8-1IBUS 681, Dr. Yang Organizational Culture Chapter 8

8-2IBUS 681, Dr. Yang Learning Objectives Define organizational culture and know why it is important Distinguish among organizational, national, and global culture and understand the relationships among them Evaluate the culture-free approach to understanding organizational culture

8-3IBUS 681, Dr. Yang Learning Objectives (cont.) Identify levels of organizational culture Know what organizational culture does Discuss the cultural dimensions and typology approaches to understanding organizational culture Understand how organizational culture can be managed

8-4IBUS 681, Dr. Yang Organizational Culture A pattern of basic assumptions - invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration That has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems (Schien, 1985)

8-5IBUS 681, Dr. Yang National and Global Culture One can not understand what’s going on inside an organizational culture without understanding what exists outside the boundary. National culture provides basic assumptions that legitimate and guide organizational behavior Industrialization promotes changes in national culture Global competition increases awareness of successful practices elsewhere Modern communication enhances connections among manufacturers, merchants, financiers, consumers, etc. globally MNCs shape organizational culture on a global basis.

8-6IBUS 681, Dr. Yang Culture-Free Approach It argues that technology, policies, rules, organizational structure, and other variables that contribute to efficiency and effectiveness make national culture irrelevant for management. E.g., McDonald’s fast food service in Moscow Recruiting, training, employee evaluation, and reward system Service, cleanliness, quality of food

8-7IBUS 681, Dr. Yang Levels of Organizational Culture Artifacts Espoused Values Actual Values Basic Underlying Assumptions Subcultures

Microsoft’s Mission: To enable people and businesses throughout the world to realize their full potentials

Great People with Great Values Delivering on our mission requires great people who are bright, creative, and energetic, and who share the following values: Integrity and honesty. Passion for customers, partners, and technology. Open and respectful with others and dedicated to making them better. Willingness to take on big challenges and see them through. Self-critical, questioning, and committed to personal excellence and self-improvement. Accountable for commitments, results, and quality to customers, shareholders, partners, and employees.

8-8IBUS 681, Dr. Yang What Organizational Culture Does FUNCTIONS Provides an external identity Creates a sense of commitment Acts as source of high reliability Defines an interpretive scheme Acts as a social control mechanism DYSFUNCTIONS Can create barriers to change Can create conflict within the organization Subcultures can change at different rates than other units

8-9IBUS 681, Dr. Yang Some Underlying Dimensions of Organizational Culture Dimension Questions to be answered 1. The organization’s relationship to its environment 2. The nature of human activity 3.The nature of reality and truth Does the organization perceive itself to be dominant, submissive, harmonizing, searching out a niche? Is it the “correct” way for humans to behave to be dominant/proactive, harmonizing, or passive/fatalistic? How do we define what is true and what is not true; and how is truth ultimately determined both in the physical and social world?

Dimension Questions to be answered 4. The nature of time 5. The nature of human nature What is our basic orientation in terms of past, present, and future, and what kinds of time units are most relevant for the conduct of daily affairs? Are humans basically good, neutral, or evil, and is human nature perfectible or fixed? IBUS 681, Dr. Yang 8-10 Some Underlying Dimensions of Organizational Culture (cont.)

IBUS 681, Dr. Yang Dimension Questions to be answered 6.The nature of human relationships 7. Homogeneity versus diversity What is the “correct” way for people to relate to each other, to distribute power and affection? Is life competitive or cooperative? Is the best way to organize society on the basis of individualism or groupism? Is the best authority system autocratic/paternalistic or collegial/participative? Is the group best off if it is highly diverse or if it is highly homogeneous, and should individuals in a group be encouraged to innovate or conform? 8-11

8-12 IBUS 681, Dr. Yang Trompenaars’ Four Corporate Cultures Family Culture Eiffel Tower Culture Guided Missile Culture Incubator Culture

Characteristics of Trompenaars’ Four Types of Corporate Culture VariablesFamilyEiffel TowerGuided MissileIncubator Relationship between employees Diffuse relationships to organic whole to which one is bonded Specific role in mechanical system of required interactions Specific tasks in cybernetic system targeted upon shared objectives Diffuse, spontaneous relationships growing out of shared creative process Attitudes toward authority Status is ascribed to parent figures who are close and powerful Status is ascribed to superior roles, which are distant yet powerful Status is achieved by project group members who contribute to targeted goals Status is achieved by individuals exemplifying creativity and growth Ways of thinking and learning Intuitive, holistic, lateral, and error- correcting Logical, analytical, vertical, and rationally efficient Problems centered, professional, practical, cross-disciplinary Process oriented, creative, an hoc, inspirational Attitudes towards people Family membersHuman resourcesSpecialists and expertsCo-creators Ways of changing “Father” changes course Change rules and procedures Shift aim as target moves Improvise and attune Ways of motivating and rewarding Intrinsic satisfaction in being loved and respected Promote to greater position, larger role Pay or credit for performance and problems solved Participating in the process of creating new realities Management style Management by subjectives Management by job description Management by objectives Management by enthusiasm Criticism and conflict resolution Turn other cheeks, save others’ faces, do not lose power game Criticism is accusation of irrationalism unless there are procedures to arbitrate conflict Constructive task- related only, then admit error fast and correct Must improve creative idea, not negate it

IBUS 681, Dr. Yang Managing and Changing Organizational Culture Leadership and organizational culture Elements of culture leaders can change Employee selection criteria Socialization of new members Meaning of work Artifacts/surface manifestations of culture 8-13

8-14IBUS 681, Dr. Yang Convergence or Divergence? Industrialization Emphasis on standardization Organizational strategies for managing culture globally Emphasis on consistency across borders MNC Use of organizational culture as a competitive tool Impact of diverse national cultures on organizational culture Benefits of conducting business in specific and culturally sensitive ways Seniority Job security Group versus individual

8-15IBUS 681, Dr. Yang Implications for Managers Analyze organizational cultures to coordinate activities or change them Understand what levels of culture can be influenced Know how national culture and organizational culture can interact to influence management philosophy and employee behaviors

Video Case: McDonald’s goes to Moscow What does the case imply in general? Whether or not was the effort worth the outcome? How things differ in Moscow as compared to McDonald’s in the U.S.? What is most critical in entering the Soviet market? What are some major issues one must be aware when going to the newly emerged markets such as Russia? How do you view the “Ruble only” policy? Potential employees and customers?