33331862 Project on Organizational Culture

8/7/2019 33331862 Project on Organizational Culture

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ORGANIZATIONAL CULTURE

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ORGANIZATIONAL CULTURETHE GLUING FACTOR

SUBMITTED TO:

Prof. Mousami Bhattacharya&Dr. Nilanjan Sengupta

SUBMITTED BY:

Group No. 6

Arun Aggarwal(6)

Krishna Kant(12)

Nithya Sridhar(18)

Preeti Jaiswal(24)

Sachin.V(30)

Shashank(36)

Sobhonson(42)

Swagatika(48)

V.Deepika(54)

Yatindra(60)


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ACKNOWLEDGEMENT

We wish to convey our heartiest thanks to Prof.Mousumi Bhattacharya & Dr. Nilanjan sengupta who has given us all an opportunity to work on this project. Weare grateful to them for their constant guidance throughout the project. It was afight in the beginning to gather all the information from various organizations

about their cultures; however, through the constant efforts of our team members,we made this project a success. Working on this project has given us an insightabout how the various organizations formulate their cultural values. We have beenable to connect our theoretical knowledge with the practical working conditions of various organizations. It has been a boon working on the following project and weonce again wish to thank our faculty members and the team, without whom this

project would not have been a success.


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ORGANIZATIONAL CULTURE:

Organizational culture is defined as a pattern of basic assumptions invented, discovered or developed by a given group, as it learns to cope with the problems of external adaption andinternal investigation that has worked well enough to be considered valid and therefore is to betaught to the new members as the correct way to perceive, think, and feel in relation to those

problems. Organizational culture is a set of shared understandings, norms, values, attitudes and beliefs of an organization which can foster or impede change.

When people join an organization, they bring with them the values and beliefs that they have been taught. Quite often, however these values and beliefs are insufficient for helping the

individual succeed in the organization. The person needs to learn how the particular enterprisedoes things.

A common misconception is that an organization has a uniform culture. However, at least asanthropology uses the concept; it is probably more accurate to treat organizations as if theyhad a uniform culture. All organizations have culture, in the sense that they are embedded inspecific societal cultures and are part of them. According to this view, organization culture is acommon perception held by the organizations members. Everyone in the organization wouldhave to share this perception. However, all may not do so to the same degree. As a result, therecan be a dominant culture as well as subcultures throughout a typical organization.

A dominant culture is a set of core values shared by a majority of the organizations members.The values that create dominant cultures in organizations help guide the day-to-day behavior of the employees. Important, but often overlooked, are the subcultures in an organization. Asubculture is a set of values shared by a minority, usually a small minority of the organizationsmembers. Subcultures typically are a result of problems or experiences that are shared bymembers of a department or unit. Subcultures can weaken and undermine an organization if theyare in conflict with the dominant culture and overall objectives. Successful firms, however findthat this is not the case always. Most subcultures are formed to help the members of a particular group deal with the specific day-to-day problems with which they are confronted. The members

may also support many, if not all, of the core values of the dominant culture.

A NEW CONCEPT: WHISTLE BLOWING

Whistle blowing is commonly defined as "the disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to


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persons or organizations that may be able to effect action". While whistleblowing includesdisclosures both internal and external to the organization, organizations benefit when employeeschoose to report internally. Internal reporting facilitates early detection of misconduct and

creates opportunity for timely investigation and corrective action. Internal reporting also positions organizations to proactively manage, or even avoid public embarrassment, governmentscrutiny, costly fines, and litigation.

To encourage internal reporting organizational ethics and compliance programs often include theavailability of an anonymous or confidential reporting channel that enables employees theopportunity to report, without fear of retaliation, their concerns regarding organizational conductranging from slight indiscretions and unprofessional behaviors to criminal acts warranting felonyconvictions. Employee utilization of these reporting channels, however, is limited, and it has

been found that the majorities of employees who become aware of individual or corporate

wrongdoing never report or disclose their observations to anyone.

Numerous variables have been studied in the literature for their relationship to whistleblowing.An employee's decision to report individual or organizational misconduct is a complex

phenomenon that is based upon organizational, situational, and personal factors.

A FEW DIMENSIONS OF ORGANIZATIONAL CULTURE

VIGILANCE

Prior to pondering whether or not to communicate an ethical, compliance, or legal concern, anemployee must first be in a position to detect violations. "What are the standards in thisorganization?" "What is my role in upholding these standards?" Accordingly, the first step insupporting employee communication and reporting behaviors is to influence a culture that

promotes not only awareness of an organization's commitment to integrity, but a sharedunderstanding of organizational standards. A look out for threats to organizational integrity alsomust be cultivated among organization members.

Thoughtful attention to training employees on the values and standards outlined in theorganization's code of conduct will facilitate awareness building. However, the mostfundamental and powerful values of an organization are not written down and exist only in theshared norms, beliefs, and assumptions reflected in the organization's culture. These norms,

beliefs, and assumptions guide how organization members think and act. The organizationalculture informs members how to relate to each other and to outsiders, how to analyze problems,and how to respond to situations encountered in the organization. To promote a sharedunderstanding of which "code" to follow, the formal code of conduct or the unwritten code of


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culture, the dynamics of organizational culture on an employee's ability to accurately interpretthe ethical standards of the organization must be addressed.

To support a culture of vigilance, employees also must be educated on the relationship betweenorganizational integrity and the organization's strategic positioning. Employees who observewrongdoing may not report it because they cannot fully estimate the resulting damage.Therefore, the organization should ensure employees are in a position to identify the potentialconsequences of ethical, compliance, and legal breaches, including opportunity costs and harm tothe organization, its reputation, and stakeholders.

ENGAGEMENT

The cultural dimension of engagement is multifaceted and complex. Engagement is concerned

with organizational and individual factors that contribute to a personal state of authenticinvolvement in the organization. Organizational processes used to recruit, orient, socialize, andmanage employees influence engagement. Employees sense making, psychological contracts,and perceptions of fairness in organizational dealings influence the degree of authenticinvolvement by them. Managing these organizational processes and individual perceptions tofacilitate high degrees of organizational commitment and identification encourages a culture of engagement that supports internal whistle blowing.

If an organization member is not committed to high ethical standards there may be a tendency torationalize questionable behavior as a common or even necessary practice in performing job

duties. On the other hand, if an employee has high ethical standards that are not supported by theorganization, there is a tendency for the employee to experience internal conflict. Such conflictwill arise when organizational demands on employees are inconsistent with personal or

professional values. The result is decreased commitment and an unwillingness to exert effort on behalf of the organization.

Once employees enter the organization, socialization methods, including training on ethicalstandards can be used to deepen employee commitment to organizational values and norms.

CREDIBILITY

A culture of engagement that supports organizational commitment and identification, however,may not be sufficient for prompting employee disclosures. An employee will also seek to "test"the organization's commitment to integrity. Leadership behavior is a key determinant of employee perceptions and beliefs.


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The most powerful strategy that can be relied upon to facilitate credibility is employee belief inespoused ethics and values including organizational expectations for employee disclosure,attending to and monitoring congruence in the organizational culture. The role of leadership is

central to this strategy.

Aligning leadership behaviors with formal policies and consistent modeling of espoused valuesare important practices for fostering credibility. Demonstrating personal commitment toorganizational values builds trust and creates a safe environment for employees to come forwardand report concerns.

ACCOUNTABILITY

Accountability for communicating knowledge of wrongdoing will be carefully judged byemployees. "Is it my job to report?" "Isn't this someone else's responsibility?" "Why should I getinvolved? After all, I am not the only one aware of what is going on here." Again, values, beliefs,and norms embedded in the organizational culture and picked up by employees will influenceemployee reflections.

HOW DID ORGANIZATIONAL CULTURE START

While organizational cultures developed in different ways, the process usually involves someversion of the following steps:

A single person (founder) has an idea for a new enterpriseThe founder brings in one or more other key people and creates a core group that shares acommon vision with the founder The founding core group begins to act in concert to create an organization by raisingfunds, obtaining patents, incorporating, locating space, building and so onAt this point, others are brought into the organization and a common history begins to be

builtMost of todays successful corporate giants in all industries basically followed these steps. Threewell-known representative examples are Motorola, McDonalds and Wal-Mart.

McDonalds: Ray Kroc worked for many years as a salesperson for a food supplier. He learnedhow retail food operations were conducted. He also had an entrepreneurial streak and began asideline business with a partner. They sold multimixers, machines that were capable of mixingup to six frozen shakes at a time. One day Kroc received a large order for multimixers from theMcDonald brothers. The order intrigued Kroc and he decided to look in on the operation the next


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time he was in their area. When he did, Kroc became convinced that the McDonalds fast foodconcept would sweep the nation. He bought the rights to franchise McDonalds units andeventually bought out the brothers. At the same time, he built the franchisee on four basic

concepts: quality, cleanliness, service and price. In order to ensure that each unit offers thecustomer the best product at the best price franchisees are required to attend McDonaldUniversity, where they are taught how to manage their business. Here they learn the McDonaldcultural values and the proper way to run the franchisee. This training ensures that thefranchisees all over the world are operating their units in the same way. Kroc died several yearsago, but the culture he left behind is still very much alive in McDonalds franchisees across theglobe. In fact, new employees receive videotaped messages from the late Mr. Kroc.

Wal-Mart: Sam Walton, founder of Wal-Mart Stores, Inc., opened his first Wal-Mart store in1962. Focusing on the sale of discounted name brand merchandise in small town markets, he

began to set up more and more stores in the Sun Belt. At the same time, he began developingeffective inventory control systems and marketing techniques. Today, Wal-Mart has not only

become the largest retailer but also one of the biggest firms in the country. Although Sam died afew years ago, his legacy and cultural values continue. To ensure that these values get out to allthe associates, the company has a communication network worthy of the Pentagon. It includeseverything from a six-channel satellite system to a private air force of numerous planes.Everyone is taught this culture and is expected to operate according to the core cultural values of hard work, efficiency and customer service.

LEVELS OF CULTURE: ARTIFACTSVALUESBASIC ASSUMPTIONS

ARTIFACTS:

Artifacts are the most visible and accessible level of culture. It is symbol of culture in the physical and social work environment of the organization.

Artifacts of culture are:

PERSONAL ENACTMENTRITES AND CEREMONIES

STORIES AND LEGENDS


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RITUALSSYMBOLS

PERSONAL ENACTMENT:

Personal enactment is a behavior that reflects the value of organization, through the examinationof the behavior of organization members.

CEREMONIES AND RITES:

Set of activities that are enacted time and again on important occasion.It provides the opportunityto reward and recognize the employees whose behaviors are according to the values of theorganization.

Rites to the employees can be awarded as

Rites of passagerites of renewalRites of integrationRites of conflict reductionRites of degradations

RITES OF PASSES:

Rites of passes show the changed status of individuals in the respected organization.

Retirement dinner

RITES OF RENEWAL:

Rites of renewal show the holistic changing in organization by enhancing the dedication towardslearning and growth .

RITES OF INTEGRATION:


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It emphasize on the commitment of the employees by uniting diverse group within theorganization.Company function, annual picnic, cultural fest are the rites of integration in theorganization .

RITES OF COFLICT REDUCTION:

Its primal objective is to dwindle the disagreements and keep up with the positive environmentinside the organization by satisfying the tangible and intangible needs of the employee.

Grievance hearing, negotiation of union contracts isrite of conflict reduction .

RITES OF DEGRADATION:

It is basically punishment oriented and organization people may be punished visibly if they dontfollow the organizational norms.

Ribbon of shame, demotion in the organizational post, reduction in salary can be under the ritesof degradation .

STORIES AND LEGENDS:

Stories are the most effective way to reinforce the organizational values. it give meaning andidentity to the organizations and very helpful in orienting new employees.

Stories can be delivered in different ways

Stories about the bossStories about getting firedStories about company detailsStories about employeesStories about rules

RITUALS:

Rituals are unwritten and shows the way the employee follow the things to be done in theorganization. These are the everyday organizational practices repeated over and over .

SYMBOLS:

Symbols are again one important artifact of the organization which communicates about theorganizational culture by unspoken messages.


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VALUES:

Values reflect a persons underling believes in the organization, it is often consciously articulated

both in conversation and the companys mission statement or annual report. a firms values andhow it promotes and publicizes them can also affect workers feeling about their job andthemselves .

ASSUMPTIONS:

Assumptions are deeply held believes that guide behavior and awakens the members of theorganization how to perceive and go about the things.

FUNCTIONS OF ORGANIZATIONAL CULTURE:

These are the functions being served by the organization

Sense of identitySense making deviceReinforcing the values in organizationControl mechanism for shaping behavior

SENE OF IDENTITY:

Culture provides a sense of identity to the members and enhances their commitment towards theorganization .

SENSE MAKING DEVICE:

Culture in the organization provides the employees to interpret the meaning of the organizationalevents .

VALUE REINFORCEMENT:

Values in the organization can be reinforced by the cultural activities.

CONTROL MECHANISM:

In shaping the behavior of members in the organization culture plays the big role.

CULTURAL PERPECTIVES:


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THE STRONG PERSPECTIVETHE FIT PERSPECTIVETHE ADAPTATION PERSPECTIVE

THE STRONG PERSPECTIVE:

The strong culture facilitates performance with the intensity visible to the outsiders.It states thatorganization with strong culture performs better than other organizations.

THE FIT PERSPECTIVE:

Fit perspective argues that the culture of the organization is valid, if it fits the industry or firmsstrategies. It is useful in explaining short term performances .

THE ADAPTATION PERSPECTIVE:

The cultures that help organizations adapt to environmental change are deeply associated withexcellent performance. It encourages confidence and risk taking capacity among the employees.

LEADERS ROLE IN SHAPING CULTURE:

WHAT LEADERS PAY ATTENTION TOHOW LEADERS REACT TO THE CRISESHOW LEARERS BEHAVEHOW LEADERS ALLOCATE REWARDSHOW LEADERS HIRE AND FIRE PEOPLE

ORGANIZATIONAL SOCIALIZATION:

Another process that perpetuates culture is the way it is handed down from generation of employees. Newcomers learn the culture through organizational socialization The process bywhich newcomers are transformed from outsiders to participating, effective members of theorganizations. The process is also a vehicle for bringing newcomers into the organizationalculture .

STAGES OF THE SOCIALIZATION PROCESS

The organizational socialization process is generally described as having three stages:


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Anticipatory Socialization.Encounter.Change and Acquisition.

ANTICIPATORY SOCIALIZATION

The first stage encompasses all of the learning that takes place prior to the newcomers first dayon the job. It includes the newcomers expectations. The two concerns at this stage are:

Realism.Congruence.

Realism is the degree to which a newcomer holds realistic expectations about the job and aboutthe organization. One thing newcomers should receive information about during entry into theorganization is the culture. Information about values at this stage can help newcomers begin toconstruct a scheme for interpreting their organizational experiences.

There are two types of Congruence between an individual and an organization:Congruence between the individuals abilities and the demand of the job, and the fit between theorganizations values and the individuals values. Value Congruence is particularly important for organizational culture. It is also important in terms of newcomer adjustment.

ENCOUNTER

The second stage of socialization, encounter, is when newcomers learn the tasks associated withthe job, clarify their roles, and establish new relationships at work. This stage commences on thefirst day at work and is thought to encompass the first six to nine months on the new job.

TASK DEMAND

Task demand involves the actual work performed. Learning to perform tasks is related to theorganizations culture. In some organizations, newcomers are given considerable latitude toexperiment with new ways to do the job, and creativity is valued.

ROLE DEMANDRole demand involves the expectations placed on newcomers. Newcomers may not know exactlywhat is expected of them or may receive conflicting expectations from other individuals. Theway newcomers approach these demand depends in part on the culture of the organization .


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INTERPERSONAL DEMAND

Interpersonal demand arises from relationships at work. Politics, Leadership style, and group

pressure are interpersonal demand. All of them reflect the values and assumptions that operatewithin the organization .

CHANGE AND ACQUISITION

In the third and final stage of socialization, change and acquisition, newcomers begin to master the demands of the job. They become proficient at managing their tasks, clarifying andnegotiating their roles, and engaging in relationship at work. The end of the process is signaled

by newcomers being considered by themselves and others as organizational insiders.

OUTCOMES OF SOCIALIZATION Newcomers who are successful socialized exhibit good performance, high job satisfaction, andthe intention to stay with the organization. In addition, they should exhibit low levels of distresssymptoms. High levels of organizational commitment are also marks of successful socialization.Successful Socialization is also signaled by mutual influences.

When socialization is effective, newcomers understand and adopt theorganizations values and norms. This provides employees a context for interpreting andresponding to things that happen at work.

Newcomers adopt the companys norms and values more quickly when theyreceive positive support from organizational insiders.

SOCIALIZATION AS CULTURAL COMMUNICATION

Socialization is a powerful cultural communication tool. While the transmission of informationabout cultural artifacts is relatively easy, the transmission of value is more difficult. Thecommunication of organizational assumption is almost impossible.

The primary purpose of socialization is the transmission of core values to neworganization members. Newcomers are exposed to these values through the role models theyinteract with, the training they receive, and the behavior they observe being rewarded and

punished.


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ACCESSING ORGANIZATIONAL CULTURE

Although some organizational scientists argue for assessing organizational culture with

quantitative methods, others say qualitative methods yield better results. Quantitative methodssuch as questionnaires are valuable because of their precision, comparability and objectivity .

ORGANIZATIONAL CULTURE INVENTORY

The OCI focuses on behaviors that help employees fit into the organization and meet theexpectations of coworkers. Using Maslows motivational need hierarchy as its basis, it measurestwelve cultural styles. The two underlying dimensions of the OCI are task/people andsecurity/satisfaction. There are four satisfaction cultural styles and eight securities cultural styles.

KILMANN-SAXTON CUKTURE-GAP SURVEYThe kilmann- saxton culture-gap survey focuses on what actually happens and on theexpectations of others in the organization. Its two underlying dimensions are technical/humanand time. With these two dimensions, the actual operating norms and the ideal norms in four areas are assessed. The areas are task support task innovation social relationships and personalfreedom.

TRIANGULATION

A study of a rehabilitation centre in a 400-bed hospital incorporated triangulation to improveinclusiveness and accuracy in measuring the organizational culture. Triangulation has been used by anthropologists, sociologists and other behavioral scientists to study organizational culture. Itsname comes from the navigational technique of using multiple reference points to locate anobject .

CHANGING ORGANIZATIONAL CULTURE

Changing situation may require changes in the existing culture of an organization. With rapidenvironmental changes such as globalization, workforce diversity and technological innovation,the fundamental assumptions and basic values that drive the organization may need to be altered.One particular situation that may require cultural change is a merger or acquisition .


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EMPOWERMENT OF EMPLOYEE TO EXCEL IN PRODUCT AND

SERVICE QUALITYEmpowerment unleashes employees creativityEmpowerment requires eliminating traditional hierarchical notions of power

y Involve employees in decision making

y Remove obstacles to their performance

y Communicate the value of product and service quality


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CISCO CULTURE CASE STUDY

ABSTRACT:

The case focuses on Cisco's organization culture, which many feel, was responsible for Cisco bouncing back to profit after recording losses during the tech meltdown of 2001. The case looksat Cisco's growth through the years, the drivers of Cisco culture, and the characteristics of work culture at Cisco. Incorporated in 1984, Cisco had a culture based on the principles of customer focus, transparent communication, employee empowerment, integrity, and frugality. The work culture, which epitomized fun and fostered a spirit of employee involvement, ensured thatemployee turnover was way below industry norms. Continuous Learning, an element of theCisco culture, was taken care of even through acquisition and partnerships. The case also looks

into the role played by the company's CEO, John Chambers, in the evolution of the Ciscoculture.

CASE:

Cisco Systems Inc. (Cisco), the leader in Internet Protocol (IP)-based networking technologiesand networking gear, recorded $2.2 billion in revenues and a market capitalization of $9 billionin 1995. By March 2000, market capitalization went up to $ 531 billion while revenues in 2000were $19 billion. In 1995, Cisco accounted for 15% of the networking industry's profit and thisfigure went up to 50% in 2000. But with the tech meltdown of 2000-01, telecom companies andInternet service providers stopped purchasing telecom equipments from Cisco. Cisco was thus ona free fall, a situation the top management did not expect. "If somebody would've told me thenthat we'd go from 70% growth to minus 30% growth in 45 days, I'd have said it wasmathematically impossible," said John T. Chambers (Chambers), President and CEO, CiscoSystems Inc. 5

Though the company recorded losses in 2001, it bounced back with net profits the next year.Cisco's net sales for fiscal 2004 were $22.0 billion, an increase of 16.8 percent from the $18.9

billion for fiscal 2003, while net income for fiscal 2004 was $4.4 billion or $0.62 per share,compared with $3.6 billion or $0.50 per share for fiscal 2003 (Refer Exhibit I for stock marketmovement of Cisco between 1990 and 2005). Industry observers were quick to point out that it

was the organization culture of Cisco that helped it survive the tough periods of meltdown. Ciscowas founded on a culture based on the principles of customer focus, open communication,empowerment, trust, integrity, and giving back to the community.

This culture ensured that Cisco was on the list of the Fortune magazine's '100 best places towork' for eight consecutive years, starting 1998.


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BACKGROUND NOTE

Headquartered at San Jose, California, US, Cisco was incorporated on December 10, 1984. Thecompany was founded by a group of computer scientists, who designed software named IOS(Internet Operating System), which could send streams of data from one computer toanother. This was loaded into a box containing microprocessors specially designed for routing.In 1985, the company started a customer support site from where customers could downloadsoftware over FTP 6 and also upgrade the downloaded software. Cisco, on its site, also provided adatabase that contained information about potential software problems to help customers anddevelopers.

By 1991, Cisco's support centre was receiving around 3,000 calls a month, which increased to12,000 by 1992. To deal with the large volume of transactions, it built an online customer support system on its site.

In 1993, Cisco installed an Internet-based system for large multinational corporate customers.The system allowed customers to post queries related to their problems. Cisco also installed atrigger function called the 'Bug Alert' on its website. The 'Bug Alert' sent e-mails on software

problems within 24 hours of their discovery.

Encouraged by the success of its customer support site, in 1994, Cisco launched CiscoInformation Online, a public website that offered not only company and product information butalso technical and customer support to customers.

In 1995, it introduced applications for selling products or services on its website. This was donemainly to transfer paper, fax, and e-mails to the web to save time for employees, customers, andtrading partners, besides broadening Cisco's market reach. In 1996, the company introduced anew Internet initiative, 'Networked Strategy' to leverage on its enterprise network to foster interactive relationships with prospective customers, partners, suppliers, and employees.

In August 1996, Cisco launched transactional facilities including product configuration andonline order placement connected to Cisco's ERP systems.In 1997, it introduced the dial-in access from desktop computers that enabled customers to placeorders without accessing the Internet. In the same year, it also introduced customized businessapplications for its customers' corporate Intranets and automated the ordering process by linkingdirectly to Cisco's internal systems. Commenting on the growth of Cisco in the late 1990s,Jeremy Duke, analyst at market research firm In-Stat 7 said, "They are entering into the zone of the great phone companies, as moneymakers and as builders of infrastructure. There's nobodylike them.


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WHAT DRIVES CISCO'S CULTURE?

CUSTOMERS FIRST

Cisco's success has been attributed to its relationship with its customers. Cisco professed a 'worship of customers', which was a part of the company's culture right from its inception. "This is a culture where thecustomer comes first. If the customer has a problem, we drop everything," said Pete Solvik (Solvik),Senior Vice President and Chief Information Officer (CIO), Cisco. Cisco viewed the assessment of customer satisfaction as a continuous process. One of the elements of this assessment was getting regular customer feedback, which helped Cisco employees to be proactive in identifying problem areas, rather than waiting for an annual customer satisfaction survey. Cisco's field teams designed the questionnairesthat were used to assess customer satisfaction.

THE WORK CULTUREThe organizational structure of Cisco fostered a spirit of employee involvement. "Very often it'smost efficient to just work with the person involved, without the formality of passing throughevery layer of management. But that requires a level of trust that not all organizations have,"mentioned Solvik. If a Cisco employee wanted the top management support for an innovativeidea, he had to discuss the idea with an employee decision-making team and get its assent. If thedecision-making team accepted the idea, the top management gave the green signal. "They (thedecision-making teams) are empowered to make that decision because we put the authority, theresponsibility, and the accountability at the same layer.

RECRUITMENT AT CISCO

Cisco's recruitment practices reflected the company culture. Cisco's recruiting teamidentified candidates whom they felt the company 'should hire' and then designed its hiring

processes to attract them to the company. In the late 1990s, the company was hiring at a ratewhich averaged 1000 new employees every month. For recruiting candidates who fit into theculture of Cisco, a selection criterion was developed which targeted candidates who werefrugal, enthusiastic about the future of the Internet, and were not obsessed with status - allhallmarks of the Cisco culture.

'BUILT TO LAST'According to some analysts, Cisco faced the risk of diluting its culture due to the influences of new recruits who brought in behaviors from past job experiences. "We're focusing on what it willtake to communicate the culture and preserve it. That's another learning experience: Culture isnot automatic.


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That it follows a principle of customer focus, transparent communication, employeeempowerment, integrity and fragility.

It is the culture where customer comes first but in CISCO its also the product that works andmatters. Here engineer counts as much as culture. So CISCOs betting big on collaboration thatdraws manager input from all levels as the main drivers for its strategy to grab new market. Itstaking a decentralized form, rather than working on a single leader decision making.

In conclusion, Cisco Systems appeals to businesses and employees in similar ways by offering astandard to be the best provider and staying ahead of the competition. Their cultural presence isfelt by worldwide leadership in technology by bringing jobs, as well as, communications tocountries and government structures. Cisco offers a strong customer-responsive organization that

blends with cultural needs and service to its employees.

Thus it has a fit culture perspective where customer and competitors comes first .

Although customer is the top priority in CISCOs culture but it gives equal importance to itsemployees. Its decentralized system of decision making & futuristic approach are the major gluing factor in retaining employees.


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3M CASE STUDY

ABSTRACT:

The case examines the organizational culture at 3M and the way in which it facilitated innovationat 3M. The policies and mechanisms adopted by 3M's management to encourage the spirit of innovation in its employees are also discussed.

The case takes a close look at 3M's environment of innovation; the culture of knowledge sharing;and the reward system. It also discusses the steps implemented by the new CEO, James McNerney,to accelerate growth at 3M. The impact of cultural change at 3M on the spirit of innovation is alsodiscussed .

ONE HUNDRED YEARS OF SUCCESSFUL INNOVATIONIt was celebration time at 3M! The company completed 100 years in business in 2002. For many,3M represented the house of innovation. For 100 years, 3M formula for growth - recruit the right

people, provide them with the right environment to work and let them do their things - resulted inaround 55,000 products and over thousands of patents for the company. Analysts attributed 3M'ssuccess to its commitment to innovation. They pointed out that 3M gave its employees the freedomto conduct research in areas of their choice even if that research was not related to their official

projects.

By thus nurturing the talents of its employees and fostering a climate of innovation, 3M became

one of the most innovative companies in the world.

In 2001, James McNerney Jr. (McNerney) took over as Chairman and CEO of 3M andannounced several initiatives to revive the stagnating growth rate of the company. He initiatedcost cutting measures, rationalized purchases, and implemented process improvement programsin the company. He gave a centralized direction to the company from its earlier laissez-faireworking style. Analysts cautioned that the changes brought about by McNerney might harm the100-year old culture at 3M that fostered innovation and sustained its growth over the years.However, McNerney pointed out that the changes brought about in 3M would provide thecompany a strategic direction in a volatile business environment without harming itsorganizational culture.

INVENTING 3M

In 1902, five businessmen founded Minnesota Mining and Manufacturing (popularly referred toas 3M) in Two Harbors, US. The new company was in the business of mining corundum, amineral best suited for making sandpaper and grinding wheels. In 1904, when an artificial


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abrasive replaced corundum, 3M decided to manufacture sandpaper. Edgar Ober (Ober), one of the founding members of 3M, approached his friend Lucius Ordway (Ordway), a successful

businessman for funds for the new venture. Ordway agreed to invest $25,000 in the company,

on condition that he won't be involved in the day-to-day affairs of the company.However, by 1906, Ordway had invested around $200,000 in 3M and had become involved inthe day-to-day affairs of the company. In the same year he became the President of the company.

When 3M realized that the corundum owned by it was a low-grade anorthosite, it decided to shutdown the mine and shift to Duluth in 1905. In the same year, 3M decided to import garnet 5fromSpain. 3M received its first shipment of garnet in 1907 and started producing sandpaper. By1911, 3M reported sales of $212, 898 and in the same year Ober appointed William L. McKnight(McKnight), who joined the company in 1907 as assistant bookkeeper as sales manager. In 1911,3M brought out its first breakthrough product, Three-M-ite cloth. Three-M-ite became thecompany's first profitable product. The Carborundum Company, which had developed artificialabrasive coated emery cloth before 3M, filed a patent infringement suit against the company.

3M hired Paul Carpenter; a Chicago based lawyer and expert in patent law, and won the caseagainst Carborundum. Due to Three-M-ite's success, 3M became debt free and announced itsfirst dividend of 6 cents per share in 1916. In the same year, McKnight became vice-president. Inthe 1920s, 3M recruited people with diverse backgrounds and expanded its product portfolio. Italso introduced two breakthrough products, waterproof sandpaper and Scotch masking tape,invented by Francis Okie (Okie) and Dick Drew (Drew) respectively. In 1922, 3M entered theEnglish market and reported sales of $68,000 in the first year of its operations. In order toconsolidate its presence in global markets, 3M established research laboratories, and a sales andmarketing network across Europe.

EXPERTS

FOSTERING INNOVATION

From its early days, 3M fostered a culture of innovation in its organization. McKnight tried tocreate an organization that would encourage its employees to take the initiative and come upwith new ideas.

RECRUITING AND RETAINING TALENT3M recruited people who were creative and had a broad range of interests. According tocompany sources people who had a broad range of interests were willing to learn and explorenew ideas. In addition, they brought a multi-disciplinary approach to their work. To make it easyfor recruiters, 3M codified the six traits of innovative people in its recruiting brochure:


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CreativityBroad interestsSelf motivated

ResourcefulHard workingProblem solvers

CREATING A CHALLENGING ENVIRONMENT

Initially 3M was organized into various product divisions. As these divisions increased in size,McKnight noticed that there was a slowdown in innovation; not much time was devoted to new

product development.

To increase the pace of new product launches, McKnight introduced the philosophy of divide and

grow. In line with this philosophy, new businesses were spun off and new management teams weredevoted to the spun off units. As a result, these new units were able to grow quickly. When these new

businesses were spun off, the established divisions had to develop new products and find new marketsto achieve their growth objectives to make up for contributions from the businesses that had becomeindependent. This mechanism, which analysts called 'Renewal,' resulted in increased diversification at3M.

KNOWLEDGE SHARING

In addition to providing an environment that stimulated innovation, 3M also took steps toencourage knowledge sharing among its employees. According to analysts, innovation couldflourish in 3M because the management encouraged its employees to talk. 3M employees never experienced any communication barriers.

REWARDING INNOVATION

In addition to recruiting innovative people, creating a challenging environment for employees, andencouraging a culture of knowledge sharing, 3M also focused on rewarding employees. To encouragethe spirit of innovation among employees 3M realized it was necessary to reward them appropriately.

The dual ladder career path adopted by 3M, created two career ladders - technical andmanagement. This approach allowed even a technical person to get promoted to the vice-presidentlevel without taking on managerial and administrative responsibilities .From the 3M case we r each at the c on clusi on that though McNerney wanted to make thedecision system a bit centralized but he preferred employees taking initiatives. Creativity, hardwork & problem solving attitude are given importance at 3M. It focused on rewarding


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employees and there was not any communication barrier which encouraged the process of knowledge sharing. It basically followed an adaptive culture where employees were the main

priority.

3M recognized that a strategic commitment to innovative products would pay off if it were tiedto creating a culture that allowed its employees to be innovative and creative. When an employeeat 3M made a mistake or had an idea that didn't work, he or she discussed it at a team meetingand the entire team celebrated the learning experience. Over time, a culture evolved where risk and innovation were viewed as necessary and complementary. 3M managed to link strategies tomanagement and employee actions. It successfully linked corporate success to the developmentof new products and a lesser dependence on mature products. It linked its HR systems to itsstrategic framework by creating a set of HR strategies that provided; innovative compensationand reward systems, creative organizational structures, training and development plans tied to

strategic outcomes, and targeted employee skills. Through over 90 years of trial and error, 3Mhas developed a culture that effectively supports both quality and innovation.

So there was a cultural overhaul in the 3M system with the entry of McNerney which resulted in:

CULTURE OVERHAUL

By the late 1990s, 3M's growth rate started slowing down. According to reports, the stock priceof 3M dropped from $83.00 in 1996 to $71.13 in 1998 and the price-earning ratio (P/E ratio) of the company also declined considerably.

It was reported that during 1995-2000, earnings per share grew at an average of only 8.8% andshareholder returns fell far behind Dow and the S&P 500. Analysts felt that 3M was unable torespond to market conditions. Commenting on 3M's performance during the decade, BobBurgstahler (Burgstahler), chief of Business development, said, "We have not produced eliteresults that correspond to the view that this is an elite organization." In December 2000, 3Mannounced the appointment of James McNerney Jr. (McNerney) of General Electric as its CEO.For the first time, an outsider was appointed as CEO of 3M. The stock markets responded

ositively to the appointment of McNerney and 3M's stock price closed at $120.50, the highest inthe decade.

3M has been encouraging a culture of innovation from the very beginning where employees aregiven freedom to work without any pressure. They are given full freedom to implement new ideasith no or very less questioning. There is no communication barrier in the organization. These are

the major gluing factor in 3M which has retained its employees since so long.


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SOUTHWEST AIRLINES

Southwest Airlines was incorporated in Texas and commenced Customer Service on June 18,

1971, with three Boeing 737 aircraft serving three Texas cities - Houston, Dallas, and SanAntonio. Today, Southwest operates more than 500 Boeing 737 aircraft between 67 cities.Southwest topped the monthly domestic originating passenger rankings for the first time in May2003. Yearend results for 2008 marked Southwests 36th consecutive year of profitability.Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue mark.Southwest is the United States most successful low-fare, high frequency, point-to-point carrier.

More than 38 years ago, Rollin King and Herb Kelleher got together and decided to start adifferent kind of airline. They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn

sure they have a good time doing it, people will fly your airline.

CULTURE DONE DIFFERENTLY

For more than 38 years, the Southwest Culture has thrived, but it hasnt been easy. The longevityhas been both their biggest accomplishment and their most significant challenge.

At Southwest, They think of Their Culture in a positive light, but every company has a culture,whether that culture is supportive or stifling, active or passive, fun or discouraging. The way theykeep their Culture supportive, active, and fun is by making Southwests Culture everyonesresponsibility. In fact, they ask everyone to own it.

The Culture Committees are just the beginning of what separates them from the way other companies approach their culture. One of the most significant Southwest differences in their

pursuit to preserve and promote their Culture is the way it is embedded in every aspect of theCompany. Hardly any company make having a Fun-Loving Attitude a key pillar of their leadership expectations. Those same expectations include The Golden Rule and possessing aServants Heart. The annual Performance Appraisal for all of their Employees includesasection on Southwest Culture. From an Employees initial interview until the day he or sheretires, the Southwest Culture is an ingrained part of daily life.

And finally, their Culture encourages celebration. First, they celebrate their Veterans on themonth of Nov. America would be a much different place without the courage of their Veterans.They then celebrate the blessings of the past year on Thanksgiving .

Southwest's no-layoff response to September 11 was a reminder to its employees of theorganization's tradition of caring for its people. When asked to comment on this, an official


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explained, "Its part of our culture. We've always said we'll do whatever we can to take care of our people. So that's what we've tried to do." 1

Southwest's organizational culture was shaped by Kelleher's leadership. Kelleher's personalityhad a strong influence on the culture of Southwest, which epitomized his spontaneity, energy andcompetitiveness. Southwest's culture had three themes: love, fun and efficiency. Kelleher treatedall the employees as a "lovely and loving family". Kelleher knew the names of most employeesand insisted that they referred to him as Herb or Herbie. Kelleher's personality charmed workersand they reciprocated with loyalty and dedication. Friendliness and familiarity also characterizedthe company's relationships with its customers...

BUILDING RELATIONSHIPS

Since its inception, Southwest attempted to promote a close-knit, supportive and enduringfamily-like culture The Company initiated various measures to foster intimacy and informalityamong employees. Southwest encouraged its people to conduct business in a loving manner.Employees were expected to care about people and act in ways that affirmed their dignity andworth .

ARTIFACTSThe artifacts which are the symbols of culture in the physical and social work environment can

be seen in the way the Southwest Company treats its employees. To help keep the Culture at the

forefront, they have two groups: Local Culture Committees and the Corporate CultureCommittee. Both groups put on low-cost Employee events throughout the year.

The Employees roll up their sleeves to help out their area Ronald McDonald Houses atThanksgiving.Colleen Barrett who is the former President of southwest airlines sent cards to allemployees on their birthdays...The CEO joins with the Employees to wish Happy Thanksgiving.Instead of decorating the wall of its headquarters with paintings, the company hung

photographs of its employees taking part at company events, news clippings, letters,

articles and advertisements.Customers are not assigned seats; rather, they are assigned to one of three "boardinggroups" depending on their check-in time (earlier check-ins get to board earlier), and areleft to choose their own seats on the plane, which helps the airline to board passengersfaster


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VALUESCompany Values ... Core Values

LUVCode word for treating individuals, employees, customersDignity, respect and caring loving attitude.Appeared on banners and posters at company facilitiesFunEntertaining behavior of employees in performing their jobs.The ongoing pranks and jokes.Frequent company-sponsored parties and celebrations.Charity benefit games, chili cook-offs, Halloween parties

THRIVING UNDER PRESSUREPost-September11, 2001, when most airlines in the US went in for massive layoffs, Southwestavoided laying off any employee. Even before the September 11 crisis hit, Kelleher hadexplained his philosophy regarding layoffs in an interview to Fortune magazine. He said,"Nothing kills your company's culture like layoffs. Nobody has ever been furloughed [atSouthwest], and that is unprecedented in the airline industry. It's been a huge strength of ours. It'scertainly helped us negotiate our union contracts. One of the union leaders.came in tonegotiate one time, and he said, "We know we don't need to talk with you about job security."We could have furloughed at various times and been more profitable, but I always thought that

was shortsighted.

You want to show your people that you value them and you're not going to hurt them just to get alittle more money in the short term. Not furloughing people breeds loyalty. It breeds a sense of security. It breeds a sense of trust. So in bad times you take care of them, and in good timesthey're thinking, perhaps, "We've never lost our jobs. That's a pretty good reason to stick around."...

Southwest was the only airline to remain profitable in every quarter since the September 11attack. (Refer Exhibit VIII for financial position of Southwest.) Although its stock price dropped

25% since September 11, it was still worth more than all the others big airlines combined. Its balance sheet looked strong with a 43% debt-to-equity ratio and it had a cash of $1.8 billion withan additional $575million in untapped credit lines. The company left no stone unturned to boostemployee loyalty and morale.


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South West Airlines has follows a fun loving attitude. Their culture is all about care, friendlinessand familiarity this resulted in the thinking of the employees that they value us and thus weneed to stick around. This is the main gluing factor of the organizations culture.


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CONCLUSION

Organizational culture is a pattern of basic assumptions that are taught tothe personnel as the correct way to perceive, think and act on a day-To-day basis. Some of the important characteristics of organizationalculture are observed behavioral regularities, norms, values, rules,

philosophy and so on. While everyone in the organization will share theorganization's culture, not all may do so to the same degree. There can

be a dominant culture, but also a number of subcultures. Someorganizations have strong cultures and others have weak cultures. Thestrength of the culture will depend on sharedness and intensity. In somecases organizations find that they must change their culture in order toremain competitive and even survive in their environment. Withreference to the cases in this project, we had analyzed the value systemof the organization like CISCO, 3M and SOUTH WEST AIRLINES.3M has built its organizational culture which holds its employeestogether in line with the vision and mission of the organization-

southwest airlines has built an organization of repute - an enterprise thatstands apart which even during the last economic downturn wasunshaken. While CISCO has given its culture an innovative andfuturistic approach with customer as the top priority.


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BIBLOGRAPHY:

www.icmrindia.org

Organizational Behavior by Nelson Quick

Organizational Behavior by K.Aswathappa

33331862 Project on Organizational Culture

Documents

Transcript of 33331862 Project on Organizational Culture