2. Explain the ways in which culture provides the framework and foundation for how work is accomplished and what activities and practices are valued in a firm
Differentiate between the three levels of culture: (1) artifacts, (2) values and beliefs, and (3) assumptions
Discuss the ways in which culture is developed, influenced, and socialized in a firm
© South-Western, a part of Cengage Learning

3. Explain how a firm’s culture can impact organizational performance
Explain the role that culture plays when a firm is acquired or when a firm must adapt to new environmental challenges
© South-Western, a part of Cengage Learning

4. What is Culture?
The way individuals in an organization uniquely and collectively think, feel, and act
Provides employees with a road map and a set of rules for how work gets done and how people interact in the firm
Responds to humans’ basic need for stability, consistency, and meaning
Needs to be externally relevant to ensure that the firm operates successfully as its environment changes
© South-Western, a part of Cengage Learning

5. Understanding Culture
Deciphering the roots of a firm’s culture
An appreciation of its values and philosophy or purpose
An understanding of the group’s boundaries
An understanding of its power structure
An understanding of its work rules and norms
An evaluation of its reward and punishment system
© South-Western, a part of Cengage Learning

6. Levels of Organizational Culture
Visible organizational structures, processes, and languages
Artifacts
The meanings that members of an organization attach to artifacts
Beliefs and values
A behavior stemming that stemmed from a belief held by a group that is no longer visible, but has become deeply embedded in the organization
Assumptions
© South-Western, a part of Cengage Learning

7. Role of the Founder in Influencing an Organization’s Culture
Their capacity to absorb the anxiety associated with risk
An organization’s culture
Their capacity to make assumptions stick
Their encouragement of innovation
© South-Western, a part of Cengage Learning

8. How Do/Should Leaders Affect Culture?
Reward achievement with non-pay perks such as new assignments and employee recognition
Create a challenging work environment
Establish and abide by a clear set of values
A leader’s role in shaping culture
Inspire all managers and employees to do their best
Empower employees and managers to make independent decisions and to find ways to improve operations
Reward achievement with pay based on performance and continue raising the bar
© South-Western, a part of Cengage Learning

9. Role of Teams
Teams directly impact culture by the manner in which they:
Encounter big problems
Solve those problems
Perceive the effects of their solutions
A course of action prescribed by a founder has to be tried and tested by employees before it becomes an integral part of an organization’s culture
© South-Western, a part of Cengage Learning

10. Cultural Socialization
The process of understanding how work gets done and how individuals should interact in an organization
Socialization
The desired end result of socialization whereby employees become committed to the organization and its goals
Organizational
commitment
© South-Western, a part of Cengage Learning

11. The Process of Cultural Socialization
Forms of cultural socialization
Stories, legends, myths, and parables
What leaders pay attention to, measure, and control
Leader reactions to critical incidents and crisis
Statements of philosophy, creeds, and values
Design of physical spaces
Role modeling, leader examples, teaching, and coaching
Reward systems and norms
Design of the organization
Criteria for recruiting, selecting, promoting, and managing employees
© South-Western, a part of Cengage Learning

12. Figure 8.1 - Determinants of Culture
© South-Western, a part of Cengage Learning

13. Figure 8.2 - Building Organizational Commitment
© South-Western, a part of Cengage Learning

14. How Does Culture Affect Performance?
A strong culture:
Can lead to better levels of performance, higher financial metrics, and distinctive competitive advantage
Promotes ethical guidelines that define acceptable and unacceptable behavior, helping the organization require less coordination and monitoring
Clarifies roles by being explicit about what is expected in an organization
Subcultures: Cultures that form around geographic or organizational units in a company
© South-Western, a part of Cengage Learning

15. Figure 8.3 - The Impact of Values on Culture
Source: Jennifer A. Chatman and Sandra Eunyoung Cha, “Leading by Leveraging Culture,” California Management Review, Vol. 45, No. 4, Summer 2003, pp. 24–25; and Yoash Wiener, “Forms of Value Systems: A Focus on Organizational Effectiveness and Cultural Change and Maintenance,” Academy of Management Review, Vol. 13, No. 4, 1988, pp. 534–545.
© South-Western, a part of Cengage Learning

16. Culture and Crucial Moments
Evaluating culture in mergers and acquisitions
Understanding the acquiring and acquired firm’s culture
Combining the two cultures
Where are the similarities and differences?
What needs to change?
How to ensure that the value of both cultures is maximized?
Key point for managers to keep in mind is that much of the value of an acquired firm may be in its culture
© South-Western, a part of Cengage Learning

17. Culture and Crucial Moments
Adapting culture to a new contextual landscape
Culture can be a competitive differentiator and a strong inhibitor to change
Culture can be changed smoothly by paying attention to the task that is performed on a continuous basis
At the time of crisis company culture changes more quickly
Employees should be willing to embrace new values
Leader should provide clear and compelling case for change
© South-Western, a part of Cengage Learning

18. Strategic Change and Culture
How work is accomplished in a firm
Internal integration
How environmental changes impact a firm’s strategy
External adaptation
© South-Western, a part of Cengage Learning

19. KEY TERMS
Artifacts Assumption Beliefs and values Culture External adaptation Internal integration Organizational commitment Socialization Subcultures
© South-Western, a part of Cengage Learning