Organizational Theory and Design: Organisational Design | Management Optional Notes for UPSC PDF Download

Meaning

Culture refers to the shared and essential understandings among members of a community, encompassing values, ideas, perceptions, preferences, concepts of morality, and a code of conduct. It creates a distinctive identity for human groups and is formed through common beliefs and attitudes.

Definitions

1. Organizational culture is a system of shared beliefs and attitudes that develops within an organization, influencing the behavior of its members.
2. Corporate culture includes the inherent values, unwritten rules of conduct, management styles, priorities, beliefs, and interpersonal behaviors within an organization. Together, they shape a climate that impacts communication, planning, and decision-making.
3. Organizational culture is defined as the philosophies, ideologies, values, assumptions, beliefs, expectations, attitudes, and norms that unite an organization and are shared by its employees. According to Edgar Schein, it is a pattern of basic assumptions developed by a group to cope with external adaptation and internal integration, considered valuable and taught to new members as the correct way to perceive, think, and feel in relation to organizational challenges.

Objectives of Organizational Culture

1. Promoting Cooperation: Cultivating shared values and assumptions within the culture fosters goodwill and mutual trust, encouraging collaboration among members.
2. Facilitating Decision Making: The presence of shared beliefs provides members with a consistent set of assumptions, leading to a more efficient decision-making process by minimizing disagreements.
3. Enabling Control: Control is maintained through three mechanisms:
   • Market control: Utilizes pricing adjustments if results fall short of goals.
   • Bureaucratic control: Relies on formal authority, adjusting rules, regulations, and issuing directives.
   • Clan control: Leverages shared beliefs and values, providing members with a guide for choosing appropriate courses of action.
4. Enhancing Communication: Culture addresses communication challenges by:
   • Eliminating the need to communicate on matters already covered by shared assumptions.
   • Offering guidelines and cues derived from shared assumptions to interpret received messages.
5. Building Commitment: Strong cultures contribute to a robust sense of identification, fostering commitment among members.
6. Influencing Perception: Shared experiences among individuals shape their perception, influenced by what others sharing the same experience express.
7. Justifying Behavior: Culture aids organization members in making sense of their behavior by providing justifications for it.

Characteristics of Organizational Culture

• Autonomy of Individuals: This pertains to the level of responsibility, freedom, and opportunities for individuals to take initiative within the organization.
• Organizational Structure: This encompasses the clarity of objectives, performance expectations, and the extent of direct supervision used to manage employee behavior.
• Support from Management: This refers to the extent to which managers provide clear communication, assistance, warmth, and support to their subordinates.
• Organizational Identity: This is the extent to which members identify with the entire organization rather than solely with their specific work group or professional field.
• Reward System for Performance: This relates to the extent to which the organization's reward system, such as salary increases and promotions, is based on employee performance rather than factors like seniority or favoritism.
• Tolerance for Conflict: This refers to the level of conflict present in relationships between colleagues and work groups, as well as the encouragement for employees to openly express conflicts and criticisms.
• Tolerance for Risk: This indicates the extent to which employees are encouraged to be innovative, aggressive, and willing to take risks.
• Communication Patterns: This encompasses the degree to which organizational communications adhere strictly to the formal hierarchy of authority.
• Outcome Focus: This pertains to the degree to which management emphasizes results or outcomes over the specific techniques and processes employed to achieve them.
• People-Centric Approach: This involves the degree to which management decisions take into account the impact of outcomes on individuals within the organization. Assessing the organization based on these characteristics provides a comprehensive understanding of its culture, forming the basis for shared norms, beliefs, and expectations among members regarding how things are done and how they should behave.

Types of Culture

Cultural Typology

Goffee and Jones have outlined four distinct cultural types based on their identification of two key dimensions, termed as sociability and solidarity. Sociability, characterized by a high concern for people and a focus on processes rather than outcomes, is paired with solidarity, which is task-oriented.
The combination of these dimensions results in four distinct cultural types:

• Networked Culture: A networked culture emphasizes high sociability and low solidarity. In such organizations, members are treated in a friendly manner, and there is an open sharing of information. However, the emphasis on people over tasks in this culture may lead to suboptimal performance.
• Mercenary Culture: A mercenary culture is characterized by low sociability and high solidarity. Organizations with a mercenary culture are task-oriented and thrive on competition. Individuals in this culture tend to be highly focused and goal-oriented, but it may also lead to frustration and stress among underperformers.
• Fragmented Culture: A fragmented culture is low on both sociability and solidarity. There is minimal or no identification with the organization, and individual members' commitment, productivity, and work quality take precedence. However, this type of culture may suffer from a lack of collegiality.
• Communal Culture: A communal culture is characterized by high levels of both sociability and solidarity. Organizations with a communal culture place value on both people and tasks. Work accomplishment is derived from committed individuals, fostering a relationship of trust and respect.

The following diagram explains the four cultural typology:

Modifying Organizational Culture

There are instances when an organization recognizes that its existing culture is not conducive to organizational effectiveness, prompting the need for change. This necessity for change may arise, for instance, due to shifts in the external environment, compelling the organization to adapt to ensure its survival. While altering established cultures can be challenging, it is an essential task for management.
Several conditions must be met for a successful cultural change:

• Dramatic Crisis: Significant crises such as a major financial setback, the loss of a key customer, or a competitor's technological breakthrough can compel management to reassess the relevance of the existing culture.
• New Top Leadership: The departure of top executives and the introduction of new leadership can bring about an alternative set of key values or a new organizational culture. This fresh leadership may be more adept at responding to crises.
• Young and Small Organization: In the case of a new organization with a small size, implementing cultural changes is more manageable for the management.
• Weak Culture: Cultures that are less entrenched or have weaker agreement among members regarding organizational values are more adaptable to change compared to strong cultures. The level of consensus among members on organizational values directly influences the difficulty of implementing change.

Methods for Enhancing Organizational Culture:

• Leadership as Positive Role Models: Top management should serve as positive role models, exemplifying desired behaviors through their own actions.
• Transformation of Stories, Symbols, and Rituals: To influence employees' understanding of the culture, outdated stories, rituals, and symbols should be replaced with new ones that reflect current values.
• Strategic Hiring at Higher Levels: Introducing new members, especially at higher levels, can be a potent strategy for cultural change, provided these new members bring in a fresh cultural perspective.
• Redesigned Socialization Processes: Align socialization processes with new organizational values to facilitate the assimilation of desired cultural norms.
• Rewards Aligned with Cultural Behaviors: Establishing and reinforcing specific cultural behaviors through the reward system can initiate and support cultural change within the organization.
• Formalization of Norms: Replace unwritten norms and beliefs with formal rules and regulations that are strongly enforceable.
• Job Rotations: Promote extensive use of job rotations to disrupt current subcultures and encourage a more fluid cultural environment.
• Top Management Change: A change in top management can significantly impact the organization, as the new leader becomes a representation of the desired culture.
• Peer Consensus through Employee Participation: Facilitate culture change by gaining consensus within peer groups through employee participation and fostering a climate of high trust.