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Chapter 16Organizational Culture
Lea
rnin
g O
utc
om
es
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.
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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
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Learning Objective
Identify the three levels of culture and the roles they play in an organization.
1
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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
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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”
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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
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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.
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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
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Learning Objective
Describe the three stages of organizational socialization and how culture is communicated in each step.
5
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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
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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..
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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
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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
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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
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• 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
EIN
FO
RC
E
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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