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Chapter 16 Organizational Culture
By Ricky Ampil and Heidi Reid
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Overview Describe the elements of organizational culture
Discuss the importance of organizational subcultures List 4 categories of artifacts through which corporate culture is deciphered Identify 3 functions of organizational subcultures Discuss the conditions under which cultural strength improves corporate performance Compare and contrast 4 strategies for merging organizational cultures Identify 4 strategies to strengthen an organization’s culture Describe the stages of organizational socialization
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Introduction Organizational Culture
Values and assumptions shared within an organization 3 Elements of Organizational Culture Visible Element – Artifacts Invisible Elements – Shared Values and Shared Assumptions
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Organizational Subcultures
Organizational Culture refers to the “dominant culture” Beneath the surface exists Subcultures Classified by division, geographic, and occupational groups Enhance dominant culture Includes countercultures which go against the grain 2 Functions of Subcultures Maintain standards of performance and ethical behavior Spawning ground for emerging values that ensure a company adapts to growing trends in the marketplace
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Artifacts Observable symbols and signs of existing culture
Example: Pixar 4 Types of Artifacts Organizational Stories and Legends Rituals and Ceremonies Organizational Language Physical Structures and Symbols
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The Importance of Organizational Culture
3 Functions Control System Social Glue Sense-making Strong cultures must be aligned with the company’s environment to succeed
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Contingencies and Performance
Strong cultures are potentially good… but: Overall weak relationship between cultural strength and success Cultural strength equates to strong individual identity which causes conflict in decision making Strength also forms decision makers into a strict mold with no room for adapting to new/different methods Dissenting subcultural values are smothered rather than promoted
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Adaptive Culture Focus on the changing needs of customers, stakeholders, and support initiatives to keep pace with those changes Possesses an external focus as opposed to internal Within an adaptive culture, employees pay equal attention to organizational processes and organizational goals Strong sense of ownership (Example: New Belgium Brewery) Organizations are more likely to succeed when they utilize an adaptive culture
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Merging Organizational Cultures
Bicultural Audit A diagnosis of cultural relations between companies prior to a merger and a determination of the extent to which cultural clashes are likely to occur In some cases a bicultural audit will result in a decision to end merger talks because the two cultures are too different to merge effectively
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Strategies to Merge Different Cultures
Assimilation Occurs when employees at the acquired company willingly embrace the cultural values of the acquiring organization Deculturation The acquiring company imposes their culture and business practices on the acquired company Integration Combine cultures into a new composite culture that preserves the best features of the previous cultures Separation Occurs if the merging companies agree to remain distinct entities with minimal exchange of culture or organizational practices
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Strategies to Change and Strengthen Org Culture
Actions of Founders and Leaders Symbolize the new culture through memorable events Model the new culture through subtle decisions and actions Culturally Consistent Rewards Reward employees for culturally consistent behaviors Reward managers who help employees understand the culture
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Strategies to Change and Strengthen Culture-cont’d
Selecting and Socializing Employees Hire people whose values are consistent with the culture Inform and indoctrinate new staff about what the culture means Aligning Artifacts Share stories supporting the culture Celebrate goals and milestones to support the culture Inhabit buildings that reflect the culture
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Organization Socialization
The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization The process of adjustment because the individuals need to adapt to their new work environment
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Stages of Socialization
Pre-employment Socialization Learn about the organization and job Form employment relationship expectations Encounter Test expectations against perceived realities Reality Shock-perceived discrepancies between pre-employment expectations and on-the-job reality Role Management Strengthen work relationships Practice new role behaviors Resolve work and non-work conflicts
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Socialization Outcomes
Higher motivations Higher loyalty Higher satisfaction Lower stress Lower turnover
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Q&A 1) How many elements make up Organizational Culture?
B) 3 C) 4 D) 5 2) What are the groups that exist beneath the dominant culture referred to as? 3) T/F – A bicultural audit always integrates two dominant cultures. 4) T/F – Culturally consistent rewards help to strengthen an organizational culture 5) Which of the following is not a positive outcome of organizational socialization? A) Higher Motivation B) Higher Loyalty C) Lower Stress D) Higher Turnover
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