1. ORGANIZATIONAL CULTURE

2. What is Organizational Culture? Shared values, ways of thinking, attitudes, and guiding beliefs… –That are relevant to, and supportive of, the organization and its goals. –Unfortunately many organizational cultures are not the most appropriate ones for the organization and its situation.

3. The Purpose of Culture To help integrate organizational members so that they know how to relate and work together effectively. To help the organization to best adapt to its mission and to its environment.

4. John Chambers: CEO of Cisco Systems (June 2010 interview) “When I started (At Cisco in 1995), I viewed my job as three main areas: vision and strategy of the company, development and recruitment of the team to implement that vision and strategy, and the need to communicate all of the above.” “Within four or five years I realized there was something that many of us do not understand when we take a leadership role: culture. Great companies have very strong and great cultures.” “ A huge part of a leadership role is to drive the culture of the company and to reinforce it.”

5. EFFECTS OF CULTURE Determines how people communicate Determines how people interact Determines how people relate to one another Guides day-to-day working relationships Determines what is appropriate behavior Determines how power and status are allocated

6. Levels of Corporate Culture The Iceberg Analogy Observable Symbols Ceremonies, Stories, Slogans, Behaviors, Dress, Physical Settings Invisible Aspects Underlying Values, Assumptions, Beliefs, Attitudes, Feelings

7. Rites and Ceremonies Rites of Passage –Facilitates transition into or out of the organization –EG: freshman week and senior week Rites of Integration –Encourages common feelings of group identity –EG: homecoming / sporting events Rites of Renewal –Improve organizational functioning –EG: team building Rites of Enhancement –Enhance social identities common feelings –EG: Student awards and recognition / dean’s list

8. Organizational Rites and Their Social Consequences Type of RiteExampleSocial Consequences Passage Induction and basic training; US Army Facilitate transition of person into new social roles and statuses EnhancementAnnual awards night Enhance social identities and increase status of members Renewal Organizational development activities Refurbish social structures and improve organization functioning IntegrationOffice holiday party Encourage and revive common feelings that bind members together and commit them to the organization Source: Adapted from Harrison M. Trice and Janice M. Beyer, “Studying Organizational Cultures through Rites and Ceremonials,” Academy of Management Review 9 (1984), 653-659. Used with permission.

9. Stories, Symbols, & Language They reinforce existing culture, but they don’t create culture by themselves. Employees learn more from observed behavior. Slogans, stories and symbols are useful in reinforcing desired behaviors. The really important thing is for managers to display the desired values and beliefs in their day-to-day behaviors.

10. Organizational Chart for Nordstrom Directors Store Mgrs, Buyers, Merchandise Mgrs. Dept Managers Sales & Sales Support CustomersCustomers

11. Determinants of Culture Stable but with a clear external vision and orientation. MISSION Highly organic and focused on adapting to the external environment. ADAPTABILITY Internal efficiency & stability. Mechanistic, conformity, high integration, collaboration BUREAUCRACTIC People oriented, family atmosphere dealing with external change. Clan controls. CLAN CULTURE ENVIRONMENT STRATEGY External focus Internal focus StableDynamic StabilityFlexibility NEEDS based on the environment

12. The Learning Organization’s Culture Each employee considers how his or her actions will affect others and the organization. A culture of equality: All employees are treated equally without status differences. A culture of risk-taking, adaptation, and continual improvement. The status quo is always being questioned.

13. SUB CULTURES Organizations can have different sub cultures just as they have different sub structures. Organic departments/divisions may well have different cultures than mechanistic ones. –EG: The culture of accounting students versus the culture of art students.

14. Cultural Strength Measured by the degree of agreement about shared values. A strong culture is associated with increased frequency of the visible elements. A strong culture can be very hard to change unless it is a culture of change. –The Learning Organization must have a strong culture that is supportive of risk taking, adaptation, improvement and change

15. Environment - Strategy - Culture The match between strategy, environment, and culture is very important. Environment Culture Strategy “Corporate culture should embody what the organization needs to be effective within its environment.” Since we have little, if any, influence on the external environment, we need to create an organizational culture that fits with the strategy and environment.

16. ETHICS versus MORALS Ethics: A system of moral principles. Morals: Have to do with right and wrong behavior. (Our principles and values governing right and wrong behavior.) Laws Ethics (moral principles)

17. QUIZ Your Friend has an open box of cookies sitting out, but he or she is not there to offer you one. Would you eat one? Two? Three? The entire box?

18. Have you ever said “I love you.” when you didn’t mean it? Never Once Twice All the time QUIZ

19. A very good friend asks you if you think she is attractive. You think she is ugly as a wart. What would you say? You find a bag with $1000 in unmarked bills. No one saw you pick it up. There is a receipt inside with the owner’s name and address. What would you do? QUIZ

20. Ethical Conundrums Is ethics a matter of degree? Can the same behavior be ethical in one situation and unethical in another? Should everyone have the same ethics?

21. Forces That Shape Managerial Ethics Is a Decision or Behavior Ethical and Socially Responsible? Is a Decision or Behavior Ethical and Socially Responsible? Beliefs and Values Moral Development Ethical Framework Beliefs and Values Moral Development Ethical Framework Personal Ethics Structure Policies, Rules Code of Ethics Reward System Selection, Training Structure Policies, Rules Code of Ethics Reward System Selection, Training Organizational Systems Government Regulations Customers Special Interest Groups Global Market Forces Government Regulations Customers Special Interest Groups Global Market Forces External Stakeholders Rituals, Ceremonies Stories, Heroes Language, Slogans Symbols Founder, History Rituals, Ceremonies Stories, Heroes Language, Slogans Symbols Founder, History Organizational Culture

22. Formal Structure and Systems of the Organization Ethics committee: A cross-functional oversight group. Chief Ethics Officer: Oversees ethics programs. Code of ethics: A formal statement of the organization’s values regarding ethics and social responsibility Training programs

23. How Leaders Shape Culture By what they do. –The examples they set –The types of people they hire By what they say. –Formal policies, codes of ethics, etc. By what the organization does. –Ethical training, ethics committees… VALUE-BASED LEADERSHIP

24. “Managerial work can be viewed as managing myth, symbols, and labels… because managers traffic so often in images, the appropriate role for the manager may be evangelist rather than accountant.” – Karl Weick

25. Ralph Davis CEO, Travel Insurance Services “Many years ago, I came back to my office after a seven week absence, having entrusted the business to those I hired. It was a mess. Cliques; infighting; no more family team that I had developed. I called each individual into my office and asked what happened. Every person pointed to someone else. Essentially, everyone was at fault for participating, yet no one took responsibility for their individual actions. So, I fired them all! Best thing I ever did.”

26. Travel Insurance Services - The Aftermath A conversation with the CEO “Next morning, I walked in and found a banner with everyone's signature and apology...and a request to be rehired. “I accepted the apologies, rehired everyone. A few week's later I let go the office manager who was the chief culprit. “One quit because of the manager's firing. Two years later, the quitter called me and took me to lunch. She apologized for quitting, realized she'd ‘backed the wrong horse’. Wasn't asking for her job, but ‘wanted me to know’ about her conclusion. “Never had the problem again. Some of the people are still with my old company.” Davis sold the company and retired in 2004

27. Update:Travel Insurance Services “The NASDAQ listed company that ultimately purchased my business told everyone two months later: ‘Your business is about revenue, THEN relationships.’ So much for today's MBAs running corporate America. When I was asked to produce my legacy notes, i.e. explain how I got to run a profitable company, my first sentence was, "It's all about relationships. Revenue will come later. By relationships, I mean (1) take care of the employees; (2) help them take care of the prospect and client; (3) then the shareholders will be taken care of. That's what made my company successful; that's why you're happy with your profitable purchase". Never again heard from them. They've refused to use me as a consultant, which has led them to lose major business unnecessarily, and 25% of the seasoned employees have left.