The factors that are most important in the creation of an organizationa€™s culture include foundersa€™ values, preferences, and industry demands. A companya€™s culture, particularly during its early years, is inevitably tied to the personality, background, and values of its founder or founders, as well as their vision for the future of the organization.
Founder values become part of the corporate culture to the degree to which they help the company be successful. While founders undoubtedly exert a powerful influence over corporate cultures, the industry characteristics also play a role.
Organizational culture is maintained through a process known as attraction-selection-attrition (ASA). Of course, this process is imperfect, and value similarity is only one reason a candidate might be attracted to a company. Even after a company selects people for person-organization fit, there may be new employees who do not fit in. Because of the ASA process, the company attracts, selects, and retains people who share its core values, whereas those people who are different in core values will be excluded from the organization either during the hiring process or later on through naturally occurring turnover. Another way in which an organizationa€™s values, norms, and behavioral patterns are transmitted to employees is through onboardingonboardingThe process through which new employees learn the attitudes, knowledge, skills, and behaviors required to function effectively within an organization. New employees who are proactive, seek feedback, and build strong relationships tend to be more successful than those who do not.
Relationship building or networking (a facet of the organizing function) is another important behavior new employees may demonstrate. Many organizations, including Microsoft, Kellogg Company, and Bank of America take a more structured and systematic approach to new employee onboarding, while others follow a a€?sink or swima€? approach where new employees struggle to figure out what is expected of them and what the norms are. A formal orientation programformal orientation programA program used to indoctrinate new employees to the company culture, as well as introducing them to their new jobs and colleagues. One of the most important ways in which organizations can help new employees adjust to a company and a new job is through organizational insidersa€”namely, supervisors, coworkers, and mentors.
Research indicates that the existence of these programs does not guarantee their success, and there are certain program characteristics that may make these programs more effective. Finally, the company culture is shaped by the type of reward systems used in the organization and the kinds of behaviors and outcomes it chooses to reward and punish.
A mission statementmission statementA statement of purpose, describing who the company is and what it does. Some mission statements reflect who the company wants to be as opposed to who they actually are. A mission statement that is taken seriously and widely communicated may provide insights into the corporate culture. Another way in which an observer may find out about a companya€™s culture is to examine its rules and policies. A companya€™s building, layout of employee offices, and other workspaces communicate important messages about a companya€™s culture. Perhaps the most colorful and effective way in which organizations communicate their culture to new employees and organizational members is through the skillful use of stories. Organizational cultures are created by a variety of factors, including foundersa€™ values and preferences, industry demands, and early values, goals, and assumptions. Do you think it is a good idea for companies to emphasize person-organization fit when hiring new employees? In working with organizations over the years, we've observed a leadership pattern that sabotages change. In our book Leading At A Higher Level, coauthored by the founding associates and consulting partners of our company, we cite a U.S. Once information concerns are satisfied, people will want to know how the change will affect them personally. If leaders address the first two concerns effectively, people will be ready to hear information on the details involved in implementing the change. With some evidence that the change is moving the organization in the right direction, momentum starts to build. Once a change effort is well on its way toward complete adoption, leaders can expect to hear others begin asking about how the change can be refined.
Refinement questions are a good sign and show that the people in the organization are focused on continuous improvement. When entrepreneurs establish their own businesses, the way they want to do business determines the organizationa€™s rules, the structure set up in the company, and the people they hire to work with them.
For example, the social activism of Ben and Jerrya€™s was instilled in the company because the founders strongly believed in these issues. Some candidates may be skillful in impressing recruiters and signal high levels of culture fit even though they do not necessarily share the companya€™s values. Thus, organizational culture will act as a self-defending organism where intrusive elements are kept out.
Particularly when a company does not have a systematic approach to onboarding, it becomes more important for new employees to facilitate their own onboarding by actively building relationships.
Leaders have a key influence over onboarding and the information and support they provide determine how quickly employees learn about the company politics and culture, while coworker influence determines the degree to which employees adjust to their teams.
There is a direct correspondence between the leadera€™s style and an organizationa€™s culture. Many studies have suggested that leader behavior, the consistency between organizational policy and leader actions, and leader role modeling determine the degree to which the organizationa€™s culture emphasizes ethics.[380] The leadera€™s own behaviors will signal to individuals what is acceptable behavior and what is unacceptable. For example, do they praise a job well done or do they praise a favored employee regardless of what was accomplished? One relevant element of the reward system is whether the organization rewards behaviors or results.
We emphasized earlier that culture influences the way members of the organization think, behave, and interact with one another. If the mission statement does not affect employee behavior on a day-to-day basis, it has little usefulness as a tool for understanding the companya€™s culture. Companies create rules to determine acceptable and unacceptable behavior and, thus, the rules that exist in a company will signal the type of values it has. For example, visitors walking into the Nike campus in Beaverton, Oregon, can witness firsthand some of the distinguishing characteristics of the companya€™s culture. A company that has an open layout where high-level managers interact with employees may have a culture of team orientation and egalitarianism, whereas a company where most high-level managers have their own floor may indicate a higher level of hierarchy. A story can highlight a critical event an organization faced and the organizationa€™s response to it, or a heroic effort of a single employee illustrating the companya€™s values. Companies often have their own acronyms and buzzwords that are clear to them and help set apart organizational insiders from outsiders. Culture is maintained through attraction-selection-attrition, new employee onboarding, leadership, and organizational reward systems.
What advantages and disadvantages do you see when hiring people who fit with company values? It occurs when senior leaders, who have been thinking, exploring, and debating about a particular change for a while, finally announce plans for a new initiative. Department of Education project conducted by Gene Hall and his colleagues at the University of Texas that identifies six predictable and sequential concerns people have when they are asked to change. Often, leaders will want to explain why the organization is moving in a certain direction and why the change is a good idea.
The following questions, even though not always expressed openly, are common: What's in it for me to change? At this stage they will be interested to hear how the thinking behind the change has been tested. Leaders can look forward to questions and ideas focused on coordination and cooperation with others. This will allow people to refocus their energy on what needs to change and what they can do to help make the change successful.
An organizationa€™s culture is shaped as the organization faces external and internal challenges and learns how to deal with them.

For example, some of the existing corporate values of the ice cream company Ben & Jerrya€™s Homemade Holdings Inc. However, these values probably would not be surviving three decades later if they had not helped the company in its initial stages. At the same time, the industry characteristics and demands act as a force to create similarities among organizational cultures. It is possible to think of organizational culture as an organism that protects itself from external forces. Someone who has a competitive nature may feel comfortable in and may prefer to work in a company where interpersonal competition is the norm. At this point in the process, the second component of the ASA framework prevents them from getting in: selection.
In any event, the organization is eventually going to eliminate candidates eventually who do not fit in through attrition.
Onboarding refers to the process through which new employees learn the attitudes, knowledge, skills, and behaviors required to function effectively within an organization. Especially on a first job, a new employee can make mistakes or gaffes and may find it hard to understand and interpret the ambiguous reactions of coworkers. According to one estimate, 35% of managers who start a new job fail in the new job and either voluntarily leave or are fired within one and a half years.
An orientation program has a role in making new employees feel welcome in addition to imparting information that may help them be successful in their new jobs. MentorsmentorA trusted person who provides an employee with advice and support regarding career-related matters.
Moreover, when mentors receive training beforehand, the outcomes of the program tend to be more positive.[378] Because mentors may help new employees interpret and understand the companya€™s culture, organizations may benefit from selecting mentors who personify the companya€™s values.
For example, when leaders motivate employees through inspiration, corporate culture tends to be more supportive and people-oriented.
In an organization in which high-level managers make the effort to involve others in decision making and seek opinions of others, a team-oriented culture is more likely to evolve. Some companies have reward systems that emphasize intangible elements of performance as well as more easily observable metrics. Thus, one way of finding out about a companya€™s culture is by observing employees or interviewing them. It serves an important function for organizations as part of the first facet of the planning P-O-L-C function. Enron provided an often-cited example of a disconnect between a companya€™s mission statement and how the company actually operated. For example, no incentives are given to physicians based on the number of patients they see. Policies about issues such as decision making, human resources, and employee privacy reveal what the company values and emphasizes.
Then, think about the effect your choice would have on the companya€™s culture (your organizing function) as well as on your controlling function. The campus is set on 74 acres and boasts an artificial lake, walking trails, soccer fields, and cutting-edge fitness centers.
Microsoft employees tend to have offices with walls and a door because the culture emphasizes solitude, concentration, and privacy. The stories usually engage employee emotions and generate employee identification with the company or the heroes of the tale. Signs of a companya€™s culture include the organizationa€™s mission statement, stories, physical layout, rules and policies, and rituals.
In your past work experience, were there any moments when you felt that you did not fit in? Forgetting that others in the organization haven’t been a part of the discussions and are not as familiar with all of the reasons for the change, leaders are surprised by the amount of resistance the new change generates.
By taking the time to address these concerns, leaders can improve the odds of success for their next change initiative. It’s important to remember that as the organization changes people may think their existing personal and organizational commitments are being threatened. They will also want to know where to go for technical assistance and solutions to problems that might arise. The good news is that if leaders have done a good job up to this point, this is the stage where people will sell themselves on the benefits of the change based on the relative merits of the results to be achieved. A solid nucleus of people in the company will want to get everyone on board because they are convinced the change is making a difference.
Take advantage of new opportunities for organizational improvement that often come to the surface at this stage. But rush through the early stages and, like so many others, you might find yourself derailed as many of these concerns surface later in the project, killing momentum when it is needed most. When the organizationa€™s way of doing business provides a successful adaptation to environmental challenges and ensures success, those values are retained. In the case of Ben and Jerrya€™s, these values helped distinguish their brand from larger corporate brands and attracted a loyal customer base. For example, despite some differences, many companies in the insurance and banking industries are stable and rule-oriented, many companies in the high-tech industry have innovative cultures, and those in nonprofit industry may be people-oriented. Organizational culture determines what types of people are hired by an organization and what types of people are left out. Just as candidates are looking for places where they will fit in, companies are also looking for people who will fit into their current corporate culture. Attrition refers to the natural process where the candidates who do not fit in will leave the company. If an organization can successfully socialize new employees into becoming organizational insiders, new employees will feel accepted by their peers and confident regarding their ability to perform; they will also understand and share the assumptions, norms, and values that are part of the organizationa€™s culture.
By actively seeking feedback, new employees may find out sooner rather than later any behaviors that need to be changed and gain a better understanding of whether their behavior fits with the company culture and expectations. Many large organizations have formal orientation programs consisting of lectures, videotapes, and written material, while some may follow more informal approaches. Thus, organizations may need to design these programs carefully to increase their chance of success.
When leaders motivate by making rewards contingent on performance, the corporate culture tended to be more performance-oriented and competitive.[379] In these and many other ways, what leaders do directly influences the cultures of their organizations. By acting as role models, leaders send signals to the organization about the norms and values that are expected to guide the actions of its members.
In these companies, supervisors and peers may evaluate an employeea€™s performance by assessing the persona€™s behaviors as well as the results.
At the same time, culture manifests itself in some visible aspects of the organizationa€™s environment.
But, while many companies have mission statements, they do not always reflect the companya€™s values and its purpose.
Their missions and values statement started with a€?As a partner in the communities in which we operate, Enron believes it has a responsibility to conduct itself according to certain basic principles.a€? Their values statement included such ironic declarations as a€?We do not tolerate abusive or disrespectful treatment. They also serve to teach employees corporate values and create identification with the organization.
For example, a company that has a policy such as a€?all pricing decisions of merchandise will be made at corporate headquartersa€? is likely to have a centralized culture that is hierarchical, as opposed to decentralized and empowering.
The campus functions as a symbol of Nikea€™s values such as energy, physical fitness, an emphasis on quality, and a competitive orientation. In contrast, Intel is famous for its standard cubicles, which reflect its egalitarian culture.
A compelling story may be a key mechanism through which managers motivate employees by giving their behavior direction and by energizing them toward a certain goal.[391] Moreover, stories shared with new employees communicate the companya€™s history, its values and priorities, and create a bond between the new employee and the organization. It’s normal for people to focus on what they are going to lose before they consider what they might gain. In 1978, the two high school friends opened up their first ice-cream shop in a renovated gas station in Burlington, Vermont.

Thus, by providing a competitive advantage, these values were retained as part of the corporate culture and were taught to new members as the right way to do business.
If the industry is one with a large number of regulatory requirementsa€”for example, banking, health care, and high-reliability (such as nuclear power plant) industriesa€”then we might expect the presence of a large number of rules and regulations, a bureaucratic company structure, and a stable culture. Moreover, once new employees are hired, the company assimilates new employees and teaches them the way things are done in the organization. Research shows that employees with different personality traits find different cultures attractive. Many companies are hiring people for fit with their culture, as opposed to fit with a certain job. This understanding and confidence in turn translate into more effective new employees who perform better and have higher job satisfaction, stronger organizational commitment, and longer tenure within the company.[373] Organizations engage in different activities to facilitate onboarding, such as implementing orientation programs or matching new employees with mentors. According to one estimate, most orientations last anywhere from one to five days, and some companies are currently switching to a computer-based orientation. A mentor is a trusted person who provides an employee with advice and support regarding career-related matters. This is a key point for managers to consider as they carry out their leading P-O-L-C function. In such companies, we may expect a culture that is relatively people- or team-oriented, and employees act as part of a family.[381] However, in companies in which goal achievement is the sole criterion for reward, there is a focus on measuring only the results without much regard to the process.
In this section, we discuss five ways in which culture shows itself to observers and employees.
An effective mission statement is well known by employees, is transmitted to all employees starting from their first day at work, and influences employee behavior. For example, at the cosmetics firm Mary Kay Inc., employees attend ceremonies recognizing their top salespeople with an award of a new cara€”traditionally a pink Cadillac.
The presence or absence of policies on sensitive issues such as English-only rules, bullying and unfair treatment of others, workplace surveillance, open-door policies, sexual harassment, workplace romances, and corporate social responsibility all provide pieces of the puzzle that make up a companya€™s culture.
In addition, at fitness centers on the Nike headquarters, only those using Nike shoes and apparel are allowed in. The same value can also be observed in its avoidance of private and reserved parking spots.[389] The degree to which playfulness, humor, and fun are part of a companya€™s culture may be indicated in the office environment. For example, you may already be familiar with the story of how a scientist at 3M invented Post-it notes. Testing the combined effects of newcomer information seeking and manager behavior on socialization.
The effectiveness of an organizational level orientation training program in the socialization of new employees. Mentorship behaviors and mentorship quality associated with formal mentoring programs: Closing the gap between research and practice.
Their strong social convictions led them to buy only from the local farmers and devote a certain percentage of their profits to charities. The industry influence over culture is also important to know because this shows that it may not be possible to imitate the culture of a company in a different industry, even though it may seem admirable to outsiders. For example, Southwest Airlines prides itself for hiring employees based on personality and attitude rather than specific job-related skills, which they learn after they are hired. Ritz Carlton, the company ranked number 1 in Training magazinea€™s 2007 top 125 list, uses a very systematic approach to employee orientation and views orientation as the key to retention. Do they want to know what caused accidents so that they can be prevented, or do they seem more concerned about how much money was lost because of an accident?
These ceremonies are conducted in large auditoriums where participants wear elaborate evening gowns and sing company songs that create emotional excitement.
Arthur Fry, a 3M scientist, was using slips of paper to mark the pages of hymns in his church choir, but they kept falling off. Consequences of individualsa€™ fit at work: a meta-analysis of persona€“job, persona€“organization, persona€“group, and persona€“supervisor fit.
Embedding leader characteristics: An examination of homogeneity of personality and values in organizations. Newcomer adjustment during organizational socialization: A meta-analytic review of antecedents, outcomes, and methods.
In the absence of clear, factual communication, people tend to create their own information about the change, and rumors become facts. The core values they instilled in their business can still be observed in the current companya€™s devotion to social activism and sustainability, its continuous contributions to charities, use of environmentally friendly materials, and dedication to creating jobs in low-income areas. We will also examine the role of leaders and reward systems in shaping and maintaining an organizationa€™s culture. Companies use different techniques to weed out candidates who do not fit with corporate values. In the two-day classroom orientation, employees spend time with management, dine in the hotela€™s finest restaurant, and witness the attention to customer service detail firsthand. Mentoring can occur naturally between two interested individuals or organizations can facilitate this process by having formal mentoring programs. Do they seem outraged when an employee is disrespectful to a coworker, or does their reaction depend on whether they like the harasser?
Whether the organization rewards performance or seniority would also make a difference in culture. During this ritual, employees feel a connection to the company culture and its values such as self-determination, willpower, and enthusiasm.[386] Another example of rituals is the Saturday morning meetings of Wal-Mart. Through rules and policies, the controlling function affects the organizationa€™s culture, a facet of organizing. Their break room is equipped with a keg of beer, free snacks and sodas, an Xbox 360, and Nintendo Wii. He remembered a superweak adhesive that had been invented in 3Ma€™s labs, and he coated the markers with this adhesive.
During these two days, they are introduced to the companya€™s intensive service standards, team orientation, and its own language. When promotions are based on seniority, it would be difficult to establish a culture of outcome orientation.
This ritual was first created by the company founder Sam Walton, who used these meetings to discuss which products and practices were doing well and which required adjustment. By introducing the candidate to several future coworkers and learning what these coworkers think of the candidate, it becomes easier to assess the level of fit. Later, on their twenty-first day they are tested on the companya€™s service standards and are certified.[376] Research shows that formal orientation programs are helpful in teaching employees about the goals and history of the company, as well as communicating the power structure. He was able to use this information to make changes in Wal-Marta€™s stores before the start of the week, which gave him a competitive advantage over rival stores who would make their adjustments based on weekly sales figures during the middle of the following week.
However, marketing surveys for the interest in such a product were weak and the distributors were not convinced that it had a market.
Which behaviors are rewarded, which ones are punished, and which are ignored will determine how a companya€™s culture evolves. Today, hundreds of Wal-Mart associates attend the Saturday morning meetings in the Bentonville, Arkansas, headquarters.
Instead of giving up, Fry distributed samples of the small yellow sticky notes to secretaries throughout his company.
Unwrapping the organizational entry process: Disentangling multiple antecedents and their pathways to adjustment.
However, these benefits may not be realized to the same extent in computer-based orientations.
People and organizational culture: A profile comparison approach to assessing person-organization fit. Shaking hands with a computer: An examination of two methods of organizational newcomer orientation.

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