Chapter 17 Organizational Culture by eco60708

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									Chapter 17:
Organizational Culture
Basic Elements of
Organizations


                  Culture


     Technology    People     Strategy


                  Structure
 Environment
Organizational Culture
   Increased study of organizational culture began in
    1980’s in response to Japanese competition
   Formal Definition
       “A pattern of basic assumptions that a given group has
        invented, discovered or developed in learning to cope with
        its problems of external adaptation and internal integration
        and that have worked well enough to be considered valid,
        and, therefore, to be taught to new members as the correct
        way to perceive, think and feel in relation to those
        problems.” (Schein)
Organizational Culture
   Informal Definitions
       “A system of shared meaning held by members
        that distinguish the organization from other
        organizations” (Robbins).
       “The way we do things around here” (Deal &
        Kennedy).
Organizational Culture
   Basic Understanding of Culture
       Assumptions: Things we take for granted
       Helps organizations solve two basic problems
           Internal integration
           External adaptation
       Taught as “the correct way”
       Influences behaviors, thoughts and feelings
Organizational Culture
   Seven basic cultural dimensions
       Innovation and risk taking
       Attention to detail
       Outcome orientation
       People orientation
       Team orientation
       Aggressiveness
       Stability
Basic Elements of Culture
   Symbols and Artifacts
       Buildings, logos, trophies
   Shared Behaviors
       Ceremonies, rituals, communication
   Values
       Goals, priorities
   Assumptions
       Sub-conscious beliefs, feelings, perceptions
Basic Elements of Culture

     Visible
                                      Symbols &
                                      Artifacts
   Visibility                    Shared Behaviors

                            Values

                 Assumptions
    Invisible
                Difficult                 Easy
                             Ease of Change
Functions of Organizational
Culture
   Defines the boundaries between
    organizations
   Identifies members of the organization
   Generates commitment to the organization
   Stabilizes the social system of the
    organization
   Increases behavioral consistency
     Organizational Socialization

           The process by which individuals learn the
           values, expected behaviors, and social
           knowledge necessary to assume their roles
           in the organization




Source: McShane & Von Glinow, 2005
       Socialization: Learning &
       Adjustment
     Learning              Process
          Newcomers form a cognitive map of the
           organization’s physical, social, and
           strategic/cultural dynamics
     Adjustment                 Process
          Newcomers need to adapt to their new work
           environment
              New work roles
              New team norms
              New corporate cultural values



Source: McShane & Von Glinow, 2005
     Stages of Socialization
               Pre-Employment           Encounter          Role
                    Stage                 Stage         Management


               • Gather              • Test           • Strengthen
                 information           expectations     work
                                                        relationships
               • Form
                 psychological                        • Practice roles
                 contract                               and behavior

                                                      • Resolve
                                                        conflicts



Source: McShane & Von Glinow, 2005
     Realistic Job Previews
     Less turnover, higher job performance
     Less reality shock

     Vaccination effect

     Applicants self-select themselves

     Builds loyalty




Source: McShane & Von Glinow, 2005
How Organizational Culture is
Taught
   Stories
   Language
   Rites and Rituals
       Passage (e.g., initiation)
       Degradation (e.g., firing)
       Enhancement (e.g., award ceremonies)
       Renewal (e.g., team building activities)
       Conflict resolution (e.g., collective bargaining)
       Integration (e.g., company picnic)
How Organizational Culture is
Taught
   Responses to socialization
                               Private Response

                          Accept                  Reject


                        Converts
                                             Conformists
           Accept   “True Believers”

Public
Response


           Reject     ?                     Independents
                                               “Rebels”
                                           “Counterculture”
Organizational Culture and
Organizational Performance
   Measuring culture is challenging
   Early conclusions based on anecdotal
    evidence
   “Strong” cultures predicted to be better
    performers
   Many other factors influence performance
Organizational Culture and
Organizational Performance
   Organizational culture as a liability
       Barrier to change
       Barrier to true benefits of diversity
       Barrier to growth by acquisitions and mergers
   “Strong” cultures change slowly
   Success can lead to failure in rapidly
    changing environment
       Nearly all 43 firms held up as “Excellent”
        examples of culture in 1980’s experienced
        dramatic failures in the years that followed
Organizational Culture and
Organizational Performance
   Organizational culture is self-perpetuating
               Company founder successfully starts a business



                              Success results in
                                “hero” status


      Employees’ success is                           Employees adopt
     measured in cultural terms                        “hero’s” values


                          HR functions preserve and
                             expand the culture
   Organizational Culture and
   Organizational Performance
      Specific aspects of culture may enhance
       performance
          Participative decision-making
          Well-organized, adaptable work procedures, clear
           goals
      Environmental context makes a difference
          “Collective mind” in high risk environments (e.g.,
           nuclear submarine)
          Accuracy in accounting firms

Results from selected research studies.
Suggestions for Managing
Organizational Culture
   Organizational culture is very difficult to
    change
       Taken for granted
       Entrenched as “right” way
       Self-perpetuating
       Fiercely defended by “true believers”
Suggestions for Managing
Organizational Culture
   Create the culture you want from the
    beginning
   Reinforce the culture you want over time
   Look for opportunities to change the culture
       Crises
       Top management succession
       Environmental changes
    Strengthening Organizational
    Culture
                                          Founders
                                         and leaders


                Selection                                     Culturally
                   and              Strengthening             consistent
               socialization        Organizational             rewards
                                       Culture
                          Managing the
                                                        Stable
                            cultural
                                                       workforce
                            network



Source: McShane, Von Glinow, 2005
    Bicultural Audit
     Part of “due diligence” in merger
     Minimizes risk of cultural collision by
      diagnosing companies before merger
    Three steps in bicultural audit:
          1. Examine artifacts
          2. Analyze data for cultural conflict/compatibility
          3. Identify strategies and action plans to bridge
              cultures


Source: McShane, Von Glinow, 2005
    Merging Organizational
    Cultures
                                    Acquired company embraces
               Assimilation         acquiring firm’s cultural values

                                    Acquiring firm imposes its culture on
              Deculturation         unwilling acquired firm

                                    Cultures combined into a new
                Integration         composite culture

                                    Merging companies remain
                Separation          separate with their own culture



Source: McShane, Von Glinow, 2005
    Adaptive Organizational
    Cultures
       External focus -- firm’s success depends on
        continuous change
       Focus on processes more than goals
       Strong sense of ownership
       Proactive --seek out opportunities




Source: McShane, Von Glinow, 2005
Adaptive Organizational
Cultures
   The organization must…
         Be proactive not reactive
         Influence and manage the environment, not just adapt
         Be pragmatic not idealistic
         Be future-oriented, not predominantly past- or present-
          oriented
         Embrace diversity not uniformity
         Be relationship-oriented not task-oriented
         Embrace external connectivity, as well as promote
          internal integration

Source: Schein, 1992

								
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