McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Organizational Context: Design and Culture Chapter Three

Learning Objectives Explain the organization theories of open systems, information processing, contingency, ecology, and learning. Present the modern horizontal, network, and virtual designs of organizations. Define organizational culture and its characteristics. Relate how an organizational culture is created. Describe how an organizational culture is maintained. Explain some ways of changing organizational culture.

Introduction Organization structure represents the skeletal framework for organizational behavior. –Consists of very flexible networks. –Recognizes the interaction of information technology and people. Cultural context that the organization provides for organizational behavior.

Organization Theory Historical roots - Chester Barnard. –Cooperative system is contingent on the human participants’ Ability to communicate Willingness to serve Strive toward a common purpose Organization as an open system –input → transformation process → output

Organization Theory Continued Information processing view of organizations –External and internal uncertainties. –Become a networked, information processing systems. Contingent and ecological organization theories –Learning organization represents the latest thinking in organization theory and compatible with the new paradigm environment.

Organization Theory Continued A learning organization –Single loop learning –Double loop learning Organizational behavior in the learning organization. –Associated with employees’ reacting to environmental changes and characterized by human-oriented cultural values. Learning organizations in action.

Characteristics of Learning Organizations

Traditional versus Learning Organizations

Modern Organization Designs Horizontal organizations –Relevant to today’s environmental needs for flexibility, speed, and cooperation. Network designs –Involves a unique combination of strategy, structure, and management processes. Virtual organization –Temporary network of companies that come together quickly to exploit fast-changing opportunities.

Traditional Hierarchical versus the Network Organization

The Contrast Between the Hierarchical and Network Organization

Example of a Virtual Organization

Organizational Culture Context Definition and characteristics –Recognize the importance of shared norms and values that guide organizational participants’ behavior. Uniformity of culture –Organizational culture, a common perception held by the organization’s members. Dominant culture Subculture

Creating and Maintaining a Culture How organizational cultures start –Common steps include the formation of an idea, a core group, action plan, and implementation. Maintaining cultures through steps of socialization –Selection of entry-level personnel –Placement on the job –Job mastery

Steps of Organizational Culture Socialization

Creating and Maintaining a Culture Continued Maintaining cultures through steps of socialization (continued) –Measuring and rewarding performance –Adherence to important values –Reinforcing the stories and folklore –Recognition and promotion

Creating and Maintaining a Culture Continued Changing organizational culture –Case of mergers and acquisitions Focus areas: structure, politics, and emotions. –Case of emerging relationship enterprises Success dependent on trust, communication, and negotiation skills. –Guidelines for change Caution: pragmatically changing an organizational culture affects almost every aspect of the business.

Questions