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Business Decision Making ADMN 2167. Professor: Bob Carpenter. Many of the slides in this presentation are from Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition . . Chapter 10. Organizational Culture. Chapter Outline. What Is Organizational Culture?
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Business Decision MakingADMN 2167 Professor: Bob Carpenter Many of the slides in this presentation are from Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition .
Chapter 10 Organizational Culture
Chapter Outline • What Is Organizational Culture? • Reading an Organization’s Culture • Creating and Sustaining Culture • The Liabilities of Culture • Changing Organizational Culture
Henry Mintzberg on Culture • “Culture is the soul of the organization — the beliefs and values, and how they are manifested. I think of the structure as the skeleton, and as the flesh and blood. And culture is the soul that holds the thing together and gives it life force.”
Organizational Culture • The pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization. • Culture is shared. • Culture helps members solve problems. • Culture is taught to newcomers. • Culture strongly influences behaviour.
Layers of Culture Material Symbols Artifacts of Language Organizational Rituals Culture Stories Beliefs Organizational Culture Values Assumptions
Levels of Culture • Artifacts • Aspects of an organization’s culture that you see, hear, and feel. • Beliefs • The understandings of how objects and ideas relate to each other. • Values • The stable, long-lasting beliefs about what is important. • Assumptions • The taken-for-granted notions of how something should be in an organization.
Characteristics of Organizational Culture • Innovation and risk-taking • The degree to which employees are encouraged to be innovative and take risks. • Attention to detail • The degree to which employees are expected to exhibit precision, analysis, and attention to detail. • Outcome orientation • The degree to which management focuses on results or outcomes rather than on technique and process. • People orientation • The degree to which management decisions take into consideration the effect of outcomes on people within the organization.
Characteristics of Organizational Culture • Team orientation • The degree to which work activities are organized around teams rather than individuals. • Aggressiveness • The degree to which people are aggressive and competitive rather than easygoing. • Stability • The degree to which organizational activities emphasize maintaining the status quo in contrast to growth.
Culture’s Functions • Social glue that helps hold an organization together. • Provides appropriate standards for what employees should say or do. • Boundary-defining. • Conveys a sense of identity for organization members.
Culture’s Functions • Facilitates commitment to something larger than one’s individual self-interest. • Enhances social system stability. • Serves as a “sense-making” and control mechanism. • Guides and shapes the attitudes and behaviour of employees.
Do Organizations Have Uniform Cultures? • Organizational culture represents a common perception held by the organization members. • Core values or dominant (primary) values are accepted throughout the organization. • Dominant culture • Expresses the core values that are shared by a majority of the organization’s members. • Subcultures • Tend to develop in large organizations to reflect common problems, situations, or experiences.
Reading an Organization’s Culture • Stories • Rituals • Material Symbols • Language
How Organizational Cultures Form Top management Philosophy of Organization's Selection organization's culture criteria founders Socialization
Creating and Sustaining Culture: Keeping a Culture Alive • Selection • Identify and hire individuals who will fit in with the culture. • Top Management • Senior executives establish and communicate the norms of the organization. • Socialization • Organizations need to teach the culture to new employees.
Socialization Model Socialization Process Outcomes Productivity Prearrival Encounter Metamorphosis Commitment Turnover
Entry Socialization Options • Formal vs. Informal • Individual vs. Collective • Fixed vs. Variable • Serial vs. Random • Investiture vs. Divestiture Sources: Based on J. Van Maanen, “People Processing: Strategies of Organizational Socialization,” Organizational Dynamics, Summer 1978, pp. 19-36; and E. H. Schein, “Organizational Culture,” American Psychologist, February 1960, p. 116.
High Networked Communal Sociability Low Fragmented Mercenary Low High Solidarity Four-Culture Typology Source: Adapted from R. Goffee and G. Jones, The Character of a Corporation: How Your Company’s Culture Can Make or Break Your Business (New York: HarperBusiness, 1998), p. 21.
The Liabilities of Culture • Culture can have dysfunctional aspects in some instances. • Culture as a Barrier to Change • When organization is undergoing change, culture may impede change. • Culture as a Barrier to Diversity • Strong cultures put considerable pressure on employees to conform. • Culture as a Barrier to Mergers and Acquisitions • Merging the cultures of two organizations can be difficult, if not impossible.
Changing Organizational Culture • Have top-management people become positive role models, setting the tone through their behaviour. • Create new stories, symbols, and rituals to replace those currently in vogue. • Select, promote, and support employees who espouse the new values that are sought. • Redesign socialization processes to align with the new values.
Changing Organizational Culture • Change the reward system to encourage acceptance of a new set of values. • Replace unwritten norms with formal rules and regulations that are tightly enforced. • Shake up current subcultures through transfers, job rotation, and/or terminations. • Work to get peer group consensus through utilization of employee participation and creation of a climate with a high level of trust.
Summary and Implications • What is the purpose of organizational culture? • Organizational culture provides stability and gives employees a clear understanding of “the way things are done around here.” • How do you read an organization’s culture? • Artifacts, such as stories, rituals, material symbols, and language, can be used to help read an organization’s culture.
Summary and Implications • How do you create and maintain culture? • An organization’s culture is derived from the philosophy of its founders. It is communicated by managers and employees are socialized into it. • Can organizational culture have a downside? • A strong culture can have a negative effect, including “pressure-cooker” cultures, barriers to change, difficulty in creating an inclusive environment, and hindering mergers and acquisitions. • How do you change culture? • It is important to change the reward structure and to work carefully to change employee beliefs.