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Contemporary OB in Action: Topic Summary: Culture 1
Topic Summary: Culture
Topic summary learning goals
1. Recognize the three dimensions of culture.
2. Describe the iceberg approach to organizational culture, notion of subcultures, and the
competing values framework of organizational cultures.
3. Differentiate between organizational and national culture
4. Describe the process of socialization and the transmission of culture.
5. Evaluate an organizations culture and organizational strategy.
Key terms
adaptation artifacts, espoused values, and basic assumptions competing values framework culture dominant culture iceberg metaphor of culture national culture organizational culture hierarchical culture market culture clan culture adhocracy culture executive culture operator culture professional culture socialization subculture
Introduction to Culture
Organizational culture describes underlying values, beliefs, and assumptions that
are shared by people within an organization. Organizational culture is important because
it determines the behavior that occurs and doesn’t occur in organizations. This topic
summary describes four important aspects of culture: 1) dimensions of organizational
Contemporary OB in Action: Topic Summary: Culture 2
culture, 2) organizational and national culture, 3) the purpose of culture, and 4) how
organizations build culture.
Figure 1: Four aspects of organizational culture
Three dimensions of culture
Our understanding of culture is informed by many disciplines, including
anthropology, social science, and psychology among others. Schein’s model, for
example, emerged from the intersection of anthropology and psychology. Schein’s model
describes three dimensions of culture: artifacts, espoused values, and basic assumptions.2
Culture reveals itself most clearly in artifacts. Artifacts represent the objects that can be
readily observed in organizations. Physical artifacts are easy to identify. Physical artifacts
include art, buildings, décor, dress, and other material objects. Day to day behaviors are
also artifacts. Behavioral artifacts include ceremonies, rituals, traditions, and customs.
Verbal artifacts include jargon, nicknames, stories, myths, villains, and metaphors.3
Three dimensions of
culture
Organizational and national culture
Purpose of culture
Building, sustaining, and indoctrining
into organizational
culture
Contemporary OB in Action: Topic Summary: Culture 3
Espoused values are the second dimension of culture. Espoused values describe
what the members of the culture say they believe. Notice these values are only
‘espoused’. This means that the values are expressed, but because they are only espoused,
the values are not always practiced in reality. Basic assumptions, the third dimension, are
the foundation of culture. Basic assumptions are the most revealing dimension of culture.
Basic assumptions are the accepted, taken for granted, unquestioned beliefs and
assumptions shared by the members of the culture. Identifying basic assumptions is
central to understanding culture because basic assumptions shape decisions and beliefs.
Table: Assumptions
Assumptions: Example of choices Reality 1. rational and fair
2. random or unpredictable Time 1. short-term
2. long-term Space 1. the world is vast and diverse
2. the world is small and similar Human nature 1. people are naturally motivated
2. people need incentives to work hard Interpersonal relationships 1. fellow employees can be friends
2. fellow employees should be held at a distance
Assumptions often include beliefs about: 1) reality, such as events can be rational
and fair or random and unpredictable; 2) the nature of time, the focus of attention is on
short term events or long timeframe; 3) space, the world is vast and diverse or small and
similar; 4) human nature, people are naturally motivated or need incentives to work hard;
and 5) interpersonal relationships, fellow employees can be friends or should be
professional, distant relationships.4
Organizational culture
Contemporary OB in Action: Topic Summary: Culture 4
Organizational cultures emerge over time and can often be traced to the
organization’s founding or attributed to the organization’s founders. Organizational
culture is the patterns of shared beliefs, values, and behaviors within an organization and
cannot be accounted for by traditional organizational factors such as organizational
reporting systems, structures, and policies. Culture shapes how individuals perceive,
think and feel. Cultures create the rituals, myths, and stories of the organization and
provide a means for individuals and organizations to identify with and interpret symbols
and events.5
The concept of culture helps us understand underlying or often hidden elements of
organizations. The iceberg metaphor helps illustrate the nature of culture in
organizations. Above the waterline, an iceberg appears to be a small piece of ice, perhaps
so small that it even floats on top of the water. Perceptions are deceiving, underneath
what is visible, lies a large body of ice, many times larger than meets the eye. The
metaphor brings into focus an obvious part of organization, like their policies, formal
structures, espoused values, work procedures and the like. However, as the cultural
iceberg metaphor illustrates, other important things are going on as well, but they appear
‘below the water line.’ What occurs below the waterline, often hidden from view is
organizational culture.
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insert iceberg figure about here
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Contemporary OB in Action: Topic Summary: Culture 5
Competing values framework: A model of organizational culture
The competing values framework of culture provides a framework for
understanding different types of organizational culture.6 It is one of many cultural
typologies. The competing values framework involves two dimensions. The control
dimension involves the degree to which a culture values flexibility versus rigidity. An
organization that measures high on the control dimension values unclear and constantly
evolving work roles, shared beliefs, and work procedures. An organization that measures
high on rigidity would be represented by clear and rigid shared beliefs that leave little
discretion to employees. On the second dimension, an organization varies to the degree it
values internal affairs versus external affairs. An internally focused organization turns to
its internal workings, history, and is characterized by phrases like ‘this is the way we do
things here.’ An externally focused culture is characterized by a concern with activities
outside the organization and might be characterized by a phrase such as ‘that’s not how
they do things at company x.’ The competing values framework identifies four types of
organizational cultures.
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insert competing values framework of culture here
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A hierarchical culture is when organizations place a strong value on stability and
control and on internal matters. Hierarchical organizations are found in government,
well-established industries such as oil and gas production, utilities, and highly regulated
industries such as banks. Hierarchical organizational cultures allow organizations to
apply and enforce controls on people and processes while engaging in complex and
Contemporary OB in Action: Topic Summary: Culture 6
sometimes risky activities. Banks for example must monitor employee behavior for
compliance with rules, but must also engage in risky activities such as investments. It is
important to monitor behavior of individuals for compliance while at the same time the
employees must engage in risky activities.
Market culture is when organizations place a strong value on stability and control
but focus on external matters. Market cultures tend to flourish in consumer and industrial
products areas where markets shift and new markets emerge. Market cultures help
organizations maintain internal controls, for example, to maintain product quality during
manufacturing processes, but to respond to environmental changes at the same time.
The clan culture is when an organization has internal focus while maintaining
flexibility and discretion. Typically, in a clan culture, values are shared among
individuals and behavior that threatens these values is sanctioned. Research shows that
employees in a clan culture report high degrees of employee satisfaction with their
organization. Clan cultures often develop loyal employees. The downside of the clan
culture is that it is often slow to respond to market changes and may lack controls for
overseeing or monitoring certain types of behavior. Professional cultures such as law
firms and hospitals are often described as a clan culture.
The adhocracy culture is when an organization values flexibility and discretion
while at the same time has an external focus. Adhocracies often lack the controls and
consistent norms of other organizations, they also lack the bureaucracy and hierarchy that
stifles many organizations. Adhocracies shift and change with the marketplace and
organizations of this sort are often short-lived because they change so quickly.
Contemporary OB in Action: Topic Summary: Culture 7
Subcultures
The artifacts, espoused values, and basic assumption shared by most or all the
individuals in an organization constitute a dominant culture; however, within an
organization, many subcultures also exist. A subculture is a culture within a culture.
Subcultures are just as important as dominant cultures in understanding behavior in the
workplace. A subculture is composed of a subset of members within the organization
who share similar values and who define their work in similar ways. Edgar Schein
identified three primary subcultures associated with the contemporary business
organizations.7 The operator subculture values local knowledge and skills of those doing
the work. The operator culture emphasizes the capacity of the individual to deal with
problems within the organization. A second subculture is the professional culture, which
is defined by a group of individuals within the organization who share a set of practices
within a particular occupation and exercise control over how work is done or how to
interpret situations based on this allegiance. In contrast to the operator culture, where
people’s focus is a specific organization, the professional culture values technical
knowledge that is transferable and general so that it can apply across different
organizations. Those members of the organization that belong to a professional culture
are often trained or certified outside the organization itself. This includes attorneys,
Certified Public Accounts, physicians, or engineers whose credentials are certified by
external organizations such as the American Bar Association (in the case of attorneys), or
the American Medical Association (in the case of physicians). People who belong to a
strong professional culture value autonomy and share similar values with others who
belong to their profession outside the organization.8
Contemporary OB in Action: Topic Summary: Culture 8
The third type of subculture is the executive culture. Executives, often those at the
top of the company’s hierarchy, share a concern over the organization’s measurable
financial success. The executive subculture values control and accountability for those in
the organization and work to see that others in the organization share the same goals.
National culture
National culture effects behavior in the workplace as national culture is another
lens to understand how people identify with culture. National culture describes the shared
values, beliefs, and behaviors within a country or culture. Employees bring these values,
beliefs, and behaviors into the workplace. Geert Hofstede, a researcher on international
culture, offers a model that classifies different cultures along five fundamental
dimensions.9
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insert figure here: Hofstede’s dimensions of culture
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• Power distance describes differences in power between individuals. This explains how
much power the culture places in one group at the expense of another. A culture high in
power distance means the culture accepts large differences in power between the most
powerful and the least powerful.
• Individualism and collectivism explain values that support and reward efforts. Cultures
high on individualism tend to focus on individual contribution where high collectivism
cultures value close relationships, reward group effort, and hold strong loyalties to groups
such as family, organization, or referent group.
Contemporary OB in Action: Topic Summary: Culture 9
• Masculinity describes how cultures differ in regards to gender roles. For example, male
gender roles involve assertiveness and competitiveness and female gender roles involve
caring, modesty, and nurturing. The masculinity dimensions measures the degree of
difference between these roles in the culture. A low masculinity dimension means that
there is not a lot of different in male and female gender roles.
• Uncertainty avoidance is the culture’s value of novelty, and structure. In a high
uncertainty avoidance culture ambiguity and lack of clear rules, roles, and appropriate
behaviors are not easily tolerated. Cultures that favor low uncertainty avoidance reflect
values where rules are largely unwritten and individuals can explore new ways of doing
things, including the creation of new cultural norms.
• Time orientation is the degree to which a culture focuses on long term time orientation
versus a short-term time orientation. Long term oriented cultures value perseverance,
future orientation, and frugality while short term oriented cultures values face saving
behavior and conforming to expectations.
Fons Trompenaars and Charles Hampden-Turner offer seven dimensions of
culture.10 They bring a socio-political angle on understanding culture and describe a set
of dilemmas that each culture must resolve.
Contemporary OB in Action: Topic Summary: Culture 10
Table: Seven dimensions of national culture
Dimension Definition
Universalism versus particularism
In a universal culture, people value rules, regulations and general principles of behavior. In particularistic cultures, people value relationships such as friendship and closeness.
1. Individualism versus communitarianism
In individualistic cultures, people value individual effort. In communitarian cultures, collective work and teamwork are valued.
2. Specific versus diffuse
A specific culture values looking at individual parts, each element is scrutinized while diffuse cultures value looking at the big picture.
3. Affective versus neutral
Affective cultures are likely to openly display emotions, while neutral cultures are likely to hide or keep feelings secret.
4. Achievement versus ascription status
In achieved status cultures, people in the culture value accomplishments that are proven by through effort, work, and creativity. Ascribed status cultures favor birth, longevity, gender, or other hierarchy.
5. Sequential time versus synchronic time
Cultures that believe in sequential time focus on time as a linear and value either the future or the past. Synchronic time focuses on the immediate present and may even see time as revolving.
6. Inner versus outer directed
Inner-directed cultures believe that control over the environment, nature can be controlled, and that ultimately people shape events. Outer directed cultures believe the environment and natural forces shape events.
Contemporary OB in Action: Topic Summary: Culture 11
Purpose and goals of culture
Cultures, both national and organizational, serve a number of important social,
psychological, and social functions. Cultures establish limits of acceptable behavior and
define what is legitimate and illegitimate behavior. Culture also sets the ground rules for
what constitutes appropriate punishment when rules are broken and what kinds of
rewards are given when people follow the rules. From an organizational perspective,
culture helps guide the selection and training of employees that will be a good
organizational fit. Cultures motivate people by providing a shared identity among
organizational members. This fulfills a human need for belonging and identity. In some
case, cultures can support organizational strategy and effectiveness. Culture helps an
organization understand what goals to set, which behaviors are important, what standards
are acceptable, and how to allocated resources.11
Transmitting culture
Once a culture has been created, it must be maintained. Socialization is the process by
which new members become indoctrinated into the culture. Socialization can occur in all
types of organizations. Effectively socializing members can result in committed
employees, but there are also downsides of socialization. When members are socialized
into a culture, they share common assumptions and similar beliefs that may not be
productive or helpful. Socialization involves several actions:
1. Defining what is important
• An organization carefully selects new members by looking for new members that possess
traits or characteristics valued by the organization.
2. Reframing what is important
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• The organization will force the newcomer into experiences that cause newcomers to
question their previous behavior or choices.
• The organization will create and tell stories about the organization that reinforces its
values. These might involve tales of the founder, stories of how the organization
overcame trying periods, or tales that reinforce the quality of its employees.
3. Rewarding and Punishing what is important
• The organization will put the new member into a situation where the new member
experiences anxiety, ambiguity, and lacks clear guidelines for action. However, the
organization will expect the new member to choose the right action. Then the
organization will reward the new member when act in the proper way.
• By rewarding good behavior (and perhaps punishing poor behavior), the organization will
reinforce its core values.
4. Showing the way
• Organizations will identify role models and use them as a model of the companies
values12
Adapting to a new culture
When a person has been socialized, they have adapted to the new culture. Living and
working in a new culture often creates uncertainty, stress, and anxiety. Over time,
individuals will adapt to the new culture, choose to leave the culture, or continue to
experience the stresses associated with the new culture. The process of adaptation occurs
as a person accepts the new culture. Accepting the new culture is demonstrated as the
person learns to successfully work in the new culture. A person can adapt in many
different ways.
Contemporary OB in Action: Topic Summary: Culture 13
OB Feature: Linking organizational culture and strategy
Culture emerged as an important concept in understanding organizations in the
1980s. The book “In Search of Excellence’ by Tom Peter’s and Waterman’s argued that
organizational culture was directly linked to the organizations strategy and that cultural
could lead to organizational effectiveness.13 The book touted several examples of
‘excellent’ organizational culture including General Motors. The book became popular,
in part, because it responded to a growing concern among US managers that Japanese
management practices were superior to US management practices. Japanese business
culture valued loyalty, hard work, sacrifice, and quality. Peters and Watermen’s book
showed how US business cultures could also be successful by focusing on customers,
innovation, and technological developments. In Search of Excellence went on to be one
of the best selling business books of all times. The importance of culture continues to be
trumpeted in popular management books like “Good to Great” by Jim Collins who argues
makes the same link between organizational culture, strategy, and success.14
Henry Mintzberg, a well-known management professor and consultant, developed
a model that links an organization’s culture to strategy. He describes that an organization
struggles to balance seven distinct organizational sub-cultures.15 When a single sub-
culture comes to predominate, it influences the organizations overall strategy.
1. The entrepreneurial culture predominates in start-ups, turnarounds, new ventures and
other situations where strong vision and strong direction is needed. The dominant cultural
force is direction – where the organization is going.
2. The machine culture predominates in production plants, manufacturing, and service
organizations such as banks, which require clear procedures to maximize efficiency. The
Contemporary OB in Action: Topic Summary: Culture 14
dominant value is efficiency – How the organization achieves its direction, which focuses
on controlling costs and benefits, creating economies of scale, building in standardized
practices, and other formal procedures that contain costs.
3. The proficiency culture relies on the knowledge, skills, and training of its the
organization members and is likely to flourish in hospitals, accounting firms, and other
professional service firms. The dominant value is professionalism, which covets
autonomy so that individual professionals must exercise independent judgments.
4. The concentration culture values the ability to serve particular markets, customers or
constituencies. The primary value is diversification so that specific markets such as
consumer products develop specific products for hair care, soaps, can be served.
5. The innovation culture values the ability to discover new ways of doing things, adapt to
change and discover better ways of achieving goals. The primary value in the innovation
culture is ‘adhocracy’ or a culture that values temporary groups that get together for short
term projects as seen in high tech development, pharmaceuticals, anything that requires
short term, but new solution.
6. The cooperation culture values the pulling together of ideology – building strong
cultures, norms, and beliefs and sharing common values. The main value is ideology as
demonstrated by religious group, an ideological or political campaign, not for profit
organizations.
7. The competition culture describes a culture that is coming apart because informal power
and authority is distributed throughout the organization rather than centralized. Politics,
or the fight for power, is the predominant value since there is no central direction and
little agreement among members of the organization or desire to compromise.
Contemporary OB in Action: Topic Summary: Culture 15
OB at work: A Taiwanese student learns to adapt
As a native of Taiwan, first studying in the United Kingdom and then later in the
United States, knowledge of Organizational Behavior concepts helped Crystal adapt to
new cultures. Crystal was 23 when she arrived in London. Despite her lifelong
fascination with European cultures, she had not anticipated some of the challenges she
was about to face. Differences in how professors manage their classroom became clear
early on. In Crystal’s native Taiwan, professors spend the entire class lecturing. As a
student, she spent her time listening to the professor and taking notes. She spent her time
quietly absorbing the lecture and then reciting the material back during the exam. The
transition to learning in a classroom in the UK, then in the US proved a challenge. In the
UK, for example, “I was astonished by the fact that so many European students actively
discuss concepts and were not afraid to confront the professor in the classroom,” she
observed.
In the US as well, she needed to be an active participant, ask questions, and
engage during the class. Crystal began to see that the two cultures were different from
what she was familiar with. She knew she needed to adapt to be successful.
She wanted to be involved, but was unsure of how. At first, she simply observed
the other students. What are good questions and what if the questions I asked were not
good ones?, she thought. She listened to the class and it only reminded her of a Chinese
saying she learned in Taiwan. "It's like a duck listening to a thunderstorm, you can hear it
but you don't understand it. “ In Taiwanese they initially used this proverb "鴨子聽雷 (a
Contemporary OB in Action: Topic Summary: Culture 16
duck listens to thunders)" to describe that when it rains, ducks happily swim in the pond
because they don't know the thunders are threatening and can be harmful, " she says.
With this in mind, she set out to develop a better understanding of this new
culture and improve her engagement as a student. She practiced the questions she wanted
to ask or the points she wanted to make during class discussion. This both clarified her
question and improved her spoken English. She turned to her dictionary to understand
key concepts. She also joined a public speaking club where participants present speeches
and conduct impromptu dialogues.
In order to improve her understanding of the differences between Taiwanese and
Western cultures she turned to concepts she learned in her course in her classes like
Organizational Behavior, Psychology, and Sociology. She began to use comparative
analysis used in anthropology and other fields to understand differences between cultures.
She studied Hofsteade’s cultural dimensions and this helped her understand some of the
differences between Western cultures and Taiwanese culture which in turn helped her
understand some of the differences between her approach and the approaches of other
students. For example, US citizens, British, and other Westerners appeared to be more
confident than the Taiwanese she observed. She learned that one reason for the difference
is that in the US in particular, children are taught to be optimistic and their achievements
and talents are recognized early on in their childhood. In Taiwan, children are more
focused on hard work than standing out from the crowd. Another difference is that
Westerns are less afraid of conflict and confront each other on a regular basis. By
contrast, in Taiwan, two people who share different opinions are more likely to find
similarities in their viewpoints than they are to argue differences.
Contemporary OB in Action: Topic Summary: Culture 17
Public speaking was also more important in her newly adopted culture than in
Taiwan. In the United States, she noted, “Communications skills matter a lot. The ability
to make a great speech, communicate clearly, and make yourself valuable to an
organization means that you will earn a high position. In Taiwan, the ability to pursue
and communicate well is not emphasized.”
Understanding the culture, improving her language skills, and building confidence
were only part of her plan. She also studied the challenges associated with adapting to a
new culture and learned that adapting to a new culture is a complex psychological
process. In addition to building her confidence, she found sources of social support, like
friends and other students. She also learned that stress was a natural part of adapting to a
new culture so she accepted that stress comes with uncertainty.
Over time, Crystal built confidence in her ability to perform in the new culture.
She even decided to pursue a doctoral degree in Organizational Behavior. Her topic of
interest: ‘how people adapt to new cultures’.
Contemporary OB in Action: Topic Summary: Culture 18
Spotlight on Research: Strong cultures do more than engage employees, they
engage customers and the community as well.
What do companies like Apple computer, Harley-Davidson motorcycle, and Google tell
us about the importance of organizational culture? One team of researchers wanted to
find out. Not only do these organizations have strong cultures within their organization,
they have a strong following of loyal customers who also share in the culture. Companies
that have a strong culture offer a compelling message and use their organization culture
to build loyalty to all their stakeholders. Companies rely on many different techniques to
communicate their culture. Owners of the Volkswagen bug are know to wave to each
other when they pass on the street. Followers of Apple computer eagerly watch and wait
for the next bit of innovation from the company. Harley-Davidson riders wear distinctive
clothing, often labeled with the name of the company. Each of these is part of an
organization’s cultural ‘toolkit’, used to build a sense of connection between the
company’s culture and outside enthusiasts.
The researchers studied a company that designs, manufactures, and sells mountain
climbing gear. The researchers don’t name the company directly, they refer to the
company simply as ‘Alpinista’. The researchers used interviews with company members
and customers and observed the company employees. They also relied on archival data,
which included reviewing nearly 10 years of the company’s mail order catalogs, their
websites, and product displays.
Alpinista, the researchers observed, has a strong customer following due to the
unique culture of the company. Like many companies with a strong culture, the
company’s culture is strongly tied to its founder’s ideals. As a mountain climber himself,
Contemporary OB in Action: Topic Summary: Culture 19
the company founder became concerned early in his career, when he noticed that many of
his favorite climbing routes were becoming cluttered with climbing gear. Climbers left
unwanted gear or gear that was difficult to retrieve. The company founder began
advocating a process of ‘clean climbing’ where climbers rely mainly on the natural
formations of the mountain and rocks. This would prevent the climbers from hammering
in pins and other aids that left permanent damage to the mountain.
The company culture can be seen in the way it hires employees. To be sure,
candidate resumes are screened for job qualifications, but Alpinista also looks for passion
for outdoor activities. In fact, passion for the outdoors and activities like skiing, hiking,
and climbing may be just as important. One top-level skier felt he would be rejected for a
job because he had worn a suit and tie for the interview and couldn’t convince his
interviewer, who was wearing khaki’s, that he was really an avid skier.
The company’s seasonal catalog featured pictures and short articles of customers,
some of whom were well known outdoor enthusiasts. This showed the connection
between the company culture and those who used the products too. The researchers noted
that the company catalogs didn’t simply promote the products. In fact, the researchers
noted that ‘Alpinista’ catalogs contained scores of articles that featured people engaging
in fun activities and the articles never mentioned the company’s products.
The researchers used examples like this one to show the connection between the
internal organizational culture and those outside the organization. It wasn’t just enough to
be qualified, you really had to live the values and lifestyle of the company’s culture.
The key point of the research: a strong organizational culture reaches beyond the
boundaries of the company and engages stakeholders.
Contemporary OB in Action: Topic Summary: Culture 20
Based on Spencer H. Harrison and Kevin G. Corley 2011. Clean climbing, carabiners,
and cultural cultivation: Developing an open systems perspective of culture. Organization
Science, March-April, 22, 2, 391-412.
Contemporary OB in Action: Topic Summary: Culture 21
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Contemporary OB in Action: Topic Summary: Culture 22
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11Richard T. Pascale. 1985. The Paradox of ‘corporate culture’: Reconciling ourselves to
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13Jim Collins. 2001. Good to Great. New York: Harper Collins.
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