Essentials of Organizational Behavior

Fifteenth Edition, Global Edition

Chapter 16
Organizational Culture

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Learning Objectives
16.1 Describe the common characteristics of organizational
culture.
16.2 Show how culture is transmitted to employees.
16.3 Identify the factors that create and sustain an
organization’s culture.
16.4 Compare the functional and dysfunctional effects of
organizational culture on people and the organization.
16.5 Describe the similarities and differences in creating an
ethical culture, a positive culture, and a spiritual culture.
16.6 Show how national culture can affect the way
organizational culture is interpreted in another country.

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Organizational Culture
Learning Objective 16.1

• Organizational culture: a system of shared

meaning held by members that distinguishes the
organization from other organizations

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The Effect of Culture on Organizational
Outcomes (Exhibit 16-2)

Employee Attitudes & High Quality Products/Services Customer Satisfaction Profitability

Performance & Operational Efficiency & Revenue Growth
&
Culture Innovation Market Share
Clan +* +* 0 +* -

Adhocracy +* + +* - 0

Market 0 + +* +* 0

Hierarchy +* - +* 0 +*

Note: + corresponds with a positive effect on the outcome, - corresponds with a negative effect on the outcome, 0 corresponds with a zero, or null, effect on the
outcome, * suggests the culture is strongly related to the outcome.
Sources: Based on findings from C. A. Hartnell, A. Y. Ou, A. J. Kinicki, D. Choi, and E. P. Karam, “A meta-analytic test of organizational culture’s association with
elements of an organization’s system and its relative predictive validity on organizational outcomes,” Journal of Applied Psychology 104, no. 6 (2019): 832–850.

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Do Organizations Have Uniform Cultures?
• The dominant culture expresses the core values
that are shared by a majority of the organization’s
members
• Subcultures tend to develop in large
organizations to reflect common problems,
situations, or experiences of members
– Subcultures mirror the dominant culture but may add to
or modify the core values

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Strong versus Weak Cultures
• In a strong culture, the organization’s core
values are both intensely held and widely shared
• Strong cultures will:
– Have great influence on the behavior of members
– Increase cohesiveness
– Result in lower employee turnover

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How Employees Learn Culture
Learning Objective 16.2

• Culture is transmitted to employees through:

– Stories: provide explanations
– Rituals: reinforce key values
– Symbols: convey importance, degree of egalitarianism
desired, and appropriate behaviors
– Language: identify and segregate members

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How a Culture Begins
Learning Objective 16.3

• Ultimate source of an organization’s culture is its

founders
• Founders create culture in three ways
1. Hiring and keeping those who think and feel the same
way they do
2. Indoctrinating and socializing those employees to their
way of thinking and feeling
3. Acting as a role model and encouraging employees to
identify with them

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How Organizational Cultures Form
(Exhibit 16-3)

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Keeping a Culture Alive
• Selection: seek out those who fit in
• Top management: establish norms of behavior by
their actions
• Socialization: help new employees adapt to the
existing culture

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A Socialization Model (Exhibit 16-4)

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Entry Socialization Options (Exhibit 16-5)

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The Functions of Culture
• Defines boundaries
• Conveys a sense of identity
• Generates commitment beyond oneself
• Enhances social stability
• Sense-making and control mechanism

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Culture Creates Climate
• Organizational climate:
– The shared perceptions organizational members have
about their organization and work environment
– More readily observable “behavioral evidence” for an
organization’s culture
– Directly links values with explicit practices
– Positive climate is linked to higher customer
satisfaction and financial performance

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How Organizational Cultures Have an
Impact on Employee Performance and
Satisfaction (Exhibit 16-6)

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The Ethical Dimension
Learning Objective 16.4

• Ethical culture: shared concept of right and

wrong behavior in the workplace that reflects the
true values of the organization and shapes the
ethical decision making of its members

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Culture and Sustainability
• Sustainability: organization practices that can be
sustained over a long period of time because the
tools or structures that support them are not
damaged by the processes

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Culture and Innovation
• Culture and innovation: innovative companies
are characterized by their open, unconventional,
collaborative, vision-driven, and accelerating
cultures
• Culture as an asset: culture can contribute to an
organization’s bottom line

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Culture as a Liability
• Institutionalization
– Behaviors and habits go unquestioned – can stifle innovation
• Barriers to change
– Culture is slow to change
• Barriers to diversity
– Culture seeks to minimize diversity
– Can embed prevalent bias and prejudice
– Toxicity and dysfunctions
• Barriers to acquisitions and mergers
– Cultural incompatibility can be a problem
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Ethical Cultures
Learning Objective 16.5

• Principles for managers:

– Be a visible role model
– Communicate ethical expectations
– Provide ethical training
– Visibly reward ethical acts and punish unethical ones
– Provide protective mechanisms

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Positive Cultures
• A positive organizational culture emphasizes:
– Building on employee strengths
– Rewarding more than punishing
– Encouraging vitality and growth
– Recognizing outside context

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Spiritual Cultures
• Workplace spirituality: recognizes that people
have an inner life that nourishes and is nourished
by meaningful work that takes place in the context
of community
• Characteristics of a spiritual organization:
– Benevolence
– Strong sense of purpose
– Trust and respect
– Open-mindedness

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Reasons for Growing Interest in
Spirituality (Exhibit 16-7)

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The Global Context
Learning Objective 16.6

• Organizational culture can reflect national culture

and it can transcend national boundaries
• Companies must be sensitive to differing
standards

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Implications for Managers
• Realize that an organization’s culture is relatively fixed in
the short term.
• Hire individuals whose values align with those of the
organization; these employees will tend to remain
committed and satisfied.
• Understand that employees’ performance and socialization
depend to a considerable degree on their knowing what to
do and not do.
• You can shape the culture of your work environment.
• Understand the cultural relevance of your organization’s
norms before introducing new plans or initiatives overseas.

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Discussion Questions
• Discuss your own organization’s culture. How are
employees formally and informally socialized to
the culture?
• Discuss the rise in workplace spiritually. How can
an awareness of spirituality help us better
understand employee behavior?

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