5. Business Environment: organizational structure also has UNIT 2: ORGANIZATIONAL CULTURE
to adapt to the demands and needs of the business Although organizations have a formal structure, there are
environment. Competitors may serve as benchmarks, also “ informal ” forces that operate to shape the
changes may be required by regulatory organizations, while organization and behavior within the organization.
markets may determine units or departments that need to be A popular approach to viewing these informal aspects of the
created (McShane and Travaglione). organization is to refer to them collectively as the
“organizational culture.” In this unit, we will now look at
how organizations develop their own individual cultures,
which can influence nearly all aspects of behavior at work.
Daimler-Chrysler merger:
The importance of organizational culture German
automaker Daimler Benz and U.S.-based Chrysler
Corporation were two leading car manufacturers that agreed
to combine their businesses in what was perceived to be a
merger of equals. However, this merger proved to be a
costly mistake for both companies. Daimler-Benz attempted
to run Chrysler USA operations in the same way as it would
run its German operations. Daimler-Benz was characterized
by methodical decision-making. On the other hand, the US
based Chrysler encouraged creativity. While Chrysler
represented American adaptability and valued efficiency
and equal empowerment, Daimler-Benz valued a more
traditional respect for hierarchy and centralized
decision-making.
I. Definition of Organizational Culture
● Shared values, beliefs, ideologies, and norms held by
organizational members that influence their behavior
(Sackman, 1992)
● A system of informal rules that spells out how people are
to behave most of the time (Deal and Kennedy, 1982).
● A cognitive framework consisting of attitudes, values,
behavioral norms, and expectations (Greenberg, 1997)
Organizational culture can, by its very nature, serve as a
force that guides behavior within the organization. However,
organizational culture can oftentimes make an organization
resistant to change and innovation (Hilton &Hertzbach,
1997; Schein, 1996). By understanding and assessing an
organization ’ s culture, it becomes easier to predict
organizational behavior under different circumstances
(Hofstede, Neuijen, Ohayv, & Sanders, 1990; Ott, 1989).
Seven Characteristics of Organizational Culture
Seven primary characteristics seem to capture the essence
of an organization’s culture:
1. Innovation and risk taking. The degree to which
employees are encouraged to be innovative and take risks.
2. Attention to detail. The degree to which employees are
to adapt to the demands and needs of the business Although organizations have a formal structure, there are
environment. Competitors may serve as benchmarks, also “ informal ” forces that operate to shape the
changes may be required by regulatory organizations, while organization and behavior within the organization.
markets may determine units or departments that need to be A popular approach to viewing these informal aspects of the
created (McShane and Travaglione). organization is to refer to them collectively as the
“organizational culture.” In this unit, we will now look at
how organizations develop their own individual cultures,
which can influence nearly all aspects of behavior at work.
Daimler-Chrysler merger:
The importance of organizational culture German
automaker Daimler Benz and U.S.-based Chrysler
Corporation were two leading car manufacturers that agreed
to combine their businesses in what was perceived to be a
merger of equals. However, this merger proved to be a
costly mistake for both companies. Daimler-Benz attempted
to run Chrysler USA operations in the same way as it would
run its German operations. Daimler-Benz was characterized
by methodical decision-making. On the other hand, the US
based Chrysler encouraged creativity. While Chrysler
represented American adaptability and valued efficiency
and equal empowerment, Daimler-Benz valued a more
traditional respect for hierarchy and centralized
decision-making.
I. Definition of Organizational Culture
● Shared values, beliefs, ideologies, and norms held by
organizational members that influence their behavior
(Sackman, 1992)
● A system of informal rules that spells out how people are
to behave most of the time (Deal and Kennedy, 1982).
● A cognitive framework consisting of attitudes, values,
behavioral norms, and expectations (Greenberg, 1997)
Organizational culture can, by its very nature, serve as a
force that guides behavior within the organization. However,
organizational culture can oftentimes make an organization
resistant to change and innovation (Hilton &Hertzbach,
1997; Schein, 1996). By understanding and assessing an
organization ’ s culture, it becomes easier to predict
organizational behavior under different circumstances
(Hofstede, Neuijen, Ohayv, & Sanders, 1990; Ott, 1989).
Seven Characteristics of Organizational Culture
Seven primary characteristics seem to capture the essence
of an organization’s culture:
1. Innovation and risk taking. The degree to which
employees are encouraged to be innovative and take risks.
2. Attention to detail. The degree to which employees are
