Chapter 16 Organizational Culture Identify the three levels of culture and the roles they play in an organization. Evaluate the four functions of culture within an organization. Explain the relationship between organizational culture and performance. Describe five ways leaders reinforce organizational culture. Describe the three stages of organizational socialization and the ways culture is communicated in each step. Discuss how managers assess their organization’s culture. Explain actions managers can take to change organizational culture. Identify the challenges organizations face developing positive, cohesive cultures. Learning Outcomes © 2011 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 © 2011 Cengage Learning. All rights reserved. 2

© 2011 Cengage Learning. All rights reserved. Learning Objective 1 Identify the three levels of culture and the roles they play in an organization. © 2011 Cengage Learning. All rights reserved.

Levels of Organizational Culture Artifacts – symbols of culture in the physical and social work environment Values Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave Levels of Organizational Culture Assumptions – deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things © 2011 Cengage Learning. All rights reserved.

Organizational Culture Artifacts – symbols of culture in the physical and social work environment Visible, often not decipherable Values Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave Greater level of awareness Assumptions – deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things 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. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Types of Artifacts Personal Enactment Ceremonies and Rites Stories About the boss About getting fired About relocating About promotions About crisis situations About status considerations Rituals Symbols © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 2 Evaluate the four functions of culture within an organization. © 2011 Cengage Learning. All rights reserved.

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 of the organization Culture serves as a control mechanism for shaping behavior © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Theories on the relationship between organizational culture and performance Strong Culture Perspective Fit Perspective Adaptive Perspective © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. 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 © 2011 Cengage Learning. All rights reserved.

Strong Cultures Facilitate Performance 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 © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Fit Perspective a culture is good only if it fits the industry or the firm’s strategy © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Fit Perspective Three particular industry characteristics affect culture: Competitive environment Customer requirements Societal expectations © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. 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 © 2011 Cengage Learning. All rights reserved.

Adaptive vs. Nonadaptive Cultures © 2011 Cengage Learning. All rights reserved.

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 © 2011 Cengage Learning. All rights reserved.

Organizational Socialization the process by which newcomers are transformed from outsiders to participating, effective members of the organization © 2011 Cengage Learning. All rights reserved.

Organizational Socialization Process

[Socialization Process] 1. [Anticipatory Socialization] – all of the learning that takes place prior to the newcomer’s first day on the job 2. [Encounter] – newcomer learns the tasks associated with the job, clarifies roles, and establishes new relationships at work 3. [Change and Acquisition] – newcomer begins to master the demands of the job © 2011 Cengage Learning. All rights reserved.

Outcomes of Socialization Newcomers who are successfully socialized should exhibit: Good performance High job satisfaction Intention to stay with organization Low levels of distress symptoms High level of orgnaizational commitment © 2011 Cengage Learning. All rights reserved.

Organizational Culture Inventory Focuses on behaviors that help employees fit into the organization and meet coworker expectations Uses Maslow’s hierarchy of needs to measure twelve cultural styles © 2011 Cengage Learning. All rights reserved.

Kilmann-Saxton Culture-Gap Survey Focuses on what actually happens in the organization and the expectations of others Two underlying dimensions – technical/human and time. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Triangulation the use of multiple methods to measure organizational culture © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Cultural Changes With rapid environmental changes such as globalization, workforce diversity and technological innovation, the fundamental assumptions and basic values that drive the organization may need to be altered. © 2011 Cengage Learning. All rights reserved.

Why is Change Difficult? Assumptions are often unconscious Culture is deeply ingrained and behavioral norms and rewards are well learned © 2011 Cengage Learning. All rights reserved.

Interventions for Changing Organizational Culture

Challenges to Developing Positive, Cohesive Culture Merger or Acquisition Developing a global organizational culture Developing an ethical organizational culture Developing a culture of empowerment and quality © 2011 Cengage Learning. All rights reserved.