Chapter Eight Organizational Culture, Structure & Design: Building Blocks of the Organization

What is an Organizational Culture? Organizational Culture: is a system of shared beliefs and values that develops within the organization and guides the behavior of its members. Layers of Organizational Culture Invisible Level: Not seen by the naked eye. Visible Level: Observable culture Manifestations of culture: Symbols Stories Heroes Rites and rituals Four Functions of Organizational Culture It gives members an organizational identity It facilitates collective commitment It promotes social-system stability It shapes behavior by helping employees make sense of their surroundings The Organization: Three Types Organization: is a system of consciously coordinated activities or forces of two or more people. For profit organizations Nonprofit organizations Mutual-benefit organizations McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Four Functions of Organizational Culture Identity Collective Commitment Sense Making Device Organizational Culture Social System Stability McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Organization Chart Board of Directors Strategic Planning Advisor Chief Executive Officer Legal Counsel President Cost Containment Staff Executive Administrative Director Executive Medical Director Director of X-Ray & Laboratory Services Director of Pharmacy Chief Physician Director of Personnel Director of Admissions Director of Nutrition & Food Services Director of Patient & Public Relations Director of Accounting Director of Surgery Director of Outpatient Services McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Common Elements of Organizations: Edgar Schein Common purpose: means of unifying members Coordinated effort: working together for common purpose Division of labor: work specialization for greater efficiency Hierarchy of authority: the chain of command More Common Elements of Organizations Span of control Authority, responsibility, and delegation Centralization versus decentralization of authority Contingency Design Contingency Design: the process of fitting the organization to its environment Environment—mechanistic versus organic Environment—differentiation versus integration Size Technology Life cycle McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Mechanistic versus Organic Organizations Decentralized hierarchy of authority Centralized hierarchy of authority Shared tasks Specialized tasks Few rules and procedures Many rules and procedures Informal communication Formalized communication Many teams of task forces Few teams or task forces Wider span of control, flatter structures Narrow span of control, taller structures McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Why Organizations Might Resist Learning Differentiation Vs. Integration Differentiation: the tendency of the parts of an organization to disperse and fragment. Integration: the tendency of the parts of an organization to draw together to achieve a common purpose. Organizational Size Organizational Size: is usually measured by the number of full-time employees. Technology Technology: consists of all the tools and ideas for transforming materials, data, or labor (inputs) into goods or services (outputs Life CycleLife Cycle: has a natural sequence of stages: birth, youth, midlife, and maturity. Why Organizations Might Resist Learning People believe that competition is always better than collaboration Fragmentation leads to specialized fiefdoms that resist learning Unless encouraged, people won’t take risks, the basis for learning McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.