Chapter 3

CHAPTER
Organizational Culture
learning Objectives
After studying this chapter, you should be able to:
LO3-1 List and discuss the four sources of organizational culture.
LO3-2 Discuss the characteristics and types of organizational culture.
LO3-3 Discuss the importance of organizational culture.
LO3-4 Describe how to manage organizational culture.
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CHAPTER
Learning Objectives
After studying this chapter, you should be able to:
LO3-1 List and discuss the four sources of organizational culture.
LO3-2 Discuss the characteristics and types of organizational culture.
LO3-3 Discuss the importance of organizational culture.
LO3-4 Describe how to manage organizational culture.
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A MANAGERS CHAllENGE
The Journey to Becoming a Successful
Multinational Telecommunication Giant
In 1987, the Qatari government
established a new corporation, Qatar
Public Telecommunications Corporation
(QPTC), to offer local telecommunication
services. QPTCs main purpose at
that time was to operate the existing
landline network. A few years later, QPTC
introduced a number of services such
as cable television and mobile telephone
services, but still locally. In the mid1990s the Qatari government started a
privatization program, aiming to reduce
government ownership in major public
corporations. Qatar Telecom (Qtel), the
successor to QPTC, was the first to be
sold in an initial public offering (IPO)
in 1998, but the real change in Qtels
vision, structure, and culture did not start
until 2003. In that year, Qtel launched
its reorganization program, Q-Turn,
with a new vision of being among the
top 20 Telecommunication Companies
in the world by 2020. In pursuit of its
new vision, Qtel launched new services
locally, established joint ventures
regionally and acquired international
telecommunication companies. Now,
Qtel has a presence in 17 countries
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across three regions: the Middle East,

North Africa, and South East Asia. In
total, it provides coverage to a population
in excess of one billion people, with
75 million consolidated subscribers,
and it is still committed to expansion
in those three and other regions. The
growth in the company profile was
Qtels head office in Doha.
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accompanied by a change in how the

company manages and cares about its
employees and the local community. To
build employee loyalty, Qtel provides
its employees with advancement
opportunities. Indeed, most of Qtels
executives have been promoted from
within. One of them is Mr. Waleed
Al-Sayed, who joined Qtel in 1987
and worked as a sales representative.
Mr. Al-Sayed moved up through the
organizations hierarchy until he was
appointed Chief Operating Officer.
Qtel employees are offered numerous
training and development opportunities,
including sponsorship and scholarship,
personal development plans, succession
planning and leadership development.
Mr. Al-Sayed explained: When we
interview people for hiring, we try to
move away from negotiating the financial
package to illustrating development as

well as advancement opportunities in
Qtel. That being said, Qtel employees
also have access to a variety of benefits
ranging from medical insurance to
subsidized telecommunication services
and end-of-year financial bonuses.
Qtels efforts in improving the work
environment, engaging in a variety of
corporate social responsibility programs
(CSR), pursuing appealing vision and
operating a customer-oriented business
all paid off. Seventy percent of customers
in Qatar, for example, prefer Qtel. Qtel
also has received many international
awards15 in 2010 aloneincluding the
Recognized for Excellence Award from
EFQM, the Best New Telecoms Service
at the Comms MEA Awards, and two top
awards at Asias Best Employer Brand
Awards.
Overview
LO3-1
List and
discuss the four sources of
organizational culture.
MG32028.indb 72
As the story of Qtel suggests, becoming a successful

company is not easy and requires a lot of effort. Plans
need to be designed and then implemented and concrete actions need to be taken to make these plans a reality. All these initiatives to improve the competitive position of the company are the
consequences of a vision set by the owners of the firm and/or its top managers. These actions contribute to shaping the culture of the organization
defined as the way things are done in the business. A specific vision,
employee diversity, and a mix of resources, policies, and plans among others make the companys culture unique in comparison with other organizational cultures including those of competing firms. In this chapter, we study
organizational culture, the sources and the types of organizational cultures,
the importance of organizational culture and how to manage organizational culture. By the end of this chapter, you will understand how organizational culture impacts the management of organizations.
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Organizational Culture 73
Where Does
Organizational
Culture Come
From?
In managing organizational culture, some important questions that arise are these: Where does organizational culture come from? Why do different companies have
different cultures? Why might a culture that for many
years helped an organization achieve its goals suddenly
harm the organization?
Organizational culture is shaped by the interaction of
four main factors: the personal and professional characteristics of people within the organization, organizational
ethics, the nature of the employment relationship, and
the design of its organizational structure (see Figure 3.1). These factors work
together to produce different cultures in different organizations and cause
changes in culture over time.
Characteristics of Organizational
Members
The ultimate source of organizational culture is the people who make up the
organization. If you want to know why organizational cultures differ, look at
how the characteristics of their members differ. Organizations A, B, and C
develop distinctly different cultures because they attract, select, and retain
people who have different values, personalities, and ethics.1 People may be
attracted to an organization whose values match theirs; similarly, an organization selects people who share its values. Over time, people who do not fit in
leave. The result is that people inside the organization become more similar,
the values of the organization become more pronounced and clear-cut, and
the culture becomes distinct from those of similar organizations.2
Figure 3.1
Sources of an Organizations Culture
Characteristics
of organizational
members
Organizational
ethics
Organizational
culture
The employment
relationship
Organizational
structure
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Chapter 3
The fact that an organizations members become similar over time and come
to share the same values may actually hinder their ability to adapt and respond
to changes in the environment.3 This happens when the organizations values
and norms become so strong and promote so much cohesiveness in members
attitudes that the members begin to misperceive the environment, as did Fords
top managers.4 Companies such as Ford, Emirates Airline, SABIC or NBAD
need a strong set of values that emphasize innovation and hard work; they also
need to be careful their success does not lead members to believe their company is the best in the business. Companies frequently make this mistake. One
famous example is the CEO of Digital Equipment, who in the 1990s laughed
off the potential threat posed by PCs to his powerful minicomputers, claiming,
Personal computers are just toys. This company no longer exists.
Organizational Ethics
organizational ethics The
moral values, beliefs, and
rules that establish the
appropriate way for an
organization and its members
to deal with each other and
with people outside the
organization.
The managers of an organization can set out purposefully to develop specific

cultural values and norms to control how its members behave. One important
class of values in this category stems from organizational ethics, which
are the moral values, beliefs, and rules that establish the appropriate way for
an organization and its members to deal with each other and with people
outside the organization. Ethical values rest on principles stressing the importance of treating organizational stakeholders fairly and equitably. Managers
and employees are constantly making choices about the right, or ethical,
thing to do; and to help them make ethical decisions, top managers purposefully implant ethical values into an organizations culture.5 Consequently ethical values, and the rules and norms that embody them, become an integral
part of an organizations culture and determine how its members will manage
situations and make decisions. At the Emirates Group, great value is placed
on corporate citizenship and social responsibility and the belief that business
ethics are integral to continued success. Each member of staffs commitment
towards ongoing improvement combines to maintain the competitive edge of
our operation in global markets.6
The Employment Relationship

A third factor shaping organizational culture is the nature of the employment
relationship a company establishes with its employees via its human resource
policies and practices. Recall from Chapter 1 our discussion of the changing
relationship between organizations and their employees due to the growth
of outsourcing and employment of contingent workers. Like a companys
hiring, promotion, and layoff policies, human resource policies, along with
pay and benefits, can influence how hard employees will work to achieve
the organizations goals, how attached they will be to the organization, and
whether they will buy into its values and norms.7 As we discuss in Chapter 11,
an organizations human resource policies are a good indicator of the values
in its culture concerning its responsibilities to employees. Consider the effects
of a companys promotion policy, for example: A company with a policy of
promoting from within will fill higher-level positions with employees who
already work for the organization. On the other hand, a company with a policy of promotion from without will fill its open positions with qualified out
siders. What does this say about each organizations culture?
Promoting from within will bolster strong values and norms that build loyalty, align employees goals with the organization, and encourage employees
to work hard to advance within the organization. If employees see no prospect
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of being promoted from within, they are likely to look for better opportunities
elsewhere, cultural values and norms result in self-interested behavior, and
cooperation and cohesiveness fall. The tech sector has gone through great
turmoil in recent years, and over 2 million US tech employees lost their jobs
during the 2000s because of outsourcing and the recession. Apple, HP, and
IBMknown for their strong employee-oriented values that emphasized longterm employment and respect for employeeswere among the many companies forced to lay off employees, and their cultures have changed as a result.
To rebuild their cultures, and make their remaining employees feel like owners, many companies have HRM pay policies that reward superior performance with bonuses and stock options.8 For example, Southwest Airlines and
Google established companywide stock option systems that encourage their
employees to be innovative and responsive to customers. Dubai Properties
Group (DPG), a member of Dubai Holding, fosters a culture of collaborative
learning. Employees are their greatest assets. The outcome of the knowledge
transfer initiative will have a profound impact on DPG competitiveness and
productivity through better leveraging of knowledge. The company empowers recently qualified employees to spearhead new projects and leverage the
expertise of professionals with DPG to drive the business forward.
Organizational Structure
We have seen how the values and norms that shape employee work attitudes
and behaviors derive from an organizations people, ethics, and HRM policies. A fourth source of cultural values comes from the organizations structure. Different kinds of structure give rise to different kinds of culture; so to
create a certain culture, managers often need to design a particular type of
structure. Tall and highly centralized structures give rise to totally different
sets of norms, rules, and cultural values than do structures that are flat and
decentralized. In a tall, centralized organization people have little personal
autonomy, and norms that focus on being cautious, obeying authority and
respecting traditions emerge because predictability and stability are desired
goals. In a flat, decentralized structure people have more freedom to choose
and control their own activities, and norms that focus on being creative and
courageous and taking risks appear, giving rise to a culture in which innovation and flexibility are desired goals.
Whether a company is centralized or decentralized also leads to the development of different kinds of cultural values. By decentralizing authority and
empowering employees, an organization can establish values that encourage
and reward creativity or innovation. In doing this, an organization signals
employees that it is okay to be innovative and do things their own wayas
long as their actions are consistent with the good of the organization. Conversely, in some organizations it is important that employees do not make
decisions on their own and that their actions be open to the scrutiny of superiors. In cases like this, centralization can be used to create cultural values that
reinforce obedience and accountability. For example, in nuclear power plants,
values that promote stability, predictability, and obedience to authority are
deliberately fostered to prevent disasters.9 Through norms and rules, employees are taught the importance of behaving consistently and honestly, and they
learn that sharing information with supervisors, especially information about
mistakes or errors, is the only acceptable form of behavior.10 At Deloitte Middle East, the diversity of each and every one is valued. With each member
firm operating independently but united by a common vision, Deloitte gives
its branches the opportunity to feel part of a local community led by global
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LO3-2
Discuss the
characteristics and types of
Chapter 3
standards. While the culture in each of the Middle East member firms varies,
it is characterized by a combination of world-class leaders and regional pragmatism, producing a conducive environment to feed growth and self-exploration while making sure short-term objectives are always kept in sight.11
An organization that seeks to manage and change its culture must take a
hard look at all four factors that shape culture: the characteristics of its members, its ethical values, its human resource policies, and its organizational
structure. However, changing a culture can be difficult because of the way
these factors interact and affect one another.12 Often a major reorganization is
necessary for a cultural change to occur.
Characteristics of
Organizational
Culture
Organizational culture is a system of shared values,

assumptions, beliefs, and norms that unite the members of
an organization. Organizational culture reflects employees and managers views about how things get done in the
organization. Culture gives meaning to actions and procedures within an organization and may be considered as the
glue that holds organizational members together and what
keeps them focused without deviating on the achievement of organizational
goals. The culture specific to each firm affects how employees feel and act as
well as the type of employee hired and retained by the company.
There are three aspects of an organizations culture; the most obvious is
visible culture or the aspects of organizational culture that one can hear, see,
or feel. For instance, the dress code conveys order and homogeneity of organizational culture, the furniture or office layout might tell about the values of
competitiveness and aggressiveness versus consensus and harmony promoted
by the culture, assigned parking spots according to rank, or cafeteria policies
are a few rules and dimensions through which an observer can sense, feel
and assess the culture of an organization. The visible aspects of the culture
represent the first aspectsmostly superficialthat we see, hear, or feel when
we first interact with a culture.
The signs of a visible culture make it possible to study dominant cultural
characteristics such as whether the organization is competitive or values harmony, formal or informal, hierarchical or egalitarian, liberal or conservative.
For instance, firms where managers use an open door policy or management
by walking tend to value informal communication, empowerment of employees, and to decentralize decision making.
At a deeper level, espoused values are not readily observed but instead are
the ways managers and employees explain and justify actions and decisions.
Espoused values are those values that are expressed on behalf of an organization
or that are expressed as explanations for policies or actions. Managers might
explain that major layoffs or restructuring are a response to the economic crisis and decrease in sales volumes; they might argue the adoption of a structure
that values formal communication and respect of hierarchy, rank, and seniority
was promoted for the sake of keeping the companys activities under control
and avoiding deviation from the objective. Promoting an innovative culture or
a customer-responsive culture might be promoted to keep the companys competitive advantage, compete more effectively against other firms in the industry,
or adjust to a changing market or changing needs and demand of customers.
Managers might not, however, give the real reason behind their actions.
For instance, they might not tell that massive layoffs or restructuring is driven
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by profit maximization only and not justified by a drop in demand or difficult

financial situation. They might not tell the truth about why promotions and
salary increases were given to some employees and not to others, arguing that
they were distributed based on merit while in reality they were assigned and
given based on personal relationships and friendships. Usually, if a gap exists
between the espoused values as highlighted by managers in their discourse
and how they are managed in reality, employees will rapidly find out and will
quickly spot the hypocrisy of the culture. Managers who are not honest about
why actions were taken may create an organizational culture that encourages
dishonesty and cynicism, and is characterized by a lack of ethics as managers
who are supposed to lead by example, act as role models, and set an example
for the rest of the company are not playing their role. This will eventually
translate into poor firm performance because trust between employees and
managers is missing and because employees will most probably deviate from
the culture as it is not enforced by managers. For Naguib Sawiris, executive
chairman of Orascom Telecom Holding, The value of sticking to principles
and not giving people what they thought they could get by threats, extortion, or blackmail is just enormous. Ibrahim Dabdoub from National Bank
of Kuwait says, succinctly, You cant be a crook and a leader at the same
time. In the Middle East, loyalty is important. Loyalty to networks, to the
tribe, and to an ethnic or religious group, continues to play a key role in the
region. Although Westerners tend to view this trait with a degree of cynicism,
for most leaders in the region wasta gives them a feeling of trust in their business dealings. It is the underpinning for the culture of my word is my bond.
Espoused values may vary substantially across organizations and reflect
the importance of the role played by managers in conveying the values that
shape employee attitudes towards work and expected behaviors. Espoused
values are generally consciously and explicitly communicated. At the center of
organizational culture are core values that are widely shared, operate unconsciously, and are considered fundamental to the culture and non-negotiable.
In some organizations, a basic assumption might be that stability and commitment of the workforce are critical for success. Consequently, employees are
valued, rewarded for goal-achievement, are treated fairly, and are empowered and encouraged to contribute in decisions. The opposite would be that
stability and commitment of employees are not critical for the companys
success. This will translate into more formal controls, no established reward
systems and low motivation, no delegation of authority, lack of empowerment and centralization of decision making. Employees are seen as commodities and an expense that should be minimized. They are easily replaceable
and are a means through which the company reaches its ends. There will be
detailed standard operating procedures and rules detailing what employees
can do and what they cannot do, and managers believe that it is their duty to
prevent deviations from the norms and to emphasize rigor, order, respect of
the hierarchy, and formality. A climate of suspicion, sabotage, and whistleblowing will flourish in the organization as employees will tend to see their
colleagues as enemies they are competing against and not as collaborators.
Negative competition will be encouraged leading to a lack of harmony within
the firm. In the Arab world, some of the values promoted by organizational
culture are specific to the local culture. For example, Mohammed Alshaya,
Executive Chairman of Kuwait-based M.H. Alshaya Co., the retail division of
the Alshaya Group of companies like his father before him, will not enter into
ventures that involve selling alcohol or tobacco. He says, We shy away from
many opportunities that we dont feel fit with our culture. Group Chalhoub
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Chapter 3
is guided by the philosophy of being Committed to Excellence. With the

aim of optimizing performance of brands, providing quality service and offering a stimulating work environment, the group cultivates the core values of
Excellence, Respect and Entrepreneurial Spirit.13
The following Management Insight box highlights the values used by the
Qatar Museums Authority (QMA).
Its Another Exciting Day at Work

The Qatar Museums Authority (QMA) was founded in late 2005 as a successor to the National Council for Culture, Heritage and the Arts. QMAs
purpose is to manage the resources of all museums in the State of Qatar, to
develop cultural institutions such as museums and galleries, and to provide
an effective system for collecting, protecting, preserving, and interpreting
historic sites, monuments, and artifacts. In 2007 a new managerial team
headed by Mr. Abdullah Al-Najjar was appointed. The new leadership
thought that QMAs aims would not be achieved unless a new organizational culture was developed. As Mr. Al-Najjar phrased it, We want our
employees to wake up in the morning saying, Im going to QMA today
because itll be another exciting day. To build this vision, the leadership
team introduced a new set of values. Seven core values were identified,
as follows: Passionate: Inspire others, love our work; Empowering: Enable
leadership and responsibility; Collaborative: Work as a team with colleagues and partners; Creative: Harness our talent for invention and innovation; Professional: Excellence and efficiency
in all we do; Ethical: Firm adherence to ethical standards; and Communicative: Accessible
and transparent in our interactions. To support
the implementation of these values, the organization went through a reorganization process.
One outcome of the process was empowering the human capital department to act as
an agent for change. With full support from
the leadership team, the traditional electronic
attendance monitoring system was dropped.
Employees work became task-driven rather
than time-driven. Tasks and projects were
performed and completed in teams. Improvements were also introduced in the workplace.
The Qatar National Museum in Doha.
A new health and fitness center, a nursery and
a prayer room were opened on campus. Employees were also encouraged
to take breaks and join their colleagues for coffee, breakfast, or lunch in the
stylish new cafeteria and discuss off-work topics. The leadership team also
joins the various departments over breakfast once a month to encourage
open communication. Recently, QMA has provided its employees with
health insurance coverage and shopping discount cards. The Chief Human
Capital Officer summarizes all of this in a few words: You look after our
business and we look after you.14
Management
Insight
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The basic underlying cultural assumptions create the lenses through which
people perceive and interpret events. For instance, production line employees engaging in a conversation on the job might be perceived as an attempt
to goof off and relax while on the job, which will decrease worker productivity and lead to a drop in performance. Employees are perceived as trying to
take advantage of the culture and exploit any loopholes. In other companies,
this conversation might indicate employee commitment to improving work
processes and their engagement to promote collaborative work and to finding
better ways to do the work as sharing of ideas and communication on issues
related to how to perform the job and improve work processes was done
through this conversation. Positive or negative interpretation of employee
actions depends on these cultural assumptions and their impact on perceptions and interpretations of events.
Research indicates that there are seven dimensions that describe organizational culture;15 each of the seven dimensions ranges from low to high, meaning that it is not a characteristic of the culture (low rating) or is a characteristic
of the culture (high rating). Characterizing the organizational culture by using
these dimensions gives a description of the underlying values used and promoted in the company.
MG32028.indb 79
Attention to detail: degree to which employees are expected to exhibit

precision, analysis, and attention to detail. In industries necessitating
precision and craftsmanship, attention to detail is essential to reach
organizational goals. For instance, in companies such as Louis Vuitton
or Herms, the brand name is built on such values, which are communicated to employees and perpetuated through socialization and training programs. The diversified nature of Qatar Foundations business
requires creativity and some risk-taking to achieve our goals. Leadership plays a pro-active role in this regard by promoting a culture of
trust, where employees are allowed to harness their individual talents to
the full.16
Innovation and risk-taking: degree to which employees are encouraged to

be innovative and to take risks. The culture of financial institutions such
as Citibank and JPMorgan is a risk-taking culture. Traders are encouraged to take calculated risks when trading stocks and currencies for the
benefit of the bank.
Stability: degree to which organizational decisions and actions emphasize

maintaining the status quo. The culture of Toyota emphasizes stability
and conservatism. Even in their worst crises, the managers preferred to
keep employees and looked for other ways to solve the crisis instead of
resorting to major layoffs.
Aggressiveness: degree to which employees are aggressive and competitive

rather than cooperative. At Kanoo group, a culture based on employee
cooperation and teamwork is promoted. In most US corporations, competition between teams, divisions, and units is used to fuel productivity
and performance.
Team orientation: degree to which work is organized around teams rather

than individuals. Qatar airways seek team-oriented candidates to fill its
cabin-crew positions. The same cultural dimension is present at Emirates
Airlines.
People orientation: degree to which management decisions take into

account the effects on people in the organization. For instance, continuous
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learning and development is one of the core values of NBADs corporate

culture since it enables the staff to contribute effectively to developing
innovative, efficient, and secure products and services to allow customers to enjoy the most convenient banking experience. Investing in career
development will ultimately support the achievement of business strategies through staff commitment and engagement, increased retention
rates, and the enhancement of intellectual assets.17
Outcome orientation: degree to which the managers focus on results or outcomes rather than on how these outcomes are achieved. At the Emirates
Group, great value is placed on corporate citizenship and social responsibility and business ethics are integral to continued success. Each member
of staffs commitment towards ongoing improvement combines to maintain the competitive edge of the operation in global markets. At Emirates, managers believe that employees are their greatest asset and their
contribution to the staggering pace at which the company grows cannot
be underestimated.18
The following Ethics in Action box depicts some of the cultural characteristics of Al Jazeera, mainly their people and innovation orientations.
Diversity at Al Jazeera
Focus on
Diversity
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Sami Al Hajj, a Sudanese journalist working for the Al Jazeera network,

was arrested in 2001 while on his way to do camera work for the network in Afghanistan and sent to the United States Guantanamo Bay
detainment camp in Cuba for over six years before being released without any charge on May 1, 2008. Al Hajj was the only journalist to be
held in Guantanamo. In response to this detention, Al Jazeera launched
a global campaign to release him. At the same time, the Arabic network did not forget its responsibility toward Al Hajjs family. His full
monthly salary and all other benefits were provided to his family as if
he were still doing his full-time job. After being released from Guantanamo, Al Hajj was promoted and then appointed the director of a new
department established to defend journalists worldwide. Many of Al
Jazeeras correspondents and journalists are arrested, injured and even
killed while doing their work, so what makes working for Al Jazeera
worthwhile? Al Jazeera has more than 65 bureaus across the globe,
more than 3,000 staff members across the world, including more than
400 journalists from more than 60 countries. It is inevitable that the
workforce in such an organization will be diverse because of the international nature of its operation; nevertheless, Al Jazeera believes in the
importance of diversity to the extent that even in its headquarters in
Qatar, there are employees from more than 55 nationalities. Al Jazeera
was voted by brandchannel.com readers in 2004 as the fifth most influential global brand, behind Apple, Google, Ikea, and Starbucks. Other
important features fueling the success of the network besides diversity
are empowerment and flexibility. Producers, presenters, and editors are
fully empowered in determining what to present and how to present it
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as long as it fits with the network code of ethics. Flexibility is important

to achieve agility, meaning having the right person in the right place at
the right time. Al Jazeeras coverage of the Arab Spring is a good example of this agility. Therefore, it is emphasized in Al Jazeera Laws that Al
Jazeera doesnt create events but is always at their heart.
Strong, Adaptive Cultures versus Weak,

Inert Cultures
Many researchers and managers believe that employees of some organizations go out of their way to help the organization because it has a strong and
cohesive organizational culturean adaptive culture that controls employee
attitudes and behaviors. Adaptive cultures are those whose values and norms
help an organization to build momentum and to grow and change as needed
to achieve its goals and be effective. By contrast, inert cultures are those whose
values and norms fail to motivate or inspire employees; they lead to stagnation and, often, failure over time. What leads to a strong adaptive culture or
one that is inert and hard to change?
Researchers have found that organizations with strong adaptive cultures,
like 3M, UPS, Microsoft, and IBM, invest in their employees. They demonstrate their commitment to their members by, for example, emphasizing the
long-term nature of the employment relationship and trying to avoid layoffs.
These companies develop long-term career paths for their employees and
spend a lot of money on training and development to increase employees
value to the organization. In these ways, terminal and instrumental values
pertaining to the worth of human resources encourage the development of
supportive work attitudes and behaviors.
In adaptive cultures employees often receive rewards linked directly to
their performance and to the performance of the company as a whole. Sometimes employee stock ownership plans (ESOPs) are developed in which workers as a group are allowed to buy a significant percentage of their companys
stock. Workers who are owners of the company have additional incentive
to develop skills that allow them to perform highly and search actively for
ways to improve quality, efficiency, and performance. At Dell, for example,
employees may still buy Dell stock at a steep 15% discount, and this will allow
them to build a sizable stake in the company over time if its performance
recovers.
Some organizations, however, develop cultures with values that do not
include protecting and increasing the worth of their human resources as a
major goal. Their employment practices are based on short-term employment according to the needs of the organization and on minimal investment
in employees who perform simple, routine tasks. Moreover, employees are
not often rewarded on the basis of their performance and thus have little
incentive to improve their skills or otherwise invest in the organization to
help it achieve goals. If a company has an inert culture, poor working relationships frequently develop between the organization and its employees, and
instrumental values of noncooperation, laziness, and loafing and work norms
of output restriction are common.
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Moreover, an adaptive culture develops an emphasis on entrepreneurship

and respect for the employee and allows the use of organizational structures, such as the cross-functional team structure, that empower employees
to make decisions and motivate them to succeed. By contrast, in an inert
culture, employees are content to be told what to do and have little incentive or motivation to perform beyond minimum work requirements. As you
might expect, the emphasis is on close supervision and hierarchical authority, which results in a culture that makes it difficult to adapt to a changing
environment.
Nokia is a good example of a company in which managers strive to create
an adaptive culture.19 Nokias top managers, including its present CEO Jorma
Ollila, have always believed that Nokias cultural values are based on the
Finnish character: Finns are down-to-earth, rational, straightforward people.
They are also friendly and democratic people who do not believe in a rigid
hierarchy based either on a persons authority or on social class. Nokias culture reflects these values because innovation and decision making are pushed
right down to the bottom line, to teams of employees who take up the challenge of developing the ever-smaller and more sophisticated phones for
which the company is known. Bureaucracy is kept to a minimum at Nokia; its
adaptive culture is based on informal and personal relationships and norms of
cooperation and teamwork.
To help strengthen its culture, Nokia built a futuristic open-plan steel and
glass building just outside Helsinki. Here, in an open environment, its R&D
employees can work together to innovate new kinds of cell phones focused on
Nokias company mission to produce phones that are more versatile, cheaper,
and easier to use than competitors phones. This is the Nokia Waya system
of cultural values and norms that cannot be written down but is always present in the values that cement people together and in the language and stories
its members use to orient themselves to the company. Yet, as we noted before,
Nokia is the cell phone company that is most sensitive to the need to appreciate the values, norms, and tastes of other nations. So the Nokia Way is not just
confined to Finland; the company has taken it to every country around the
globe in which it operates.
Another company with an adaptive culture is GlaxoSmithKline, the prescription drug maker discussed earlier in the chapter. Much of GSKs success
can be attributed to its ability to recruit the best research scientists because
its adaptive culture nurtures scientists and emphasizes values and norms of
innovation. Scientists are given great freedom to pursue intriguing ideas even
if the commercial payoff is questionable. Moreover, researchers are inspired
to think of their work as a quest to alleviate human disease and suffering
worldwide, and GSK has a reputation as an ethical company whose values
put people above profits.
Although the experience of Nokia and GSK suggests that organizational
culture can give rise to managerial actions that ultimately benefit the organization, this is not always the case. The cultures of some organizations become
dysfunctional, encouraging managerial actions that harm the organization
and discouraging actions that might improve performance.20 For example,
Sunflower Electric Power, an electricity generation and transmission cooperative, almost went bankrupt in the early 2000s. A committee of inquiry
set up to find the source of the problem put the blame on Sunflowers CEO
and decided he had created an abusive culture based on fear and blame that
encouraged managers to fight over and protect their turfan inert culture. The
CEO was fired, and a new CEO was appointed to change the cooperatives
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culture, which he found hard to do because his top managers were so used
to the old values and norms. With the help of consultants, he changed values and norms to emphasize cooperation, teamwork, and respect for others
which involved firing many top managers. Clearly, managers can influence
how their organizational culture develops over time.
An interesting example of a manager who has been working hard to change
a companys culture is profiled in the following Manager as a Person box.
Alan Mulally Transforms Fords

Culture
Manager as
a Person
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After a loss of more than $13 billion in 2006, William Ford III, who
had been Ford Motors CEO for five years, decided he was not the
right person to turn around the companys performance.21 In fact, it
became apparent that he was a part of Fords problems because he and
other Ford top managers tried to build and protect their own corporate
empires, and none would ever admit that mistakes had occurred over
the years. As a result the whole companys performance had suffered;
its future was in doubt. Finally Fords board of directors realized they
needed an outsider to change Fords culture and the way it operated, and
they recruited Alan Mulally from Boeing to become Fords new CEO.
After arriving at Ford, Mulally attended hundreds of executive meetings with his new managers; and at one meeting he became confused
why one top division manager, who obviously did not know the answer
to one of Mulallys questions concerning the performance of his car
division, had rambled on for several minutes trying to disguise his ignorance. Mulally turned to his second-in-command Mark Fields and asked
him why the manager had done that. Fields explained that at Ford you
never admit when you dont know something. He also told Mulally
that when he arrived as a middle manager at Ford and wanted to ask
his boss to lunch to gain information about divisional operations, he was
told, What rank are you at Ford? Dont you know that a subordinate
never asks a superior to lunch?22
It turned out that over the years Ford had develop a tall hierarchy
composed of managers whose main goal was to protect their turf and
avoid any direct blame for its plunging car sales. When asked why car
sales were falling, they did not admit to bad design and poor quality
issues in their divisions; instead they hid in the details. They brought
thick notebooks and binders to meetings, listing the high prices of components and labor costs to explain why their own particular car models
were not selling wellor even why they had to be sold at a loss. Why,
Mulally wondered, did Fords top executives have this inward-looking,
destructive mind-set?
Mulally soon realized the problem was the values and norms in
Fords culture that had created a situation in which the managers of its
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different divisions and functions thought the best way to maintain their
jobs, salaries, and status was to hoard, rather than share, information.
Thus values and norms of secrecy and ambiguity, and of emphasizing
status and rank, to protect their information had developed. The reason
why only the boss could ask a subordinate to lunch was to allow superiors to protect their information and positions. Fords culture allowed
managers to hide their problems and poor performance. What could
Mulally do? He issued a direct order that the managers of every division
should share with every other Ford division a detailed statement of the
costs they incurred to build each of its vehicles. He insisted that each
of Fords divisional presidents should attend a weekly (rather than a
monthly) meeting to share and
discuss openly the problems
all the companys divisions
faced. He also told them they
should bring a different subordinate with them to each
meeting so every manager in
the hierarchy would learn of
the problems that had been
kept hidden.23
Essentially, Mulallys goal
was to demolish the dysfunctional values and norms of
Fords culture that focused
managers attention on their
own empires at the expense
of the whole company. No
longer would they be allowed
to protect their own careers
at the expense of customers.
New Ford CEO Alan Mulally (left), with former CEO Bill Ford (right), who realized the company needed an outsider at the helm to change Fords insular,
Mulallys goal was to create
self-protective culture.
new values and norms that
it was fine to admit mistakes,
share information about all aspects of model design and costs, and
of course find ways to speed development and reduce costs. He also
wanted to emphasize norms of cooperation within and across divisions
to improve performance.
How could this situation have gone unchanged in a major car company that has been experiencing increased competition since the mid1970s? The answer is that the norms and values of an organizations
culture are difficult to change; and despite Fords major problems, no
CEO had been able to change the mind-set of the top managers in the
company. Ford had become more hierarchical and bureaucratic over
time as its problems increased because poor performance led managers
to become more defensive and concerned with defending their empires.
By 2010 it was clear that Mulally had changed Fords values and
norms; the company finally reported a profit in the spring of 2010, for
which Mulally received over $17 million in salary and other bonuses.
Many managers who could not or would not conform to the new Ford
culture were gone; the others were still learning to adjust their behavior
to the new culture oriented to satisfying the needs of customers, not the
needs of top managers.
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The cultures of organizations can differ in a variety of ways. For

instance, cultural uniformity, the strength of the firms culture, the
degree of formalization emphasized by cultural values, and the gap
or differences between organizational culture and national culture can
characterize the culture of an organization and determine how organizational culture influences employees. Moreover, the nature or type of
organizational culture varies widely across organizations. There are different typologies of organizational cultures. Being able to classify and
recognize the type of organizational culture present in the firm will make
the identification of the values supported by the culture an easier task.
Cultural Uniformity versus

Heterogeneity
Organizations vary in the extent to which a uniform culture is promoted
throughout the company. In some large corporations, different subcultures
might be found in the different branches and subsidiaries. This indicates managers in the companys headquarters allow the different branches or divisions
to develop their own values and guiding principles as long as the major core
values in the branches are the same as those used at headquarters. This cultural flexibility is justified by a need for each division to create its own identity, or by differences in goals and nature of activities. The dominant culture
is emphasized throughout the firm but with some variations in some divisions
and branches. In 2009, Etisalat received an award at the 3rd Middle East
Customer Care Excellence Awards, organized by the Middle East Excellence
Awards Institute. Etisalat won this award for its strong corporate culture and
dedication to providing quality customer service. New employees in the company are immediately integrated into Etisalats quality culture, thanks to the
clear and structured processes they follow. These processes help managers
to review and augment these systems, to ensure staff performs at consistently
high levels. Etisalat has been named Best Operator in the Middle East five
times in the last three years and was recently named Best International Carrier in the world at the World Communications Awards.24
Neither uniformity nor heterogeneity is good or bad in a company. When
cultural heterogeneity is promoted, branches and divisions are given flexibility and freedom to adjust the companys strategy and make it fit with
the contingencies that are specific to the division or branch. Because of the
specificities of these contingencies or product lines or production processes,
cultural flexibility is needed to allow for a customer-responsive and innovation-driven culture.
Culture versus Formalization

Organizational culture might substitute for formal systems of control and
decision making such as organizational structure, rules, procedures, policies,
and direct supervision. When the values are widely supported by employees,
compliance, predictability and consistency would be much easier to obtain.
All employees understand the values that guide their actions in the company
and trust between employees, commitment to the goals, and loyalty to the
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firm reduce the need for written documentation, formal rules and SOPs,
and for monitoring and formal control mechanisms. When employees trust
each other and are reliable and responsible; the need for these mechanisms
decreases. For instance, CAD GULF LLC is a team-based organization
focused on the roles and competencies of its people. Throughout the years,
the company has been able to gather some of the best people in the industry,
hone their skills and cross-train them in other aspects of the business. The
result is a synergistic group living in a culture of excellence, professionalism,
teamwork, and customer orientation.25
National versus Organizational Culture

A national culture can guide behaviors; for example Arabs tend to be more
collectivistic while Americans are more individualistic. Teamwork with
reward systems geared toward group performance might experience more
success in Arab countries than in the US. The culture of the organization
will be influenced not only by the national culture but also by regional
influences, and ethnic and religious backgrounds and beliefs. By embracing diversity and through employee selection and socialization, organizations
keep the best of the national culture and align it with the values supported
by the founders and top managers vision. Some multinational companies
deliberately attempt to create a culture that values diversity to fuel innovation and creativity and increase the companys capacity to quickly adjust to
changes in the environment and to the ever-evolving customer needs. For
instance, the fear of losing face in the Arab world is a significant restraint on
creating new businesses. It tempers any desire that talented graduates might
have to become entrepreneurs, steering them instead to the relative safety
of an established family firm or a well-paid government job. This regional
reticence is also, in part, a function of the cultures continuing respect for
age. Young people are less likely than in the West to go against the wishes
of their parents, and their parents views are almost certain to be more conservative than their own. This dynamic also plays out powerfully in family
firms, where three generations may be working side by side. All will defer to
the eldest, who in general will be one of the least inclined to take a gamble
on a new business. Whats more, as one leader puts it, In the Arab world
almost everything is politicized, and governments are rarely encouraging to
new business.26
Types
An increasing number of culture typologies are being used

to identify various kinds of culture. Classifying the type of
culture in an organization can be helpful to understand if
the culture fits with the strategies of the firm or if some adjustments are needed
to make them more aligned. The control mechanisms, the reward systems,
and other procedures and standards are impacted by the type of culture and
its characteristics. For instance, the adoption of formal or informal control
mechanisms can be linked to the nature or type of culture emphasized in the
organization. The type of culture has implications on how employees should
be managed and what candidates should be hired.
Cultural elements and their relationships within an organization create a
pattern that is a unique part of that organization, creating an organizations
culture. Several types of organizational culture can be described, namely the
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bureaucratic culture, clan culture, entrepreneurial culture, and market culture.

In Figure 3.2 the vertical axis reflects the relative formal control orientation
within the organization, which ranges from stable control to flexible control.
The horizontal axis, on the other hand, reflects the relative focus of attention
of the organization, and ranges from internal functioning to external functioning. The farthest corners of the four quadrants correspond to four pure
organizational cultural types, which are bureaucratic, clan, entrepreneurial
and market. Each of the four organizational cultural types developed by Hellriegel et al.27 will be briefly discussed.
Bureaucratic Culture: This type of organization values rules, hierarchical

coordination, formalization and standard operating procedures; with the
long-term concerns being efficiency, predictability, and stability. Managers within a bureaucratic organization are good coordinators, organizers, and enforcers of rules and procedures that are clearly defined. The
tasks, responsibilities, and authority for all the organizations employees
are also clearly stated. For example, most municipalities and government
Table 3-1
Organizational Culture Typology
Type
Characteristics
Formal control
Example
Orientation and
Forms of Attention
Bureaucratic
culture
Rules, hierarchical coordination, formalization

and standard operating procedures.
Long-term concerns are efficiency, predictability,

and stability.
Stable control
and internal
attention.
Managers are good coordinators, organizers, and

enforcers of clearly-defined rules and procedures.
Tradition, loyalty, teamwork, personal

commitment, and self-management.
Employee contribution exceeds contractual

agreements.
Flexible control Health

Matrix
and internal
attention.
Long-term commitment through a long and

thorough socialization process.
Strong peer pressure to adhere to important norms.

High levels of risk-taking, dynamism, and creativity.
Commitment to experimentation and innovation.
Individual initiative, flexibility, and freedom are
encouraged and rewarded.
Reacts quickly to change and creates it.
Flexible control Group

Chalhoub
and external
attention.
Achievement of measurable and demanding

agreed upon goals.
Contractual relationship between the employee
and the organization.
Concerns for competitiveness and productivity.
Increased levels of performance are rewarded
through increased compensation.
Stable control
and external
attention.
Clan culture
Entrepreneurial
culture
Market culture
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McDonalds
General
Electric
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institutions have bureaucratic cultures, which can hinder their effectiveness and efficiency. The focus of attention of this organization is internal,
and the formal control is stable. McDonalds promotes a bureaucratic
culture throughout the organization as the company follows standard
operating procedures and needs to emphasize homogeneity, coordination of activities, and control of work sequences. Setting routines to be
followed by all McDonalds restaurants is essential for success. The need
for coordination, routinized work processes, formality, and respect of the
chain of command outweighs the need for flexibility and informality. This
is why a bureaucratic culture fits McDonalds vision and strategy.
Clan Culture: Attributes of this type of organization are tradition, loyalty,

teamwork, personal commitment, and self-management. The organization focuses its attention internally, yet its formal control is flexible. The
members of this organization recognize an obligation that is beyond their
job descriptions, with the understanding that their contributions to the
organization may exceed their contractual agreements. Employees identify that their long-term commitment to their organization, in the form of
loyalty, is in exchange for the organizations long-term commitment to the
employee, in the form of security. Unity from this culture type is created
through a long and thorough socialization process, where long-term clan
members serve as mentors and role models for newer members. There is
also strong peer pressure to adhere to important norms within the organization, and an environment is created in which few departments are left
completely free from normative pressures, which may generate innovation
and risk-taking behavior. Success of this type of organization is assumed to
depend on teamwork, participation, consensus decision making, as well as
employee sensitivity to customers and concern for people. According to
Mishal Kanoo from Kanoo Group, the Arab business is not just run by the
family; it is run for the family. A leaders success is not judged merely by
financial results, but also by the sense of responsibility and commitment
he gives to the family as a whole. The measure of commercial success lies
more in retaining a strong family business culture and providing ongoing
security for the family than it does in simply making profits.28
Clan culture means working together with emphasis on concern for people.
A good example of a collaborative culture or clan is Health Matrix, a company based in the Middle East, which provides innovative IT solutions for
the growing healthcare market. Managers recognize that the company is only
as good as its people, which is why they invest in top talent. According to
the companys website, the goal of the company has always been to share its
success by attracting, developing, and retaining top talent in a healthcare IT
industry, and employees experience the companys commitment and dedication to the team. Health Matrix thrives in a highly collaborative culture of
innovation and teamwork. The company respects relationships with coworkers, customers, owners, agents, suppliers, the community, and the environment and provides employees with a safe and fulfilling environment and an
opportunity to grow and learn.29
Leaders in the Arab world think of hiring people for life, of treating
employees as an extension of their family. This puts a different angle on their
ideas about fostering teams. Mohammed Alshaya says the key is to treat
people as you would like to be treated. Mishal Kanoo believes in what he
calls consultative leadership. This is the ability to negotiate with people so
that they buy into your ideas. You wont get 100 percent of what you want,
but 80 percent is not a bad goal to aim for.30
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LO3-3
Discuss the
importance of organizational
culture.
Entrepreneurial Culture: This cultural form is characterized by high levels of risk-taking, dynamism and creativity. Employees are committed to
experimentation, innovation, and being on the leading edge. This organizational culture type reacts quickly to change, as well as creates it due
to the fact that individual initiative, flexibility, and freedom promoting
growth are encouraged and rewarded. Effectiveness within this organization means providing new and unique products and rapid growth. The
organization focuses its attention externally and formal control orientation is flexible in order to foster innovation and change. For instance,
Group Chalhoub is guided by the philosophy of being Committed to
Excellence. With the aim of optimizing performance of brands, providing quality service and offering a stimulating work environment, the
group cultivates the core values of Excellence, Respect and Entrepreneurial Spirit.31 Google develops innovative web tools, taking advantage
of entrepreneurial software engineers and cutting-edge processes and
technologies. Its ability to quickly develop new services and capture market share has made it a leader in the marketplace and forced competitors
to catch up and revise their strategies.
Market Culture: The achievement of measurable and demanding goals,

especially those that are finance-based and market-based, are characteristics of this type of organizational culture. In this organization, the relationship between employee and organization is contractual, where the
obligation of each is agreed in advance; therefore the formal control orientation is quite stable. This is because the employee is responsible for an
agreed level of performance; with the organization exchanging this for an
agreed level of remuneration and reward in return. Competitiveness and
a profit-gaining orientation therefore exist throughout this organization
because increased levels of performance from the employee are rewarded
through increased compensation from the organization. Market cultures
are concerned with competitiveness and productivity through emphasis
on partnerships and positioning. General Electric, under the leadership
of former CEO Jack Welch, is a good example of a market culture. He
famously announced that if businesses divisions were not first or second
in their markets then, simply, they would be sold. Its corporate culture
was (and still largely is) highly competitive where performance results
speak louder than process.32
The Importance
of Culture
Organizational culture can be critical in determining the

performance of the firm and its capacity to compete effectively in the market place and maintain and strengthen its
competitive advantage. While culture may seem more of a
concept than something that is physically real, the potential harm or potential benefit for the business might be real and careful attention is needed to properly manage organizational culture. Studies show that
loyalty and commitment to the goals of the company are the result of an effective and positive organizational culture more than pay and benefits. Culture
might also differentiate firms in the labor market and make some companies
more attractive than others to job seekers. For instance, Qatar Airwayswhich
was ranked among the top 100 best companies to work for in the Middle
Eastbenefits from a competitive advantage that very few other companies in
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the industry have. With its organizational culture that focuses on creating an
environment that nurtures employee skills, emphasizes collaboration and
team work, values participation, delegation of authority, and empowerment
of employees along with promoting a work environment where diversity is
valued and supported, the company is able to attract talented job candidates
and to recruit best employees which gives the company a competitive edge
against rival companies. Organizational culture can help managers achieve
objectives in several ways. Organizational culture helps create favorable conditions that facilitate the achievement of organizational goals. Each of the following aspects points out how organizational culture can help or hinder the
achievement of organizational objectives.
Employee Self-Management
To direct and help employees achieve organizational goals, managers define
jobs with job descriptions, create a structure and hierarchy to establish a chain
of command and line of authority, dedicate resources to departments and
units, and develop work schedules. While these mechanisms and actions
guide employee actions, the companys goals will only be achieved when
employees decide to behave the way the company desires.
Organizational culture can induce employees to behave in a particular way
without close supervision or formal control mechanisms. When employees
support the organizational culture and feel part of it, they tend to conform to
it as their own values match those promoted by the culture of the organization. Conversely, failure to comply with cultural norms generates social pressure to conform as the group will look down on those who do not conform
with the norms and values emphasized by the culture; thus the employee
will either adjust and align his or her behaviors and attitudes with the cultural expectations or face peer pressure which might lead to the departure of
the employee when there is no willingness and readiness to conform. Much
of this process through which the culture directs the actions and attitudes of
employees occurs informally and in an unspecified manner.
Stability
Culture provides a sense of continuity in the midst of rapid change and
intense competition. In industries operating in dynamic environments such
as the high technology industry, culture ensures predictability, security, and
comfort. Organizational culture ensures that employees can effectively adjust
to the changing conditions in the environment and feel that they are in control and on track to achieve the goals of the organization and are confident
that the companys strategies will lead to success. The stress caused by fierce
competition in the market place, by the rapid adjustments and updates of
product lines and services as they become quickly obsolete, by the need to
continuously innovate and create new work routines or new products and
services can be controlled and alleviated through organizational culture.
Socialization
Organizational culture subtly teaches employees the values of the organization. The process of internalizing or taking organizational values as ones own
is called socialization. Socialization is a three-stage process. The first stage, prearrival, consists of the values, attitudes, biases, and expectations the employee
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brings to the organization when first hired. These values are influenced by
the background of the employee, his prior experiences, and the environment
he lived in previously. The values of newcomers tell about their way to do
things as learned from their culture and past experiences. Organizations try
to select candidates that most likely fit into the companys culture. Even if the
firm hires the right candidate whose values fit within those promoted by the
business, it still has to learn the culture of the organization and adjust if there
is a gap between his values and those of the company.
When the employee joins the company and starts working in his new
position, he reaches the encounter stage. At this point, the individual begins
to compare his expectations about the firms culture with the reality of the
expectations set by the firm. For instance, the employee might have his own
perception of what being punctual and on time to work means while the
company has a very strict attendance policy. There is a misfit, in this case,
between employee values as concretely translated into practice and the values
promoted by the culture of the organization. When there is a gap between
cultural expectations and reality, the employee has to adjust to the culture
of the organization during the metamorphosis stage. Training programs are
designed to help employees adjust their values to firm expectations.
An organization can choose from among formal or informal, individual or
collective, fixed or variable, serial or random, and investiture or divestiture
socialization. Not all employees adjust successfully to the requirements of the
culture and when the company fails to socialize employees, the employee
might decide to leave the company and join a company that supports the
same values he is supporting or the company might decide to terminate the
employee if the gap prevents the employee from reaching organizational
goals. While companies must maintain and strengthen their cultures through
proper socialization, they also have to value employee diversity and promote
an environment that nurtures employee skills and talents and where employees can capitalize on their own values and cultural background. This might
also bring value to the company and help it strengthen its competitive position in the market place.
Implementation of the Organization

Strategy
Organization strategy may support the achievement of the goals and the
vision of the firm by supporting the implementation of the firms strategies
and desired changes in the strategy in case actual strategies are revised or
changed. Organizational culture helps create the needed commitment to
organizational goals. For high performance, the firm strategy and the culture
must be aligned and ideally they must reinforce each other. Any change in the
culture must be reflected in the strategy and vice versa. The shared values and
norms make it easier for employees to support the companys strategy.
Negative Culture
While the companys culture may support the companys strategy and help
with goal achievement, it might also lead to negative outcomes. For instance,
a culture that is too strong and fully entrenched into one model and one set of
values and norms that are constantly emphasized as being the best, might lack
the capacity to adjust if change is needed to improve performance, strengthen
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LO3-4
Chapter 3
Describe how
to manage organizational
culture.
a competitive advantage, or even guarantee survival. A closed and inflexible

culture might diminish the firms capacity to adjust to the different forces in the
environment and make any strategy revision very difficult to set and to implement. At the other extreme, when the values and norms are not constantly
emphasized and reinforced, the company fails to achieve its goals as employees
will show little support and commitment to organizational goals. When the values are not deeply held by employees and reinforced by managers, following
the vision of the company becomes difficult and so would be the implementation of strategies to convey the vision. Each employee or group of employees
will have his own interpretation of the companys values and norms, which
leads to inconsistent actions that prevent the company from reaching its goals. A
too strong or a too weak culture may harm performance and goal achievement.
Managing
Cultural
Processes
The culture of an organization evolves gradually over

time. It starts with the founders of the company and is
influenced by their beliefs and philosophy. Their vision for
the company is usually reflected in the initial set of values
and norms they develop for the firm. These beliefs and
values are then transmitted to a group of close associates
and different mechanisms are then set (e.g. training programs) to further transmit them to a larger number of employees as the company grows in size. Managers have to act as role models and lead the process
of transmission and enforcement of cultural values to fellow employees.
A variety of techniques and elements maintain and reinforce culture over
time. Some may be deliberately imposed by management such as cultural
symbols, rituals, and the choice of company heroes that embody the firms
values. Others may be largely unconscious processes such as the use of stories, language, and employee perception of the companys leadership style.
Cultural Symbols
Cultural symbols are the icons and objects that communicate organizational
values such as flags, uniforms, or other logos. The management uses them to
create a sense of belongingness and identity and convey and sustain shared
meanings among employees. For example, holding classes for female students
and classes for male students at the University of Sharjah symbolizes religious
beliefs used as guiding values of the organizational culture at that university.
Company Rituals and Ceremonies

Organizations plan events and ceremonies to offer employees and stakeholders the opportunity to share cultural meanings. At the American University of
Sharjah and AUB, graduation ceremonies at the end of every teaching semester convey the values and beliefs of the institution and delineate the use of the
American model of higher education in these two universities.
Company Heroes
Organizations communicate their values to employees by identifying individuals whose deeds best reflect what the organization believes in so that
other people and employees can reproduce their behavior and can use these
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heroes as an inspiration to guide attitudes and actions in the workplace. For

instance, the Al Fardan name has been strongly associated with pearl trading in the Arabian Gulf for over a century. The owners and managers of the
group still see in its founder, Mr. Ibrahim Al Fardana renowned pearl expert
and tradera hero who still guides the vision and strategy of the group. In
1954 the chairman of the Group, Mr. Hassan Ibrahim Al Fardan, started the
first establishment as the Al Fardan Jewellery showroom in the UAE.33
Stories
Organizational culture is sustained by the narratives and legends that capture
the organizations values and beliefs. For instance, Dubai history highlights the
role of HH Sheikh Ahmed bin Saeed Al Maktoum who has been at the forefront of Dubais remarkable economic development for more than 25 years
and who was appointed Chairman of Dubai World in December 2010. Under
his leadership, Dubai World has entered a new phase of growth in line with
Dubais economic development. HH Sheikh Ahmed has been a highly successful corporate leader since 1985, when he was appointed President of the Dubai
Department of Civil Aviation and Chairman of the newly launched Emirates
Airline. The phenomenal growth of Dubais aviation industry under his stewardship is testimony to HH Sheikh Ahmeds grand vision and foresight. He is
now the Chairman and Chief Executive of Emirates Airline and Group.34
Language
The language used by managers is used to convey company values and promotes both positive and negative values. For example, the language used at
Abu Dhabi Investment Authority is different than the language used at Dubai
School of Government. The visions, missions, strategies, and objectives of
the two institutions are different, so is the language used to convey cultural
values and beliefs. Firms often use slogans to reflect their values and make
stakeholders aware of the culture of the firm. The slogan for Abu Dhabi Commercial Bank (ADCB) is Our Knowledge. Your Future.
Leadership
Employee actions are influenced by how leaders behave in the organization.
Effective leaders set a vision for the organization that employees will commit
to and try to achieve. Leaders are also role models for employees. They provide a daily example of how to articulate the values in practice and emphasize
the important values that employees have to follow. All the leaders interviewed for the Business Leadership in the Arab World report emphasized
the importance of following their moral compass. As a leader, you are being
challenged every day with issues that cut across your value system, says Loay
Nazer, the founder in 1991 of Nazer Group, a holding company that has made
a diverse range of entrepreneurial investments in Saudi Arabia and abroad.
To establish leadership you have to have a pre-defined value system.35
Organizational Policies and Decision

Making
Performance appraisals, budgets, new plans, and other policies and decisions
clearly communicate company values and therefore the companys culture.
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The control mechanisms and the criteria used to measure performance reflect
the values promoted by organizational culture.
Employees learn what the company truly values when change is required
in times of crisis. The need for restructuring, downsizing of company activities and to plan revisions will be handled in accordance with the most important values supported by the organization. The conservative and stable
culture used at Toyota was emphasized when the company faced major crises
throughout its history but refused to adopt a massive layout strategy. Toyotas
culture values seniority and creates loyalty and commitment to the companys goals and vision.
Cultural values are communicated by the ways employees are rewarded.
In top-tier research universities, promotions and salary increases are tied to
research productivity and quality of faculty publications while teaching universities reward faculties based on their course evaluations and on other indicators of their teaching performance.
Summary and
Review
LO3-1
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HOW TO SHAPE ORGANIZATIONAL CULTURE Organizational culture is shaped by the interaction of four main
factors: the personal and professional characteristics of
people within the organization, organizational ethics, the
nature of the employment relationship, and the design of
its organizational structure. These factors work together to produce different
cultures in different organizations and cause changes in culture over time.
LO3-2
CHARACTERISTICS OF ORGANIZATIONAL CULTURE Organizational

culture is a system of shared values, assumptions, beliefs, and norms that unite
the members of an organization. Organizational culture reflects employees
and managers views about how things get done in the organization. Culture
gives meaning to actions and procedures within an organization and may be
considered as the glue that holds organizational members together and what
keeps them focused without deviating from the achievement of organizational
LO3-3
THE IMPORTANCE OF CULTURE Organizational culture can be critical in determining the performance of the firm and its capacity to compete
effectively in the market place and maintain and strengthen its competitive
advantage. While culture may seem more of a concept than something that is
physically real, the potential harm or potential benefit to the business might
be real and careful attention is needed to properly manage organizational culture. The culture can support employee self-management, increase stability,
smoothen the socialization process, and facilitate the implementation of the
organization strategy.
LO3-4
MANAGING CULTURAL PROCESSES The culture of an organization

evolves gradually over time. It starts with the founders of the company and
is influenced by their beliefs and philosophy. A variety of techniques and elements maintain and reinforce culture over time. Some may be deliberately
imposed by management such as cultural symbols, rituals, and the choice of
company heroes that embody the firms values. Others may be largely unconscious processes such as the use of stories, language, and employee perception
of the companys leadership style.
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Management in Action
Topics for Discussion and Action
Discussion
Action
1. How does organizational culture emerge? [LO3-1]
6. Interview a manager and identify the type of

organizational culture that his organization has
implemented. Why is the organization using this
type of culture? Do you think other types might
be more appropriate? Which one(s)? Explain.
2. How do managers select the characteristics and

dimensions to include in the culture? [LO3-2]
3. Discuss the different types of culture that could
possibly be implemented in a firm. Explain how
managers select one type over the others and
analyze the factors that explain their choice.
[LO3-2]
4. Why is culture so needed in a firm? How does it
help the firm reach a good level of performance?
[LO3-3]
5. How can organizational culture be managed
through artifacts? Provide examples of these
artifacts and discuss how they can be used to
maintain and strengthen the culture. [LO3-4]
[LO3-2]
7. Interview some employees of an organization,
and ask them about the organizations values
and norms, the typical characteristics of
employees, the organizations ethical values,
cultural dimensions, and the artifacts. Using this
information, try to describe the organizations
culture and the way it affects how people and
groups behave. [LO3-1, 3-2, 3-4]
Building Management Skills

Understanding Organizational Culture [LO 3-1, 3-2, 3-4]
Think of an organization with which you are familiar, perhaps one you have worked for, such as a store,
restaurant, bank, office, or school. Then answer the following questions:
1. Describe the dimensions of its organizational
culture. Were innovation and risk-taking part of
these dimensions? Be specific.
2. How did this organizational culture emerge?
3.
What role did organizational culture play to guarantee

the stability and performance of the company?
4. Different artifacts are used to manage

organizational culture and perpetuate it. These
artifacts include language, symbols, stories,
heroes, rituals, and ceremonies. How were these
artifacts used in the organization to maintain and
manage organizational culture?
5. Can you think of any additional action that the
managers could take to reinforce organizational

culture or to change it?
6. Was the culture bureaucratic, clan-oriented,
entrepreneurial, or more market-driven? Explain.
7. What made the companys managers decide to
adopt a specific type of culture instead of another
one? Explain.
8. How did the internal and the external
environments of the firm influence organizational
culture? Provide specific examples.
9. What advice would you give to the companys
managers to help them improve the culture of their
firm?
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Managing Ethically [LO3-1, 3-2]
uppose an organization has just recruited a new

management team and started laying off many of
its middle managers. The new top managers decided
to terminate all managers who disagree with the cultural
change that the new top managers want to introduce.
They want to move from a bureaucratic culture characterized by centralized decision making and low employee
empowerment to a more entrepreneurial culture emphasizing more decentralized decision making and more
employee empowerment. The new managers believe that
all those who disagree with their vision have to leave the
company. Some high performing middle managers who
spent most of their careers in the company have been
laid off. Think of the ethical issues involved in designing a
hierarchy, and discuss the following issues.
Questions
1. Do you think managers can decide to lay off high
performing employees just because they disagree
with their vision? Explain what you would have
done if you were part of the new management
team appointed in this company.
2. Some people argue that employees who have
worked for an organization for many years have a
claim on the organization at least as strong as that
of its stakeholders. What do you think of the ethics
of this positioncan employees claim to own
their jobs if they have contributed significantly to
the organizations past success?
Small Group Breakout Exercise

Leenas Jewelry
[LO3-1, 3-2, 3-3]
Form groups of three or four people, and appoint one member as the spokesperson who will communicate
your findings to the class when called on by the instructor. Then discuss the following scenario:
eenas Jewelry sells and services high-end jewelry

and luxury watches. Over the years, the company
has developed a good reputation for the quality of its
products and for its excellent customer service. However, the store was run as a small business and the
owner Leena Munajed never thought of designing formal plans, of setting a formal structure, or devising a
long-term vision for the company. While her experience
in the field (as she worked in a jewelry store when she
was a student) helped her succeed in the field, her lack
of management skills prevented her from expanding the
business rapidly. The deepening economic crisis and
the fierce competition faced from more established jewelry stores are threatening the expansion and the longterm survival of Leenas Jewelry. You are a team of local
consultants whom Leena has called in to advise her as
she tries to learn about how to manage her business.

She asked you to help her answer these questions:
1. How can she build an organizational culture and
how does she pick the right one?
2. How can she improve effectiveness and efficiency
by picking the right culture for her firm?
3. Leena wants to expand to one of the neighboring
GCC countries. She thinks that expanding could
help generate more revenues and profits. She
is asking you to help her figure out whether the
culture of the new branch should be similar or
different from the original one and the advantages
and disadvantages of having dissimilar cultures in
the different branches.
Exploring the World Wide Web [LO3-1, 3-2]
o to the website of the Emirates Group

(www.theemiratesgroup.com). Click on Our Vision
and Values. Explore the values promoted by the group.
1. What values are promoted by the Emirates Group?
How do you think promoting these values has
helped the group be successful?
2. Browse the groups website and identify the

type of organizational culture used. Is it the best
culture to use? Is there any other alternative
culture that could be used by the Emirates
Group? Explain.
96
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Be the Manager [LO3-1, 3-2, 3-3, 3-4]
ou have been hired as a middle manager in a large

multi-branch furniture store. The company is seeking to expand internationally and is in the process of
selecting foreign suppliers to lower its dependence on
local suppliers and diversify its supply sources. The
companys top managers delegated their powers to you
and charged you to negotiate and to sign on their behalf
the contracts with the new suppliers. The top managers briefed you on how crucial these contracts are to
secure the firms expansion and asked you not to disappoint them even when sealing the deal requires bribery
and binding the rules. The company promotes a clanoriented and ethical culture and managers do their best
to act as role models for the rest of the employees. Bribing and acting unethically are not part of the values you
personally support. However, you know how important
these deals are for your company and for your future
career in the company.
1. How do you think you should act? Follow the
guidelines that were given by your bosses or
follow your values and beliefs? Why?
2. Do you think the culture should reflect the
values and beliefs of the top managers? Are
there inconsistencies between the way cultural
values are outlined and the way the top
managers act?
3. If top managers keep separating between written
values and actions, the company would most
probably fail in the long run. What cultural changes
do you suggest to make the values more aligned
with the actions?
97
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A MANAGERS CHALLENGE
The Journey to Becoming a Successful
Multinational Telecommunication Giant
In 1987, the Qatari government
established a new corporation, Qatar
Public Telecommunications Corporation
(QPTC), to offer local telecommunication
services. QPTCs main purpose at
that time was to operate the existing
landline network. A few years later, QPTC
introduced a number of services such
as cable television and mobile telephone
services, but still locally. In the mid1990s the Qatari government started a
privatization program, aiming to reduce
government ownership in major public
corporations. Qatar Telecom (Qtel), the
successor to QPTC, was the first to be
sold in an initial public offering (IPO)
in 1998, but the real change in Qtels
vision, structure, and culture did not start
until 2003. In that year, Qtel launched
its reorganization program, Q-Turn,
with a new vision of being among the
top 20 Telecommunication Companies
in the world by 2020. In pursuit of its
new vision, Qtel launched new services
locally, established joint ventures
regionally and acquired international
telecommunication companies. Now,
Qtel has a presence in 17 countries
MG32028.indb 71
across three regions: the Middle East,

North Africa, and South East Asia. In
total, it provides coverage to a population
in excess of one billion people, with
75 million consolidated subscribers,
and it is still committed to expansion
in those three and other regions. The
growth in the company profile was
Qtels head office in Doha.
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accompanied by a change in how the

company manages and cares about its
employees and the local community. To
build employee loyalty, Qtel provides
its employees with advancement
opportunities. Indeed, most of Qtels
executives have been promoted from
within. One of them is Mr. Waleed
Al-Sayed, who joined Qtel in 1987
and worked as a sales representative.
Mr. Al-Sayed moved up through the
organizations hierarchy until he was
appointed Chief Operating Officer.
Qtel employees are offered numerous
training and development opportunities,
including sponsorship and scholarship,
personal development plans, succession
planning and leadership development.
Mr. Al-Sayed explained: When we
interview people for hiring, we try to
move away from negotiating the financial
package to illustrating development as

well as advancement opportunities in
Qtel. That being said, Qtel employees
also have access to a variety of benefits
ranging from medical insurance to
subsidized telecommunication services
and end-of-year financial bonuses.
Qtels efforts in improving the work
environment, engaging in a variety of
corporate social responsibility programs
(CSR), pursuing appealing vision and
operating a customer-oriented business
all paid off. Seventy percent of customers
in Qatar, for example, prefer Qtel. Qtel
also has received many international
awards15 in 2010 aloneincluding the
Recognized for Excellence Award from
EFQM, the Best New Telecoms Service
at the Comms MEA Awards, and two top
awards at Asias Best Employer Brand
Awards.
Overview
LO3-1
List and
discuss the four sources of
MG32028.indb 72
As the story of Qtel suggests, becoming a successful

company is not easy and requires a lot of effort. Plans
need to be designed and then implemented and concrete actions need to be taken to make these plans a reality. All these initiatives to improve the competitive position of the company are the
consequences of a vision set by the owners of the firm and/or its top managers. These actions contribute to shaping the culture of the organization
defined as the way things are done in the business. A specific vision,
employee diversity, and a mix of resources, policies, and plans among others make the companys culture unique in comparison with other organizational cultures including those of competing firms. In this chapter, we study
organizational culture, the sources and the types of organizational cultures,
the importance of organizational culture and how to manage organizational culture. By the end of this chapter, you will understand how organizational culture impacts the management of organizations.
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73
Where Does
Organizational
Culture Come
From?
In managing organizational culture, some important questions that arise are these: Where does organizational culture come from? Why do different companies have
different cultures? Why might a culture that for many
years helped an organization achieve its goals suddenly
harm the organization?
Organizational culture is shaped by the interaction of
four main factors: the personal and professional characteristics of people within the organization, organizational
ethics, the nature of the employment relationship, and
the design of its organizational structure (see Figure 3.1). These factors work
together to produce different cultures in different organizations and cause
changes in culture over time.
Characteristics of Organizational
Members
The ultimate source of organizational culture is the people who make up the
organization. If you want to know why organizational cultures differ, look at
how the characteristics of their members differ. Organizations A, B, and C
develop distinctly different cultures because they attract, select, and retain
people who have different values, personalities, and ethics.1 People may be
attracted to an organization whose values match theirs; similarly, an organization selects people who share its values. Over time, people who do not fit in
leave. The result is that people inside the organization become more similar,
the values of the organization become more pronounced and clear-cut, and
the culture becomes distinct from those of similar organizations.2
Figure 3.1
Sources of an Organizations Culture
Characteristics
of organizational
members
Organizational
ethics
Organizational
culture
The employment
relationship
Organizational
structure
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74
Chapter 3
The fact that an organizations members become similar over time and come
to share the same values may actually hinder their ability to adapt and respond
to changes in the environment.3 This happens when the organizations values
and norms become so strong and promote so much cohesiveness in members
attitudes that the members begin to misperceive the environment, as did Fords
top managers.4 Companies such as Ford, Emirates Airline, SABIC or NBAD
need a strong set of values that emphasize innovation and hard work; they also
need to be careful their success does not lead members to believe their company is the best in the business. Companies frequently make this mistake. One
famous example is the CEO of Digital Equipment, who in the 1990s laughed
off the potential threat posed by PCs to his powerful minicomputers, claiming,
Personal computers are just toys. This company no longer exists.
Organizational Ethics
organizational ethics The
moral values, beliefs, and
rules that establish the
appropriate way for an
organization and its members
to deal with each other and
with people outside the
organization.
The managers of an organization can set out purposefully to develop specific

cultural values and norms to control how its members behave. One important
class of values in this category stems from organizational ethics, which
are the moral values, beliefs, and rules that establish the appropriate way for
an organization and its members to deal with each other and with people
outside the organization. Ethical values rest on principles stressing the importance of treating organizational stakeholders fairly and equitably. Managers
and employees are constantly making choices about the right, or ethical,
thing to do; and to help them make ethical decisions, top managers purposefully implant ethical values into an organizations culture.5 Consequently ethical values, and the rules and norms that embody them, become an integral
part of an organizations culture and determine how its members will manage
situations and make decisions. At the Emirates Group, great value is placed
on corporate citizenship and social responsibility and the belief that business
ethics are integral to continued success. Each member of staffs commitment
towards ongoing improvement combines to maintain the competitive edge of
our operation in global markets.6
The Employment Relationship

A third factor shaping organizational culture is the nature of the employment
relationship a company establishes with its employees via its human resource
policies and practices. Recall from Chapter 1 our discussion of the changing
relationship between organizations and their employees due to the growth
of outsourcing and employment of contingent workers. Like a companys
hiring, promotion, and layoff policies, human resource policies, along with
pay and benefits, can influence how hard employees will work to achieve
the organizations goals, how attached they will be to the organization, and
whether they will buy into its values and norms.7 As we discuss in Chapter 11,
an organizations human resource policies are a good indicator of the values
in its culture concerning its responsibilities to employees. Consider the effects
of a companys promotion policy, for example: A company with a policy of
promoting from within will fill higher-level positions with employees who
already work for the organization. On the other hand, a company with a policy of promotion from without will fill its open positions with qualified outsiders. What does this say about each organizations culture?
Promoting from within will bolster strong values and norms that build loyalty, align employees goals with the organization, and encourage employees
to work hard to advance within the organization. If employees see no prospect
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75
of being promoted from within, they are likely to look for better opportunities
elsewhere, cultural values and norms result in self-interested behavior, and
cooperation and cohesiveness fall. The tech sector has gone through great
turmoil in recent years, and over 2 million US tech employees lost their jobs
during the 2000s because of outsourcing and the recession. Apple, HP, and
IBMknown for their strong employee-oriented values that emphasized longterm employment and respect for employeeswere among the many companies forced to lay off employees, and their cultures have changed as a result.
To rebuild their cultures, and make their remaining employees feel like owners, many companies have HRM pay policies that reward superior performance with bonuses and stock options.8 For example, Southwest Airlines and
Google established companywide stock option systems that encourage their
employees to be innovative and responsive to customers. Dubai Properties
Group (DPG), a member of Dubai Holding, fosters a culture of collaborative
learning. Employees are their greatest assets. The outcome of the knowledge
transfer initiative will have a profound impact on DPG competitiveness and
productivity through better leveraging of knowledge. The company empowers recently qualified employees to spearhead new projects and leverage the
expertise of professionals with DPG to drive the business forward.
Organizational Structure
We have seen how the values and norms that shape employee work attitudes
and behaviors derive from an organizations people, ethics, and HRM policies. A fourth source of cultural values comes from the organizations structure. Different kinds of structure give rise to different kinds of culture; so to
create a certain culture, managers often need to design a particular type of
structure. Tall and highly centralized structures give rise to totally different
sets of norms, rules, and cultural values than do structures that are flat and
decentralized. In a tall, centralized organization people have little personal
autonomy, and norms that focus on being cautious, obeying authority and
respecting traditions emerge because predictability and stability are desired
goals. In a flat, decentralized structure people have more freedom to choose
and control their own activities, and norms that focus on being creative and
courageous and taking risks appear, giving rise to a culture in which innovation and flexibility are desired goals.
Whether a company is centralized or decentralized also leads to the development of different kinds of cultural values. By decentralizing authority and
empowering employees, an organization can establish values that encourage
and reward creativity or innovation. In doing this, an organization signals
employees that it is okay to be innovative and do things their own wayas
long as their actions are consistent with the good of the organization. Conversely, in some organizations it is important that employees do not make
decisions on their own and that their actions be open to the scrutiny of superiors. In cases like this, centralization can be used to create cultural values that
reinforce obedience and accountability. For example, in nuclear power plants,
values that promote stability, predictability, and obedience to authority are
deliberately fostered to prevent disasters.9 Through norms and rules, employees are taught the importance of behaving consistently and honestly, and they
learn that sharing information with supervisors, especially information about
mistakes or errors, is the only acceptable form of behavior.10 At Deloitte Middle East, the diversity of each and every one is valued. With each member
firm operating independently but united by a common vision, Deloitte gives
its branches the opportunity to feel part of a local community led by global
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76
LO3-2
Discuss the
characteristics and types of
Chapter 3
standards. While the culture in each of the Middle East member firms varies,
it is characterized by a combination of world-class leaders and regional pragmatism, producing a conducive environment to feed growth and self-exploration while making sure short-term objectives are always kept in sight.11
An organization that seeks to manage and change its culture must take a
hard look at all four factors that shape culture: the characteristics of its members, its ethical values, its human resource policies, and its organizational
structure. However, changing a culture can be difficult because of the way
these factors interact and affect one another.12 Often a major reorganization is
necessary for a cultural change to occur.
Characteristics of
Organizational
Culture
Organizational culture is a system of shared values,

assumptions, beliefs, and norms that unite the members of
an organization. Organizational culture reflects employees and managers views about how things get done in the
organization. Culture gives meaning to actions and procedures within an organization and may be considered as the
glue that holds organizational members together and what
keeps them focused without deviating on the achievement of organizational
There are three aspects of an organizations culture; the most obvious is
visible culture or the aspects of organizational culture that one can hear, see,
or feel. For instance, the dress code conveys order and homogeneity of organizational culture, the furniture or office layout might tell about the values of
competitiveness and aggressiveness versus consensus and harmony promoted
by the culture, assigned parking spots according to rank, or cafeteria policies
are a few rules and dimensions through which an observer can sense, feel
and assess the culture of an organization. The visible aspects of the culture
represent the first aspectsmostly superficialthat we see, hear, or feel when
we first interact with a culture.
The signs of a visible culture make it possible to study dominant cultural
characteristics such as whether the organization is competitive or values harmony, formal or informal, hierarchical or egalitarian, liberal or conservative.
For instance, firms where managers use an open door policy or management
by walking tend to value informal communication, empowerment of employees, and to decentralize decision making.
At a deeper level, espoused values are not readily observed but instead are
the ways managers and employees explain and justify actions and decisions.
Espoused values are those values that are expressed on behalf of an organization
or that are expressed as explanations for policies or actions. Managers might
explain that major layoffs or restructuring are a response to the economic crisis and decrease in sales volumes; they might argue the adoption of a structure
that values formal communication and respect of hierarchy, rank, and seniority
was promoted for the sake of keeping the companys activities under control
and avoiding deviation from the objective. Promoting an innovative culture or
a customer-responsive culture might be promoted to keep the companys competitive advantage, compete more effectively against other firms in the industry,
or adjust to a changing market or changing needs and demand of customers.
Managers might not, however, give the real reason behind their actions.
For instance, they might not tell that massive layoffs or restructuring is driven
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77
by profit maximization only and not justified by a drop in demand or difficult

financial situation. They might not tell the truth about why promotions and
salary increases were given to some employees and not to others, arguing that
they were distributed based on merit while in reality they were assigned and
given based on personal relationships and friendships. Usually, if a gap exists
between the espoused values as highlighted by managers in their discourse
and how they are managed in reality, employees will rapidly find out and will
quickly spot the hypocrisy of the culture. Managers who are not honest about
why actions were taken may create an organizational culture that encourages
dishonesty and cynicism, and is characterized by a lack of ethics as managers
who are supposed to lead by example, act as role models, and set an example
for the rest of the company are not playing their role. This will eventually
translate into poor firm performance because trust between employees and
managers is missing and because employees will most probably deviate from
the culture as it is not enforced by managers. For Naguib Sawiris, executive
chairman of Orascom Telecom Holding, The value of sticking to principles
and not giving people what they thought they could get by threats, extortion, or blackmail is just enormous. Ibrahim Dabdoub from National Bank
of Kuwait says, succinctly, You cant be a crook and a leader at the same
time. In the Middle East, loyalty is important. Loyalty to networks, to the
tribe, and to an ethnic or religious group, continues to play a key role in the
region. Although Westerners tend to view this trait with a degree of cynicism,
for most leaders in the region wasta gives them a feeling of trust in their business dealings. It is the underpinning for the culture of my word is my bond.
Espoused values may vary substantially across organizations and reflect
the importance of the role played by managers in conveying the values that
shape employee attitudes towards work and expected behaviors. Espoused
values are generally consciously and explicitly communicated. At the center of
organizational culture are core values that are widely shared, operate unconsciously, and are considered fundamental to the culture and non-negotiable.
In some organizations, a basic assumption might be that stability and commitment of the workforce are critical for success. Consequently, employees are
valued, rewarded for goal-achievement, are treated fairly, and are empowered and encouraged to contribute in decisions. The opposite would be that
stability and commitment of employees are not critical for the companys
success. This will translate into more formal controls, no established reward
systems and low motivation, no delegation of authority, lack of empowerment and centralization of decision making. Employees are seen as commodities and an expense that should be minimized. They are easily replaceable
and are a means through which the company reaches its ends. There will be
detailed standard operating procedures and rules detailing what employees
can do and what they cannot do, and managers believe that it is their duty to
prevent deviations from the norms and to emphasize rigor, order, respect of
the hierarchy, and formality. A climate of suspicion, sabotage, and whistleblowing will flourish in the organization as employees will tend to see their
colleagues as enemies they are competing against and not as collaborators.
Negative competition will be encouraged leading to a lack of harmony within
the firm. In the Arab world, some of the values promoted by organizational
culture are specific to the local culture. For example, Mohammed Alshaya,
Executive Chairman of Kuwait-based M.H. Alshaya Co., the retail division of
the Alshaya Group of companies like his father before him, will not enter into
ventures that involve selling alcohol or tobacco. He says, We shy away from
many opportunities that we dont feel fit with our culture. Group Chalhoub
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Chapter 3
is guided by the philosophy of being Committed to Excellence. With the

aim of optimizing performance of brands, providing quality service and offering a stimulating work environment, the group cultivates the core values of
Excellence, Respect and Entrepreneurial Spirit.13
The following Management Insight box highlights the values used by the
Qatar Museums Authority (QMA).
Its Another Exciting Day at Work

The Qatar Museums Authority (QMA) was founded in late 2005 as a successor to the National Council for Culture, Heritage and the Arts. QMAs
purpose is to manage the resources of all museums in the State of Qatar, to
develop cultural institutions such as museums and galleries, and to provide
an effective system for collecting, protecting, preserving, and interpreting
historic sites, monuments, and artifacts. In 2007 a new managerial team
headed by Mr. Abdullah Al-Najjar was appointed. The new leadership
thought that QMAs aims would not be achieved unless a new organizational culture was developed. As Mr. Al-Najjar phrased it, We want our
employees to wake up in the morning saying, Im going to QMA today
because itll be another exciting day. To build this vision, the leadership
team introduced a new set of values. Seven core values were identified,
as follows: Passionate: Inspire others, love our work; Empowering: Enable
leadership and responsibility; Collaborative: Work as a team with colleagues and partners; Creative: Harness our talent for invention and innovation; Professional: Excellence and efficiency
in all we do; Ethical: Firm adherence to ethical standards; and Communicative: Accessible
and transparent in our interactions. To support
the implementation of these values, the organization went through a reorganization process.
One outcome of the process was empowering the human capital department to act as
an agent for change. With full support from
the leadership team, the traditional electronic
attendance monitoring system was dropped.
Employees work became task-driven rather
than time-driven. Tasks and projects were
performed and completed in teams. Improvements were also introduced in the workplace.
The Qatar National Museum in Doha.
A new health and fitness center, a nursery and
a prayer room were opened on campus. Employees were also encouraged
to take breaks and join their colleagues for coffee, breakfast, or lunch in the
stylish new cafeteria and discuss off-work topics. The leadership team also
joins the various departments over breakfast once a month to encourage
open communication. Recently, QMA has provided its employees with
health insurance coverage and shopping discount cards. The Chief Human
Capital Officer summarizes all of this in a few words: You look after our
business and we look after you.14
Management
Insight
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79
The basic underlying cultural assumptions create the lenses through which
people perceive and interpret events. For instance, production line employees engaging in a conversation on the job might be perceived as an attempt
to goof off and relax while on the job, which will decrease worker productivity and lead to a drop in performance. Employees are perceived as trying to
take advantage of the culture and exploit any loopholes. In other companies,
this conversation might indicate employee commitment to improving work
processes and their engagement to promote collaborative work and to finding
better ways to do the work as sharing of ideas and communication on issues
related to how to perform the job and improve work processes was done
through this conversation. Positive or negative interpretation of employee
actions depends on these cultural assumptions and their impact on perceptions and interpretations of events.
Research indicates that there are seven dimensions that describe organizational culture;15 each of the seven dimensions ranges from low to high, meaning that it is not a characteristic of the culture (low rating) or is a characteristic
of the culture (high rating). Characterizing the organizational culture by using
these dimensions gives a description of the underlying values used and promoted in the company.
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Attention to detail: degree to which employees are expected to exhibit

precision, analysis, and attention to detail. In industries necessitating
precision and craftsmanship, attention to detail is essential to reach
organizational goals. For instance, in companies such as Louis Vuitton
or Herms, the brand name is built on such values, which are communicated to employees and perpetuated through socialization and training programs. The diversified nature of Qatar Foundations business
requires creativity and some risk-taking to achieve our goals. Leadership plays a pro-active role in this regard by promoting a culture of
trust, where employees are allowed to harness their individual talents to
the full.16
Innovation and risk-taking: degree to which employees are encouraged to

be innovative and to take risks. The culture of financial institutions such
as Citibank and JPMorgan is a risk-taking culture. Traders are encouraged to take calculated risks when trading stocks and currencies for the
benefit of the bank.
Stability: degree to which organizational decisions and actions emphasize

maintaining the status quo. The culture of Toyota emphasizes stability
and conservatism. Even in their worst crises, the managers preferred to
keep employees and looked for other ways to solve the crisis instead of
resorting to major layoffs.
Aggressiveness: degree to which employees are aggressive and competitive

rather than cooperative. At Kanoo group, a culture based on employee
cooperation and teamwork is promoted. In most US corporations, competition between teams, divisions, and units is used to fuel productivity
and performance.
Team orientation: degree to which work is organized around teams rather

than individuals. Qatar airways seek team-oriented candidates to fill its
cabin-crew positions. The same cultural dimension is present at Emirates
Airlines.
People orientation: degree to which management decisions take into

account the effects on people in the organization. For instance, continuous
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learning and development is one of the core values of NBADs corporate

culture since it enables the staff to contribute effectively to developing
innovative, efficient, and secure products and services to allow customers to enjoy the most convenient banking experience. Investing in career
development will ultimately support the achievement of business strategies through staff commitment and engagement, increased retention
rates, and the enhancement of intellectual assets.17
Outcome orientation: degree to which the managers focus on results or outcomes rather than on how these outcomes are achieved. At the Emirates
Group, great value is placed on corporate citizenship and social responsibility and business ethics are integral to continued success. Each member
of staffs commitment towards ongoing improvement combines to maintain the competitive edge of the operation in global markets. At Emirates, managers believe that employees are their greatest asset and their
contribution to the staggering pace at which the company grows cannot
be underestimated.18
The following Ethics in Action box depicts some of the cultural characteristics of Al Jazeera, mainly their people and innovation orientations.
Diversity at Al Jazeera
Focus on
Diversity
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Sami Al Hajj, a Sudanese journalist working for the Al Jazeera network,

was arrested in 2001 while on his way to do camera work for the network in Afghanistan and sent to the United States Guantanamo Bay
detainment camp in Cuba for over six years before being released without any charge on May 1, 2008. Al Hajj was the only journalist to be
held in Guantanamo. In response to this detention, Al Jazeera launched
a global campaign to release him. At the same time, the Arabic network did not forget its responsibility toward Al Hajjs family. His full
monthly salary and all other benefits were provided to his family as if
he were still doing his full-time job. After being released from Guantanamo, Al Hajj was promoted and then appointed the director of a new
department established to defend journalists worldwide. Many of Al
Jazeeras correspondents and journalists are arrested, injured and even
killed while doing their work, so what makes working for Al Jazeera
worthwhile? Al Jazeera has more than 65 bureaus across the globe,
more than 3,000 staff members across the world, including more than
400 journalists from more than 60 countries. It is inevitable that the
workforce in such an organization will be diverse because of the international nature of its operation; nevertheless, Al Jazeera believes in the
importance of diversity to the extent that even in its headquarters in
Qatar, there are employees from more than 55 nationalities. Al Jazeera
was voted by brandchannel.com readers in 2004 as the fifth most influential global brand, behind Apple, Google, Ikea, and Starbucks. Other
important features fueling the success of the network besides diversity
are empowerment and flexibility. Producers, presenters, and editors are
fully empowered in determining what to present and how to present it
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as long as it fits with the network code of ethics. Flexibility is important

to achieve agility, meaning having the right person in the right place at
the right time. Al Jazeeras coverage of the Arab Spring is a good example of this agility. Therefore, it is emphasized in Al Jazeera Laws that Al
Jazeera doesnt create events but is always at their heart.
Strong, Adaptive Cultures versus Weak,

Inert Cultures
Many researchers and managers believe that employees of some organizations go out of their way to help the organization because it has a strong and
cohesive organizational culturean adaptive culture that controls employee
attitudes and behaviors. Adaptive cultures are those whose values and norms
help an organization to build momentum and to grow and change as needed
to achieve its goals and be effective. By contrast, inert cultures are those whose
values and norms fail to motivate or inspire employees; they lead to stagnation and, often, failure over time. What leads to a strong adaptive culture or
one that is inert and hard to change?
Researchers have found that organizations with strong adaptive cultures,
like 3M, UPS, Microsoft, and IBM, invest in their employees. They demonstrate their commitment to their members by, for example, emphasizing the
long-term nature of the employment relationship and trying to avoid layoffs.
These companies develop long-term career paths for their employees and
spend a lot of money on training and development to increase employees
value to the organization. In these ways, terminal and instrumental values
pertaining to the worth of human resources encourage the development of
supportive work attitudes and behaviors.
In adaptive cultures employees often receive rewards linked directly to
their performance and to the performance of the company as a whole. Sometimes employee stock ownership plans (ESOPs) are developed in which workers as a group are allowed to buy a significant percentage of their companys
stock. Workers who are owners of the company have additional incentive
to develop skills that allow them to perform highly and search actively for
ways to improve quality, efficiency, and performance. At Dell, for example,
employees may still buy Dell stock at a steep 15% discount, and this will allow
them to build a sizable stake in the company over time if its performance
recovers.
Some organizations, however, develop cultures with values that do not
include protecting and increasing the worth of their human resources as a
major goal. Their employment practices are based on short-term employment according to the needs of the organization and on minimal investment
in employees who perform simple, routine tasks. Moreover, employees are
not often rewarded on the basis of their performance and thus have little
incentive to improve their skills or otherwise invest in the organization to
help it achieve goals. If a company has an inert culture, poor working relationships frequently develop between the organization and its employees, and
instrumental values of noncooperation, laziness, and loafing and work norms
of output restriction are common.
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Moreover, an adaptive culture develops an emphasis on entrepreneurship

and respect for the employee and allows the use of organizational structures, such as the cross-functional team structure, that empower employees
to make decisions and motivate them to succeed. By contrast, in an inert
culture, employees are content to be told what to do and have little incentive or motivation to perform beyond minimum work requirements. As you
might expect, the emphasis is on close supervision and hierarchical authority, which results in a culture that makes it difficult to adapt to a changing
environment.
Nokia is a good example of a company in which managers strive to create
an adaptive culture.19 Nokias top managers, including its present CEO Jorma
Ollila, have always believed that Nokias cultural values are based on the
Finnish character: Finns are down-to-earth, rational, straightforward people.
They are also friendly and democratic people who do not believe in a rigid
hierarchy based either on a persons authority or on social class. Nokias culture reflects these values because innovation and decision making are pushed
right down to the bottom line, to teams of employees who take up the challenge of developing the ever-smaller and more sophisticated phones for
which the company is known. Bureaucracy is kept to a minimum at Nokia; its
adaptive culture is based on informal and personal relationships and norms of
cooperation and teamwork.
To help strengthen its culture, Nokia built a futuristic open-plan steel and
glass building just outside Helsinki. Here, in an open environment, its R&D
employees can work together to innovate new kinds of cell phones focused on
Nokias company mission to produce phones that are more versatile, cheaper,
and easier to use than competitors phones. This is the Nokia Waya system
of cultural values and norms that cannot be written down but is always present in the values that cement people together and in the language and stories
its members use to orient themselves to the company. Yet, as we noted before,
Nokia is the cell phone company that is most sensitive to the need to appreciate the values, norms, and tastes of other nations. So the Nokia Way is not just
confined to Finland; the company has taken it to every country around the
globe in which it operates.
Another company with an adaptive culture is GlaxoSmithKline, the prescription drug maker discussed earlier in the chapter. Much of GSKs success
can be attributed to its ability to recruit the best research scientists because
its adaptive culture nurtures scientists and emphasizes values and norms of
innovation. Scientists are given great freedom to pursue intriguing ideas even
if the commercial payoff is questionable. Moreover, researchers are inspired
to think of their work as a quest to alleviate human disease and suffering
worldwide, and GSK has a reputation as an ethical company whose values
put people above profits.
Although the experience of Nokia and GSK suggests that organizational
culture can give rise to managerial actions that ultimately benefit the organization, this is not always the case. The cultures of some organizations become
dysfunctional, encouraging managerial actions that harm the organization
and discouraging actions that might improve performance.20 For example,
Sunflower Electric Power, an electricity generation and transmission cooperative, almost went bankrupt in the early 2000s. A committee of inquiry
set up to find the source of the problem put the blame on Sunflowers CEO
and decided he had created an abusive culture based on fear and blame that
encouraged managers to fight over and protect their turfan inert culture. The
CEO was fired, and a new CEO was appointed to change the cooperatives
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culture, which he found hard to do because his top managers were so used
to the old values and norms. With the help of consultants, he changed values and norms to emphasize cooperation, teamwork, and respect for others
which involved firing many top managers. Clearly, managers can influence
how their organizational culture develops over time.
An interesting example of a manager who has been working hard to change
a companys culture is profiled in the following Manager as a Person box.
Alan Mulally Transforms Fords

Culture
Manager as
a Person
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After a loss of more than $13 billion in 2006, William Ford III, who
had been Ford Motors CEO for five years, decided he was not the
right person to turn around the companys performance.21 In fact, it
became apparent that he was a part of Fords problems because he and
other Ford top managers tried to build and protect their own corporate
empires, and none would ever admit that mistakes had occurred over
the years. As a result the whole companys performance had suffered;
its future was in doubt. Finally Fords board of directors realized they
needed an outsider to change Fords culture and the way it operated, and
they recruited Alan Mulally from Boeing to become Fords new CEO.
After arriving at Ford, Mulally attended hundreds of executive meetings with his new managers; and at one meeting he became confused
why one top division manager, who obviously did not know the answer
to one of Mulallys questions concerning the performance of his car
division, had rambled on for several minutes trying to disguise his ignorance. Mulally turned to his second-in-command Mark Fields and asked
him why the manager had done that. Fields explained that at Ford you
never admit when you dont know something. He also told Mulally
that when he arrived as a middle manager at Ford and wanted to ask
his boss to lunch to gain information about divisional operations, he was
told, What rank are you at Ford? Dont you know that a subordinate
never asks a superior to lunch?22
It turned out that over the years Ford had develop a tall hierarchy
composed of managers whose main goal was to protect their turf and
avoid any direct blame for its plunging car sales. When asked why car
sales were falling, they did not admit to bad design and poor quality
issues in their divisions; instead they hid in the details. They brought
thick notebooks and binders to meetings, listing the high prices of components and labor costs to explain why their own particular car models
were not selling wellor even why they had to be sold at a loss. Why,
Mulally wondered, did Fords top executives have this inward-looking,
destructive mind-set?
Mulally soon realized the problem was the values and norms in
Fords culture that had created a situation in which the managers of its
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different divisions and functions thought the best way to maintain their
jobs, salaries, and status was to hoard, rather than share, information.
Thus values and norms of secrecy and ambiguity, and of emphasizing
status and rank, to protect their information had developed. The reason
why only the boss could ask a subordinate to lunch was to allow superiors to protect their information and positions. Fords culture allowed
managers to hide their problems and poor performance. What could
Mulally do? He issued a direct order that the managers of every division
should share with every other Ford division a detailed statement of the
costs they incurred to build each of its vehicles. He insisted that each
of Fords divisional presidents should attend a weekly (rather than a
monthly) meeting to share and
discuss openly the problems
all the companys divisions
faced. He also told them they
should bring a different subordinate with them to each
meeting so every manager in
the hierarchy would learn of
the problems that had been
kept hidden.23
Essentially, Mulallys goal
was to demolish the dysfunctional values and norms of
Fords culture that focused
managers attention on their
own empires at the expense
of the whole company. No
longer would they be allowed
to protect their own careers
at the expense of customers.
New Ford CEO Alan Mulally (left), with former CEO Bill Ford (right), who realized the company needed an outsider at the helm to change Fords insular,
Mulallys goal was to create
self-protective culture.
new values and norms that
it was fine to admit mistakes,
share information about all aspects of model design and costs, and
of course find ways to speed development and reduce costs. He also
wanted to emphasize norms of cooperation within and across divisions
to improve performance.
How could this situation have gone unchanged in a major car company that has been experiencing increased competition since the mid1970s? The answer is that the norms and values of an organizations
culture are difficult to change; and despite Fords major problems, no
CEO had been able to change the mind-set of the top managers in the
company. Ford had become more hierarchical and bureaucratic over
time as its problems increased because poor performance led managers
to become more defensive and concerned with defending their empires.
By 2010 it was clear that Mulally had changed Fords values and
norms; the company finally reported a profit in the spring of 2010, for
which Mulally received over $17 million in salary and other bonuses.
Many managers who could not or would not conform to the new Ford
culture were gone; the others were still learning to adjust their behavior
to the new culture oriented to satisfying the needs of customers, not the
needs of top managers.
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The cultures of organizations can differ in a variety of ways. For

instance, cultural uniformity, the strength of the firms culture, the
degree of formalization emphasized by cultural values, and the gap
or differences between organizational culture and national culture can
characterize the culture of an organization and determine how organizational culture influences employees. Moreover, the nature or type of
organizational culture varies widely across organizations. There are different typologies of organizational cultures. Being able to classify and
recognize the type of organizational culture present in the firm will make
the identification of the values supported by the culture an easier task.
Cultural Uniformity versus

Heterogeneity
Organizations vary in the extent to which a uniform culture is promoted
throughout the company. In some large corporations, different subcultures
might be found in the different branches and subsidiaries. This indicates managers in the companys headquarters allow the different branches or divisions
to develop their own values and guiding principles as long as the major core
values in the branches are the same as those used at headquarters. This cultural flexibility is justified by a need for each division to create its own identity, or by differences in goals and nature of activities. The dominant culture
is emphasized throughout the firm but with some variations in some divisions
and branches. In 2009, Etisalat received an award at the 3rd Middle East
Customer Care Excellence Awards, organized by the Middle East Excellence
Awards Institute. Etisalat won this award for its strong corporate culture and
dedication to providing quality customer service. New employees in the company are immediately integrated into Etisalats quality culture, thanks to the
clear and structured processes they follow. These processes help managers
to review and augment these systems, to ensure staff performs at consistently
high levels. Etisalat has been named Best Operator in the Middle East five
times in the last three years and was recently named Best International Carrier in the world at the World Communications Awards.24
Neither uniformity nor heterogeneity is good or bad in a company. When
cultural heterogeneity is promoted, branches and divisions are given flexibility and freedom to adjust the companys strategy and make it fit with
the contingencies that are specific to the division or branch. Because of the
specificities of these contingencies or product lines or production processes,
cultural flexibility is needed to allow for a customer-responsive and innovation-driven culture.
Culture versus Formalization

Organizational culture might substitute for formal systems of control and
decision making such as organizational structure, rules, procedures, policies,
and direct supervision. When the values are widely supported by employees,
compliance, predictability and consistency would be much easier to obtain.
All employees understand the values that guide their actions in the company
and trust between employees, commitment to the goals, and loyalty to the
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firm reduce the need for written documentation, formal rules and SOPs,
and for monitoring and formal control mechanisms. When employees trust
each other and are reliable and responsible; the need for these mechanisms
decreases. For instance, CAD GULF LLC is a team-based organization
focused on the roles and competencies of its people. Throughout the years,
the company has been able to gather some of the best people in the industry,
hone their skills and cross-train them in other aspects of the business. The
result is a synergistic group living in a culture of excellence, professionalism,
teamwork, and customer orientation.25
National versus Organizational Culture

A national culture can guide behaviors; for example Arabs tend to be more
collectivistic while Americans are more individualistic. Teamwork with
reward systems geared toward group performance might experience more
success in Arab countries than in the US. The culture of the organization
will be influenced not only by the national culture but also by regional
influences, and ethnic and religious backgrounds and beliefs. By embracing diversity and through employee selection and socialization, organizations
keep the best of the national culture and align it with the values supported
by the founders and top managers vision. Some multinational companies
deliberately attempt to create a culture that values diversity to fuel innovation and creativity and increase the companys capacity to quickly adjust to
changes in the environment and to the ever-evolving customer needs. For
instance, the fear of losing face in the Arab world is a significant restraint on
creating new businesses. It tempers any desire that talented graduates might
have to become entrepreneurs, steering them instead to the relative safety
of an established family firm or a well-paid government job. This regional
reticence is also, in part, a function of the cultures continuing respect for
age. Young people are less likely than in the West to go against the wishes
of their parents, and their parents views are almost certain to be more conservative than their own. This dynamic also plays out powerfully in family
firms, where three generations may be working side by side. All will defer to
the eldest, who in general will be one of the least inclined to take a gamble
on a new business. Whats more, as one leader puts it, In the Arab world
almost everything is politicized, and governments are rarely encouraging to
new business.26
Types
An increasing number of culture typologies are being used

to identify various kinds of culture. Classifying the type of
culture in an organization can be helpful to understand if
the culture fits with the strategies of the firm or if some adjustments are needed
to make them more aligned. The control mechanisms, the reward systems,
and other procedures and standards are impacted by the type of culture and
its characteristics. For instance, the adoption of formal or informal control
mechanisms can be linked to the nature or type of culture emphasized in the
organization. The type of culture has implications on how employees should
be managed and what candidates should be hired.
Cultural elements and their relationships within an organization create a
pattern that is a unique part of that organization, creating an organizations
culture. Several types of organizational culture can be described, namely the
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bureaucratic culture, clan culture, entrepreneurial culture, and market culture.

In Figure 3.2 the vertical axis reflects the relative formal control orientation
within the organization, which ranges from stable control to flexible control.
The horizontal axis, on the other hand, reflects the relative focus of attention
of the organization, and ranges from internal functioning to external functioning. The farthest corners of the four quadrants correspond to four pure
organizational cultural types, which are bureaucratic, clan, entrepreneurial
and market. Each of the four organizational cultural types developed by Hellriegel et al.27 will be briefly discussed.
Bureaucratic Culture: This type of organization values rules, hierarchical

coordination, formalization and standard operating procedures; with the
long-term concerns being efficiency, predictability, and stability. Managers within a bureaucratic organization are good coordinators, organizers, and enforcers of rules and procedures that are clearly defined. The
tasks, responsibilities, and authority for all the organizations employees
are also clearly stated. For example, most municipalities and government
Table 3-1
Organizational Culture Typology
Type
Characteristics
Formal control
Example
Orientation and
Forms of Attention
Bureaucratic
culture
Rules, hierarchical coordination, formalization

and standard operating procedures.
Long-term concerns are efficiency, predictability,

and stability.
Stable control
and internal
attention.
Managers are good coordinators, organizers, and

enforcers of clearly-defined rules and procedures.
Tradition, loyalty, teamwork, personal

commitment, and self-management.
Employee contribution exceeds contractual

agreements.
Flexible control Health

Matrix
and internal
attention.
Long-term commitment through a long and

thorough socialization process.
Strong peer pressure to adhere to important norms.

High levels of risk-taking, dynamism, and creativity.
Commitment to experimentation and innovation.
Individual initiative, flexibility, and freedom are
encouraged and rewarded.
Reacts quickly to change and creates it.
Flexible control Group

Chalhoub
and external
attention.
Achievement of measurable and demanding

agreed upon goals.
Contractual relationship between the employee
and the organization.
Concerns for competitiveness and productivity.
Increased levels of performance are rewarded
through increased compensation.
Stable control
and external
attention.
Clan culture
Entrepreneurial
culture
Market culture
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McDonalds
General
Electric
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institutions have bureaucratic cultures, which can hinder their effectiveness and efficiency. The focus of attention of this organization is internal,
and the formal control is stable. McDonalds promotes a bureaucratic
culture throughout the organization as the company follows standard
operating procedures and needs to emphasize homogeneity, coordination of activities, and control of work sequences. Setting routines to be
followed by all McDonalds restaurants is essential for success. The need
for coordination, routinized work processes, formality, and respect of the
chain of command outweighs the need for flexibility and informality. This
is why a bureaucratic culture fits McDonalds vision and strategy.
Clan Culture: Attributes of this type of organization are tradition, loyalty,

teamwork, personal commitment, and self-management. The organization focuses its attention internally, yet its formal control is flexible. The
members of this organization recognize an obligation that is beyond their
job descriptions, with the understanding that their contributions to the
organization may exceed their contractual agreements. Employees identify that their long-term commitment to their organization, in the form of
loyalty, is in exchange for the organizations long-term commitment to the
employee, in the form of security. Unity from this culture type is created
through a long and thorough socialization process, where long-term clan
members serve as mentors and role models for newer members. There is
also strong peer pressure to adhere to important norms within the organization, and an environment is created in which few departments are left
completely free from normative pressures, which may generate innovation
and risk-taking behavior. Success of this type of organization is assumed to
depend on teamwork, participation, consensus decision making, as well as
employee sensitivity to customers and concern for people. According to
Mishal Kanoo from Kanoo Group, the Arab business is not just run by the
family; it is run for the family. A leaders success is not judged merely by
financial results, but also by the sense of responsibility and commitment
he gives to the family as a whole. The measure of commercial success lies
more in retaining a strong family business culture and providing ongoing
security for the family than it does in simply making profits.28
Clan culture means working together with emphasis on concern for people.
A good example of a collaborative culture or clan is Health Matrix, a company based in the Middle East, which provides innovative IT solutions for
the growing healthcare market. Managers recognize that the company is only
as good as its people, which is why they invest in top talent. According to
the companys website, the goal of the company has always been to share its
success by attracting, developing, and retaining top talent in a healthcare IT
industry, and employees experience the companys commitment and dedication to the team. Health Matrix thrives in a highly collaborative culture of
innovation and teamwork. The company respects relationships with coworkers, customers, owners, agents, suppliers, the community, and the environment and provides employees with a safe and fulfilling environment and an
opportunity to grow and learn.29
Leaders in the Arab world think of hiring people for life, of treating
employees as an extension of their family. This puts a different angle on their
ideas about fostering teams. Mohammed Alshaya says the key is to treat
people as you would like to be treated. Mishal Kanoo believes in what he
calls consultative leadership. This is the ability to negotiate with people so
that they buy into your ideas. You wont get 100 percent of what you want,
but 80 percent is not a bad goal to aim for.30
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LO3-3
Discuss the
importance of organizational
culture.
89
Entrepreneurial Culture: This cultural form is characterized by high levels of risk-taking, dynamism and creativity. Employees are committed to
experimentation, innovation, and being on the leading edge. This organizational culture type reacts quickly to change, as well as creates it due
to the fact that individual initiative, flexibility, and freedom promoting
growth are encouraged and rewarded. Effectiveness within this organization means providing new and unique products and rapid growth. The
organization focuses its attention externally and formal control orientation is flexible in order to foster innovation and change. For instance,
Group Chalhoub is guided by the philosophy of being Committed to
Excellence. With the aim of optimizing performance of brands, providing quality service and offering a stimulating work environment, the
group cultivates the core values of Excellence, Respect and Entrepreneurial Spirit.31 Google develops innovative web tools, taking advantage
of entrepreneurial software engineers and cutting-edge processes and
technologies. Its ability to quickly develop new services and capture market share has made it a leader in the marketplace and forced competitors
to catch up and revise their strategies.
Market Culture: The achievement of measurable and demanding goals,

especially those that are finance-based and market-based, are characteristics of this type of organizational culture. In this organization, the relationship between employee and organization is contractual, where the
obligation of each is agreed in advance; therefore the formal control orientation is quite stable. This is because the employee is responsible for an
agreed level of performance; with the organization exchanging this for an
agreed level of remuneration and reward in return. Competitiveness and
a profit-gaining orientation therefore exist throughout this organization
because increased levels of performance from the employee are rewarded
through increased compensation from the organization. Market cultures
are concerned with competitiveness and productivity through emphasis
on partnerships and positioning. General Electric, under the leadership
of former CEO Jack Welch, is a good example of a market culture. He
famously announced that if businesses divisions were not first or second
in their markets then, simply, they would be sold. Its corporate culture
was (and still largely is) highly competitive where performance results
speak louder than process.32
The Importance
of Culture
Organizational culture can be critical in determining the

performance of the firm and its capacity to compete effectively in the market place and maintain and strengthen its
competitive advantage. While culture may seem more of a
concept than something that is physically real, the potential harm or potential benefit for the business might be real and careful attention is needed to properly manage organizational culture. Studies show that
loyalty and commitment to the goals of the company are the result of an effective and positive organizational culture more than pay and benefits. Culture
might also differentiate firms in the labor market and make some companies
more attractive than others to job seekers. For instance, Qatar Airwayswhich
was ranked among the top 100 best companies to work for in the Middle
Eastbenefits from a competitive advantage that very few other companies in
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the industry have. With its organizational culture that focuses on creating an
environment that nurtures employee skills, emphasizes collaboration and
team work, values participation, delegation of authority, and empowerment
of employees along with promoting a work environment where diversity is
valued and supported, the company is able to attract talented job candidates
and to recruit best employees which gives the company a competitive edge
against rival companies. Organizational culture can help managers achieve
objectives in several ways. Organizational culture helps create favorable conditions that facilitate the achievement of organizational goals. Each of the following aspects points out how organizational culture can help or hinder the
achievement of organizational objectives.
Employee Self-Management
To direct and help employees achieve organizational goals, managers define
jobs with job descriptions, create a structure and hierarchy to establish a chain
of command and line of authority, dedicate resources to departments and
units, and develop work schedules. While these mechanisms and actions
guide employee actions, the companys goals will only be achieved when
employees decide to behave the way the company desires.
Organizational culture can induce employees to behave in a particular way
without close supervision or formal control mechanisms. When employees
support the organizational culture and feel part of it, they tend to conform to
it as their own values match those promoted by the culture of the organization. Conversely, failure to comply with cultural norms generates social pressure to conform as the group will look down on those who do not conform
with the norms and values emphasized by the culture; thus the employee
will either adjust and align his or her behaviors and attitudes with the cultural expectations or face peer pressure which might lead to the departure of
the employee when there is no willingness and readiness to conform. Much
of this process through which the culture directs the actions and attitudes of
employees occurs informally and in an unspecified manner.
Stability
Culture provides a sense of continuity in the midst of rapid change and
intense competition. In industries operating in dynamic environments such
as the high technology industry, culture ensures predictability, security, and
comfort. Organizational culture ensures that employees can effectively adjust
to the changing conditions in the environment and feel that they are in control and on track to achieve the goals of the organization and are confident
that the companys strategies will lead to success. The stress caused by fierce
competition in the market place, by the rapid adjustments and updates of
product lines and services as they become quickly obsolete, by the need to
continuously innovate and create new work routines or new products and
services can be controlled and alleviated through organizational culture.
Socialization
Organizational culture subtly teaches employees the values of the organization. The process of internalizing or taking organizational values as ones own
is called socialization. Socialization is a three-stage process. The first stage, prearrival, consists of the values, attitudes, biases, and expectations the employee
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brings to the organization when first hired. These values are influenced by
the background of the employee, his prior experiences, and the environment
he lived in previously. The values of newcomers tell about their way to do
things as learned from their culture and past experiences. Organizations try
to select candidates that most likely fit into the companys culture. Even if the
firm hires the right candidate whose values fit within those promoted by the
business, it still has to learn the culture of the organization and adjust if there
is a gap between his values and those of the company.
When the employee joins the company and starts working in his new
position, he reaches the encounter stage. At this point, the individual begins
to compare his expectations about the firms culture with the reality of the
expectations set by the firm. For instance, the employee might have his own
perception of what being punctual and on time to work means while the
company has a very strict attendance policy. There is a misfit, in this case,
between employee values as concretely translated into practice and the values
promoted by the culture of the organization. When there is a gap between
cultural expectations and reality, the employee has to adjust to the culture
of the organization during the metamorphosis stage. Training programs are
designed to help employees adjust their values to firm expectations.
An organization can choose from among formal or informal, individual or
collective, fixed or variable, serial or random, and investiture or divestiture
socialization. Not all employees adjust successfully to the requirements of the
culture and when the company fails to socialize employees, the employee
might decide to leave the company and join a company that supports the
same values he is supporting or the company might decide to terminate the
employee if the gap prevents the employee from reaching organizational
goals. While companies must maintain and strengthen their cultures through
proper socialization, they also have to value employee diversity and promote
an environment that nurtures employee skills and talents and where employees can capitalize on their own values and cultural background. This might
also bring value to the company and help it strengthen its competitive position in the market place.
Implementation of the Organization

Strategy
Organization strategy may support the achievement of the goals and the
vision of the firm by supporting the implementation of the firms strategies
and desired changes in the strategy in case actual strategies are revised or
changed. Organizational culture helps create the needed commitment to
organizational goals. For high performance, the firm strategy and the culture
must be aligned and ideally they must reinforce each other. Any change in the
culture must be reflected in the strategy and vice versa. The shared values and
norms make it easier for employees to support the companys strategy.
Negative Culture
While the companys culture may support the companys strategy and help
with goal achievement, it might also lead to negative outcomes. For instance,
a culture that is too strong and fully entrenched into one model and one set of
values and norms that are constantly emphasized as being the best, might lack
the capacity to adjust if change is needed to improve performance, strengthen
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LO3-4
Chapter 3
Describe how
to manage organizational
culture.
a competitive advantage, or even guarantee survival. A closed and inflexible

culture might diminish the firms capacity to adjust to the different forces in the
environment and make any strategy revision very difficult to set and to implement. At the other extreme, when the values and norms are not constantly
emphasized and reinforced, the company fails to achieve its goals as employees
will show little support and commitment to organizational goals. When the values are not deeply held by employees and reinforced by managers, following
the vision of the company becomes difficult and so would be the implementation of strategies to convey the vision. Each employee or group of employees
will have his own interpretation of the companys values and norms, which
leads to inconsistent actions that prevent the company from reaching its goals. A
too strong or a too weak culture may harm performance and goal achievement.
Managing
Cultural
Processes
The culture of an organization evolves gradually over

time. It starts with the founders of the company and is
influenced by their beliefs and philosophy. Their vision for
the company is usually reflected in the initial set of values
and norms they develop for the firm. These beliefs and
values are then transmitted to a group of close associates
and different mechanisms are then set (e.g. training programs) to further transmit them to a larger number of employees as the company grows in size. Managers have to act as role models and lead the process
of transmission and enforcement of cultural values to fellow employees.
A variety of techniques and elements maintain and reinforce culture over
time. Some may be deliberately imposed by management such as cultural
symbols, rituals, and the choice of company heroes that embody the firms
values. Others may be largely unconscious processes such as the use of stories, language, and employee perception of the companys leadership style.
Cultural Symbols
Cultural symbols are the icons and objects that communicate organizational
values such as flags, uniforms, or other logos. The management uses them to
create a sense of belongingness and identity and convey and sustain shared
meanings among employees. For example, holding classes for female students
and classes for male students at the University of Sharjah symbolizes religious
beliefs used as guiding values of the organizational culture at that university.
Company Rituals and Ceremonies

Organizations plan events and ceremonies to offer employees and stakeholders the opportunity to share cultural meanings. At the American University of
Sharjah and AUB, graduation ceremonies at the end of every teaching semester convey the values and beliefs of the institution and delineate the use of the
American model of higher education in these two universities.
Company Heroes
Organizations communicate their values to employees by identifying individuals whose deeds best reflect what the organization believes in so that
other people and employees can reproduce their behavior and can use these
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heroes as an inspiration to guide attitudes and actions in the workplace. For

instance, the Al Fardan name has been strongly associated with pearl trading in the Arabian Gulf for over a century. The owners and managers of the
group still see in its founder, Mr. Ibrahim Al Fardana renowned pearl expert
and tradera hero who still guides the vision and strategy of the group. In
1954 the chairman of the Group, Mr. Hassan Ibrahim Al Fardan, started the
first establishment as the Al Fardan Jewellery showroom in the UAE.33
Stories
Organizational culture is sustained by the narratives and legends that capture
the organizations values and beliefs. For instance, Dubai history highlights the
role of HH Sheikh Ahmed bin Saeed Al Maktoum who has been at the forefront of Dubais remarkable economic development for more than 25 years
and who was appointed Chairman of Dubai World in December 2010. Under
his leadership, Dubai World has entered a new phase of growth in line with
Dubais economic development. HH Sheikh Ahmed has been a highly successful corporate leader since 1985, when he was appointed President of the Dubai
Department of Civil Aviation and Chairman of the newly launched Emirates
Airline. The phenomenal growth of Dubais aviation industry under his stewardship is testimony to HH Sheikh Ahmeds grand vision and foresight. He is
now the Chairman and Chief Executive of Emirates Airline and Group.34
Language
The language used by managers is used to convey company values and promotes both positive and negative values. For example, the language used at
Abu Dhabi Investment Authority is different than the language used at Dubai
School of Government. The visions, missions, strategies, and objectives of
the two institutions are different, so is the language used to convey cultural
values and beliefs. Firms often use slogans to reflect their values and make
stakeholders aware of the culture of the firm. The slogan for Abu Dhabi Commercial Bank (ADCB) is Our Knowledge. Your Future.
Leadership
Employee actions are influenced by how leaders behave in the organization.
Effective leaders set a vision for the organization that employees will commit
to and try to achieve. Leaders are also role models for employees. They provide a daily example of how to articulate the values in practice and emphasize
the important values that employees have to follow. All the leaders interviewed for the Business Leadership in the Arab World report emphasized
the importance of following their moral compass. As a leader, you are being
challenged every day with issues that cut across your value system, says Loay
Nazer, the founder in 1991 of Nazer Group, a holding company that has made
a diverse range of entrepreneurial investments in Saudi Arabia and abroad.
To establish leadership you have to have a pre-defined value system.35
Organizational Policies and Decision

Making
Performance appraisals, budgets, new plans, and other policies and decisions
clearly communicate company values and therefore the companys culture.
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Chapter 3
The control mechanisms and the criteria used to measure performance reflect
the values promoted by organizational culture.
Employees learn what the company truly values when change is required
in times of crisis. The need for restructuring, downsizing of company activities and to plan revisions will be handled in accordance with the most important values supported by the organization. The conservative and stable
culture used at Toyota was emphasized when the company faced major crises
throughout its history but refused to adopt a massive layout strategy. Toyotas
culture values seniority and creates loyalty and commitment to the companys goals and vision.
Cultural values are communicated by the ways employees are rewarded.
In top-tier research universities, promotions and salary increases are tied to
research productivity and quality of faculty publications while teaching universities reward faculties based on their course evaluations and on other indicators of their teaching performance.
Summary and
Review
LO3-1
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HOW TO SHAPE ORGANIZATIONAL CULTURE Organizational culture is shaped by the interaction of four main
factors: the personal and professional characteristics of
people within the organization, organizational ethics, the
nature of the employment relationship, and the design of
its organizational structure. These factors work together to produce different
cultures in different organizations and cause changes in culture over time.
LO3-2
CHARACTERISTICS OF ORGANIZATIONAL CULTURE Organizational

culture is a system of shared values, assumptions, beliefs, and norms that unite
the members of an organization. Organizational culture reflects employees
and managers views about how things get done in the organization. Culture
gives meaning to actions and procedures within an organization and may be
considered as the glue that holds organizational members together and what
keeps them focused without deviating from the achievement of organizational
LO3-3
THE IMPORTANCE OF CULTURE Organizational culture can be critical in determining the performance of the firm and its capacity to compete
effectively in the market place and maintain and strengthen its competitive
advantage. While culture may seem more of a concept than something that is
physically real, the potential harm or potential benefit to the business might
be real and careful attention is needed to properly manage organizational culture. The culture can support employee self-management, increase stability,
smoothen the socialization process, and facilitate the implementation of the
organization strategy.
LO3-4
MANAGING CULTURAL PROCESSES The culture of an organization

evolves gradually over time. It starts with the founders of the company and
is influenced by their beliefs and philosophy. A variety of techniques and elements maintain and reinforce culture over time. Some may be deliberately
imposed by management such as cultural symbols, rituals, and the choice of
company heroes that embody the firms values. Others may be largely unconscious processes such as the use of stories, language, and employee perception
of the companys leadership style.
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Management in Action
Topics for Discussion and Action
Discussion
Action
1. How does organizational culture emerge? [LO3-1]
6. Interview a manager and identify the type of

organizational culture that his organization has
implemented. Why is the organization using this
type of culture? Do you think other types might
be more appropriate? Which one(s)? Explain.
2. How do managers select the characteristics and

dimensions to include in the culture? [LO3-2]
3. Discuss the different types of culture that could
possibly be implemented in a firm. Explain how
managers select one type over the others and
analyze the factors that explain their choice.
[LO3-2]
4. Why is culture so needed in a firm? How does it
help the firm reach a good level of performance?
[LO3-3]
5. How can organizational culture be managed
through artifacts? Provide examples of these
artifacts and discuss how they can be used to
maintain and strengthen the culture. [LO3-4]
[LO3-2]
7. Interview some employees of an organization,
and ask them about the organizations values
and norms, the typical characteristics of
employees, the organizations ethical values,
cultural dimensions, and the artifacts. Using this
information, try to describe the organizations
culture and the way it affects how people and
groups behave. [LO3-1, 3-2, 3-4]
Building Management Skills

Understanding Organizational Culture
[LO 3-1, 3-2, 3-4]
Think of an organization with which you are familiar, perhaps one you have worked for, such as a store,
restaurant, bank, office, or school. Then answer the following questions:
1. Describe the dimensions of its organizational
culture. Were innovation and risk-taking part of
these dimensions? Be specific.
2. How did this organizational culture emerge?
3.
What role did organizational culture play to guarantee

the stability and performance of the company?
4. Different artifacts are used to manage

organizational culture and perpetuate it. These
artifacts include language, symbols, stories,
heroes, rituals, and ceremonies. How were these
artifacts used in the organization to maintain and
manage organizational culture?
5. Can you think of any additional action that the
managers could take to reinforce organizational

culture or to change it?
6. Was the culture bureaucratic, clan-oriented,
entrepreneurial, or more market-driven? Explain.
7. What made the companys managers decide to
adopt a specific type of culture instead of another
one? Explain.
8. How did the internal and the external
environments of the firm influence organizational
culture? Provide specific examples.
9. What advice would you give to the companys
managers to help them improve the culture of their
firm?
95
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Managing Ethically
[LO3-1, 3-2]
uppose an organization has just recruited a new

management team and started laying off many of
its middle managers. The new top managers decided
to terminate all managers who disagree with the cultural
change that the new top managers want to introduce.
They want to move from a bureaucratic culture characterized by centralized decision making and low employee
empowerment to a more entrepreneurial culture emphasizing more decentralized decision making and more
employee empowerment. The new managers believe that
all those who disagree with their vision have to leave the
company. Some high performing middle managers who
spent most of their careers in the company have been
laid off. Think of the ethical issues involved in designing a
hierarchy, and discuss the following issues.
Questions
1. Do you think managers can decide to lay off high
performing employees just because they disagree
with their vision? Explain what you would have
done if you were part of the new management
team appointed in this company.
2. Some people argue that employees who have
worked for an organization for many years have a
claim on the organization at least as strong as that
of its stakeholders. What do you think of the ethics
of this positioncan employees claim to own
their jobs if they have contributed significantly to
the organizations past success?
Small Group Breakout Exercise

Leenas Jewelry
[LO3-1, 3-2, 3-3]
Form groups of three or four people, and appoint one member as the spokesperson who will communicate
your findings to the class when called on by the instructor. Then discuss the following scenario:
eenas Jewelry sells and services high-end jewelry

and luxury watches. Over the years, the company
has developed a good reputation for the quality of its
products and for its excellent customer service. However, the store was run as a small business and the
owner Leena Munajed never thought of designing formal plans, of setting a formal structure, or devising a
long-term vision for the company. While her experience
in the field (as she worked in a jewelry store when she
was a student) helped her succeed in the field, her lack
of management skills prevented her from expanding the
business rapidly. The deepening economic crisis and
the fierce competition faced from more established jewelry stores are threatening the expansion and the longterm survival of Leenas Jewelry. You are a team of local
consultants whom Leena has called in to advise her as
she tries to learn about how to manage her business.

She asked you to help her answer these questions:
1. How can she build an organizational culture and
how does she pick the right one?
2. How can she improve effectiveness and efficiency
by picking the right culture for her firm?
3. Leena wants to expand to one of the neighboring
GCC countries. She thinks that expanding could
help generate more revenues and profits. She
is asking you to help her figure out whether the
culture of the new branch should be similar or
different from the original one and the advantages
and disadvantages of having dissimilar cultures in
the different branches.
Exploring the World Wide Web
o to the website of the Emirates Group

(www.theemiratesgroup.com). Click on Our Vision
and Values. Explore the values promoted by the group.
1. What values are promoted by the Emirates Group?
How do you think promoting these values has
helped the group be successful?
[LO3-1, 3-2]
2. Browse the groups website and identify the

type of organizational culture used. Is it the best
culture to use? Is there any other alternative
culture that could be used by the Emirates
Group? Explain.
96
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Be the Manager
[LO3-1, 3-2, 3-3, 3-4]
ou have been hired as a middle manager in a large

multi-branch furniture store. The company is seeking to expand internationally and is in the process of
selecting foreign suppliers to lower its dependence on
local suppliers and diversify its supply sources. The
companys top managers delegated their powers to you
and charged you to negotiate and to sign on their behalf
the contracts with the new suppliers. The top managers briefed you on how crucial these contracts are to
secure the firms expansion and asked you not to disappoint them even when sealing the deal requires bribery
and binding the rules. The company promotes a clanoriented and ethical culture and managers do their best
to act as role models for the rest of the employees. Bribing and acting unethically are not part of the values you
personally support. However, you know how important
these deals are for your company and for your future
career in the company.
1. How do you think you should act? Follow the
guidelines that were given by your bosses or
follow your values and beliefs? Why?
2. Do you think the culture should reflect the
values and beliefs of the top managers? Are
there inconsistencies between the way cultural
values are outlined and the way the top
managers act?
3. If top managers keep separating between written
values and actions, the company would most
probably fail in the long run. What cultural changes
do you suggest to make the values more aligned
with the actions?
97
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CHAPTER

across three regions: the Middle East,

Qtels head office in Doha.

accompanied by a change in how the

package to illustrating development as

As the story of Qtel suggests, becoming a successful

The managers of an organization can set out purposefully to develop specific

The Employment Relationship

Organizational culture is a system of shared values,

by profit maximization only and not justified by a drop in demand or difficult

is guided by the philosophy of being Committed to Excellence. With the

Its Another Exciting Day at Work

Attention to detail: degree to which employees are expected to exhibit

Innovation and risk-taking: degree to which employees are encouraged to

Stability: degree to which organizational decisions and actions emphasize

Aggressiveness: degree to which employees are aggressive and competitive

Team orientation: degree to which work is organized around teams rather

People orientation: degree to which management decisions take into

learning and development is one of the core values of NBADs corporate

Sami Al Hajj, a Sudanese journalist working for the Al Jazeera network,

as long as it fits with the network code of ethics. Flexibility is important

Strong, Adaptive Cultures versus Weak,

Moreover, an adaptive culture develops an emphasis on entrepreneurship

Alan Mulally Transforms Fords

The cultures of organizations can differ in a variety of ways. For

Cultural Uniformity versus

Culture versus Formalization

National versus Organizational Culture

An increasing number of culture typologies are being used

bureaucratic culture, clan culture, entrepreneurial culture, and market culture.

Bureaucratic Culture: This type of organization values rules, hierarchical

Rules, hierarchical coordination, formalization

Long-term concerns are efficiency, predictability,

Managers are good coordinators, organizers, and

Tradition, loyalty, teamwork, personal

Employee contribution exceeds contractual

Flexible control Health

Long-term commitment through a long and

Strong peer pressure to adhere to important norms.

Flexible control Group

Achievement of measurable and demanding

Clan Culture: Attributes of this type of organization are tradition, loyalty,

Market Culture: The achievement of measurable and demanding goals,

Organizational culture can be critical in determining the

Implementation of the Organization

a competitive advantage, or even guarantee survival. A closed and inflexible

The culture of an organization evolves gradually over

Company Rituals and Ceremonies

heroes as an inspiration to guide attitudes and actions in the workplace. For

Organizational Policies and Decision

CHARACTERISTICS OF ORGANIZATIONAL CULTURE Organizational

MANAGING CULTURAL PROCESSES The culture of an organization

1. How does organizational culture emerge? [LO3-1]

6. Interview a manager and identify the type of

2. How do managers select the characteristics and

Building Management Skills

What role did organizational culture play to guarantee

4. Different artifacts are used to manage

managers could take to reinforce organizational

Managing Ethically [LO3-1, 3-2]

uppose an organization has just recruited a new

Small Group Breakout Exercise

[LO3-1, 3-2, 3-3]