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

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.