Chapter Fifteen
Organizational Culture
Chapter Overview …………………………………………………….. Error! Bookmark not defined.
Learning Outcomes …………………………………………………………………………………………. 1
Real-World Challenge: Creating a Top Workplace Culture at Asana …………………… 2
Chapter Outline ………………………………………………………………………………………………. 2
I. THE MEANING AND DETERMINANTS OF ORGANIZATIONAL CULTURE …… 2
Chapter Overview
Organizational culture is essential to organizational performance. Not only does it influence the decisions
and behaviors of employees, but it also explains what is happening in an organization and why it is
happening. Just as organizational structure can be thought of as an organization’s skeleton, organizational
Learning Outcomes
After studying this chapter, students should be able to:
1. Describe the meaning, importance, and origins of organizational culture.
Real-World Challenge: Creating a Top Workplace Culture at Asana
Summary: According to the U.S. Bureau of Labor Statistics, in 2017 the San Francisco Bay area’s
unemployment and wage statistics put a lot of pressure on area companies to hire and retain talent.
Workplace-productivity company Asana believed they should create a clear, transparent company with an
employee-friendly, respectful culture to have happier, more productive employees as well as a
competitive advantage. Creating a culture that enabled greater agility would also help Asana compete
effectively and execute its mission, to “help humanity thrive by enabling all teams to work together
effortlessly.”
Real-World Challenge: What advice would you give Asana in creating and maintaining this type of
organizational culture?
Real-World Response: Culture is thought of at Asana as a multifeatured product, with someone assigned
to each feature. Within each area, Asana goes through the product cycle of design, implement, measure,
work.
Chapter Outline
I. THE MEANING AND DETERMINANTS OF ORGANIZATIONAL CULTURE
Organizational culture is a system of shared values, norms, and assumptions that guides members’
attitudes and behaviors and influences how they perceive and react to their environment.
An organization’s culture is reflected in how it gets work done and how employees interact with
each other. It takes a long time for a culture to evolve and a long time to change it.
Performance management, feedback, and compensation systems all help align espoused and
enacted values and norms.
Assumptions are those organizational values that have become so taken for granted over time that
they become the core of the company’s culture.
A. Does Culture Matter?
Research has shown that by actively managing culture, your organization and its employees
will be more likely to deliver on strategic objectives over the long run.
In particular, culture boosts organizational performance when it (1) is strategically relevant, (2)
is strong, and (3) emphasizes innovation and change to adapt to a changing environment.
A strong positive culture promotes employee commitment to the firm’s value system and helps
to align employee and company values. In a strong negative culture, employees have shared
norms and values that are not consistent with what the organization wants or values.
Because strong cultures create stable and consistent employee values and behaviors, they are
slow to change.
B. How Leaders Create and Maintain Culture
Different industries develop different cultures. Company founders and leaders also influence a
firm’s culture.
Shaping an organization’s culture is harder to learn in school than other aspects of management
and it takes personal involvement. It can be very time-consuming to create and maintain an
organizational culture.
II. CULTURES OF CONFLICT AND CULTURES OF INCLUSION
To better understand organizational culture, let’s now discuss two specific types of culture: cultures
of conflict and cultures of inclusion.
A. Cultures of Conflict
Conflict cultures are one example of a specific type of culture.
This results in four types of conflict cultures: dominating, collaborative, avoidant, and passive–
aggressive, as shown in Figure 15.2.
1. Dominating Conflict Cultures
Dominating conflict cultures are active and disagreeable; open confrontations are accepted
as well as heated arguments and threats.
2. Collaborative Conflict Cultures
3. Avoidant Conflict Cultures
Avoidant conflict cultures are passive and agreeable. This type of culture strives to preserve
4. Passive–Aggressive Conflict Cultures
Passive–aggressive conflict cultures are both passive and disagreeable. Rather than dealing
openly with conflict, this culture develops norms to handle it via passive resistance such as
Global Issues: Cross-Cultural Influences on Conflict Cultures
Summary: Societal culture influences aspects of an organization’s culture, including its conflict cultures.
Dominating conflict cultures may occur more often in national cultures emphasizing individualism, as in
the United States. In the U.S. media and institutions, for example, conflict is often referred to adversely as
“a war” or something that should be “won.”
B. Cultures of Inclusion
Organizational culture is an important part of effective diversity management. An
organization’s values and culture interact with its demographic composition to influence social
interaction, conflict, productivity, and creativity.
Case Study: Building a Culture for Inclusion at Microsoft
Summary: One of the ways that Microsoft pursues its goal of empowering every person and every
organization to achieve more is through its commitment to a diverse workforce and an inclusive culture in
which its employees can do their best work. At Microsoft, diversity and inclusion mean gender, race,
III. EFFECTS OF TECHNOLOGY AND INNOVATION ON CULTURE
Creating and maintaining a desired culture can be facilitated by technology, but at the same time
can be made more difficult by the consequences of using technology to work remotely. Innovation
and culture also have major impacts on each other.
A. Using Intranets to Build and Maintain Culture
By building and fostering a sense of community among employees, intranets can help reinforce
an organization’s culture.
Each intranet design reflects a different type of organizational culture and in turn reinforces the
firm’s culture by controlling the flow of information and establishing norms of behavior.
Following are some of the ways intranets can both reflect and influence organizational culture:
1. Their scope: Narrow intranets reinforce a culture of secrecy and information hoarding.
B. Building and Maintaining Culture with Remote Employees
Being virtual challenges an organization’s identity and culture, particularly when the company
C. Innovation and Culture
Innovation is the process of creating and doing new things that are introduced into the
marketplace as products, processes, or services.
One of the organization’s biggest challenges is to bring innovative technology to the needs of
the marketplace in the most cost-effective manner possible. Note that innovation does not just
1. Types of Innovation
A radical innovation (sometimes called disruptive innovation) is a major breakthrough that
changes or creates whole industries.
2. New Ventures
New ventures based on innovations require entrepreneurship and good management to
work.
3. Corporate Research
The most common means of developing innovation in the traditional organization is
through corporate research, or research and development.
IV. MANAGING ORGANIZATIONAL CULTURE
The three elements of managing organization culture are (1) taking advantage of the existing
culture, (2) teaching the organization culture, and (3) changing the organization culture.
A. Taking Advantage of the Existing Culture
Most managers are not in a position to create an organization culture; rather, they work in
B. Teaching the Organization Culture: Socialization
Socialization is the process through which individuals become social beings. In complex
societies, the socialization process takes many years.
Organizational socialization is the process through which employees learn about their
organization’s culture and pass their knowledge and understanding on to others. They learn
C. Changing the Organization Culture
Much of our discussion to this point has assumed that an organization’s culture enhances its
performance.
Research suggests that while some firms have performance-enhancing values, others have
performance-reducing values.
1. Managing Symbols
Managers interested in changing cultures should attempt to substitute stories and myths that
support new cultural values for those that support old ones. They can do so by creating
2. The Difficulty of Change
Changing a firm’s culture is a long and difficult process. A primary problem is that upper-
3. The Stability of Change
In the long run, a firm that successfully changes its culture will find that the new values and
Summary and Application
Organizational culture is a system of shared values, norms, and assumptions that guides members’
attitudes and behaviors and influences how they perceive and react to their environment. Cultures are
made up of formal and informal practices, artifacts, espoused values and norms, and assumptions.
Creating and maintaining a desired culture can be facilitated by technology, but at the same time can be
made more difficult by the consequences of using technology to work remotely. Innovation and culture
also have major impacts on each other.
Discussion Questions
1. Describe three different types of organizational cultures. When would each be most and least
effective for a research and development company dependent on employee innovation?
Dominating conflict cultures have open confrontations as well as heated arguments and threats (e.g.,
2. Do you think that culture is important to organizational performance? Why or why not?
3. How do you learn about prospective employers’ cultures? How important is a company’s
culture to you when you decide to apply or to accept a job offer?
You can learn about prospective employers’ cultures by talking to current employees and studying the
4. Which of the four conflict management cultures would be the best fit for you? Why?
I prefer the collaborative conflict culture because it is active and agreeable. Employees actively
provides for a satisfying work environment and a more productive employee.
5. What can companies do to create and reinforce a culture of inclusion?
Companies can create a culture of inclusion by effectively managing diversity to bring out the best in
6. In what ways can the influence of the founder of an organization be assessed after that founder
is no longer a part of the organization?
7. How are technology and innovation interrelated?
Technology is a tool to facilitate innovation. One use of technology is the use of intranets to keep
8. What current examples can you identify to reflect radical, systems, and incremental
innovations?
Students may think of other examples, but cell phones could be considered a radical innovation as
9. Describe how you might go about taking advantage of an existing organizational culture.
Student’s answers will vary due to the request for a personal response. There should be some mention
of first fully understanding the current culture: its values and behaviors or actions those values
Understand Yourself Exercise—Performance Improvement Through
Culture Change
In this exercise, students imagine that they have accepted a leadership position with an Internet retail
company focused on a wide variety of pirate-themed products. They’ve been given the authority to do
whatever is needed to improve the company’s performance. Students must decide what type of culture the
company should adopt and how they will change it. After 20 minutes of working alone or in small groups,
students then share their insights with the class.
Group Exercise—Culture of the Classroom
Learning Objective: This exercise will help students appreciate the fascination as well as the difficulty
of examining culture in organizations.
Summary: Each group analyzes the organization culture of a college class. Students in most classes that
use this book will have taken many courses at the college they attend and therefore should have several
classes in common.
Task: Divide the class into groups of four to six on the basis of classes the students have had in common.
1. Each group should first decide which class it will analyze. Each person in the group must
have attended the class.
2. Each group should list the cultural factors to be discussed. Items to be covered should
include:
a. Stories about the professor
3. Students should carefully analyze the stories and symbols to discover their underlying
Follow-up Questions
1. What was the most difficult part of this exercise? Did other groups experience the same
difficulty?
4. If the instructor wanted to try to change the culture in the class you analyzed, what steps would
you recommend that he or she take?
Video Exercise
Videos and questions can be found in the eBook and MindTap video folder.
The Environment and Corporate Culture at Recycline
Summary: Thanks to Eric Hudson’s perceptive scanning of the external environment in the mid-1990s,
1. What are some visible aspects of Recycline’s culture that reflect the company’s values and
commitment to green issues?
Visible aspects include of the following: casual dress code, including flip-flops and Birkenstocks; the
2. What role do leaders play in shaping Recycline’s organizational culture? Explain.
Cultural leadership is essential for establishing and maintaining culture. Leaders at Recycline shape
3. Could Recycline easily change its organizational culture if the green products market
encounters a backlash? How would management know if a permanent change in culture has
occurred?
Changing organizational culture is difficult. Since core assumptions are the deepest level of culture
Now What?
Imagine attending a meeting with your boss and two coworkers to discuss declining sales for a previously
popular product. A competitor introduced a similar but better product that has been taking your market
share. The company knew about the competitor’s product, but underestimated the threat. Happy Time
Toys wants to make sure it recognizes potential threats faster in the future. What do you say or do? Go to
this chapter’s “Now What?” video, watch the challenge video, and choose a response. Be sure to also
view the outcomes of the two responses you didn’t choose.
OB Concepts Applied: resistance to change; after action review; organizational learning; ethics
Discussion Questions
1. In what ways might culture influence how responsive Happy Time Toys is to competitor
threats?
If the company has a story about another time when they succumbed to a competitor’s threat, the
2. How are ethics illustrated in these videos? What is the best way to ensure decisions are made
ethically?
Ethics is a code of moral principles and values that governs behavior with respect to what is right or
3. Based on the chapter, what other suggestions would you make to change the culture to enhance
responsiveness to the environment and why would you suggest them?
