08 Organizational Culture

8/12/2019 08 Organizational Culture

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Chapter Learning Objectives

Define organization culture, explain how it affectsemployee behavior, and understand its historical roots.

Describe how to create organization culture.

Describe different types of culture

Describe two different approaches to culture in

organizations.

Discuss the important elements of managing the

organizational culture

Identify emerging issues in organization culture.


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The Nature of Organization Culture

Culture Values Are often taken for granted (implicit);The conscious, affective

desires or wants of people that guide their behavior; A societys

ideas about what is right or wrong

May not be made explicit (i.e., not written down)

Are communicated through symbolic means; Are passed fromone generation to the next

Organizations are able to operate efficiently only when

shared values exist among the employees.

An individuals personal values guide behavior on andoff the job.


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18.1 Definitions of Organization CultureDefinition Source

A belief system shared by an organizations members J. C. Spender, Myths, Recipes and Knowledge-Bases in Organizational Analysis(Unpublished manuscript, Graduate School of Management, University of California

at Los Angeles, 1983), p. 2.

Strong, widely shared core values C. OReilly, Corporations, Cults, and Organizational Culture: Lessons from Silicon

Valley Firms (Paper presented at the Annual Meeting of the Academy of

Management, Dallas, Texas, 1983), p. 1.

The way we do things around here T. E. Deal and A. A. Kennedy, Corporate Cultures: The Rites and Rituals of

Corporate Life (Reading, MA: Addison-Wesley, 1982), p. 4.

The collective programming of the mind G. Hofstede, Cultures Consequences: International Differences in Work-Related

Values (Beverly Hills, CA: Sage, 1980), p. 25.

Collective understandings J. Van Maanen and S. R. Barley, Cultural Organization: Fragments of a Theory

(Paper presented at the Annual Meeting of the Academy of Management, Dallas,

Texas, 1983), p. 7.

A set of shared, enduring beliefs communicated through a

variety of symbolic media, creating meaning in peoples

work lives

J. M. Kouzes, D. F. Caldwell, and B. Z. Posner, Organizational Culture: How It Is

Created, Maintained, and Changed (Presentation at OD Network National

Conference, Los Angeles, October 9, 1983).

A set of symbols, ceremonies, and myths that

communicates the underlying values and beliefs of that

organization to its employees

W. G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge

(Reading, MA: Addison-Wesley, 1981), p. 41.

A dominant and coherent set of shared values conveyed by

such symbolic means as stories, myths, legends, slogans,

anecdotes, and fairy tales

T. J. Peters and R. H. Waterman Jr., In Search of Excellence: Lessons from

Americas Best-Run Companies (New York: Harper & Row, 1982), p. 103.

The pattern of basic assumptions that a given group has

invented, discovered, or developed in learning to cope with

its problems of external adaptation and internal integration

E. H. Schein, The Role of the Founder in Creating Organizational Culture,

Organizational Dynamics, Summer 1985, p. 14.


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Examples of Cultural Attributes

Documents

Physical layouts

Furnishings

Language

Jargon

Work ethic and practice

Fair days work for a fair

days pay

Loyalty

Commitment

Helping others

Performance leads to

rewards

Management equity

Competency counts


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Organizational Cultures Demonstration

Visible but often notdecipherable

Greater level ofawareness

Taken for granted,invisible, preconscious

Layer III: Basic AssumptionsRelationship to environment

Nature of reality, time, &space

Nature of human nature

Nature of human activity

Nature of human relations

Layer I: Artifacts & CreationsTechnology

Art

Visible and audible behavior patterns

Layer II: ValuesTestable in the physical environment

Testable only by social consensus

Scheins Three-Layer Organizational Model


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Do Organizations Have Uniform Cultures?

Culture is a descriptive term: it may act as a substitutefor formalization

Dominant Culture

Expresses the core values that are shared by a majority of theorganizations members

Subcultures Minicultures within an organization, typically defined by

department designations and geographical separation

Core Values

The primary or dominant values that are accepted throughoutthe organization

Strong Culture

A culture in which the core values are intensely held andwidely shared


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What Do Cultures Do?

Cultures Functions1. Defines the boundary between one organization

and others

2. Conveys a sense of identity for its members

3. Facilitates the generation of commitment to

something larger than self-interest

4. Enhances the stability of the social system

5. Serves as a sense-making and control

mechanism for fitting employees in the

organization


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Culture as a Liability

Barrier to change Occurs when cultures values are not aligned with the values

necessary for rapid change

Barrier to diversity

Strong cultures put considerable pressure on employees to

conform, which may lead to institutionalized bias

Barrier to acquisitions and mergers

Incompatible cultures can destroy an otherwise successful

merger


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Historical

Foundations

Anthropology

Social

Psychology

Sociology

Economics


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Anthropological Contributions.

Anthropologists study human cultures in terms of the values, symbols, and stories

that people in society use to bring order and meaning to their lives. A description of

the values and beliefs of one organization is not transferable to those of other

organizations; each culture is unique

Sociological Contributions.

Sociologists have centered on the categorization of social system structure through

systematic interviews, questionnaires, and other quantitative research methods.This sociological tradition was used in the major recent studies of organization

culture, including Ouchis Theory Z, Deal and Kennedys Corporate Culture, and

Peters and WatermansIn Search of Excellence.

Social Psychology Contributions.

Social psychologists have concentrated on the creation and manipulation of

symbols and stories in the development of organization culture. The impact ofstories on decision making suggests an important reason that organization culture

has such a powerful influence on the people in an organization.

Economics Contributions.

Economic contributions have been based on the economic performance of a firm.

Researchers have attempted to link organization culture to economic performance.

The relationship between culture and performance depends, to some extent, on thevalues expressed in the organizations culture.


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Organization Culture Versus Climate

Organization Culture

The study of culture isbased in anthropology

and sociology. Refers to the historical

context within which asituation occurs.

Deals with the way that

people in theorganization learn andcommunicate what isacceptablein otherwords, its norms andvalues

Organization Climate

The study of climate is based inpsychology

Is based on individualperceptions and is often definedas the recurring patterns ofbehavior, attitudes, and feelingsthat characterize life in theorganization and

Refers to current situations inan organization and the linkagesamong work groups, employees,and work performance

Climate is usually assumed to bemore easily changed ormanipulated by management.


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18.2 Creating Organization Culture

Creating Organization Culture

Step 1Formulate Strategic Values

Step 2Develop Cultural Values

Step 3Create Vision

Step 4Initiate Implementation

Strategies

Step 5Reinforce Cultural Behaviors


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Creating the Organization Culture

Establish Values Strategic values

The basic beliefs about an organizations

environment that shape its strategy.

Cultural values The values that employees need to have and act on

for the organization to act on the strategic values.

Create Vision

Create a picture of the organization that portrays how the

strategic and cultural values will combine to create the

future.


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Creating the Organization Culture (contd)

Initiate Implementation Strategies

Take actions founded on the strategic and cultural values to

accomplish the vision.

Reinforce Cultural Behaviors

Use formal reward systems to encourage desired employeebehaviors

Tell stories that epitomizing cultural values

Conduct ceremonies and rituals that emphasize right actions

by employees


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Creating an Ethical Organizational Culture

Characteristics of Organizations that Develop High

Ethical Standards

High tolerance for risk

Low to moderate in aggressiveness

Focus on means as well as outcomes

Managerial Practices Promoting an Ethical Culture

Being a visible role model

Communicating ethical expectations

Providing ethical training

Rewarding ethical acts and punishing unethical ones

Providing protective mechanisms


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Creating a Positive Organizational Culture

Positive Organizational Culture

A culture that:

Builds on employee strengths

Focus is on discovering, sharing, and building on the

strengths of individual employees

Rewards more than it punishes

Articulating praise and catching employees doing

something right

Emphasizes individual vitality and growth

Helping employees learn and grow in their jobs and

careers

Limits of Positive Culture:

May not work for all organizations or everyone within them


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TYPES OF CULTURE

Power culture

Based on personalities

Adaptable and

informal

Small size Good personal

relations

Role culture Roles, not personalities

Not entrepreneurial

Stability

Slow to change

Task culture Team based

Get the job done

Expertise

Results-oriented Costly, because of

variety

Job satisfaction

Person culture


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Types of Culture

FormalControlOrientation

Flexible

Internal External

Stable

Clan Culture Entrepreneurial

Culture

Bureaucratic

CultureMarket Culture

Forms of Attention


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Types of Cultures

The Clan Culture

A very friendly place to

work where people share a

lot of themselves. It is like

an extended family.

Being part of a working

family, following tradition

and rituals, teamwork and

spirit, self-management, and

social influence

Example: Nordstroms


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Types of Cultures

The Hierarchy /Bureaucratic

Culture

A very formalized structured

place to work. Procedures

govern what people do. Emphasizes rules, policies,

procedures, chain of

command, and central

decision making

Example: government

agencies, the military, firms

managed by autocratic

managers


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Types of Cultures

The Adhocracy/Entrepreneurial

Culture

A dynamic entrepreneurial, and

creative place to work. People

stick their necks out and take

risks.

Innovation, creativity, risktaking, and aggressivelyseeking opportunities

Employees understand that

dynamic change, individualinitiatives, and autonomy arestandard practices

Example: 3M


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Types of Cultures

The Market Culture

A results oriented organization whose

major concern is with getting the job

done. People are competitive and goal-

oriented. Emphasis on increased sales growth,

increased market share, financial stability,and profitability.

Employees have contractual relationshipwith firm

Little feeling of teamwork andcohesiveness

Example: Nike, Citigroup, Wells Fargo,Allstate


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Approaches to Describing Organization Culture:

The Ouchi Framework

TypicalUnited States

firms

TypicalJapanese

firms

Type ZUnited States

firms

The Ouchi Framework


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18.3 The Ouchi Framework


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18.4 The Peters and Waterman Framework

Attributes of an Excellent Firm

1. Bias for action: managers are not reluctant to make decisions even if allthe facts arent in.

2. Stay close to the customer

3. Autonomy and entrepreneurship4. Productivity through people

5. Hands-on management

6. Stick to the knitting: Successful firms do not diversify into businessesoutside their expertise

7. Simple form, lean staff

8. Simultaneously loose and tight organization: tightness comes fromthe commitment of all organization members to the firms core values ; less

administrative overhead, smaller staff, and fewer rules and regulations


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Managing Organization Culture

Taking

advantage of

existing culture

Teaching

organization

culture

Changing

organization

culture

Elements of Managing

Organization Culture


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Managing Organization Culture (contd)

Taking Advantage of the Existing Culture

Easier and faster to alter employee behaviors within the

existing culture than it is to change existing history,

traditions, and values

Managers must be aware and understand the organizationsvalues

Managers can communicate their understanding to lower-

level individuals


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How Employees Learn Culture

Stories

Anchor the present into the past and provide explanations

and legitimacy for current practices

Rituals

Repetitive sequences of activities that express and reinforce

the key values of the organization

Material Symbols

Acceptable attire, office size, opulence of the office

furnishings, and executive perks that convey to employees

who is important in the organization

Language

Jargon and special ways of expressing ones self to indicate

membership in the organization


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Managing Organization Culture (contd)

Changing the Organization Culture

Managing symbols

Substituting stories and myths that support the new cultural

values for those that support old ones

Culture can be difficult to change when upper management

inadvertently reverts to old behaviors

The Stability of Change

New values and beliefs must be seen as stable and influential

as old ones

Changing value systems requires enormous effort because

value systems tend to be self-reinforcing


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Changing culture

Culture can be changed, but

Need time

Support from top managers

Other resources

How to make culture change

Change people

Change corporate vision and mission

Change organizational policies and

system: reward system, recruitment and

selection policies, technology


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Emerging Issues in Organization Culture:

Innovation

Radical innovation:

represents a major breakthrough that changes or

creates whole industries.

Systems innovation:creates a new functionality by assembling parts in new

ways.

Incremental innovation:

continues the technical improvement and extends the

applications of radical and systems innovations


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Innovation (contd)

New Ventures

Require entrepreneurship and good management

Intrapreneurship

Entrepreneurial activity that takes place within thecontext of a large organization

Entrepreneurs profile

Need for achievement

Desire to assume responsibility

Willing to take risks

Focus on concrete results


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Innovation (contd)

Corporate Research

Supports existing businesses to provide incremental

innovations and to explore potential new technology bases

Is responsible for keeping the companys products andprocesses technologically advanced

Corporate culture can be instrumental in fostering environment

for creativity and innovation


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Emerging Issues in Organization Culture

(contd)

Empowerment

Is enabling workers to set their own work goals, make

decisions, solve problems within their sphere of responsibility

and authority Appropriate Cultures (Goffee and Jones)

Factors that may determine the appropriate type of culture

appropriate for an organization:

The nature of the value chain

The dynamism of the environment