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Human Resource Management
AGRI90089 – Week 2
Week 2: What is organizational culture? Why does it matter?
Text book readings
• Chapter 2 (if you haven’t already) – Strategic Human Resource Management
Main focus this week
• Define organizational culture and workplace culture
• Consider the relationship between organizational/workplace culture and strategic HRM
• Identify different dimensions of organizational and workplace culture in different
organizational examples.
Learning objectives this week
Students to:
1. Understand how organizational and workplace culture develops
2. Understand the role of HRM in:
• Diagnosing a cultural problem
• Defining and supporting change in organizational culture
• Understand the processes involved in creating a positive organizational/workplace
culture
3. Examine case study organizations and contexts to identify different types of
organizational and workplace cultures and how they are developed
1. Strategic HRM and organizational culture
• Recap - Strategic HRM (SHRM)
The pattern of planned human resource deployments and activities intended to enable an
organisation to achieve its goals. It is the strategic integration of the interests of an
organization and its employees (Kramar et al., 2014 p 6).
– Strategic HRM links employers, employees and the vision and mission of the
organization/business.
– Strengths in SHRM will enable an organization to better attract, retain and motivate
quality employees.
Strategically managing human resources can provide an advantage to the organisation.
Organisational culture and people make the difference to customers and the business
(Kramar, 2014 p 55)
What is organisational culture? (sometimes called ‘corporate
culture’ in business settings)
An organization’s psychological and social climate forms its culture.
Organizational culture:
• A system of shared perspectives or collectively held or sanctioned definitions within a group of people.
• Values, beliefs, assumptions, customs, practices, traditions, interactions, behaviors, attitudes, symbols and
ideologies of organisations.
• Culture defines how the organization conducts its business (Stone, 2017, pg 41)
• Organizational culture tells employees how things are done, what is important and what kind of behavior
is rewarded.
• Culture impacts on employee expectations, behavior and
performance.
Organizational culture has been shown to be the most critical
determinant of ethical and safety performance in organisations.
(Stone, 2017, pg 42)
Examples….
Yahoo: A ‘killer culture’ people work hard and play hard, they are here because they want
to change the world.
ANZ bank: A culture of integrity; collaboration; accountability; respect; excellence
Public service: A culture committed to service: ethical; respectful; accountable; impartial.
ATO (tax office): hamstrung by bureaucracy; risk aversion; characterised by internal
empire building; lacking in trust and respect having no accountability for performance.
This accompanies low productivity; high level of unscheduled absenteeism; inability to
deal with underperformers.
High targets and reward driven performance = positive business performance
Cultural change is a major issue : past corruption, secrecy, politicking, personal fiefdoms,
absence of accountability.
What is workplace culture?
Workplace culture: The social behaviors and norms in the workplace which strengthens or
undermines objectives.
Positive culture is significant, especially because:
It attracts talent. Job candidates evaluate your organization and its climate. A strong,
positive, clearly defined and well-communicated culture attracts talent that fits.
It drives engagement and retention. Culture impacts how employees interact with their
work and your organization.
It impacts happiness and satisfaction. Research shows that employee happiness and
satisfaction are linked to strong workplace culture (Source: Deloitte).
It affects performance. Organizations with stronger cultures outperform their competitors
financially and are generally more successful.
The biggest mistake organizations make is letting their workplace culture form naturally
without first defining what they want it to be.
What influences organisational and workplace culture?
Leadership, management, workplace practices, policies, people, and more impact culture
significantly.
Strategic approach to HR (need to include employee perspective as HRM is about
organizational performance and individual employee performance – employee attitudes,
behavior and perceptions positively or negatively influence performance and hence high
performance HRM cannot ignore HR outcomes from the employee perspective. Org
strategy affects and involves HR strategy.
Evaluation of HR – must be the organization and the employee
Why does organizational culture matter?
https://asic.gov.au/about-asic/news-centre/speeches/reinforcing-culture-in-a-climate-of-
low-trust/
Royal Commission into finance and banking sector:
ANZ’s financial planning business had ‘put growth ahead of clients’ interests.
ASIC and APRA have previously recognised that an inappropriate culture is at the root of
many cases of corporate malfeasance,
Culture matters to ASIC because poor culture can be a driver of poor conduct. Culture has
been at the root of some of the worst misconduct we’ve seen in the financial sector.
Looking at cultural problems can give us an early warning of where things might be going
wrong to help us disrupt bad behaviour before it happens and catch misconduct early.
Importantly, it helps with identifying not just individual instances of misconduct but
broader, more pervasive, problems’ (2015 chair of ASIC, Greg Medcraft)
Bureaucratic culture, Secrecy, Boys club
Commissioner Hayne’s Final Report was released publicly on 4 February 2019, along with
the Government’s response to the inquiry’s recommendations.
The report highlights that “failings of organisational culture, governance arrangements and
remunerations systems, lie at the heart of much of the misconduct examined in the
Commission”.
• Bureaucratic culture
• Secrecy
• Boys club
Culture therefore constrains or enables the HRM strategy
Culture influences the way HRM is done and thus pervades the HRM function – the way
the importance placed on people and workplace harmony and the work environment; the
way people are recruited and selected; the importance of training and development;
diversity, pay and performance, etc.
Thus we need to consider organisational and workplace culture in all aspects of HRM
The role of HRM in organization and workplace culture
• Diagnosing a cultural problem
• Defining and supporting change in organizational culture
• Understand the processes involved in creating a positive organizational/workplace
culture