Chapter 16 Organizational Culture

Learning Outcomes 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

Learning Outcomes 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 Outcome Identify the three levels of culture and evaluate the roles they play in an organization ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Organizational (Corporate) Culture Pattern of basic assumptions that are considered valid Taught to new members as the way to perceive, think, and feel in the organization Levels Artifacts Values Assumptions

Figure 16.1 - Levels of Organizational Culture

Table 16.1 - Six Rites in Organizations

Beyond the Book: Identifying Norms This exercise asks you to identify campus norms at your university. Every organization or group has a set of norms that help determine individuals’ behavior. A norm is an unwritten rule for behavior in a group. When a norm is not followed, negative feedback is given. It may include negative comments, stares, harassment, and exclusion As a group, brainstorm all the norms you can think of in the following areas: Dress Classroom behavior; Studying; Weekend activities; Living arrangements; Campus activities; Dating; Relationships with faculty; Eating on campus versus off campus; Transportation How did you initially get this information? What happens to students who don’t follow these norms? What values can be inferred from these norms? SOURCE: Dorothy Marcic, “Identifying Behavioral Norms.” Organizational Behavior: Experiences and Cases (St. Paul, MN: West Publishing, 1989). Reprinted by permission.

Evaluate the four functions of culture within an organization Learning Outcome Evaluate the four functions of culture within an organization ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Functions of Organizational Culture Provides a sense of identity to members and increases their commitment to the organization Serves as a sense-making device for organization members Reinforces the values of the organization Serves as a control mechanism for shaping behavior

Beyond the Book: NetApp’s Culture of Openness What is the key to success at NetApp? According to top executives, it’s openness Everyone, including the CEO, works in an open cubicle. Information is shared freely. Every two weeks, employees meet with the Vice President to share their perspectives In addition, NetApp shows employees that they are valuable and cared for through flexible scheduling, and sponsorship of volunteer activities NetApp’s culture of openness and trust has made it one of Fortune magazine’s “Best Companies to Work For.” The data storage and management company NetApp has survived the dot-com crash and has enjoyed tremendous success under long-time CEO Dan Warmenhoven. Top executives at NetApp are quick to credit the open, trusting culture for the company’s success—and employees agree, catapulting NetApp to the top of Fortune’s “Best Companies to Work For” list. A culture of trust and openness gives NetApp a distinct competitive advantage. The office design supports these values. Everyone, including the CEO, works in an open air cubicle. Information is shared fully and openly. A Vice President’s Forum is held every two weeks in which information about the company and the economy is shared, but its main purpose is for the VP to hear what’s on the mind of NetApp employees. Key to the culture is the commitment to simplicity and common sense. Bureaucracy is at a minimum, and products are designed in order to do the job as simply as possible for customers. A twelve-page travel policy was canned in favor of a simple statement asking employees to use their common sense. Recruiting is done to attract brilliant people to the organization, and care is taken to let employees know how brilliant and appreciated they are. NetApp provides exciting work, provides flexible scheduling for work–life balance, and encourages volunteer efforts in the community. Five paid days off are given to each employee for volunteer work. Unique benefits are provided, too, like adoption aid and autism coverage. NetApp’s culture of trust, openness, simplicity, and common sense has garnered not only recognition, but highly performing employees and loyal customers, both keys to competitive advantage. SOURCES: R. Levering and M. Moskowitz, “And the Winners Are….” Fortune, February 2, 2009, 67–78; http://greatplacetowork.com/best/100best-2009/100best2009-netapp.php

Learning Outcome Explain the relationship between organizational culture and performance ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Theories on the Relationship between Organizational Culture and Performance Strong culture perspective: Organizational culture with a consensus on the values that drive the company Strong culture facilitate performance because it is: Characterized by goal alignment Create a high level of motivation Provide control without oppressive effects of a bureaucracy

Theories on the Relationship between Organizational Culture and Performance Fit perspective - Culture is good only if it fits the industry or the firm’s strategy Industry characteristics that affect culture Competitive environment Customer requirements Societal expectations

Theories on the Relationship between Organizational Culture and Performance Adaptation perspective - Organizational culture that: Encourages confidence and risk taking among employees Has leadership that produces change Focuses on the changing needs of customers

Table 16.2 - Adaptive versus Nonadaptive Organizational Cultures

Describe five ways leaders reinforce organizational culture Learning Outcome Describe five ways leaders reinforce organizational culture ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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

Learning Outcome Describe the three stages of organizational socialization and the way culture is communicated in each step ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Organizational Socialization Transformation of newcomers from outsiders to participating, effective members of the organization 2

Figure 16.2 - The Organizational Socialization Process: Stages and Outcomes

Discuss how managers assess their organization’s culture Learning Outcome Discuss how managers assess their organization’s culture ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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 cultural styles Four satisfaction cultural styles Eight security cultural styles

Kilmann-Saxton Culture-Gap Survey Focuses on what happens in the organization and the expectations of others Underlying dimensions - Technical/human orientation and short-term versus long-term time Areas in which operating and ideal norms are assessed Task support Task innovation Social relationships Personal freedom

Triangulation Use of multiple methods to measure organizational culture Some methods used to triangulate on the culture Obtrusive observations by trained observers, which provides an outsider perspective Self-administered questionnaires, which provides quantitative insider information Personal interviews with the center’s staff, which provides qualitative contextual information

Explain actions managers can take to change organizational culture Learning Outcome Explain actions managers can take to change organizational culture ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 16.3 - Interventions for Changing Organizational Culture

Learning Outcome Identify the challenges organizations face developing positive, cohesive cultures ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Challenges to Developing Positive, Cohesive Culture Merger or Acquisition Global organizational culture Ethical organizational culture Culture of empowerment and quality

Beyond the Book: Six Guidelines to Creating a Global Culture Create a clear and simple mission statement Create systems that ensure an effective flow of information Broaden managers’ minds to allow them to think globally Develop global career paths Use cultural differences as a major asset Implement worldwide management education and team development programs **Following are six specific guidelines for managers who want to create a global culture: 1. Create a clear and simple mission statement. A shared mission can unite individuals from diverse cultural backgrounds. 2. Create systems that ensure an effective flow of information. Coordination councils and global task forces can be used to ensure that information flows throughout the geographically dispersed organization are consistent. 3. Create “matrix minds” among managers; that is, broaden managers’ minds to allow them to think globally. IBM does this through temporary overseas assignments. Managers with international experience share that experience when they return to the home organization. 4. Develop global career paths. This means ensuring not only that home country executives go overseas but also that executives from other countries rotate into service in the home office. 5. Use cultural differences as a major asset. The former Digital Equipment Corporation (now part of Hewlett-Packard), for example, transferred its research and development functions to Italy to take advantage of the free-flowing Italian management style that encouraged creativity. Its manufacturing operations went to Germany, which offered a more systematic management style. 6. Implement worldwide management education and team development programs. Unified training efforts that emphasize corporate values can help establish a shared identity among employees. These guidelines are specifically aimed at multinational organizations that want to create a global corporate culture, but other organizations can also benefit from. Companies that want to broaden employees’ views or to use the diversity of their workforce as a resource will find several of these recommendations advantageous.

Charlie Wilson’s War Artifacts are at the first level of organizational culture and are the easiest to see. Which artifacts did you observe in this sequence? Values appear at the next level of organizational culture. You can infer a culture’s values from the behavior of organizational members. Which values appear in this sequence? Organizational members will unconsciously behave according to an organization culture’s assumptions. You also can infer these from observed behavior. Which assumptions appear in this sequence? Democratic Congressman Charlie Wilson (Tom Hanks) from East Texas lives a reckless life that includes heavy drinking and chasing attractive women. The film focuses on the Afghanistan rebellion against the Soviet troop invasion in the 1980s. Wilson becomes the unlikely champion of the Afghan cause through his role in two major congressional committees that deal with foreign policy and covert operations. Houston socialite Joanne Herring (Julia Roberts) strongly urges the intervention. CIA agent Gust Avrakotos (Philip Seymour Hoffman) helps with some details. This sequence appears early in the film after the scene showing Charlie Wilson, Paul Brown (Brian Markinson), Crystal Lee (Jud Tyler), and two strippers drinking and partying in a hot tub. It opens with a shot of the Capitol building. Congressman Charlie Wilson talks to his assistant Bonnie Bach (Amy Adams) while walking to chambers for a vote. The sequence ends after Wilson enters the chambers.

Camp Bow Wow What aspects of Camp Bow Wow’s corporate culture are visible and conscious? What aspects are invisible and unconscious? Why did Camp Bow Wow have to change its culture when it became a national franchise? What impact does Heidi Ganahl’s story have on employees at Camp Bow Wow? According to Heidi Ganahl, Camp Bow Wow’s top dog, corporate culture has many elements: it can mean logos and branded material, a presence on the Internet, or even the relationships developed with customers and employees. But a key element of Camp Bow Wow’s culture that doesn’t exist in other franchises is the staff’s deep emotional connection with animals. The connection is immediately apparent at Camp Bow Wow’s corporate headquarters, where offices are bustling with employees and pets alike. “It’s all about the pets,” Ganahl says. “If we keep that focus and that commitment, I think our culture will be alive and well for a long time.” Ask your students: What aspects of Camp Bow Wow’s corporate culture are visible and conscious? What aspects are invisible and unconscious? Why did Camp Bow Wow have to change its culture when it became a national franchise? What impact does Heidi Ganahl’s story have on employees at Camp Bow Wow?