary for cultural
change in an organization
Understand
different
diagnostic
mechanisms
for
identifying cultural constructs of an organization.
Understand the appropriate interventions strategy to
bring cultural change in organizations
Understand how cultural change influences behavioural
issues in an organization
Understand the use of Organizational Development tools
for effecting cultural changes in organizations

Introduction

Culture is the moral, social, and behavioural norms of an

organization.
It creates impacts on beliefs, attitudes, and priorities of
organizational members.
Building culture through continuous learning is now a global
practice.
This is primarily more important for globalization and crossborder mergers and acquisitions.
The movement of people from one country to another
renewed our attention on building organization-specific
corporate cultures to bring order in behaviours and attitudes.
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Definition
Culture is the way organization works. Culture is
now the major differentiator of an organization
from another.
Every organization continuously interacts with its
environment.
This,
therefore,
requires
an
organization to strike a balance between the
internal features and the characteristics of the
external environment, which is part of the
contingency theory in organizational science. The
theory suggests that an organization has to
understand the dynamics of its environment in
order to be able to adapt to the changing
demands of the outside and the inside (inside the
organization).
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Concept
There is no consensus on definition of culture but most authors agree that it is
something holistic, historically determined, related to the things, socially
constructed, soft, and difficult to change.
It is something an organization has, but can also be seen as something an
organization is. Organizational culture should be distinguished from national
culture.
Organizational culture manifest s, from superficial to deep, in symbols, heroes,
rituals, and values.
National cultures differ mostly on the value levels; organization cultures mostly
differ at the levels of symbols, heroes, and rituals.
These together translate into organizational practices. Managing international
business means handling both national and organizational culture differences at
the same time.
Organization itself is a culture (Bate, 1994). It is more a metaphor for study,
through which meanings are constructed and expressed. More modern views,
however, consider organizational culture a variable rather than a metaphor
(Wilson, 2001). Variables are different organizational practices, such as,
performance management (Deal and Kennedy, 1982), mechanism for
effectiveness and control (Peters and Waterman, 1982), recruitment and
selection (Guest, 1994), training and development (Schein, 1968, 1991; O'Reilly,
1989), knowledge management practices (Brown, 1995), reward systems (Kerr
and Slocum, 1987), and overall human resource management practices.
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Org. Culture and Org.

Behavioural Practices
The word culture has many dimensions; hence, defining it
requires us to consider the term from different perspectives.
Anthropologist James P Spradley defined culture is the acquired
knowledge people use to interpret experience and generate
behaviour.
Literally, culture is the abstract miniscule, which moves the
organization.
Culture is an ongoing process of reality
construction, providing a pattern of understanding that helps
members of the organizations to interpret events and to give
meaning to their working worlds.
It is a shared understanding of the people (Schein, 1990;
Schneider, 1988; Kotter and Heskett, 1992), and it frames the
interactions and processes of the organizational environment.
From organizational contexts, culture can be defined in terms of:

Overt organizational behaviour

Organizational ideology and philosophy
Group and organizational norms
Espoused organizational values
Policies, procedures, and rules of socialization
Climate

Organizational Culture and

Organizational Climate
The very concept of organizational culture is born from early
studies of organizational climate, intertwined with human resources
and various sociological disciplines. The true definition is often a
matter of perspective.
For some, the organization itself is a culture (Bate, 1994).
Therefore, culture is a metaphor for study through which meanings
are constructed and expressed through social interaction. Yet, a
more modern view of organizational culture is that it is something
that an organization has. Hence, it is more of a variable, rather than
a metaphor (Wilson, 2001).
Whether it is a metaphor or a variable, organizational culture
translates into organizational climate, and this organizational
climate, per se, decides the organizational practices. Organizational
practices on people related issues are classified under human
resource management, which naturally governs organizational
behaviour issues. Hence, culture issues encompass recruitment,
selection, training, appraisal, and reward systems and so on.
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Organizational Culture from Global

Perspective in the Context of
Globalization
Corporate culture as the act of developing intellectual
and moral faculties, especially through education.
The other definition of culture is the moral, social, and
behavioural norms of an organization based on the
beliefs, attitudes, and priorities of its members.
Even though the first definition dwells on building culture
through the act of education, we find largely its relevance
more in those corporate who have their unique system of
emphasizing on continuous learning.

Example : Culture of HP
HPs culture is commitment to diversity inclusion, and nondiscrimination. Since its formation, HP has demonstrated an
ongoing commitment to people and to fair employment
practices. HPs overall commitment is reflected in their
diversity and inclusion philosophy, which we can list as under:

A diverse, high-achieving workforce is the sustainable

competitive advantage that differentiates HP. It is essential to
win in the marketplaces, workplaces and communities around
the world.
An inclusive, flexible work environment that values differences
motivates employees to contribute their best.
To better serve customers, HP attracts, develops, promotes
and retains a diverse workforce.
Trust, mutual respect and dignity are fundamental beliefs that
are reflected in HPs behaviour and actions.
Accountability for diversity and inclusion goals drives HPs
success.

Example : GE
Similarly, Jack Welch, CEO, General Electric,
created a new corporate culture. Key elements
of GEs corporate culture are as under:

Redesigning the role of the leader in the new

economy:
creating
followers
through
communicating a vision, and establishing open,
caring relations with every employee
Creating an open, collaborative workplace where
everyone's opinion is welcome
Empowering senior executives to run far-flung
businesses in entrepreneurial fashion
Liberating the workforce; making everybody a
participant
through
improving
vertical
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communication and employee empowerment.

Merger and Acquisition impact

on corporate culture
Merger and acquisition also bring major changes in the corporate culture. Across the globe,
we have many examples. Before going for a detailed discussion of a case, here we can jot
down certain cultural issues that were experienced by organizations throughout the world,
during the post merger phase.

Disintegration of organizational value systems (Rent-to-own Store case)

Low employee morale (results to poor productivity, conflicts) Rent-to-own Store, Dell
cases)
Benefits of Synergy require time (IOC and IBP Case) IOCs market share is 54% to POL
products but in retail business its share is 40%. With IBP, IOC gets 1540 outlets to its
existing 7750 outlets (IBPs market share is 8%).
HPCL, BPCL merger (together now enjoy 20%). Threat is from emerging new organizations
like Reliance, etc.
Rationalization and relocation of manpower may encounter problem (Blue Star Case)
Generation Gap may create conflict (CMC-TATA, Bank of Madura and ICICI case)
Flying of Talents
Different cultures (including cross country culture, AMD case discussed in our introductory
part).
Rigidity to learn new things for the blue collar employees
Sentimental attachment
Anxieties for pink slip (as merger follows manpower rationalization)
Difference in HR Style (Blue Star for example)
Broken faith in management due the veil of secrecy in merger (India Foils acquisition by
Sterlite).
Stalemate in managerial positions (one has to leave or compromise for the new 11
group,
which is taking over).
Reduces employee enthusiasms.

Effective mergers from org. structure and behaviour

perspectives

To make mergers effective, addressing the people related issues, require an

organization to consider following aspects, which largely encompass interventions
in streamlining organizational structure and behaviour. These are as under:

Ascertain the differences in basic culture and procedures.

Pre-assess the cost implication to integrate manpower of merging organization.
Plan for adopting voluntary retirement scheme (VRS) for people who are rendered
surplus
Make provisions for increased HR cost for training and redeployment, relocation,
VRS benefits
Accommodate employees (including executives) of merging organization in new
environment (Tata and VSNL case)
Develop an integrated culture with inputs from two organizations (Tata and VSNL
case)
Focus on training and learning process (TCS executives handle mostly
international projects while CMC executives handle mostly domestic projects, thus
maintaining their individual identity, even though they have merged together.
Develop a new organization chart and make it transparent.
Align the compensation package, if required even by redesigning (IMB and PwC
case).
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Applications for the Culture in

the Workplace
Some of the areas of application of culture in the workplace can be
listed as under.
Mergers and Acquisitions
Strategic Alliances and Partnerships
Restructuring Issues
Change Management
Self development processes
People Management Skills
Executive Coaching
Negotiation Skills
Multi-national/remote/teambuilding
Facilitating Top Teams
Project Teams
Expatriate / Inpatriate coaching/briefings
Sales and Marketing skills
General Management training and education
Counseling
Leadership
Organizational Influencing
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Managing Cultural Change through Org.

Diagnostics
Diagnostic Area : Attitudes towards work
Measures

Issues of concern

Sample question items

-Job Satisfaction

-Degree of workers satisfaction

-Role Clarity

-Knowledge about behavioural

expectations from the assigned
job
- Degree of job pressure
(simultaneously trying to
achieve too many things)
- Degree of employees freedom
in scheduling their work
- Degree of employees
involvement in setting goals,
objectives, and policies of the
organization
- Degree of employees
commitment to the job

-I feel satisfied with my nature of

job
- I know my job responsibilities

-Role Conflict
- Autonomy
-Participation in decision making
-Job Involvement

- I need to go beyond policies to

achieve my goal
- I enjoy autonomy in
accomplishing my tasks
- I participate in decision
making, particularly in my work
areas
- I do not become a clock
watcher in accomplishing my
task

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Managing Cultural Change through Org.

Diagnostics
Diagnostic Area : Organisational Commitment
Measures

Issues of concern

Sample question items

-Job Security

- Degree of stability in current iob

-Loyalty

-Degree of attachment towards the

organization

-Trust in management

- Degree of confidence in actions

and work of management
- Degree of sense of belonging to the
organization
- Degree of employees
disappointment in achieving their
career goals and objectives
- Degree of feeling helpless in the
organizations

-My company believes in good

work, hence, I do not feel
threatened of losing my job as I
am a good worker
- My primary motivation for a job
change is the scope of earning
more in my same job
- I believe in my managements
task and actions
- I consider organizational
problems as my problems
- I lack a sense of pride in my
current job

-Identification
- Alienation
- Helplessness

-I hardly have any option to

leave the organization

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Issue for Managemnet to Verify:

Organisational Climate
Measures

Issues of concern

Sample question items

Fairness

- The extent to which employees perceive

their workplace to be equitable and free of
bias.
- The extent to which employees perceive
their workplace to be safe and free from
physical dangers.
- The amount of perceived emotional
support employees feel from their
organization.
- The accuracy and openness of
information exchange.
- The degree to which the organization
encourages bold actions, risks, and
independence of thought from employees.
- The degree of adaptability and tolerance
for ambiguity in an organization.
- Perceptions of training and development
opportunities in one's organization.

- Employees in my workplace are

treated fairly, regardless of race.
- I am often in situations at work
where I can easily get physically
hurt.
- Management here is interested
in the welfare of its people.
- I am kept informed about
changes that affect my work.
- Risk taking is a value supported
by our corporate culture.
- This organization adapts
quickly to changes.
- There are adequate
opportunities to pursue
professional development
activities beyond the scope of my
immediate job.

Safety
Support
Communication
Tolerance for Risk
Flexibility
Continuous Learning

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Managing Cultural Change through

Organization Development
Organization development (OD) is understood to
mean planned change based on the paradigm of
action research. OD can thus be described as a
learning process. The active development of an
organization towards its desired corporate identity
succeeds only if this change process is undertaken
holistically. A new approach to organizational
transformation (OT) is beginning to gain acceptance in
the literature. OT is a harder concept, often
associated with re-engineering, and there is some
concern that this could be used, not as a contingency
measure, but as a replacement for organizational
development. Clearly, there are dangers in a
widespread adoption of such an approach.
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Process of Organizational
Development
Organizational Development is a strategy or an
effort, which is planned and managed from the top,
to bring about planned organizational changes for
increasing organizational effectiveness through
planned interventions based on social philosophy.
The following statement amply clarifies the need for
OD in an organization.
Circumstances of an ever-changing market and an
ever-changing product are capable of breaking any
business organization if that organization is
unprepared for change indeed, in my opinion, if it
has not provided procedures for anticipating
change
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Characteristics of OD

Planned Organization Change

Planned Intervention
Top Management Commitment to
OD
Social Philosophy as a Norm of
Change

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Important goals of OD
OD emphasizes the need for changing from the closed system to
the open system by inculcating various changes in the
organization. Such changes inter alia, also include introduction of
concepts of social philosophy in the organization, which makes the
organization socially more responsible and transparent.
To supplement authority and hierarchical role with knowledge and
skills, replacing traditional authority assigned role, which creates a
more congenial work environment, we need to take following steps:

To build mutual trust and confidence in the organization for man

managing and reducing conflict.
To change structure and roles in consistent with accomplishment of
goals.
To encourage sense of ownership and pride in the organization.
To decentralize decision making close to the source of activity.
To emphasize on feedback, self-control, and self-direction.
To develop the spirit of cooperation, mutual trust, and confidence.
To develop reward system based on achievement of goals and
development of people.
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Steps in Organization
Development

Identification and diagnosis of the

problem
Development of strategy
Development of structure
Implementing the programme
Reviewing the progress of the
programme

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Leadership and organizational

culture
According to Edgar H Schein, culture is a phenomenon which surrounds
us all. It defines leadership. We can understand an organization through
understanding its culture.
Schein defined organizational culture as customs and rights. It implies
structural stability and patterning and integration, hence for
organizations culture accumulates shared learning from the share
history.
Based on Schein we can define culture as a pattern of shared basic
assumptions that the group learns through external adaptation and
internal integration. Based on Schein classification, we can list the
following elements of culture:

Culture explains the incomprehensible, the irrational

Organization with history has a culture
Not every group develops a culture
Once culture exists it determines the criteria of leadership
Leaders should be conscious of culture otherwise the culture will
manage them

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