4.10. Organisational culture

Question 1

Define organisational culture

Answer 1

• the values/assumptions shared within an organisation
• defines what is important
• provides direction toward the right way of doing thing
• company’s DNA

Question 2

Elements of organisational culture

Answer 2

artifacts of organisational culture: 
- physical structures
- language
- rituals and ceremonies
- stories and legends
organisational culture:
- shared values: conscious beliefs, evaluation of what's right and wrong
- share assumptions: unconscious, taken for granted beliefs, implicit mental models, ideal prototype of behaviours

Question 3

Espoused values

Answer 3

Represent the explicitly stated values and norms that are preferred by an organization

Question 4

Enacted values

Answer 4

Represent the values and norms that actually are exhibited or converted into employee behavior

Question 5

Rituals, ceremonies and language

Answer 5

• Rituals:
– programmed routines
– (e.g., how visitors are greeted)
• Ceremonies
– Planned activities for that demonstrate what a firm values (e.g. awards for employees who performed in line with certain values)
• Language
– How employees address each other and outsiders, express emotions, describe stakeholders, etc.

Question 6

Why is organisational culture important?

Answer 6

• Control system: directing employees in a given direction– once people internalize certain values you don’t have to tell them what to do anymore
• Social glue: people drink “the Kool Aid” (group identity)
• Sense making: create an understanding for why
something happens
• However, a very strong culture might undermine innovation capabilities

Question 7

Limitations of organisational culture

Answer 7

• Strength of cultural values depends on how long members of a group have been together and how stable and homogenous the group has been (established vs. young firms)
• Multiple groups within an organisation may develop partly different sub-cultures

Question 8

How is the culture preserved?

Answer 8

• Formal rules and procedures
• Widespread practices
• Leader’s example
• Informal advice
• Common stories

Question 9

How can organisational culture be changed/strengthened?

Answer 9

1. Actions of founders/leaders
   – Founder’s values/personality
2. Aligning artifacts
   – Artifacts keep culture in place
   3.Introducing culturally consistent rewards
   – Rewards are powerful artifacts
3. Support workforce stability and communication
   – High turnover weakens org culture
   – Strong culture depends on frequent, open communication
4. Attracting, selecting, and socialization of employees
   – Socialization practices

Question 10

Different types of merging cultures

Answer 10

1. Assimilation: acquired company embraces acquiring firm’s cultural values
2. Deculturation: acquiring firm imposes its culture on unwilling acquired firm
3. Integration: cultures combined into a new composite culture
4. Separation: merging companies remain separate with their own culture