Organizational Culture Chapter 10 Organizational Culture Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-1 Copyright © 2007 Pearson Education Canada

Organizational Culture The pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization. Culture is shared. Culture helps members solve problems. Culture is taught to newcomers. Culture strongly influences behaviour. Material pertinent to this discussion is found on pages 354-355. Organizational culture is the pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization. Seven key characteristics of what the organization values capture the essence of culture: (1) innovation and risk taking, (2) attention to detail, (3) outcome orientation, (4) people orientation, (5) team orientation, (6) aggressiveness, and (7) stability. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-2 Copyright © 2007 Pearson Education Canada

Exhibit 10-1 Layers of Culture Artifacts of Material Symbols Organizational Language Culture Rituals Stories Organizational Beliefs Material pertinent to this illustration is found on page 354. The layers of culture include Displayed Layer 1) Artifacts Aspects of an organization’s culture that you see, hear, and feel. Hidden Layer 2) Beliefs The understandings of how objects and ideas relate to each other. 3) Values The stable, long-lasting beliefs about what is important. 4) Assumptions The taken-for-granted notions of how something should be in an organization. Culture Values Assumptions Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-3 Copyright © 2007 Pearson Education Canada

Levels of Culture Artifacts Beliefs Values Assumptions Aspects of an organization’s culture that you see, hear, and feel. Beliefs The understandings of how objects and ideas relate to each other. Values The stable, long-lasting beliefs about what is important. Assumptions The taken-for-granted notions of how something should be in an organization. Material pertinent to this exercise is found on pages 354-355. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-4 Copyright © 2007 Pearson Education Canada

Characteristics of Organizational Culture Innovation and risk-taking The degree to which employees are encouraged to be innovative and take risks. Attention to detail The degree to which employees are expected to exhibit precision, analysis, and attention to detail. Outcome orientation The degree to which management focuses on results or outcomes rather than on technique and process. People orientation The degree to which management decisions take into consideration the effect of outcomes on people within the organization. Material pertinent to this discussion is found on page 355. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-5 Copyright © 2007 Pearson Education Canada

Characteristics of Organizational Culture Team orientation The degree to which work activities are organized around teams rather than individuals. Aggressiveness The degree to which people are aggressive and competitive rather than easygoing. Stability The degree to which organizational activities emphasize maintaining the status quo in contrast to growth. Material pertinent to this discussion is found on page 355. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-6 Copyright © 2007 Pearson Education Canada

Exhibit 10-2 Contrasting Organizational Cultures Organization B • Managers must fully document • Management encourages and all decisions. rewards risk-taking and change. • Creative decisions, change, and risks • Employees are encouraged to are not encouraged. “ run with ” ideas, and failures are treated as “ learning experiences. ” • Extensive rules and regulations exist • Employees have few rules and for all employees. regulations to follow. • Productivity is valued over employee • Productivity is balanced with treating Material pertinent to this illustration is found on page 356. morale. its people right. • Employees are encouraged to stay • Team members are encouraged to interact within their own department. with people at all levels and functions. • Individual effort is encouraged. • Many rewards are team based. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-7 Copyright © 2007 Pearson Education Canada

Culture’s Functions Social glue that helps hold an organization together. Provides appropriate standards for what employees should say or do. Boundary-defining. Conveys a sense of identity for organization members. Material pertinent to this discussion is found on page 356. Culture has a number of functions. It has a boundary defining role, it conveys a sense of identity, facilitates the generation of commitment to something larger than self-interest, enhances social system stability, and serves as a sense-making and control mechanism that guides and shapes the attitudes and behaviour of employees. An organization’s culture, when it is strong and consistent, also determines the image the organization presents outside to the greater world. A good example of this is Disney. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-8 Copyright © 2007 Pearson Education Canada

Culture’s Functions Facilitates commitment to something larger than one’s individual self-interest. Enhances social system stability. Serves as a “sense-making” and control mechanism. Guides and shapes the attitudes and behaviour of employees. Material pertinent to this discussion is found on page 356. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-9 Copyright © 2007 Pearson Education Canada

Do Organizations Have Uniform Cultures? Organizational culture represents a common perception held by the organization members. Core values or dominant (primary) values are accepted throughout the organization. Dominant culture Expresses the core values that are shared by a majority of the organization’s members. Subcultures Tend to develop in large organizations to reflect common problems, situations, or experiences. Material pertinent to this discussion is found on pages 357-358. Most organizations have a dominant culture and numerous sets of subcultures. The first expresses the core values that are shared by a majority of members. Subcultures develop to reflect common problems, situations, or experiences that members face such as department or geographical differentiation. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-10 Copyright © 2007 Pearson Education Canada

Reading an Organization’s Culture Stories Rituals Material Symbols Language Material pertinent to this discussion is found on pages 358-360. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-11 Copyright © 2007 Pearson Education Canada

Exhibit 10-3 How Organizational Culture Forms Top Philosophy management of Selection Organization's organization's criteria culture founders Socialization Material pertinent to this illustration is found on page 362. As with most creations, culture begins with the organization's founders, who have a major impact in establishing the early culture. They are unconstrained by previous customs, their small size usually facilitates the founders’ imposing their vision on other organization members, and they also have biases on how to get the idea fulfilled. They have a vision or mission of what the organization should be. Instructor can get students in the class who have some work experience to tell the ‘creation stories’ of organizations in which they have worked and discuss how those stories fit in with the organizational culture. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-12 Copyright © 2007 Pearson Education Canada

Creating and Sustaining Culture: Keeping a Culture Alive Selection Identify and hire individuals who will fit in with the culture. Top Management Senior executives establish and communicate the norms of the organization. Socialization Organizations need to teach the culture to new employees. Material pertinent to this discussion is found on pages 362-367. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-13 Copyright © 2007 Pearson Education Canada

Exhibit 10-5 A Socialization Model Socialization Process Outcomes Productivity Prearrival Encounter Metamorphosis Commitment Material pertinent to this illustration is found on page 365. Socialization can be conceptualized as a process composed of three stages: Prearrival: This first stage encompasses all the learning that occurs before a new member joins the organization. Encounter: In this second stage, the new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge. Metamorphosis: In this third stage, the relatively long-lasting changes take place. The new employee masters the skills required for his or her job, successfully performs his or her new roles, and makes the adjustments to his or her work group’s values and norms. This three-stage process has an impact on the new employee’s work productivity, commitment to the organization’s objectives, and eventual decision to stay with the organization. The exhibit depicts this process. Turnover Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-14 Copyright © 2007 Pearson Education Canada

Exhibit 10-6 Entry Socialization Options Formal vs. Informal Individual vs. Collective Fixed vs. Variable Serial vs. Random Investiture vs. Divestiture Material pertinent to this illustration is found on page 366. Formal vs. Informal: The more a new employee is segregated from the ongoing work setting and differentiated in some way to make explicit his or her newcomer’s role, the more formal socialization is. Individual vs. Collective: New members can be socialized individually. This describes how it’s done in many professional offices. They can also be grouped together and processed through an identical set of experiences, as in military boot camp. Fixed vs. Variable: This refers to the time schedule in which newcomers make the transition from outsider to insider. A fixed schedule establishes standardized stages of transition. Variable schedules give no advanced notice of their transition timetable. Variable schedules describe the typical promotion system, where one is not advanced to the next stage until he or she is “ready.” Serial vs. Random: Serial socialization is characterized by the use of role models who train and encourage the newcomer. Apprenticeship and mentoring programs are examples. In random socialization, role models are deliberately withheld. The new employee is left on his or her own to figure things out. Investiture vs. Divestiture: Investiture socialization assumes that the newcomer’s qualities and qualifications are the necessary ingredients for job success, so these qualities and qualifications are confirmed and supported. Divestiture socialization tries to strip away certain characteristics of the recruit. Fraternity and sorority “pledges” go through divestiture socialization to shape them into the proper role. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-15 Copyright © 2007 Pearson Education Canada

Exhibit 10-7 Four-Culture Typology Fragmented Networked Low High Solidarity Mercenary Communal Sociability Material pertinent to this illustration is found on page 368. Goffee and Jones have identified types of cultures, linking them to how people might fit in. They start with two dimensions that underly organizational culture. The first they call sociability. This is a measure of friendliness. The second is solidarity. It's a measure of task-orientation. From these two dimensions they identify four types of cultures: Networked culture (high on sociability; low on solidarity): These organizations view members as family and friends. People know and like each other. The major negative associated with this culture is that the focus on friendships can lead to a tolerance for poor performance and creation of political cliques. Mercenary culture (low on sociability; high on solidarity): These organizations are fiercely goal-focused. People are intense and determined to meet goals. Mercenary cultures aren't just about winning; they're about destroying the enemy. The downside of this culture is that it can lead to an almost inhumane treatment of people who are perceived as low performers. Fragmented culture (low on sociability; low on solidarity): These organizations are made up of individualists. There is little or no identification with the organization. In fragmented cultures, employees are judged solely on their productivity and the quality of their work. The major negatives in these cultures are excessive critiquing of others and an absence of collegiality. Communal culture (high on sociability; high on solidarity): This final category values both friendship and performance. People have a feeling of belonging but there is still a ruthless focus on goal achievement. The downside of these cultures is that they often consume one's total life. Their charismatic leaders frequently look to create disciples rather than followers, resulting in a work climate that is almost "cult-like." Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-16 Copyright © 2007 Pearson Education Canada

The Liabilities of Culture Culture can have dysfunctional aspects in some instances. Culture as a Barrier to Change When organization is undergoing change, culture may impede change. Culture as a Barrier to Diversity Strong cultures put considerable pressure on employees to conform. Culture as a Barrier to Mergers and Acquisitions Merging the cultures of two organizations can be difficult, if not impossible. Material pertinent to this discussion is found on pages 370-374. Culture as a Liability occurs when the shared values are not in agreement with those that will further the organization's effectiveness. This occurs when the environment is dynamic, and the entrenched culture may no longer be appropriate. The culture at Enron became a liability as individuals put more and more effort into pretending that everything was going well. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-17 Copyright © 2007 Pearson Education Canada

Changing Organizational Culture Have top-management people become positive role models, setting the tone through their behaviour. Create new stories, symbols, and rituals to replace those currently in vogue. Select, promote, and support employees who espouse the new values that are sought. Redesign socialization processes to align with the new values. Material pertinent to this discussion is found on page 375. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-18 Copyright © 2007 Pearson Education Canada

Changing Organizational Culture Change the reward system to encourage acceptance of a new set of values. Replace unwritten norms with formal rules and regulations that are tightly enforced. Shake up current subcultures through transfers, job rotation, and/or terminations. Work to get peer group consensus through utilization of employee participation and creation of a climate with a high level of trust. Material pertinent to this discussion is found on page 375. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-19 Copyright © 2007 Pearson Education Canada

Point-CounterPoint When Culture Can Change Why Culture Doesn’t Change There is a dramatic crisis. There is a turnover in leadership. The organization is young and small. There is a weak culture. Why Culture Doesn’t Change Culture develops over many years, and becomes part of how the organization thinks and feels. Selection and promotion policies guarantee survival of culture. Top management chooses managers who are likely to maintain culture. Material pertinent to this discussion is found on page 378. Point: The first argument, “Organizational Culture Doesn’t Change,” argues that culture is relatively unmanageable and very difficult to change. There are many forces that act to maintain it even when it needs changes. Change will occur only when the organization confronts a survival-threatening crisis.  Counterpoint: The second argument, “How to Change an Organization's Culture,” is more optimistic about changing culture. The case presents examples that culture can be changed. The article offers eight actions that can lead to cultural change. This article echoes the first one in that it suggests that some dramatic crises or change in leadership can stimulate cultural change. As well, it is acknowledged that quick fixes should not be expected. It can take years to change a culture. The issue addressed here (can culture be changed?) is extremely important and likely to be the subject of debate for a number of years. If culture cannot be changed, it cannot be managed. It, therefore, becomes a constraint that management must work around. If it can be changed, managers can modify their culture to align with the organization's changing environment. Management scholars have a vested interest in promoting the argument that culture can be changed. The second article expands the notion of managers as directing the future of their organizations, not as impotent observers, but rather as people who take credit for successes and blame for failures. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-20 Copyright © 2007 Pearson Education Canada

Breakout Group Exercises Form small groups to discuss the following: 1. Choose two courses that you are taking this term, ideally in different faculties, and describe the culture of the classroom in each. What are the similarities and differences? What values about learning might you infer from your observations of culture? 2. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you conclude that the organization had a strong or weak culture? 3. Have you or someone you know worked somewhere where the culture was strong? What was your reaction to that strong culture? Did you like that environment, or would you prefer to work where there is a weaker culture? Why? Material pertinent to this exercise is found on page 380. Chapter 10, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 10-21 Copyright © 2007 Pearson Education Canada