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ORGANIZATIONAL CULTURE AND QUALITY MANAGEMENT ASSOC. PROF. DR. JEGAK ULI Objective: After studying this unit, you should be able to understand: the concept of ... – PowerPoint PPT presentation

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Objective After studying this unit, you should
be able to understand
  1. the concept of organizational or corporate
  2. the elements of organizational culture
  3. the importance of organizational culture and
  4. the method to determine the observable
    organizational culture among the employees
  5. the process of change in organizational culture

  • Change in the cultural contexts is inevitable in
  • Changes in any system or subsystem would not be
    effective until the change is aligned with the
    organizational / corporate culture.
  • Otherwise resistance to change may affect the
    planned change.
  • For instance, the adoption of bureaucratic
    culture may not facilitate fast and effective
    change and to counter the frequency of
    organization change.

Fig. 1 Interaction between corporate culture,
strategy, and change

  • Any attempt to bring changes in organization
    usually involves changing the organizations
  • If rapid changes were to take place, the basic
    assumptions and transformation of the current
    culture may be altered if it is to have a
    realistic opportunity to succeed.
  • The potential areas of interdependence among
    organizational culture, strategies and the
    desired change ought to be noted.
  • A deep understanding of organizational culture is
    vital in managing and implementing a change

Definition of Organizational Culture
  • There are numerous scholarly definitions and
    opinions in defining culture in the context of
  • However, culture inevitably is described as an
    intangible asset in organizations (Itami,
    1987)1 which is shared, learnt, and
    transmitted (Beaumont, 1993)2.
  • Schein (1985) 3 depicts organizational culture
    as the set of values, beliefs, and assumptions
    shared by the members of the organization.
  • This is further supported by Morgans (1986) 4
    definition of organizational culture as a vital
    tool in establishing ideas, values, norms,
    beliefs, and customs in creating an organization
    as a social unit.
  • 1 Itami, H. (1987). Mobilizing Invisible Asset.
    Cambridge Harvard University Press.
  • 2 Beaumont, P.B. (1993). Human Resource
    Management Key Concepts and Skills. London Sage
  • 3 Schein, H.E. (1985). Organizational Culture
    and Leadership. San Francisco Jossey Bass.
  • 4 Morgan, G. (1986). Images of Organizations.
    Beverly Hill Sage Publication.

Definition of Organizational Culture
  • Sackman (1991) 1 is of the opinion that
    culture acts as a control mechanism that can
    increase commitment towards the organization,
    achieving integration between firms and assist in
    adapting towards the desired change.
  • A strong organizational culture acts as a
    compass, exhibits controlled guide, and serves as
    a balanced force among members of the
  • It can also act as a glue to bond people together
    in the organization.
  • 1 Sackman, S.A. (1991). Cultural Knowledge in
    the Organization Exploring Collective Mind.
    California Newbury Park.

Definition of Organizational Culture
  • Hofstede (1991)1 defines culture as the
    collective programming of the mind which
    distinguishes the members of one human group from
  • According to Flanagan (1995)2, corporate
    culture demonstrates how practices are manifested
    and how problems are solved in an organization.
  • Comprehensively, corporate culture is the pattern
    of basic assumptions created, discovered, and
    developed by an organization when confronted with
    problems of external adaptation and internal
  • These basic assumptions evolved into beliefs,
    artifacts and rituals / norms (Schein, Martin,
    and Meyerson, 1986)3.
  • 1 Hofstede, G. (1991). Culture and
    Organizations Software of The Mind. London
    McGraw Hill.
  • 2 Flanagan, P. (1995). The ABCs of Changing
    Corporate Culture. Management Review, AMA, pp.
  • 3 Schein,E.H., Martin,J., Meyerson,D. (1986).
    Organizational Cultures and Denial Channeling,
    Acceptance of Ambiguity. Research Reports No.
    807R, Research Paper Series, Graduate School of
    Business, Stanford University, CA.

Definition of Organizational Culture
  • Generally, culture can be defined as collection
    of beliefs, values, behavior, attitudes, and
    customs that characterize a community of people
    in an organization.
  • It is a conventional way to perpetuate how people
    think and act, in understanding reality,
    recognize and solve problems in an organization.

Fig. 2 Elements of Organizational Culture
Basic Assumptions
Values Artifacts
Elements of Corporate Culture
  • Four elements of corporate culture include
  • Basic assumptions
  • Artifacts
  • Values
  • Norms

Basic assumptions
  • These are the basic precepts or principles that
    characterizes an organization in terms of what it
    is, what it stands for and what it is all about.
  • It is what drives the organization and determines
    how its members perceive, think, feel and behave.
  • It underlies the various aspects of
    organizational activity and represents the core

Examples of Basic assumption
  • emphasis on quality
  • customer-oriented
  • market oriented
  • risk taking and innovation
  • employee participation
  • open communication and safety
  • continuous improvement thinking

More definitions of assumptions
  • An assumption is an assertion about some
    characteristic of the future that underlies the
    current operations or plans of an organization

Types of assumptions.
  • There are multiple types of assumptions.
  • The most known derivation is between explicit and
    implicit assumptions.

Explicit assumptions
  • Explicit assumptions are assumptions of which the
    intention that is fully revealed or expressed
    without vagueness, implication or ambiguity.
  • Explicit assumptions are often not hard to find,
    since they are explicitly stated in the business
  • Examples of parts in the business plan full of
    explicit assumptions are the financial forecast
    and the business system and organization.

Callout 1 Deriving assumptions out of an
explicit statement
If we are later than 12 months, we will start losing opportunities. If so The product will be available The competitors have the capability to close the deals in 12 months There must be an opportunity for us to lose, if so A customer is identified The customer will feel a need to buy
If we are later than 12 months, we will lose the
opportunity. You can probably restate this
statement, based on the underlying assumptions to
For each month delay in product availability,
beyond the 12th month, we will lose a market
share of 3. This way you can calculate the
financial impact of changes in the assumptions
and start determining the criticality of the
assumptions made.
Implicit assumptions
  • Implicit assumptions are assumptions that are
    capable of being understood from something else
    though they are not expressed.
  • The problem is that some important implicit
    assumptions in a plan go undetected.
  • And if no precautions are taken for a scenario
    where implicit assumptions prove to be wrong,
    this might lead to unpleasant surprises.

Callout 2 Some Dangerous Implicit Assumptions
List copied from McGrath MacMillan (1995)
Customers will buy our product because we think its a good product Customers will buy our product because its technically superior Customers will agree with our perception that the product is great The product will sell itself Distributors are desperate to stock and service the product We can develop the product on time and on budget Competitors will respond rationally We will be able to hold down prices while gaining share rapidly We will have no trouble attracting the right staff Customers will run no risk in buying from us instead of continuing to buy from their past suppliers
McGrath, R. G. and I. C. MacMillan (1995).
Discovery-Driven Planning. Harvard Business
  • The visible manifestation of culture as seen in
    the physical and social environment of the
    organization such as
  • the structure, system, subsystem, symbols,
    plaques, etc.
  • release of public documents, media reports and
    stories about the organization.
  • rituals, norms, customs, rules and procedures.
  • the observable behavior of its members (the way
    they talk, the jargons they use, the way they
    dress, etc.)
  • E.g. The 24-hour hotline for customers

  • These are the social principles, goals, or
    standards held by members of an organization
    individually or collectively.
  • Values form the core of the culture, reflecting
    what is important in the organization and
    determining how the organization ought to be.

  • For instance, Boeing, characterized its product
    safety as its core values that form the basis of
    its policies and actions in safety standards,
    test and analyses to all its commercial flights.
  • Identifying, communicating, and shaping
    organizational values is difficult as values
    relate to employee emotions and feelings
    (affective) than their rational thinking
  • Values may not be observed directly but could be
    inferred from employee behavior and the stated
    reasons for the behavior.

  • These are the significant elements of the
    organizations social environment and evolve out
    of the organizations value.
  • Unwritten rules of behavior, the informal rules
    of the game telling employees what they are
    supposed to be saying, believing and doing, and
    what is right and wrong.

  • For instance, IBMs norms outlined that its
    employees need to listen actively and act
    accordingly to meet its customers needs, demands
    and rectify complaints.
  • Norms are generally passed on to new employees by
    word of mouth and enforced by the social approval
    or disapproval of ones behavior in terms of its
    congruence or incongruence with prevalent norms.

Forces for Change (When does change in
organizational culture occur?)
  • Change in organizational culture is likely to
    result when-
  • The organizations general environment has
    changed or is going to change due to the rapid
    technological, economic, and political changes
  • Competitive environment in the industry exists
  • An organization is experiencing expansion and
    development process

Forces for Change (When does change in
organizational culture occur?)
  • A planned change to design and implement radical
    changes, fundamental or strategic transformations
    or recreational changes
  • The only alternative to ensure continual survival
    of the organization
  • Two or more organizations merge.

Steps of effective change in organizational
culture (10 steps)
  1. Formulate a clear picture of the firms new
    strategy and of the shared values, norms, and
    behaviors needed to make it work.
  2. Examine in depth the internal functioning of the
    organization and ascertain if cultural change is
  3. Identify aspects of the current culture that
    could be still be valid and other aspects that
    need to modified or changed.

Steps of effective change in organizational
culture (10 steps)
  1. Identify the scope or depth of the cultural
    change needed.
  2. Maintain open communication during the change
    process by announcing those changes in terms of
    general objectives, specific activities and
    desired behaviors.

Steps of effective change in organizational
culture (10 steps)
  1. Implement top-down change. Top management
    commitment has to be obviously seen and felt.
  2. Involve the employees in the change process.

Steps of effective change in organizational
culture (10 steps)
  1. Check on the leadership and support processes to
    overcome anxiety and resentful sentiments among
    managers and employees.
  2. Monitor the progress from time to time build
    momentum in terms of initial success.
  3. Overcome or defuse resistance. Despite this,
    expect certain casualties to occur.

Approaches to increase supportive organizational
culture among teamwork (based on Joharis Window)
  1. Check knowledge with each individual in the team
    on organizational culture and strengthen the
  2. Identify aspects of organizational culture that
    are known by the team members, of which you do
    not know and learn from them.
  3. Identify and share aspects of organization
    culture that you know but not known by the team

Approaches to increase supportive organizational
culture among teamwork (based on Joharis Window)
  • Coordinate and reinforce the obvious culture that
    you and your team know and yet to know with the
    management level. The objective is to involve,
    collaborate, and increase employee participation
  • the effect of basic assumptions, values and norms
    on organization
  • state all aspects of organizational culture
    including tradition and history, objective,
    policies and procedures, product and service,
    customer, technology, system and organizational
    control, success and failures.

Approaches to increase supportive organizational
culture among teamwork (based on Joharis Window)
  1. Educate all the teams on organizational culture.
    Every employee needs to understand the breadth
    of areas in beliefs and basic values that
    influence and relevant to the organizational

Approaches to increase supportive organizational
culture among teamwork (based 0n Joharis Window)
  • Team members can use the Joharis Window (Luft,
    1961) 1 as an exercise to examine the extent to
    which realization of organizational culture exist
    and to strengthen the organizational culture.
  • 1 Luft, J. (1961). Of Human Interaction. Palo
    Alto, California National Press Books.

Fig. 3 Joharis Window on Organizational

Knowledge on Organizational Culture
Aspects of organizational Aspects of
organizational culture that I do not realized
culture that others and I but known by
others do not know (What
should I learn from (not collectively
known) others?) What is known collectively
Aspects of organizational on organizational
culture culture that I know
but (Organizational culture not
known by others known by everyone)
(What I should tell others)

What I do not know
What I know
What others know
What others do not know
Changing Organizational Culture
  • Changing organizational culture is not easy and
    time consuming for a cultural transformation to
    take effect.
  • Changing the corporate culture requires
    systematic planning and careful implementation.
  • There are a few models that can be used to effect
    change in the corporate culture and one of them
    is that of Gonzales Model (1987)1.
  • 1 Gonzales, R. (1987). Corporate Culture
    Modification A Guide for Managers. Manila.
    National Books Co.

There are five key steps involved Step 1
  1. Identify the reason the organization needs to
    change its corporate culture. -It is imperative
    to identify current culture and give reasons for
    the required change. -The change has to be from
    within the organization because the employees
    need to believe and to be tuned to its culture

There are five key steps involved Step 2
  • Identify the main objectives of the change in
    corporate culture. -Establish the form of the
    new cultural change. -Involve as many employees
    as possible to develop a list of new beliefs,
    values, norms, rules and procedures, and
    corporate system to have a positive impact on
    organizational effectiveness.

There are five key steps involved Step 3
  1. Plan the approach or strategy to achieve the
    objectives of the change. -Identify cultural
    gaps between actual norms and those which would
    impact positively on the organization. How
    would the organization move towards the new
    directions? -The means to reinforce the new
    corporate culture has to be considered. -The
    transformation of the new corporate system to
    produce a conducive environment for the
    organization has to be communicated and enacted.

There are five key steps involved Step 4
  1. Implement the planned change of the corporate
    culture with various strategies.

There are five key steps involved Step 5
  1. Evaluate the progress of the corporate culture
    change through feedback from organization
    members. -Organization power tools are required
    such as information, support and resources for
    adapting to change and ensuring its success based
    on the stated objectives.