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Organizational Culture
By: Kriti Gupta
Mehak Singla
Akashdeep Singh
Abhineet Dhaliwal
CULTURE
Culture is the way of life of a particular society or group of people, including patterns of thought, beliefs, behavior, customs, traditions, rituals, dress, and language, as well as art, music, and literature.
Organizational Culture
Questions for Consideration
What is organizational Culture? What are the types of
organizational cultures? Do mergers and acquisitions
affect work culture?
What is organization culture??
The pattern of shared values, beliefs and assumptions considered to be the appropriate way to think and act within an organization. Culture is shared Culture helps members solve problems Culture strongly influences behavior
In word of Louis “A set of understandings or meanings shared by a group of people that are largely tacit among members and are clearly relevant and distinctive to the particular group which are also passed on to new members.”
Characteristics of Organizational Culture
Innovation and risk taking
Attention to detail
Outcome orientation
People orientation
Team orientation
Aggressiveness
Stability
Benefits of good organization culture
Talent attractor and talent retainer
Creates energy and momentum
Changes the view of work
Creates greater synergy
Makes everyone more successful
How can employees learn culture?
STORIES
RITUALS
LANGUAGE
MATERIAL SYMBOLS
Types of Cultures CONTROL (HIERARCHY)
COMPETE (MARKET)
CREATE (ADHOCRACY)
COLLABORATE (CLAN)
CONTROL(HIERARCHY)
Features:
Highly structures and formal place
Rules and regulations guide behaviour
Formal policies hold groups together
Stability and performance oriented
Example:
MC Donald’s – standardisation and efficiency
Ford motors - typical hierarchy structure of 17 levels
COMPETE(MARKET)
Features:
Leaders are demanding and productive
Result driven organization
Focus is on market share and penetration
Highly competitive
Example:
General Electric – highly competitive culture where performance speaks louder than process
CREATE (ADHOCRACY)
Features:
Highly dynamic and creative place to work
Innovation and risk taking are embraced by people
Emphasis on growth and acquiring new resources
Depends on ability of an entrepreneur to develop new product
Example:
NASA-Culture is highly flexible, innovative and temporary
COLLABORATE(CLAN)
Features :
Open and friendly place to work
Extended family and sense of togetherness
Group commitment and loyalty
Long term benefit of HR development
Example:
People express airlines-founder Don Burr
Importance of organization culture
It indicates direction in which organization will move in future
It is a powerful tool for guiding behaviour
Helps employees to do their work
Provides guidelines for day to day activities
Gives sense of belongingness to employees
Less labour turn over.
Diversification in Organisation Culture
IBM INNOVATIVE AND RISK TAKING
ATTENTION TO DETAILS
PEOPLE AND TEAM ORIENTED
AGGRESSIVE AND COMPITITIVE
LOW STABILITY
INNOVATIVE
Culture is highly innovative and highly risk taking in terms of technology, strategy and business model. It was ranked among one of the world’s most innovative companies by Business Week and Boston Consultancy Group
IBM has been granted more patents than any other company or individual. it has held the no 1 position for patents for the last 8 years
It has acquired 2886 patents from United States Patents and Trademarks office in a single year
ATTENTION TO DETAILS
Management demands its employees to be expert and precise in whatever they do
PEOPLE AND TEAM ORIENTED
Mgt is highly committed to its people. Informal discussions are a cliché to discuss work related issues
AGGRESSIVE
Employees are expected to be highly aggressive and competitive towards their duties and goals. They work for 45 hours a week and even on weekends
STABILITY
It is quite low. Management slack off all those who underperform or cannot meet to the expectations. Employees say than IBM has sweet shop culture
MICROSOFT BUREAUCRATIC CULTURE
PEOPLE BACK STAB EACH OTHER
CONFLICTS BETWEEN GOALS
DISSATISFIED EMPLOYESS
INDIVIDUAL CONTRIBUTION GIVEN IMPORTANCE OVER TEAMS
The environment inside company is dog eat dog types. For each person who gets a good performance review, an equal number of people must receive a "bad" performance review. This leads to cutthroat internal competition, a lack of empathy or friendship in the office, and generally an unfriendly environment.
Employees are highly dissatisfied. They are not paid for their extra efforts. Just a 3% hike in pay adds to their grievances
MS has a performance review system that values "individual" contributions over team work, everybody wants to make impact on everything. This leads to mutually exclusive ideas.
Mergers and Acquisitions
M & A can be compared to a marriage where a newly married couple has to adjust to new circumstances. When the two cultures are comparatively close to each other, it becomes easier to adjust.
Do mergers and acquisitions affect culture??
According to KPMG study. Around 83% of M & A fails to produce any benefits or they destroy value.When they tried to find out the reason, they concluded that it was people and cultural differences between organizations
People cannot shed values or norms of their prior organizations and adopt to the new culture instantly. The prior culture remains in the merged companies even after years of mergers
Once upon a time...
one observer attending an HP reception after the HP/Compaq merger commented that he “’could tell the H-P folks from the Compaq folks right away.’ The former Compaq employees, in suits and ties, huddled on one side of the room. Polo-shirted H-P staffers stood on the other.”
BMW & ROVER DIVORCE
BMW had acquired Rover in 1994. The acquisition proved problematic from the outset, both in terms of declining sales of Rover in the UK, and because of differences in management styles between the UK and Germany. In March 2000, due to such problems, the parent company announced its decision to sell its unprofitable British subsidiary. This was met by protests by British car workers and trade unions . A number of bids were then made for the company’s assets over years, resulting in their being sold to a Chinese bidder
The major problems were:
Difference in the mgt styles between Britain and Germany
In Britain , leadership style is more people oriented where as in Germany it is task oriented
GE MEDICAL SYSTEMS Under the leadership of Jeffrey Immelt, General Electric (GE) Medical Systems
acquired Marquette Medical Systems (MMS), a privately held company, in late 1998. Both organisations had a history as bitter rivals. Each company had very different organisational cultures. Marquette Medical projected a strong entrepreneurial culture as defined by its founder, who did not tolerate much bureaucracy. GE was part of a multinational corporation, heavily embarked with process orientation. Serious union avoidance issues and concerns about change in benefits and rewards structures existed at Marquette Medical.
Immelt and his leadership team spent significant time meeting with employees of both companies — to explain their vision for the new combined organisation. They worked to create a shared vision for the future that everyone could embrace. GE leadership personally address the concerns. They explained why these control requirements were necessary and how they would drive stronger business results for the combined organisation. This merger was a great success and helped Emmet into the top job at GE.
How to overcome effect of organisation culture to make M&A successful??
Forming a team which will be in charge of cultural integration. It will be responsible to define and implement the new culture in organisation
Evaluation of circumstances and risk involved in M&A in advance and work on the solutions before hand
Use M&A as a tool to obtain competency and skill rather than primarily increasing the size or efficiency of organisation
Work Culture Similarities and Differences
Europe India
Character
Adherence to specifications • Penalties in case of non- performance Promises have to be kept
Tend to generalize rather than being specific Incentives for completing the transactionConfirmations are flexible
PerspectivesPrecise & accurate Do it yourself attitude
Think practical Servants make life easier from childhood on
CommunicationClear & Brief Yes / No
Indirect way of communicating Saying no is impolite
Social StructuresLive in small families Generations go separate ways Need freedom, privacy is very important
Live in large families Strong bonding within the family Hardly any personal sphere, privacy, think in terms of ‘we’
BIBLIOGRAPHY B.McMenamin, “The Virtue of Making Mistakes,” Forbes (May 9,
1994), pp.192-94.
Stephen P. Robbins, “Organizational Behavior: Concepts, Controversies, Applications,” 7th edition.
Haworth org culture,4 org culture types, Bruce m Tharp.
<http://w3.ibm.com/technical/news/20010110_patent.html>.
http://www.icmrindia.org/casestudies
http://mergers-and-growth.com/media
Research paper on unraveling mystical Indian organizational culture by DR Uday Salunkhe
New York times