UNIT-V

Organizational Culture and Organizational Stress

Organizational Culture

Meaning and Nature

• Organizational culture is a system of shared assumptions, values, and beliefs that guide
behavior within an organization.

• It reflects an organization’s expectations, experiences, philosophy, and values, shaping self-

image, internal interactions, and external relations.

• Culture is based on shared attitudes, beliefs, customs, and written/unwritten rules,

influencing how people dress, act, and perform their jobs.

• Each organization develops a unique culture, providing guidelines and boundaries for
member behavior.

Definition (by Scholars)

• Robbie Katanga: “Organizational culture is how organizations do things.”

• Alec Haverstock: “Organizational culture is largely a product of compensation.”

• Bruce Perron: “Organizational culture defines a jointly shared description of an organization

from within.”

• Richard Perrin: “Organizational culture is the sum of values and rituals that integrate
organization members.”

Characteristics of Organizational Culture

Organizational culture influences behavior through norms, stories, rituals, rules, jargon, and insider
knowledge. Seven key characteristics (from high to low priority) are:

1. Innovation (Risk Orientation) – Encourages creativity and taking risks.

2. Attention to Detail (Precision Orientation) – Focuses on accuracy and meticulousness.

3. Emphasis on Outcome (Achievement Orientation) – Prioritizes results and goal attainment.

4. Emphasis on People (Fairness Orientation) – Values fairness, well-being, and employee care.

5. Teamwork (Collaboration Orientation) – Encourages collaboration and group cohesion.

6. Aggressiveness (Competitive Orientation) – Promotes assertiveness and competitiveness.

7. Stability (Rule Orientation) – Focuses on rules, procedures, and predictable processes.

Functions of Organizational Culture

1. Boundary-Defining Role – Differentiates the organization from others.

2. Sense of Identity – Gives members a feeling of belonging.

3. Commitment Generation – Encourages prioritizing organizational interests over personal

ones.
 4. Enhances Social System Stability – Acts as a social glue with guidelines on expected
behavior.

5. Sense-Making and Control Mechanism – Guides attitudes and behavior through

assumptions, rules, and norms; conformity often influences rewards and promotions.

Benefits:

• For the organization: Enhances commitment, stability, and consistent employee behavior.

• For employees: Reduces ambiguity, clarifies expectations, and guides behavior effectively.

Types of organizational culture:

1. Normative Culture

2. Pragmatic Culture

3. Academy Culture

4. Baseball Team Culture

5. Club Culture

6. Fortress Culture

7. Tough Guy Culture

8. Bet your Company Culture

9. Process Culture

10. Power Culture

11. Role Culture

12. Task Culture

13. Person Culture

1. Normative Culture

• Follows predefined norms, rules, and regulations.

• Employees strictly adhere to policies; no deviations allowed.

2. Pragmatic Culture

• Focused on customer satisfaction.

• Rules are flexible; employees prioritize client needs over procedures.

3. Academy Culture

• Hires skilled individuals; roles based on qualifications and experience.

• Strong focus on training and professional development.

• Common in universities, hospitals, and educational institutions.

4. Baseball Team Culture

 • Employees are considered the organization’s most valuable assets.

• Individuals have autonomy; performance is highly valued.

• Typical in advertising, event management, and financial firms.

5. Club Culture

• Recruitment based on specialization and talent.

• High-potential employees are promoted and appraised regularly.

6. Fortress Culture

• Employee job security is uncertain; layoffs occur if the organization performs poorly.

• Common in high-risk industries like stockbroking.

7. Tough Guy Culture

• Employees are closely monitored; feedback and performance reviews are frequent.

• Team managers guide and supervise constantly.

8. Bet Your Company Culture

• Decisions involve high risk with unpredictable outcomes.

• Policies are designed to manage sensitive, long-term issues.

9. Process Culture

• Employees strictly follow established procedures.

• Feedback and performance reviews are less emphasized.

• Typical of government organizations

Charles Handy, a leading authority on organizational culture, defined four different kinds of culture:

Charles Handy’s Four Types of Culture

• Power culture

• Role culture

• Task culture

• Person culture

10. Power Culture

• Power concentrated in a few individuals.

• Few rules; decisions are made by those in power.

• Quick decision-making but can become toxic if misused.

11. Role Culture

• Highly structured and rule-based.

 • Power determined by position in hierarchy.

• Bureaucratic; decision-making can be slow.

12. Task Culture

• Teams are formed for specific problems or projects.

• Power shifts based on team skills and project needs.

• Success depends on team dynamics and collaboration.

13. Person Culture

• Individuals see themselves as more important than the organization.

• Organization exists to serve the people working in it.

• Essentially a collection of independent individuals.

Creating and Maintaining Organizational Culture

1. Role of Founders

o Many organizational cultures originate from the actions and values of founders.

o Founders can create strong cultures that drive performance and growth.

o Example: Thomas Watson, Sr. of IBM transformed a small firm into a global leader
through his dominant personality and cultural influence.

2. Need for Cultural Renewal

o Sometimes founders create weak or outdated cultures.

o Organizations may need new leadership to instill a strong, adaptive culture.

o IBM in the early 1990s faced decline due to a culture misaligned with the emerging
PC market.

3. Changing Culture

o Cultural change becomes necessary when the environment shifts or core values no
longer align with organizational survival.

o Leaders must implement bold strategies to transform culture from top to bottom.

o Example: Louis Gerstner’s leadership at IBM introduced radical cultural change,

moving the company away from hardware sales and enabling a successful
turnaround.

4. Maintenance of Culture

o Sustaining culture requires continuous reinforcement of values, behaviors, and

practices.

o Minor modifications alone are insufficient if they do not address core cultural
misalignments.
 o Culture should evolve with the organization’s strategy and environmental demands.

How Organizational Cultures Start

Organizational culture usually develops through these steps:

1. Founder’s Idea: A single person has a vision for a new enterprise.

2. Core Group Formation: The founder brings in key people who share the vision.

3. Organizational Creation: The core group raises funds, incorporates, and builds the
organization.

4. Building History: New members join, and a shared history and culture begin to form.

Many successful companies, like McDonald’s and Wal-Mart, followed these steps.

Examples of Founders Creating Strong Cultures

1. McDonald’s – Ray Kroc

• Bought franchise rights and expanded globally.

• Built culture around quality, cleanliness, service, and price.

• Franchisees trained at McDonald University to uphold cultural values.

• Legacy preserved through traditions, training, and communications.

2. Wal-Mart – Sam Walton

• Focused on discounted merchandise and small-town markets.

• Emphasized hard work, efficiency, and customer service.

• Encouraged associates to improve systems and innovate.

• Cultural values transmitted through robust communication networks.

3. Cisco – John Chambers

• Took Cisco to a global leader with focus on trust, hard work, and customer solutions.

• Strong but flexible culture helped survive economic downturns and dot-com volatility.
Socialization Steps to Maintain Organizational Culture

1. Selection of Entry-Level Personnel

o Recruiters screen candidates for cultural fit using standardized procedures.

o Realistic job previews (RJP) help newcomers adjust better.

o Example: North Shore Bank hires locally to ensure alignment with community
culture.

2. Placement on the Job

o New employees undergo experiences that test acceptance of norms.

o Early tasks may humble them and build group cohesion.

o Example: Procter & Gamble assigns simple tasks to teach humility.

3. Job Mastery

o Extensive training ensures employees gain competence and internalize culture.

o Japanese firms and Coca-Cola use multi-year programs to instill values.

4. Measuring and Rewarding Performance

o Operational metrics and rewards reinforce desired behavior.

o Violations of culture may lead to penalties or lateral moves.

o Examples: Procter & Gamble, Motorola.

5. Adherence to Important Values

o Employees internalize core values and align personal sacrifices with organizational
goals.
 o Adaptation to local cultural differences may occur.

o Example: Wal-Mart adjusted customer interaction practices in Germany.

6. Reinforcing Stories and Folklore

o Stories and legends convey cultural values and guide behavior.

o Examples: 3M Post-it Notes story, HP bolt-cutter story, Barnes & Noble CEO
anecdotes.

7. Recognition and Promotion

o Role models demonstrate cultural values; recognition motivates others.

o Examples: Procter & Gamble, Morgan Stanley.

Strategies to Manage Cultural Diversity

1. Adaption

o Teams adjust practices and attitudes to work around cultural differences.

o Encourages creative problem-solving and team responsibility.

2. Structural Intervention

o Reorganize teams or create smaller, diverse working groups to reduce conflicts.

3. Managerial Intervention

o Managers set norms early, address issues like language or ethnic differences, and
ensure collaboration.

4. Exit

o As a last resort, remove members unable to integrate into team culture.

Organizational Stress

Definition and Meaning

• Organizational stress is a cognitive, emotional, and behavioral response to harmful aspects

of work, organizational climate, or environment.

• Occurs when employees feel helpless, uneasy, or unable to cope with tasks.

• Stress is a reaction to excessive pressures or demands that exceed an individual’s ability to

adapt.

Common Stressors Reported by People

• Money/financial concerns

• Work-related pressures

• Family responsibilities

• Health issues
Sources of Organizational Stress

1. Individual Factors

• Family issues: marital problems, children’s issues, ailing relatives.

• Financial pressures: inability to meet expenses or sudden financial demands.

• Personality traits: personal disposition influences perception of stress; some see situations
as negative, increasing stress.

2. Organizational Factors

• Task/role demands: workload, tight deadlines, complex responsibilities.

• Interpersonal demands: conflicts with coworkers, lack of social support.

• Organizational structure: rigid rules, poor decision-making participation, high differentiation.

• Leadership style: authoritarian or unrealistic expectations, creating fear and anxiety.

• Organizational life stage: birth or decline phases bring uncertainty, heavy workloads, and
instability.

3. Environmental Factors

• Economic downturns and job insecurity.

• Political unrest or societal changes.

• Rapid technological change making skills obsolete; expectation to stay connected 24/7.

Individual Differences Affecting Stress

These differences determine whether stress is positive (motivating) or negative (harmful):

• Perception: How a person interprets a stressor; e.g., a layoff can be seen as a threat or an
opportunity.
 • Job Experience: Long-tenured employees tend to handle stress better.

• Social Support: Caring coworkers or friends reduce stress impact.

• Locus of Control: Internals (believe they control their fate) handle stress better than
externals.

• Self-Efficacy: Belief in one’s ability to complete tasks increases stress resilience.

• Hostility: Distrustful or hostile personalities are more prone to stress.

Manifestations of Stress

• Physiological: Fatigue, headaches, high blood pressure.

• Psychological: Anxiety, tension, boredom, job dissatisfaction.

• Behavioral: Absenteeism, turnover, reduced performance.

*****Impact of Stress on Organizations

1. Performance and Health Benefits

• Eustress (moderate stress) can improve alertness, focus, and motivation.

• Helps employees meet deadlines and handle challenging tasks efficiently.

• Can encourage innovation and problem-solving under pressure.

• Improves resilience, enabling employees to adapt to changes in the workplace.

• Peak performance: Provides temporary energy bursts for critical tasks or emergencies.

2. Individual Distress

Occurs in three main forms:

Physiological Symptoms

• Heart disease, strokes, high blood pressure, backaches, headaches, peptic ulcers.

• Fatigue and lowered immunity, making employees prone to illness.

• Stress can accelerate aging and reduce overall life expectancy.

Psychological Symptoms

• Anxiety, depression, burnout, loss of motivation, and dissatisfaction.

• Cognitive effects: poor concentration, indecision, memory lapses.

• Reduced creativity and problem-solving ability.

Behavioral Symptoms

• Increased absenteeism, turnover, and workplace conflicts.

• Substance abuse (alcohol, smoking, drugs).

• Risk-taking or careless behavior leading to accidents or mistakes.

 • Changes in eating habits, sleep patterns, and social withdrawal.

3. Organizational Distress

Stress impacts the organization in several ways:

Participation Problems

• Absenteeism, tardiness, strikes, work stoppages, and employee turnover.

• Reduced employee engagement and low morale.

Performance Decrements

• Lower productivity and quality of work.

• Increased errors, grievances, and unscheduled downtime.

• Decreased teamwork and collaboration due to stress-induced conflicts.

Financial Costs

• Compensation awards from workplace stress-related lawsuits.

• Increased healthcare costs and insurance claims.

Other Organizational Impacts

• Poor communication and breakdowns in interpersonal relationships.

• Negative workplace climate leading to reduced job satisfaction.

• Hindered decision-making and innovation due to stressed leadership.

Stress Management Techniques

1.Stress Diary – Finding Your Optimum Stress Levels

Purpose: Identify what causes stress, your preferred stress level, and effectiveness under pressure.

How to use tool-Track daily stress levels, feelings, and stressful events to identify causes and optimal
performance under pressure

i. At a regular interval, for example every hour, record routine stress.

Note:

➢ The time

➢ The amount of stress that you feel (perhaps on a scale of 1 to 10)

➢ How happy you feel

➢ How efficiently you are working

ii. When stressful events occur, write down-

➢ What the event was

➢ When and where did it occur?

 ➢ What important factors made the event stressful?

➢ How stressful was the event?

➢ How did you handle the event?

➢ Did you tackle the cause or the symptom?

➢ Did you deal with the stress correctly?

Analyzing the Diary

After a few weeks, review your diary to:

1. Identify the stress level where you perform best and feel comfortable.

2. Recognize the main sources of unpleasant stress and evaluate how effectively you handle
them.

3. Spot patterns in stressful situations to anticipate and manage future stress more effectively.

2. Psyching Up- Raising Stress Levels to Improve Performance:

How to Use Tool- Where you are not feeling motivated towards a task, either because you are bored
by it, or because you are tired, then you may need to ‘psych yourself up’. This will increase your
arousal so that you can perform effectively.

You can try the following:

➢ Focus on the importance or urgency of the task

➢ Set yourself a challenge, e.g., to do the job in a particular time or to do it to a particularly

high standard

➢ Break job down into small parts, do each part between more enjoyable work and take
satisfaction from the successful completion of each element.

➢ Use suggestion, e.g., ‘I can feel energy flowing into me’

➢ Get angry about something!

3. Anticipating Stress- Managing Stress by Preparing for it:

1. How to use tool- By anticipating stress you can prepare for it and work out how to control
it when it happens. You can do this in a number of ways:
i. Rehearsal:
By practicing for a stressful event such as an interview or a speech several times in advance you
can polish your performance and build confidence.
ii. Planning: Analyze likely stressors and plan responses or techniques in advance; formal
planning prevents unproductive worrying and ensures effective handling of stress.
iii. Avoidance: Skip situations that are unpleasant and unproductive, but be sure you’re not
avoiding necessary challenges.
iv. Reducing Importance of an Event: Put events in perspective; focus on task performance
rather than rewards, spectators, or high stakes to lower stress.
v. Reducing Uncertainty: Clarify expectations, future plans, career development, and
instructions to reduce stress caused by ambiguity or lack of information.

4. Get a Hobby, Relax and have Fun- Talk with Friends or Someone You Can Trust about Your
Worries/Problems:

i. Learn to use your time wisely-

➢ Evaluate how you are budgeting your time.

➢ Plan ahead and avoid procrastination.
➢ Make a weekly schedule and try to follow it.

ii. Set realistic goals and priorities

iii. Practice relaxation techniques. For example, whenever you feel tense, slowly breathe in and
out for several minutes.

5. Other Techniques:

i. Meditation can also be a good effort to bring down the stress levels.

ii. Taking exercise

iii. Effective time Management

iv. Good Food and nutrition.

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