Organizational Culture Chapter 16 Nelson & Quick Organizational Culture

Organizational (Corporate) Culture A pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization Each year Fortune magazine releases its list of America’s Top Employers. Visit the site and do a keyword search on “best companies to work for.” Who are some of the top companies to work for according to Fortune? What might employees find appealing about the organizational culture of those companies? 2

Levels of Organizational Culture Artifacts - symbols of culture in the physical and social work environment Values Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave Levels of Organizational Culture Organizational culture can be developed in many ways. IDEO is a respected design firm that helps companies create an innovative culture through the development of sophisticated products and “workplace environments.” Visit IDEO to explore ways in which the firm’s products and services help contribute to corporate culture at various levels. Assumptions - deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things

Organizational Culture Levels Artifacts : Personal enactment Ceremonies and rites Stories Ritual Symbols Visible, often not decipherable Values: Testable in physical environment Testable only by social consensus Greater level of awareness Assumptions Relationship to environment Nature of reality, time, and space Nature of human nature Nature of human activity Nature of human relationships Taken for granted Invisible Preconscious Reprinted with permission from Edgar H. Schein, Organizational Culture and Leadership: A Dynamic View. Copyright © 1985 Jossey-Bass Inc, asubsidiary of John Wiley & Sons, Inc. 3

Functions of Organizational Culture Culture provides a sense of identity to members and increases their commitment to the organization Culture is a sense-making device for organization members Culture reinforces the values in the organization Culture serves as a control mechanism for shaping behavior

organizational culture and performance Theories about the relationship between organizational culture and performance Strong Culture Perspective Fit Perspective Adaptive Perspective

Strong Culture Perspective An organizational culture with a consensus on the values that drive the company and with an intensity that is recognizable even to outsiders Strong Culture Perspective Strong cultures facilitate performance because They are characterized by goal alignment They create a high level of motivation because of shared values by the members They provide control without the oppressive effects of bureaucracy

Argument that a culture is good only if it fits the industry’s or the firm’s strategy. Perspective Organizational characteristics that may affect culture Customer requirements Competitive environment Societal expectations

An organizational culture that encourages confidence and risk taking among employees, has leadership that produces change, and focuses on the changing needs of customers Adaptive Perspective Adaptive Nonadaptive Most managers care about themselves, their work group, or an associated product about customers, stockholders, and employees Managers tend to behave somewhat insularly, politically, and bureaucratically Managers pay close attention to all their constituencies, esp. customers Core Values Common Behavior Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Corporate Culture and Performance by John P. Kotter and James L Heskett. Copyright © 1992 by Kotter Associates, Inc. and James L. Heskett.

Five Most Important 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

Organizational Socialization The process by which newcomers are transformed from outsiders to participating, effective members of the organization

Stages of Socialization Realism Congruence 1. Anticipatory Socialization 2. Encounter Job demands Task Role Interpersonal 3. Change and Acquisition Mastery Performance Satisfaction Mutual influence Low levels of distress Intent to remain Outcomes of Socialization Stages of Socialization From “An Ethical Weather Repart: Assessing the Organizaiton’s Ethical Climate” by John B. Cullen, et al. In Organizational Dynamics, Autumn 1989. Copyright © 1989 American Management Asociation International. Reprinted by permission of American Management Association International, New York, N.Y. All rights reserved. Http://www.amanet. Org.

1. Anticipatory Socialization - the first socialization stage--encompasses all of the learning that takes place prior to the newcomer’s first day on the job 2. Encounter the second socialization stage-- the newcomer learns the tasks associated with the job, clarifies roles, and establishes new relationships at work 3. Change & Acquisition the third socialization stage--the newcomer begins to master the demands of the job

Socialization as Cultural Communication Core values are transmitted to new organization members through the role models they interact with the training they receive the behavior they observe being rewarded and punished

Assessing Organizational Culture Organizational Culture Inventory focuses on behaviors that help employees fit into the organization & meet coworker expectations Kilman-Saxton Culture-Gap Survey focuses on the expectations of others in the organization Triangulation - the use of multiple methods to measure organizational culture

Situations That May Require Cultural Changes Merger or acquisition Employment of people from different countries Reasons That Change Is Difficult Assumptions are often unconscious Culture is deeply ingrained and behavioral norms and rewards are well learned

Interventions for Changing Organizational Culture Hiring and socializing members who fit in with the new culture Removing members who reject the new culture Culture 4 5 Cultural communication Changing behavior 1 3 Examining justifications for changed behavior Interventions for Changing Organizational Culture 2 Reprinted with permission from Vijay Sathe “How to Decipher & Change Corporate Culture,” Copyright © 1985 Jossey-Bass Inc, Reprinted by permission Of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc..

Cultural Modifications in the Current Business Environment Empowerment of employees to excel in product and service quality Support for a global view of business Reinforcement of ethical behavior

Support for a global view of business Create a clear and simple mission statement Create systems that ensure effective information flow Create “matrix minds” among managers Develop global career paths Use cultural differences as major assets Implement worldwide management education and team development programs Diversityauthority.com is a branch of the International Quality and Productivity Center that helps develop cultural diversity among business organizations. Visit the site to learn more about how the group provides proven strategies for successfully measuring, managing, and leveraging diversity goals for a more global business environment.

Reinforcement of ethical behavior Clear communication of the boundaries of ethical conduct Selection of employees who support the ethical culture Reward of ethical behavior Conspicuous punishment of members who engage in unethical behavior

Empowerment of employees to excel in product and service quality Empowerment unleashes employees’ creativity Empowerment requires eliminating traditional hierarchical notions of power Involve employees in decision making Remove obstacles to their performance Communicate the value of product and service quality