© 2009 cengage learning. all rights reserved. chapter 16 organizational culture learning outcomes 1...

© 2009 Cengage Learning. All rights reserved.

Chapter 16Organizational Culture

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1 Identify the three levels of culture and the roles they play in an organization.

2 Evaluate the four functions of culture within an organization.

3 Explain the relationship between organizational culture and performance.

4 Describe five ways leaders reinforce organizational culture.

5 Describe the three stages of organizational socialization and how culture is communicated in each step.

6 Discuss how managers assess their organization’s culture.

7 Explain actions managers can take to change organizational culture.

8 Identify the challenges organizations face developing positive, cohesive cultures.

© 2009 Cengage Learning. All rights reserved.

Organizational (Corporate) Culture

A pattern of basic assumptions that are

considered valid and that are taught to new

members as the way to perceive, think, and

feel in the organization

© 2009 Cengage Learning. All rights reserved.

Learning Objective

Identify the three levels of culture and the roles they play in an organization.

1

Levels of Organizationa

l Culture

Artifacts – s symbols ofculture in the physical

and social work environment

ValuesEspoused: what members of an organization say they valueEnacted: reflected in the way individuals actually behave

Assumptions – deeply held beliefs that guide behavior and tell

members of an organization how to perceive and think about things

OrganizationalCulture LevelsVisible, often not

decipherable

Greater levelof awareness

Taken for granted, Invisible, Preconscious

Reprinted with permission from Edgar H. Schein, Organizational Culture and Leadership: A Dynamic View. Copyright © 1985 Jossey-Bass Inc, a subsidiary of John Wiley & Sons, Inc.

Artifacts • Personal enactment• Ceremonies and rites• Stories• Ritual• Symbols

Values• Testable in the physical environment• Testable only by social consensus

Basic Assumptions • Relationship to environment• Nature of reality, time, and space• Nature of human nature• Nature of human activity• Nature of human relationships

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Beyond the Book:Making Coffee, Making Coffee Matter

Caribou Coffee’s culture is based on its founders’ dreams of bringing people an inspiring and beneficial product

Caribou’s core values encourage innovation, excellence, and positive involvement in the world, and are reflected in its lodge-style store designs and hourly-worker title “vice president of smiles and service”

© 2009 Cengage Learning. All rights reserved.

Learning Objective

Evaluate the four functions of culture within an organization.

2

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Functions of Organizational Culture

• Culture provides a sense of identity to members and increases their commitment to the organization

• Culture is a sense-making device for organization members

• Culture reinforces the values in the organization

• Culture serves as a control mechanism for shaping behavior

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Beyond the Book:Values that Benefit

New Balance Athletic Shoe empowers its US employees to compete against low-wage suppliers overseas

The company shares competitive information with them and offers extensive training on- and off-the-job

New Balance’s dedication to employees has a payoff: its US workers can produce a pair of shoes over 6 times as quickly as its overseas competitors

© 2009 Cengage Learning. All rights reserved.

Learning Objective

Explain the relationship between organizational culture and performance.

3

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AdaptivePerspective

Theories about the relationship between organizational culture and performance

Strong Culture

Perspective

FitPerspective

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Strong Culture

An organizational culture with a consensus

on the values that drive the company and

with an intensity that is recognizable even

to outsiders

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BECAUSE • They are characterized by goal

alignment• They create a high level of motivation

because of shared values by the members

• They provide control without the oppressive effects of bureaucracy

Strong cultures facilitate performance

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Argument that a culture is good only if it fits the industry’s or the firm’s strategy.

Organizational characteristics that may affect culture

Customer requirements Competitive environment Societal expectations

FitPerspective

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Adaptive Culture

An organizational culture that encourages

confidence and risk taking among

employees, has leadership that produces

change, and focuses on the changing

needs of customers

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Adaptive Perspective

Adaptive Nonadaptive Most managers care

about themselves,their work group, oran associated product

Most managers care about customers,stockholders, and employees

Managers tend tobehave somewhat insularly, politically,and bureaucratically

Managers pay close attention to alltheir constituencies,esp. customers

Core Values

CommonBehavior

Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Corporate Culture and Performance by John P. Kotter and James L Heskett. Copyright © 1992 by Kotter Associates, Inc. and James L. Heskett.

© 2009 Cengage Learning. All rights reserved.

Learning Objective

Describe five ways leaders reinforce organizational culture.

4

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Five Most Important Elements in Managing Culture

• What leaders pay attention to

• How leaders react to crises

• How leaders behave

• How leaders allocate rewards

• How leaders hire and fire individuals

5

© 2009 Cengage Learning. All rights reserved.

Learning Objective

Describe the three stages of organizational socialization and how culture is communicated in each step.

5

Stages of Socialization

Realism Congruence 1. Anticipatory Socialization

2. Encounter Job demands

• Task • Role • Interpersonal

3. Change andAcquisition Mastery

PerformanceSatisfactionMutual influenceLow levels of distressIntent to remainFrom “An Ethical Weather Repart: Assessing the Organization's Ethical Climate” by John B. Cullen, et

al. In Organizational Dynamics, Autumn 1989. Copyright © 1989 American Management AssociationInternational. Reprinted by permission of American Management Association International, New York, N.Y.All rights reserved. Http://www.amanet. Org.

Outcomes of Socialization

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Organizational Socialization

The process by which newcomers

are transformed from outsiders to

participating, effective members of

the organization

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1. [Anticipatory Socialization] – first socialization stage—encompasses all of the learning that takes place prior to the newcomer’s first day on the job

2. [Encounter] – the second socialization stage—the newcomer learns the tasks associated with the job, clarifies roles, and establishes new relationships at work

3. [Change and Acquisition] – the third socialization stage—the newcomer begins to master the demands of the job

[Socialization Process]

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Learning Objective

Discuss how managers assess their organization’s culture.

6

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Assessing Organizational Culture

• Organizational Culture Inventory focuses on behaviors that help employees fit into the organization and meet coworker expectations

• Kilman-Saxton Culture-Gap Survey focuses on the expectations of others in the organization

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Triangulation

the use of multiple methods to measure

organizational culture

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Learning Objective

Explain actions managers can take to change organizational culture.

7

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Cultural Changes

Merger or acquisition Employment of people from different countries

Situations That May Require Cultural Change

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Reasons that Change Is Difficult

• Assumptions are often unconscious

• Culture is deeply ingrained and behavioral norms and rewards are well learned

Hiring andsocializing

members whofit in with thenew culture

Removingmembers who

reject the new culture

Culture

Culturalcommunication

Changing behavior

Examiningjustificationsfor changed

behavior

2

1

5

3

4

Interventions forChanging

OrganizationalCulture Reprinted with permission from Vijay Sathe “How to Decipher & Change

Corporate Culture,” Copyright © 1985 Jossey-Bass Inc, Reprinted by permissionOf Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc..

© 2009 Cengage Learning. All rights reserved.

Cultural Modifications in the Current Business Environment

Support for a globalview of business

Reinforcement ofethical behavior

Empowerment of employees to excelin product and service quality

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Learning Objective

Identify the challenges organizations face developing positive, cohesive cultures.

8

© 2009 Cengage Learning. All rights reserved.

Support for a Global View of Business• Create a clear

and simple mission statement

• Create systems that ensure effective information flow

• Create “matrix minds” among managers

• Develop global career paths

• Use cultural differences as

major assets• Implement

worldwide management

education and team

development programs

© 2009 Cengage Learning. All rights reserved.

Beyond the Book:Six Guidelines to Creating a Global Culture

1.Create a clear and simple mission statement

2.Create systems that ensure an effective flow of information

3.Broaden managers’ minds to allow them to think globally

4.Develop global career paths

5.Use cultural differences as a major asset

6. Implement worldwide management education and team development programs

© 2009 Cengage Learning. All rights reserved.

• Clear communication of the boundaries of ethical conduct

• Selection of employees who support the ethical culture

• Reward of ethical behavior• Conspicuous punishment of

members who engage in unethical behavior

ETHICAL BEHAVIORR

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• Empowerment unleashes employees’ creativity

• Empowerment requires eliminating traditional hierarchical notions of power– Involve employees in decision

making– Remove obstacles to their

performance– Communicate the value of product

and service quality

Empowerment

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Beyond the Book:Six Guidelines to Creating a Global Culture

John Friel, CEO of medical device manufacturer Medrad, Inc., is committed to continued improvement, quality, and employee empowerment

Friel spends at least one day a month in company shop floor operations—performing the same customer-service and general operations tasks as his workers

The company’s commitment to excellence earned it the 2003 Malcolm Baldridge Award for quality in manufacturing