#Notes 8.4 Signs of Organizational Culture

8.4 Signs of Organizational Culture

How do you find out about a company’s culture? 

Mission Statement

A mission statement is a statement of purpose, describing who the company is and what it does. 

• The first facet of the planning P-O-L-C function. 
• Effective mission statement: 1. Well known by employees 2.Transmitted to all employees starting from their first day at work. 3.Influences employee behavior.
• If the mission statement does not affect employee behavior on a day-to-day basis, it has little usefulness as a tool for understanding the company’s culture. 
• Enron provided an often-cited example of a disconnect between a company’s mission statement and how the company actually operated. Their mission and values statement started with “As a partner in the communities in which we operate, Enron believes it has a responsibility to conduct itself according to certain basic principles.” Their values statement included such ironic declarations as “We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here.”
• A mission statement that is taken seriously and widely communicated may provide insights into the corporate culture. For example, the Mayo Clinic’s mission statement is “The needs of the patient come first.” This mission statement evolved from the founders who are quoted as saying, “The best interest of the patient is the only interest to be considered.” 
• Mayo Clinics have a corporate culture that puts patients first. For example, no incentives are given to physicians based on the number of patients they see. Because doctors are salaried, they have no interest in retaining a patient for themselves, and they refer the patient to other doctors when needed. 
• Wal-Mart may be another example of a company that lives its mission statement and therefore its mission statement may give hints about its culture: “Saving people money so they can live better.

Rituals

Rituals refer to repetitive activities within an organization that has symbolic meaning.

• Usually, rituals have their roots in the history of a company’s culture. They create camaraderie and a sense of belonging among employees. 
• Serve to teach employees corporate values and create identification with the organization. For example, at the cosmetics firm Mary Kay Inc., employees attend ceremonies recognizing their top salespeople with an award of a new car—traditionally a pink Cadillac. These ceremonies are conducted in large auditoriums where participants wear elaborate evening gowns and sing company songs that create emotional excitement. During this ritual, employees feel a connection to the company culture and its values such as self-determination, willpower, and enthusiasm. 
• Another example of rituals is the Saturday morning meetings of Wal-Mart. This ritual was first created by the company founder Sam Walton, who used these meetings to discuss which products and practices were doing well and which required adjustment. He was able to use this information to make changes in Wal-Mart’s stores before the start of the week, which gave him a competitive advantage over rival stores who would make their adjustments based on weekly sales figures during the middle of the following week. Today, hundreds of Wal-Mart associates attend the Saturday morning meetings in the Bentonville, Arkansas, headquarters. The meetings start and end with the Wal-Mart cheer; the agenda includes a discussion of weekly sales figures and merchandising tactics. As a ritual, the meetings help maintain a small-company atmosphere, ensure employee involvement and accountability, communicate a performance orientation, and demonstrate taking quick actions. 

Rules and Policies

Companies create rules to determine acceptable and unacceptable behavior and, thus, the rules that exist in a company will signal the type of values it has. 

• Policies about issues such as decision making, human resources, and employee privacy reveal what the company values and emphasizes. For example, a company that has a policy such as “all pricing decisions of merchandise will be made at corporate headquarters” is likely to have a centralized culture that is hierarchical, as opposed to decentralized and empowering. 
• The presence or absence of policies on sensitive issues such as English-only rules, bullying and unfair treatment of others, workplace surveillance, open-door policies, sexual harassment, workplace romances, and corporate social responsibility all provide pieces of the puzzle that make up a company’s culture. This highlights how interrelated the P-O-L-C functions are in practice. 
• Through rules and policies, the controlling function affects the organization’s culture, a facet of organizing.

Below are scenarios of critical decisions you may need to make as a manager one day. Read each question and select one response from each pair of statements. Then, think about the effect your choice would have on the company’s culture (your organizing function) as well as on your controlling function.

1. Your company needs to lay off 10 people. Would you

a. lay off the newest 10 people?

b. lay off the 10 people who have the lowest performance

evaluations?

2. You’re asked to establish a dress code. Would you

a. ask employees to use their best judgment?

b. create a detailed dress code highlighting what is proper and

improper?

3. You need to monitor employees during work hours. Would you

a. not monitor them because they are professionals and you trust them?

b. install a program monitoring their Web usage to ensure that they are spending work hours actually doing work?

4. You’re preparing performance appraisals. Would you

a. evaluate people on the basis of their behaviors?

b. evaluate people on the basis of the results (numerical sales

figures, etc.)?

5. Who will be promoted? Would you promote individuals based on

a. seniority?

b. objective performance?

Physical Layout

A company’s building, the layout of employee offices, and other workspaces communicate important messages about a company’s culture. 

• Nike campus in Beaverton, Oregon, can witness firsthand some of the distinguishing characteristics of the company’s culture. The campus is set on 74 acres and boasts an artificial lake, walking trails, soccer fields, and cutting-edge fitness centers. The campus functions as a symbol of Nike’s values such as energy, physical fitness, an emphasis on quality, and a competitive orientation. In addition, at fitness centers on the Nike headquarters, only those using Nike shoes and apparel are allowed in. This sends a strong signal that loyalty is expected. The company’s devotion to athletes and their winning spirit are manifested in campus buildings named after famous athletes, photos of athletes hanging on the walls, and their statues dotting the campus. 
• The layout of the office space also is a strong indicator of a company’s culture. A company that has an open layout where high-level managers interact with employees may have a culture of team orientation and egalitarianism, whereas a company where most high-level managers have their own floor may indicate a higher level of the hierarchy. 
• Microsoft employees tend to have offices with walls and a door because the culture emphasizes solitude, concentration, and privacy. In contrast, Intel is famous for its standard cubicles, which reflect its egalitarian culture. The same value can also be observed in its avoidance of private and reserved parking spots. 
• The degree to which playfulness, humor, and fun are part of a company’s culture may be indicated in the office environment. For example, Jive Software boasts a colorful, modern, and comfortable office design. Their break room is equipped with a keg of beer, free snacks and sodas, an Xbox 360, and Nintendo Wii. A casual observation of their work environment sends the message that employees who work there see their work as fun.

Stories and Language

Perhaps the most colorful and effective way in which organizations communicate their culture to new employees and organizational members is through the skillful use of stories. 

• A story can highlight a critical event an organization faced and the organization’s response to it, or a heroic effort of a single employee illustrating the company’s values. 
• The stories usually engage employee emotions and generate employee identification with the company or the heroes of the tale. 
• A compelling story may be a key mechanism through which managers motivate employees by giving their behavior direction and by energizing them toward a certain goal, a new tool for engaging employees in setting direction.
• Moreover, stories shared with new employees communicate the company’s history, its values, and priorities, and create a bond between the new employee and the organization. For example, you may already be familiar with the story of how a scientist at 3M invented Post-it notes. 
• Language is another way to identify an organization’s culture. Companies often have their own acronyms and buzzwords that are clear to them and help set apart organizational insiders from outsiders. In business, this code is known as jargon. Jargon is the language of specialized terms used by a group or profession. Every profession, trade, and organization has its own specialized terms.

KEY TAKEAWAY

Organizational cultures are created by a variety of factors, including founders’ values and preferences, industry demands, and early values, goals, and assumptions. Culture is maintained through attraction-selection- attrition, new employee onboarding, leadership, and organizational reward systems. Signs of a company’s culture include the organization’s mission statement, stories, physical layout, rules and policies, and rituals.