MGB 301

1. MGB 301 Organizational Culture

2. Studying Human Behaviors Organizational Factors (Culture, Org structire, etc. ) Part3 Human Behaviors Interpersonal Factors (Communication, Relationships, Groups, etc.) Part2 Individual Factors (Personality, Feelings, Attitudes, etc.) Part1

3. Learning Objectives • Three levels of Org culture • Four functions of Org culture • Org culture and performance • Socialization • Managing Org culture • Org culture change

4. Org Culture Organizational culture is a pattern of basic assumptions that are considered valid; they are taught to new members as the way to perceive, think, and feel in the organization Culture is product of nearly all organizational functioning, and consists of three levels: Artifacts (more visible) Values Assumptions (invisible)

5. Artifacts Artifacts are symbols of culture in the physical and social work environments; there are five general types of artifacts: Personal enactment:Behaviors that model or support organizational values Ceremonies & rites: Elaborate sets of activities enacted on important occasions

6. Artifacts Stories:Themes emerge when stories are passed down and guide organizational behavior; can be used to inspire and motivate as well Rituals:Everyday, repetitive organizational practices Symbols:Physical entities that communicate culture through unspoken messages

7. Values Artifacts represent and reinforce the values held by organizational members; values are inherent beliefs about what should or should not be There are two types of values in a company: Espoused values: What employees say they value Enacted values: Values reflected in the way employees actually behave

8. Assumptions Assumptions are deeply held beliefs that guide behavior and tell employees how to perceive situations and people Assumptions are so strongly held that violating them is nearly unthinkable; they non-consciously guide behavior Values and solutions to problems that are used repeatedly will, over time, become assumptions

9. Levels of Org Culture Artifacts – symbols of culture in the physical and social work environment Visible, often not decipherable Values Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave Greater level of awareness Assumptions –deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things Taken for granted, Invisible, Preconscious

10. Four Functions of Org Culture In general, culture serves four basic functions: Provides a sense of identity to employees (enhance commitment, motivation) Provides the interpretation of events Reinforces the values of the organization Provides controls (e.g., norms) that guide behavior

11. Culture and Performance Different perspectives explain the link between culture and firm performance Strong culture:As consensus of organizational values and assumptions increases, so does firm performance; enhances goal alignment, high motivation, effective control (without bureaucracy)

12. Culture and Performance Fit:Cultures enhance performance only when they fit the firm’s strategy or industry; culture is influenced by competitors, customers, and social expectations Adaptation: Adaptive cultures encourage confidence and risk taking among employees, their leaders produce change, and they focus on the changing needs of customers

13. Adaptive and Non-adaptive Culture

14. Socialization Culture shapes and is perpetuated by organizational socialization, which is the process by which newcomers are transformed from outsiders to participating, effective members New members must learn about: performance proficiency, people, politics, language, goals/values, and history

15. Socialization Next, newcomers pass through three stages of socialization: 1. Anticipatory socialization:Expectations that arise before work actually starts; strive for realism and congruence Realism:Match between expectations and organizational reality Congruence:Match of abilities to demands, and person vs. org values Class 21: Levels ∙ Impact ∙ Leadership ∙ Culture Change

16. Socialization • Encounter:Newcomers learn job tasks, clarify roles, and interaction styles (politics, leadership, group); the culture can determine how newcomers approach tasks, roles, and relationships • Change and acquisition:Master tasks, roles, interactions; newcomers are eventually considered insiders

17. Socialization Successful socialization leads to enhanced performance, satisfaction, retention, commitment, and low levels of distress; mutual influence occurs such that the firm makes adjustments to accommodate the newcomer Socialization helps newcomers adopt the organization’s and values, thus ensuring the culture continues to exist; shared understanding arises

18. Managing Org Culture Leaders play a critical role in shaping the culture of an organization; the culture developed by a company’s founders can quickly become strongly embedded There are five elements that strongly shape culture: What leaders pay attention to; leaders send signals by what they notice, measure, control How leaders react to crises; Company shows its fundamental requirements during crises

19. Managing Org Culture How leaders behave; employees often model after leaders How leaders allocate rewards; reward behavior that aligns with organizational values How leaders hire and fire employees; leaders typically unconsciously seek newcomers who are similar to current employees, selection is also shaped by organizational goals and values

20. Culture Change Changing organizational culture is very difficult because assumptions are often unconscious, and behavioral norms and rewards are well learned Two basic approaches to culture change: • Help existing members adopt a new set of values • Adding newcomers and socializing them to the organization, while removing current members that are inappropriate

21. Culture Change There are five general steps to culture change: • Change overt behavior • Examine extent of value change • Communicate change; ensure that all artifacts and leader behaviors send a consistent message about new values/beliefs • Revise selection strategy to fit desired culture • Remove members who reject desired culture

22. Culture Change Class 21: Levels ∙ Impact ∙ Leadership ∙ Culture Change

23. Culture Change Three relevant modern culture changes include: supporting global view of business, reinforcing ethics, empowering employees Mergers and acquisitions often require the combining of two cultures, which can result in both parties highlighting their differences; both cultures must be respected and slowly and reasonable integrated