1. Chapter 12: Organizational Culture Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. Organizational Culture Organizational culture is the shared social knowledge within an organization regarding the rules, norms, and values that shape the attitudes and behaviors of its employees. »Culture is social knowledge among members of the organization. »Culture tells employees what the rules, norms, and values are within the organization. »Organizational culture shapes and reinforces certain employee attitudes and behaviors by creating a system of control over employees. 12-2

3. Culture Components Observable artifacts are the manifestations of an organization’s culture that employees can easily see or talk about. »Symbols can be found throughout an organization, from its corporate logo to the images it places on its Web site to the uniforms its employees wear. »Physical structures are the organization’s buildings and internal office designs. »Language reflects the jargon, slang, and slogans used within the walls of an organization. 12-3

4. Culture Components, Cont’d Observable artifacts, continued »Stories consist of anecdotes, accounts, legends, and myths that are passed down from cohort to cohort within an organization. »Rituals are the daily or weekly planned routines that occur in an organization. »Ceremonies are formal events, generally performed in front of an audience of organizational members. Espoused values are the beliefs, philosophies, and norms that a company explicitly states. »Published documents, verbal statements made to employees by managers. 12-4

5. Culture Components, Cont’d Basic underlying assumptions are taken-for- granted beliefs and philosophies that are so ingrained that employees simply act on them rather than questioning the validity of their behavior in a given situation. »Represent the deepest and least observable part of a culture and may not be consciously apparent, even to organizational veterans. »Its hidden beliefs are those that are the most likely to dictate employee behavior and affect employee attitudes. 12-5

6. General Culture Types Fragmented culture is an organizational culture type in which employees are distant and disconnected from one another. Mercenary culture is an organizational culture type in which employees think alike but are not friendly to one another. Communal culture is an organizational culture type in which employees are friendly to one another, but everyone thinks differently and does his or her own thing. Networked culture is an organizational culture type in which employees are friendly to one another and all think alike. 12-6

7. Specific Culture Types Customer service culture is a specific culture type focused on service quality. »Shown to change employee attitudes and behaviors toward customers. Figure 12-3 12-7

8. Specific Culture Types, Cont’d Diversity culture is a specific culture type focused on fostering or taking advantage of a diverse group of employees. Creativity culture is a specific culture type focused on fostering a creative atmosphere. »Affects both the quantity and quality of creative ideas within an organization. 12-8

9. Culture Strength Culture strength exists when employees definitively agree about the way things are supposed to happen within the organization (high consensus) and when their subsequent behaviors are consistent with those expectations (high intensity). Subcultures unite a smaller subset of the organization’s employees. »Created because there is a strong leader in one area of the company that engenders different norms and values »Created because different divisions in a company act independently and create their own cultures. Countercultures exist when a subcultures’ values do not match those of the organization. 12-9

10. Maintaining an Organizational Culture Attraction-Selection-Attrition (ASA) framework holds that potential employees will be attracted to organizations whose cultures match their own personality. »Some potential job applicants won’t apply due to a perceived lack of fit. »Organizations will select candidates based on whether their personalities fit the culture, further weeding out potential “misfits.” »Those people who still don’t fit will either be unhappy or ineffective when working in the organization. 12-10

11. Maintaining an Organizational Culture, Cont’d Socialization is the primary process by which employees learn the social knowledge that enables them to understand and adapt to the organization’s culture. »It is a process that begins before an employee starts work and doesn’t end until an employee leaves the organization. »Realistic job preview (RJP) is the process of ensuring that a potential employee understands both the positive and negative aspects of the potential job. –One of the most inexpensive and effective ways of reducing early turnover among new employees. »Mentoring is a process by which a junior-level employee (protégé) develops a deep and long-lasting relationship with a more senior-level employee (mentor) within the organization. –Can provide social knowledge, resources, and psychological support to the protégé both at the beginning of employment and as the protégé continues his or her career with the company. 12-11

12. Changing an Organizational Culture Changes in leadership »New leaders bring their own ideas and values, and leaders are expected to be a driving force for change. Mergers and Acquisitions »Two companies with distinct cultures are merged to form a new culture. 12-12

13. How Important Is Organizational Culture? Person–organization fit is the degree to which a person’s personality and values match the culture of an organization. »Employees judge fit by thinking about the values they prioritize the most, then judging whether the organization shares those values. »When employees feel that their values and personality match those of the organization, they experience higher levels of job satisfaction and feel less stress about their day-to-day tasks. »Employees also feel higher levels of trust toward their managers. 12-13