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MGT504 - Organization Theory and Design - Lecture Handout 23

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The popularity of the organizational culture topic raises a number of questions. Can we identify cultures? Can culture be aligned with strategy? How can cultures be managed or changed? The best place to start is by defining culture and explaining how it can identify in organizations.


Culture is the set of values, guiding beliefs, understandings, and ways of thinking that is shared by members of an organization and taught to new members as correct. It represents the unwritten, felling part of the organization. Everyone participates in culture, but culture generally goes unnoticed. It is only when organizations try to implement new strategies or programs that go against basic culture norms and values that they come face to face with the power of culture.

Organizational culture exists at two levels. On the surface are visible artifacts and observable behaviors. --- The ways people dress and act and the symbols, stories, and ceremonies organization members share. The visible elements of culture, however, reflect deeper values in the minds of organizations members. These underlying values, assumptions, beliefs, and thought processes are the true culture. For example, at Southwest Airlines, red “LUV” hearts emblazon the company’s training manuals and other materials. The hearts are a visible symbol; the underlying value is that “we are one family of people who truly care about each other,” the attributes of culture display themselves in many ways but typically evolve into a patterned set of activities carried out through social interactions. Those patterns can be used to interpret culture.


Culture provides members with a sense of organizational identity and generates a commitment to beliefs and values that are larger than themselves. Though ideas that become part of culture can come from anywhere within the organization, an organization’s culture generally begins with a founder or early leader who articulates and implements particular ideas and values as a vision, philosophy, or business strategy, when these ideas and values lead to success, the become institutionalized, and an organizational culture emerges that reflects the vision and strategy of the founder or leader, as it did at SAS institute?

Culture serves two critical functions in organizations; (1) to integrate members so that they know how to relate to one another, and (2) to help the organization adapt to the external environment. Internal integration means that members develop a collective identity and know how tow work together effectively, it is culture that guides day-today working relationships and determines how people communicate within the organization, what behavior is acceptable or not acceptable, and how power and status are allocated, External adaptation refers to how the organization meets goals and deals with outsiders. Culture helps guide the daily activities of workers to meet certain goals. It can help the organization respond rapidly to customer needs or the moves of a competitor.

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