Organizational Culture

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Chapter 16 Organizational Culture
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Objectives

• Define organizational culture and explain its
  function
• Explain how organizational culture evolves and is
  transmitted
• Contrast the characteristics of strong and weak
  cultures
• Explain the relationship between strong cultures
  and high performance

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Objectives

• Describe the importance of organizational justice
• Explain the impact of organizational culture in
  mergers
• Describe how leaders can manage culture
• Identify the four stages in the organizational
  life cycle

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Organizational Culture - Defined

• Pattern of shared values and beliefs that
  produce certain norms of behavior

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Uncovering Levels of Culture
Visible organizational structures and processes
Artifacts
Espoused Values
Strategies, goals, philosophies
Unconscious, taken-for-granted beliefs,
perceptions, thoughts, and feelings
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Types f Cultures

• Dominant culture manifests the values shared by
  a majority of the organization's members
• Subculture shares the dominant cultures core
  values as well as other values that characterize
  their own department, geographical unit, etc.
• Counterculture its values are in opposition to
  those of the dominant culture

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Functions of Organizational Culture

• Provide a sense of identity
• Generate commitment
• Helps make sense of occurrences
• Control mechanism

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Sources of Culture

• Beliefs, values and assumptions of founders,
  leaders
• Learning experiences of group members as their
  organization evolves
• New beliefs, values, and assumptions brought in
  by new members and leaders

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Strong Cultures - Defined

• Strong cultures have core values and beliefs
  that are intensely held, more widely shared and
  more ordered than weak cultures

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Characteristics of Strong Cultures

• Easily identified dominant values
• Selection process targets people who fit the
  culture
• Socialization and training teach newcomers the
  ropes
• Employees who dont fit are fired
• Rewards for acting in accordance with cultural
  values
• Leaders and managers send clear signals about
  desired values and norms

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Strong Cultures

• Advantages
• High performance under certain conditions
• Clear sense of purpose
• More value-driven decision making
• Employee commitment
• Loyalty
• Pride

• Disadvantages
• Pressure for conformity
• Resistance to change

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Strong Cultures and Performance

• Strong Culture
• Focus on Key Constituencies
• Leadership at all Levels

High Performance
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The Importance of Fit
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Transmitting Culture Via

• Socialization
• Stories
• Symbols
• Jargon
• Rituals and Ceremonies
• Statements of Principles

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Socialization - Defined

• Socialization is the systematic process by
• which organizations bring new members into
• their cultures

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Seven Steps of Socialization
Humility-inducing experiences
Careful selection of candidates
In-the-trenches training
Careful attention to rewards control systems
Consistent role models
Careful adherence to core values

• Reinforcing
• folklore

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Organizational Justice

• Distributive Justice - Fair distribution of
  resources (pay, rewards, promotions and dispute
  resolutions)
• Procedural Justice - Fair decision-making
  procedures regarding resource distribution
• Interactional Justice - Fair treatment from others

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Outcomes of Organizational Justice

• Higher performance
• Compliance
• Trust
• Cooperation with coworkers
• Organizational citizenship behavior
• Less turnover
• Less absenteeism
• Less employee silence
• Less counterproductive behaviors

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Outcomes of Organizational Justice

• Increased
• Performance
• Compliance
• Trust in managers
• Cooperation with coworkers
• Organizational citizenship behavior

• Decreased
• Less turnover
• Less absenteeism
• Less employee silence
• Less counterproductive behaviors

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Mergers and Culture

• 50 failure rate on mergers and acquisitions
• To ensure a successful merger
• Analyze cultural compatibility of both
  organizations beforehand
• Develop shared values rather than imposing the
  values of one firm on the other

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How Leaders Create and Modify Culture Primary
Mechanisms

• What they regularly pay attention to, measure,
  and control
• Their reaction to critical incidents and crises
• Criteria used to allocate scarce resources

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How Leaders Create and Modify Culture

• Deliberate role modeling, teaching, and
• coaching
• Criteria for allocating rewards and status
• Criteria for recruitment, selection, promotion
  and termination

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How Leaders Create and Modify Culture - Secondary
Mechanisms

1. Organizational design
2. Systems and procedures
3. Rites and rituals
4. Design of physical space, facades, buildings
5. Stories about important events and people
6. Formal statements of organizational philosophy,
   creeds, and charters

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Organization Stages of Development
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How Can You Renew a Mature Organization?

• Instill a customer perspective and focusing on
  customer demands
• Increase their capacity for change
• Alter both hardware and software within the
  organization
• Create empowered employees who act as leaders at
  all organizational levels

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