1. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall12-1 Managing Behavior In Organizations Sixth Edition Jerald Greenberg

2. Organizational Culture, Creativity and Innovation Chapter Twelve

3. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-3 Learning Objectives  DEFINE organizational culture and IDENTIFY its core characteristics  DESCRIBE the major types of organizational culture identified in the competing values framework  IDENTIFY the factors responsible for creating organizational culture, for transmitting it, and for getting it to change  DEFINE creativity and DESCRIBE the basic components of individual and team creativity  DESCRIBE various approaches to promoting creativity in organizations  IDENTIFY the basic components of general innovation, its various forms, and the stages of the innovation process

4. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-4 Culture, Creativity, Innovation Three Good Reasons Why You Should Care About... Culture, Creativity, Innovation 1.Organizational culture exerts profound influences on employees, both positive and negative 2.Managers play pivotal roles in developing, transmitting, and changing organizational culture 3.Individual and team creativity is an important determinant of an organization’s capacity to be innovative. This, in turn, plays an important role in organizational success

5. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-5 Organizational Culture  Organizational culture is a cognitive framework consisting of assumptions and values shared by organization members

6. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-6 Core Cultural Characteristics  Sensitivity to others  Interest in new ideas  Willingness to take risks  The value placed on people –Toxic organizational cultures - people do not feel valued –Healthy organizational cultures - people are treated well and are inspired  Openness of available communication options  Friendliness and congeniality

7. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-7 Core Cultural Characteristics

8. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-8 Strength of Organizational Culture  Strong culture - exerts a major influence on the behavior of individuals in the organizations –Values are held intensely and shared widely  Weak culture - has a limited impact on the way people behave  Stronger organizational cultures are more common in smaller, newer organizations

9. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-9 Organizational Culture: One or Many?  Subcultures - cultures existing within parts of organizations rather than entirely throughout them  Dominant Culture - the distinctive, overarching “personality” of an organization, which reflects its core values –Reflects core values

10. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-10 The Role of Organizational Culture  Cultures serve the following vital functions:  Provide a sense of identity for members  Generate commitment to the organization’s mission  Clarify and reinforce standards of behavior

11. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-11 The Role of Organizational Culture Organizational Culture: Provides a sense of identity for members Enhances commitment to the organization’s mission Clarifies and reinforces standards of behavior

12. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-12 The Competing Values Framework  Competing values framework ― cultures of organizations differ with respect to two sets of opposite values 1.Flexibility and discretion as opposed to stability, order, and control 2.Attention to internal affairs as opposed to what’s going on in the external environment

13. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-13 The Competing Values Framework  Four unique types of organizational culture: 1.Hierarchy culture ― internal focus, stability, and control 2.Market culture ― stability and control, but external in their orientation culture 3.Clan culture ― strong internal focus with high degrees of flexibility and discretion 4.Adhocracy culture ― flexibility yet attending to the external environment

14. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-14 Creating Organizational Culture  Two key factors: 1.Company founders 2.Experiences with the external environment Organizational memory – information from an organization’s history that its leaders draw upon later as needed

15. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-15 Founders and Organizational Culture Development of Organizational Culture: Step 1: Founder has idea for new business Step 2: Founder brings in others who share his or her version of the business Step 3: Members of this group act in concert to develop the business Step 4: As the business grows, others are told about the company’s vision and its beginnings

16. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-16 Transmitting Organizational Culture  Symbols ― material objects that connote meanings that extend beyond their intrinsic content  Slogans – send messages about the cultures of the organizations that use them  Jargon - the special language that defines a culture  Ceremonies ― special events that commemorate corporate values  Stories ― illustrate key aspects of an organization’s culture; telling them can effectively introduce those values to employees  Statements of principle ― define culture in writing

17. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-17 Slogans and Organizational Culture

18. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-18 Stories and Organizational Culture New employees at Nike are told stories that transmit the company’s underlying cultural values. The themes of some of the most important ones are summarized here, along with several of the ways the company helps keep its heritage alive. New employees are told the following… Founder Phil Knight was a middle-distance runner who started the business by selling shoes out of his car. Knight’s running coach and company cofounder, Bill Bowerman, developed the famous “waffle sole” by pouring rubber into the family waffle iron. The late Steve Prefontaine, coached by Bowerman, battled to make running a professional sport and was committed to helping athletes. To ensure that these tales of Nike’s heritage are kept alive, the company… Takes new hires to the track where Bowerman coached and the site of Prefontaine’s fatal car crash. Has created a “heritage wall” in its Eugene, Oregon, store. Requires salespeople to tell the Nike story to employees of the retail stores that sell its products.

19. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall12-19 How Culture Changes  Composition of the workforce  Mergers and acquisitions  Culture clashes ― merger of two organizations with incompatible cultures  Strategic organizational change  Responding to the Internet

20. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-20  Creativity is the process by which individuals or teams produce novel and useful ideas  Components of individual and team creativity include:  Domain-relevant skills - the capacity to perform a given task  Creativity-relevant skills - the capacity to approach things in novel ways  Intrinsic task motivation - the motivation to do work because it is interesting, engaging, or positively challenging Creativity

21. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-21 Components of Creativity Creativity: Skills in the task domain Skills in creative thinking Intrinsic task motivation

22. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-22  Creativity-relevant skills ― special skills that foster creativity  Break mental sets and take new perspectives Divergent thinking ― process of reframing familiar problems in unique ways  Understand complexities  Keep options open and avoid premature judgments  Follow creativity heuristics ― strategies that help approach tasks in novel ways  Use productive forgetting ― ability to abandon unproductive ideas and temporarily put aside stubborn problems until new approaches can be considered Creativity-Relevant Skills

23. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-23 Triggering Divergent Thinking To encourage divergent thinking, exercises often are conducted in which people are asked open-ended questions to which there are no correct answers. Responses are free to fall outside normal ways of thinking. The following are typical examples: List various uses for hat other than wearing it Make as many sentences as you can that include the following words: melon, consider, flower, paper. How could you turn a cardboard box into a temporary tent for use on a camping trip in the woods? Think carefully about a stone. Then indicate what you believe to be its hidden meanings. If you were going to host a party for a group of elves, what would you serve (in additon to those cookies they make)? Your car is stuck in a ditch along a deserted road and you do not have a cell phone. Using only the things likely to be found around the car, how could you summon help?

24. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-24 A Model of the Creative Process Step 1: Prepare to be creative Step 2: Allow idea to incubate Step 3: Document insight Step 4: Verify ideas

25. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-25 Training People to be Creative  Think outside the box  Encourage openness to experience  Send employees on thinking expeditions  Set creative goals

26. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-26 Developing Creative Environments  Ensure autonomy  Provide exposure to other creative people  Allow ideas to cross-pollinate  Make jobs intrinsically interesting  Set your own creative goals  Support creativity at high organizational levels

27. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-27 Innovation  Innovation - the successful implementation of creative ideas within an organization  Building blocks:  Motivation to innovate  Resources to innovate  Innovation management Goals Rewards Time Pressure

28. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-28 Five Most Innovative Companies

29. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-29 Major Forms of Innovation  Impact on existing business –Sustaining innovation – the “better mousetrap” –Disruptive innovation – completely changes the market  Degree of uncertainty –Incremental innovation – slow and steady approach to innovation –Radical innovation – quantum leaps in innovation  Source of innovation –Manufacturer innovation – occurs when an individual or organization develops an innovation for the purpose of selling it –End-user innovation – involves getting inspiration from users of goods or services

30. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-30 Targets of Innovation  Product innovation – introducing goods that are new or substantially improved  Service innovation – introducing services that are new or substantially improved  Process innovation – creating new or significantly improved production or delivery methods  Marketing innovation – coming up with new and/or improved marketing methods  Supply chain innovation – developing quicker and more accurate ways to get products from suppliers into the hands of customers  Business model innovation - revising how business is done  Organizational innovation – changing key organizational practices

31. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 12-31 The Process of Innovation  Stage 1: Setting the agenda –Creating a mission statement - provides overall direction and general goals  Stage 2: Setting the stage –Using skills for innovation management –Full use of human and financial resources  Stage 3: Producing the ideas –Individual and small group creativity –Coming up with new ideas and testing them  Stage 4: Testing and implementing the ideas –Other parts of the organization get involved  Stage 5: Outcome assessment –Assessing the new idea

32. Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall32