© 2005 Prentice-Hall, Inc Chapter 13 Organizational Culture

© 2005 Prentice-Hall, Inc Learning Objectives Define organizational culture and know why it is important Distinguish among organizational, national, and global culture and understand the relationships among them

© 2005 Prentice-Hall, Inc Learning Objectives Evaluate the culture-free approach to understanding organizational culture Identify levels of organizational culture Know what organizational culture does

© 2005 Prentice-Hall, Inc Learning Objectives Discuss the cultural dimensions and typology approaches to understanding organizational culture Understand how organizational culture can be managed

© 2005 Prentice-Hall, Inc 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

© 2005 Prentice-Hall, Inc National and Global Culture Relationship between national and corporate culture complex “Logic of industrialization" may affect all organizations the same way

© 2005 Prentice-Hall, Inc National and Global Culture National culture and other elements in an organization's environment may determine internal organizational culture Globalization also affects organizational culture

© 2005 Prentice-Hall, Inc Understanding Organizational Culture Culture-free approach Technology, policies, rules, organizational structure, and other variables that contribute to efficiency and effectiveness make national culture irrelevant for successful management Organizations culture free in some respects, but culture bound in many others

© 2005 Prentice-Hall, Inc Levels of Organizational Culture Artifacts Concrete aspects of an organization that symbolize its culture Espoused Values Public values and principles that organization's leaders announce it intends to achieve

© 2005 Prentice-Hall, Inc Levels of Organizational Culture Actual Values Validated espoused values, what the organization demonstrates it stands for Basic Underlying Assumptions Unconscious beliefs and values that structure feelings, perceptions, thoughts, and actions that members of a culture view as the only correct understanding of life Usually emphasize or exaggerate major national cultural themes

© 2005 Prentice-Hall, Inc Levels of Organizational Culture Subcultures Shared meanings created and maintained by groups within an organization Reflect division of labor or personal background of employees

© 2005 Prentice-Hall, Inc 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 Can clash when two companies merge Can become "cultural Tower of Babel"

© 2005 Prentice-Hall, Inc 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 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?

© 2005 Prentice-Hall, Inc Some Underlying Dimensions of Organizational Culture 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?

© 2005 Prentice-Hall, Inc Some Underlying Dimensions of Organizational Culture 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?

© 2005 Prentice-Hall, Inc Trompenaars’ Four Corporate Cultures Family culture Emphasizes personal, face-to-face relationships Hierarchical with authority structure based on power differentials commonly experienced between parents and children

© 2005 Prentice-Hall, Inc Trompenaars’ Four Corporate Cultures Eiffel Tower culture Emphasizes division of labor and coordination through hierarchy of authority Relies on planning to accomplish its goals

© 2005 Prentice-Hall, Inc Trompenaars’ Four Corporate Cultures Guided missile culture Egalitarian, impersonal, task oriented Incubator culture Attempts to minimize organizational structure and culture

© 2005 Prentice-Hall, Inc Leadership and Organizational Culture Not clear to what extent leaders can manage organizational culture Elements of Culture Leaders Can Change Employee selection criteria Socialization of new members Meaning of work Artifacts/surface manifestations of culture

© 2005 Prentice-Hall, Inc Convergence or Divergence? Industrialization Organizational strategies for managing culture Use of organizational culture as a competitive tool Impact of diverse national cultures on organizational culture

© 2005 Prentice-Hall, Inc Implications for Managers Analyze organizational cultures to coordinate activities or change them Understand what levels of culture can be influenced Know how organizational culture can influence a manager