institutionalization A condition that occurs when an organization takes ona life of its own, apart from any of its members, and acquires immortality.
When an organization becomes institutionalized, it takes on a life of its own, apart from its founders or any of its members. When an organization becomes institutionalized, it becomes valued for itself, not merely for the goods or services it produces. It acquires immortality. If its original goals are no longer relevant, it doesn’t go out of business. Rather, it redefines itself. Institutionalization operates to produce common understandings among members about what is appropriate and, fundamentally, meaningful behavior.3 So when an organization takes on institutional permanence, acceptable modes of behavior become largely self-evident to its members. As we’ll see, this is essentially the same thing that organizational culture does. So an understanding of what makes up an organization’s culture and how it is created, sustained, and learned will enhance our ability to explain and predict the behavior of people at work.
organizational culture A system of shared meaning held by members that distinguishes the organization from other organizations.
There are seven primary characteristics that, in aggregate, capture the essence of an organization’s culture:
1. Innovation and risk taking. The degree to which employees are encouraged to be innovative and take risks.
2. Attention to detail. The degree to which employees are expected to exhibit precision, analysis, and attention to detail.
3. Outcome orientation. The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes.
4. People orientation. The degree to which management decisions take into consideration the effect of outcomes on people within the organization. 5. Team orientation. The degree to which work activities are organized...