Understanding & “Managing” Corporate Culture BA 152

Characteristics of Organizations Environment Cultures People Systems Technologies Structures Strategies Goals FIT!

What is Corporate Culture? An organization’s and/or work units’ –Personality; –Set of shared assumptions about the way things are done; and/or –Shared values, norms, and beliefs about the ways things are done.

Performance implications? Organizational guidance systems? –Nature of cultures at Enron, Arthur Andersen, Tyco, HealthSouth,? Impact of differences on mergers and/or acquisitions? Corporate Culture: Why should we be concerned?

General Culture Work Unit Cultures

Corporate Culture: What should we examine? 1.Visible events, actions, and/or behaviors 2.Rules, language, symbols, and/or things 3.Public norms/justification for the above 4.Hidden values/assumptions for the above

Corporate Culture: Where does it come from? The organization’s founder A strong leader Reactions to a crisis Strategic decisions

Corporate Culture What are the components? Culture’s Content 1.Assumptions about what is important 2.The ordering of those assumptions

Culture’s Content: KFBS Achievement Responsibility Family-like Friendliness Team work Support Family-like Team work Support Friendliness Achievement

Corporate Culture What are the components? Culture’s Strength 1.Number of shared assumptions 2.How many employees share these assumptions? 3.How many employees share the ordering of these assumptions? Culture’s Content 1. 1.Assumptions about what is important 2. 2.The ordering of those assumptions

Many Some # of shared assumptions # of employees sharing ordering of assumptions # of employees sharing these assumptions Few Culture’s Strength Characteristics Weak Culture Moderate Culture Strong Culture FewSome

Corporate Culture Why is it important? Impact on behavior and control? – –Greater predictability of behavior – –Provides control in the absence of controls Impact on performance? – –Is it better to have a strong culture or a weak culture?

Culture and Performance STRATEGY STRUCTURE CULTURE PERFORMANCE ENVIRONMENT

Environment, Strategy, and Culture Needs of the Environment Flexibility Stability Strategic Focus External Internal Mission Culture Clan Culture Bureaucratic Culture Adaptability/ Entrepreneurial Culture

Changing Your Culture How should you start? TOP DOWN? BOTTOM UP?

Leadership and Culture “... the only thing of real importance that leaders do is to create and manage culture, and the unique talent of leaders is their ability to work with culture.” (italics in the original) (From Edgar Schein, Organizational Culture and Leadership, 1997)

“Maintaining/Changing” a Corporate Culture 1.Hiring/socializing new employees 2.(Re)moving current employees 3.Communicating cultural values 4.Modeling appropriate behavior 5.Rewarding appropriate behavior

“Managing” a Corporate Culture 1.Culture is not a simple concept. 2.Culture’s influence is pervasive. 3.Manipulating culture is not any easy task. 4.There is no one best (permanent) culture for an organization.

Next Time Implementing Change at National Industrial Products