Page 334 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 16: Organisational Culture

16.3 Functions of Organisational Culture Notes

Organisational culture has many significant functions. The most important of them all are as
under:
1. It gives a sense of identity to the employee
2. It promotes commitment among people
3. It enhances stability among the employees
4. It makes sense of behavior.

16.4 Importance of Culture to the Organisation

It is already clear from the above discussion that the prevailing culture of an organisation affects
business results as well as shapes the health, morale and productivity of its employees. All the
employees are encouraged to make decisions that will positively move us toward this vision for
an outstanding corporate culture that continues for decades to come.

A healthy organisational culture translates in a reduced turnover rate, decreased absenteeism,
and a reputation as an employer of choice. Attracting the best candidates reduces operational
costs and achieves stellar performance levels. Success stories abound linking organisational
performance with culture. An organisational culture influences the occupational or industry
peculiarities tied to the organisation as well as the national culture of the country in which the
organisation operates.
An organisational culture establishes standards of acceptable behavior and an understanding of
organisational operating styles. Changing, guiding and sustaining a high organisational culture
requires engaging fortitude and rigour on the part of management and an ability to measure
variations so as to correct whenever needed.
The organisations that were able to make the leap from good to great were able to do so because
of their focus on building a strong culture around their organisation, within which their
employees could excel. These companies built this culture and filled it with highly disciplined
people who will take disciplined action. They shook off bureaucracies, as "bureaucratic cultures
only arise to compensate for incompetence and lack of discipline." When you have the right
people in place in your organisation, then there is no need for bureaucracy.
The above mentioned relevance of organisational culture supports the proposition that, in this
competitive and globalized corporate scenario, there is huge need of the development of a
strong organisational culture.
Schein suggests that organisational culture is even more important today than it was in the past.
Increased competition, globalization, mergers, acquisitions, alliances, and various workforce
developments have created a greater need for:
1. Coordination and integration across organisational units in order to improve efficiency,
quality, and speed of designing, manufacturing, and delivering products and services.
2. Product innovation
3 Strategy innovation
4. Process innovation

5. Effective management of dispersed work units and increasing workforce diversity
6. Cross-cultural management of global enterprises
7. Construction and management of hybrid-cultures
8. Facilitation and support of teamwork.

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