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Chapter 4 Organizational Culture

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... completely new culture, usually in a separate work unit or in a new organization ... Change their culture to a new set of values, basic assumptions, and ideologies ... – PowerPoint PPT presentation

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Title: Chapter 4 Organizational Culture


1
Chapter 4 Organizational Culture
2
Learning Goals
  • Discuss the concept of organizational culture
  • Understand the effect of organizational culture
    on you as an individual
  • Describe the different levels at which we
    experience an organization's culture
  • Discuss the functions and dysfunctions of
    organizational culture

3
Learning Goals (Cont.)
  • Diagnose an organization's culture
  • Understand the relationship between
    organizational culture and organizational
    performance
  • Explain the issues involved in creating,
    maintaining, and changing organizational culture

4
Chapter Overview
  • Introduction
  • Levels of Organizational Culture
  • Functions of Organizational Culture
  • Dysfunctions of Organizational Culture
  • Diagnosing Organizational Culture

5
Chapter Overview (Cont.)
  • Organizational Culture and Organizational
    Performance
  • Creating, Maintaining, and Changing
    Organizational Culture
  • International Aspects of Organizational Culture
  • Ethical Issues in Organizational Culture

6
Introduction
  • Organizational culture an ideology and a set of
    values that guide the behavior of organization
    members
  • Includes ceremonies, rituals, heroes, and
    scoundrels in the organizations history
  • Defines the content of what a new employee needs
    to learn to become an accepted member of an
    organization

7
Introduction (Cont.)
  • Key aspects of organizational culture
  • Sharing of values
  • Structuring of experiences
  • Different sets of values can coexist
  • Although values differ, members of each group can
    share a set of values
  • If you have traveled abroad, you have already
    experienced what it is like to enter a new,
    different, and "foreign" culture

8
Introduction (Cont.)
  • All human systems that have endured for some
    time, and whose members have a shared history,
    develop a culture
  • Specific content of an organization's culture
    develops from the experiences of a group
  • Adapting to its external environment
  • Building a system of internal coordination

9
Introduction (Cont.)
  • Each human system within which you interact has a
    culture family, college or university,
    employer, sororities, fraternities
  • Can make different and conflicting demands on you

10
Introduction (Cont.)
  • Divides into multiple subcultures
  • Departments, divisions
  • Different operating locations
  • Occupational groups
  • Workforce diversity
  • Global environment

Jargon, different social backgrounds, different
local cultures
11
Introduction (Cont.)
Organizational culture and organizational
socialization
Organizational Culture (Chapter 4)
Organizational Socialization (Chapter 6)
What a new employee needs to learn.
The process by which a new employee learns the
culture.
12
Introduction (Cont.)
Definition of organizational culture
  • "Any organizational culture consists broadly of
    long-standing rules of thumb, a somewhat special
    language, an ideology that helps edit a member's
    everyday experience, shared standards of
    relevance as to the critical aspects of the work
    that is being accomplished, matter-of-fact
    prejudices, models for social etiquette and
    demeanor, certain customs and rituals suggestive
    of how members are to relate to colleagues,
    subordinates, superiors, and outsiders, and . . .
    some rather plain 'horse sense' regarding what is
    appropriate and 'smart' behavior within the
    organization and what is not."
  • Organizational culture is both the glue holding
    the system together and the motor moving it
    toward its goals.

13
Levels of Organizational Culture (Cont.)
  • Artifacts behavior, language, architecture,
    attire, décor. High visibility
  • Values guides to behavior. Hard for newcomer
    to see, but can learn them
  • Espoused values what people say
  • In-use values what people do
  • Basic assumptions like values but often
    unconscious to veteran members

14
Levels of Organizational Culture (Cont.)
Artifacts/physical characteristics
High visibility
Values (Espoused In-use)
Basic assumptions
Low visibility
Text book figure 4.1
15
Functions of Organizational Culture (Cont.)
  • Adaptation to the organizations external
    environment
  • Consensus about mission
  • Identify with the organization
  • Clear vision
  • Consistent image to markets, customers, clients

16
Functions of Organizational Culture (Cont.)
  • Coordination of internal systems and processes
  • Measurement of results
  • Rewards and sanctions
  • Common language
  • Social relationships
  • Status relationships (stratification)
  • Ideology heroes, folklore

17
Dysfunctions of Organizational Culture
  • Culture constrains strategy
  • Merging cultures culture clash
  • Upjohn Kalamazoo, Michigan
  • Pharmacia Sweden
  • Resistance to change holding to existing values
  • Conflict among subcultures
  • Communication failures subculture jargon

18
Diagnosing Organizational Culture
Visible artifacts
Public documents
Physical characteristics
Behavior
See textbook Table 4.1
infer Invisible artifacts
Basic assumptions
Values
19
Diagnosing Organizational Culture (Cont.)
  • Two perspectives
  • An outsider considering a job with an
    organization
  • An insider after you have joined an organization
  • Use the Organizational Culture Diagnosis
    Worksheet, text book Table 4.1

20
Diagnosing Organizational Culture (Cont.)
  • As an outsider
  • Physical characteristics of organization site
    visit or photographs
  • Read about the organization annual reports,
    press accounts, Web sites
  • Site visit How are you treated?
  • Talk to present employees

21
Diagnosing Organizational Culture (Cont.)
  • As an insider
  • Stories and anecdotes
  • Organization heroes
  • Basis of promotions and pay increases
  • Observe behavior in meetings status differences
  • Focus of meetings what is discussed?

22
Organizational Culture and Organizational
Performance
  • Theoretical and empirical research shows a
    relationship between organizational culture and
    organizational performance
  • Different theoretical views of the
    culture-performance link

23
Organizational Culture and Organizational
Performance (Cont.)
  • Organizations have a competitive advantage when
    their culture is valuable, rare, and not easily
    imitated
  • Value guidance it gives to direct people's
    behavior toward higher performance
  • Rarity features of a culture not common among
    competing organizations

24
Organizational Culture and Organizational
Performance (Cont.)
  • Competitive advantage (cont.)
  • Not easily imitated hard for competitors to
    change their cultures to get the same advantages
  • Difficulty of imitation follows from the rare
    features of some cultures and the difficulties
    managers have when trying to change a culture

25
Organizational Culture and Organizational
Performance (Cont.)
  • The environment-culture congruence theoretical
    view
  • Organizations facing high complexity and high
    ambiguity require a cohesive culture widely
    shared values and basic assumptions
  • Organizations facing low uncertainty and low
    complexity can use more formal control processes
    such as organization policies, rules, and
    procedures

26
Organizational Culture and Organizational
Performance (Cont.)
  • Trait theory of organizational culture. Four
    traits
  • Involvement degree of participation of
    employees in organizational decisions
  • Consistency degree of agreement among
    organization members about important values and
    basic assumptions

27
Organizational Culture and Organizational
Performance (Cont.)
  • Trait theory (cont.)
  • Adaptability ability of the organization to
    respond to external changes with internal changes
  • Mission core purposes of the organization that
    keep members focused on what is important

28
Organizational Culture and Organizational
Performance (Cont.)
  • Some empirical research results
  • Involvement and adaptability related to
    organizational growth
  • Consistency and mission traits related to
    profitability
  • Strong, widely dispersed cultures help high risk
    organizations maintain high reliability. Nuclear
    submarines, nuclear aircraft carriers

See text book for more detail.
29
Creating, Maintaining, and Changing
Organizational Culture
  • Managers face three decisions about their
    organization's culture
  • Create a completely new culture, usually in a
    separate work unit or in a new organization
  • Maintain existing organizational culture
  • They believe it is right for their environments
  • Change their culture to a new set of values,
    basic assumptions, and ideologies

30
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Creating organizational culture
  • A deliberate effort to build a specific type of
    organizational culture
  • Happens when an entrepreneur forms an
    organization to pursue a vision or when managers
    of an existing organization form a new operating
    unit

31
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Creating organizational culture (cont.)
  • The new culture needs an ideology that is
    understandable, convincing, and widely discussed
  • Ideology is a key tool for getting commitment to
    the vision from organization members

32
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Maintaining organizational culture
  • A dilemma
  • Keep successful values of the past
  • Question whether those values are right for the
    environment the organization now faces
  • Requires managers to be aware of what
    organizational culture is and how it manifests
    itself in their organization

33
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Maintaining organizational culture (cont.)
  • Requires knowing the existing artifacts, values,
    and ideologies
  • Can become familiar with their culture by doing
    the culture diagnosis described earlier
  • Managers want to maintain commitment of
    organization members to key parts of that culture
  • Strengthen key values so they are widely held
    throughout the organization

34
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Maintaining organizational culture (cont.)
  • Keep the good part of the organization's culture
  • Requires managers to carefully examine new
    practices for consistency with their culture
  • Example introducing drug testing in an
    organizational culture built on trust

35
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Changing organizational culture
  • Breaking from some features of the old culture
    and creating new features
  • Size and depth of change varies depending on
    degree of difference between the desired new
    culture and the old
  • The change reaches deep into the cultural fabric
    of the organization over many years

Changing the culture of an organization that has
a homogeneous workforce to one that values
diversity
36
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Changing organizational culture (cont.)
  • Successfully managing the change process
  • Choosing the right time for change
  • Act when the times seem right for culture change
  • Situation clearly demands change

Pursue favorable new markets. The organization is
performing poorly and faces clear threats to its
viability.
37
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Changing organizational culture (cont.)
  • Successfully managing the change process (cont.)
  • Managers should not assume everyone in the
    organization will share their view of the need to
    change
  • Senior executives play leadership roles
  • Managers move forward with confidence,
    persistence, and optimism about the new culture

38
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Changing organizational culture (cont.)
  • Successfully managing the change process (cont.)
  • The change effort focuses on many aspects of the
    organization's culture ideology, values,
    symbols
  • Managers should know the roots of their
    organization's culture and maintain some
    continuity with the past

39
Creating, Maintaining, and Changing
Organizational Culture (Cont.)
  • Changing organizational culture (cont.)
  • Successfully managing the change process (cont.)
  • Example FBI perceives itself as the worlds
    finest law-enforcement agency. Move to Quality
    Management is consistent with that view
  • This approach also lets managers say what will
    not change as a way of offering familiarity and
    security to veteran employees

40
International Aspects of Organizational Culture
  • Effects of national cultures on multinational
    organizations
  • Local cultures can shape the subcultures of
    globally dispersed units
  • National culture, local business norms, and the
    needs of local customers can affect the
    subcultures of such units

41
International Aspects of Organizational Culture
(Cont.)
  • Effects of national cultures (cont.)
  • Example the multinational insurance firm AIG
    follows local practices in collecting monthly
    premiums
  • At each insureds home in Taiwan
  • Electronic bank transfers in Hong Kong

42
International Aspects of Organizational Culture
(Cont.)
  • Multinational organizations
  • Employees from many countries working side by
    side
  • They do not shed their national cultural values
    when they come to work

43
International Aspects of Organizational Culture
(Cont.)
  • Multinational organizations (cont.)
  • Strong chance of subcultures forming along
    national lines
  • Research evidence suggests that instead of
    masking local differences with organizational
    culture, multinational cultures may increase ties
    people have to their native cultures

44
International Aspects of Organizational Culture
(Cont.)
  • Multinational cultural diversity
  • Managers may refuse to recognize cultural
    differences and insist on the home culture way of
    doing business
  • The cultural synergy view sees multinational
    cultural diversity as a resource

45
International Aspects of Organizational Culture
(Cont.)
  • Multinational cultural diversity (cont.)
  • Use combinations of cultural differences for the
    strategic advantage of the organization
  • Get better product ideas for culturally diverse
    markets and better communication with culturally
    diverse customers

46
Ethical Issues in Organizational Culture
  • What moral action should managers take in
    managing the cultures of their organiza-tions?
  • An analysis with different ethical theories gives
    different answers

47
Ethical Issues in Organizational Culture (Cont.)
  • Utilitarian analysis
  • The moral action is the one that gives the
    greatest net benefit to the greatest number of
    people
  • Cultural values supporting such action are
    morally correct
  • Managers are morally correct in changing or
    creating cultures in that direction

48
Ethical Issues in Organizational Culture (Cont.)
  • Rights-based analysis
  • People must have the right to make free and
    informed choices about what affects them
  • Fully disclose values and basic assumptions to
    new employees

49
Ethical Issues in Organizational Culture (Cont.)
  • Rights-based analysis (cont.)
  • Fully inform employees about proposed changes to
    the organization's culture
  • Managers can have difficulty honoring a
    rights-based ethic because veteran employees
    often are not consciously aware of basic
    assumptions

50
Ethical Issues in Organizational Culture (Cont.)
  • Justice analysis
  • A culture is unethical if it prevents employees
    from freely voicing their opinions
  • A culture is unethical if all employee groups do
    not have an equal chance for advancement

51
Ethical Issues in Organizational Culture (Cont.)
  • A moral dimension of organizational culture
  • Require an ethical dialogue in management
    decision processes
  • Make ethical dialogue an explicit part of the
    organization's ideology
  • Goal The discussion of moral issues in
    decisions is a comfortable, desired, and required
    part of every manager's job
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