Organisational Culture

1. Organisational Culture • Refers to the “context” – the organisational environment • Determines the the type of communication that will take place

2. Organisational Culture • “How things are done around here” • Reflects underlying assumptions about the way work is performed • What is acceptable and not acceptable • What behaviour and actions are encouraged or discouraged

3. “Strong culture” • Core values are intensely held • High agreement • Shared purpose • Builds cohesiveness • Loyalty

4. National Culture • Usually takes precedence over organsiational culture • Mercedes Benz in Alabama • Abandoned strict heirarchy of German plant • Employee teams • Employee intervention • Sense of ownership

5. Culture’s Functions • identity for organisation • sense of identity for members • social system stability • provides “social glue” • provides appropriate standards • guides and shapes attitudes and behaviours

6. What are the characteristics of organsiational cultures? • innovation & risk taking • interest in having employees generate new ideas • openness of communication • Sensitivity to the needs of customers and employees

7. How does a culture begin? 1. The founders • Philosophy/vision of the founders influences • Indoctrinate and socialize employees • Founder’s behaviour acts as model 2. Selection of candidates 3. Socialization methods - A process that adapts employees to the culture

8. Organisational Values • Formal Statement of Values • Found in mission statements, value statements or coporate credos

9. What we believe in The Body Shop is a stake-holder led company. It believes its success is dependent upon its relationships with all its stakeholders, including its employees, franchisees, customers, communities, suppliers, shareholders and NGOs. • The Body Shop approach to ethical business operates on three levels: 1) compliance: opening up to defined standards of human rights, social welfare and worker safety, environmental protection and, where relevant, wider ethical issues like animal protection 2) disclosure: only through public disclosure can a real process of dialogue and discussion with stakeholders be achieved and the right direction charted for the future 3) campaigning: to play an active part in campaigning for positive change in the way the business world works, with the ultimate aim of making a positiveimpact on the world at large.

10. We believe in making a difference. In our customer’s eyes, Virgin stands for value for money, quality, innovation, fun and a sense of competitive challenge. We deliver a quality service by empowering our employees and we facilitate and monitor customer feedback to continually improve the customer’s experience through innovation

11. Values – in - Use The way people in the company actually behave •       May differ from the “espoused values”

12. Ford Pinto Case Study

13. Pinto Crash Tests

14. Cost Benefit Analysis • if the cost is greater than the benefit, the project is not worth it—no matter what the benefit. • Examine the cost of every action, decision, contract part or change, then carefully evaluate the benefits to be certain that they exceed the cost before you begin a program

15. BENEFITS  Savings: 180 burn deaths, 180 serious burn injuries, 2,100 burned vehicles.  Unit Cost: $200,000 per death, $67,000 per injury, $700 per vehicle.  Total Benefit: 180 X ($200,000) + 180 X ($67,000) + $2,100 X ($700)  = $49.5 million. COSTS  Sales: 11 million cars, 1.5 million light trucks.  Unit Cost: $11 per car, $11 per truck.  Total Cost: 11,000,000 X ($11) + 1,500,000 X ($11) = $137 million. 

16. Stakeholder vs Stockholder Approach • Stakeholder Approach • Stockholder Approach

17. Homework • Read the Ford Pinto case study enclosed in the course packet • Answer the following questions in your communciations notebook: • How would you describe the culture that existed at Ford Motor Company in the 1970s? • How did that culture affect internal and external communciation?