Organizational Culture and Cultural Diversity

1. Organizational Culture and Cultural Diversity Chapter 18

2. Learning Goals • Describe the core elements of a culture • Compare and contrast four types of organizational culture • Discuss why subcultures exist in organizations • Describe several activities for successfully managing diversity

3. Elements of a Culture • Culture: the unique pattern of shared assumptions, values, and norms that shape the socialization, symbols, language, narratives, and practices of a group of people • Shared assumptions: the underlying thoughts and feelings that members of a culture take for granted and believe to be true • Value: a basic belief about something that has considerable importance and meaning to individuals and is stable over time

4. Elements of a Culture: The Culture Iceberg Practices Observable Elements of Culture Narratives Language Symbols Socialization Norms Hidden Elements of Culture Values Assumptions

5. Elements of a Culture (cont'd) • Norms: rules that govern the behaviors of group members • Socialization: a process by which new members are brought into a culture • Symbol: anything visible that can be used to represent an abstract shared value or something having special meaning

6. Elements of a Culture • Language: a shared system of vocal sounds, written signs, and/or gestures used to convey special meanings among members of a culture • Narratives: the unique stories, sagas, legends, and myths in a culture • Practices • Taboos: culturally forbidden behaviors • Ceremonies: elaborate and formal activities designed to generate strong feelings

7. Basic Types of Organizational Cultures Flexible Clan Culture EntrepreneurialCulture Formal Control Orientation BureaucraticCulture MarketCulture Stable Internal External Focus of Attention

8. Bureaucratic Culture • Behavior of employees is governed by formal rules and standard operating procedures, and coordination is achieved through hierarchical reporting relationships • Focuses on predictability, efficiency, and stability • Tasks, responsibilities, and authority clearly spelled out • Internal Focus

9. Clan Culture • Behaviors of employees are shaped by tradition, loyalty, personal commitment, extensive socialization, and self-management • Formal rules and procedures minimized • High sense of member obligation and identity to the organization • Long and thorough socialization process • Mentors and role models • Strong peer pressure • Internal focus

10. Clan Culture: Snapshot “There’s a family mentality here as opposed to just being another number. That trickles down from the top. He [the CEO] knows everyone’s name and says ‘hi’ everyday when I see him during morning workouts at the gym.” Andres Smith, Accountant, Analytic Graphics, Inc., Easton, Pennsylvania

11. Entrepreneurial Culture • External focus and flexibility create an environment that encourages risk taking, dynamism, and creativity • Commitment to experimentation, innovation, and being on the leading edge • Creates change and quickly reacts to change • Individual initiative, flexibility, and freedom seen as fostering growth • Encouraged and rewarded

12. Market Culture • Values and norms reflect the importance of achieving measurable and demanding goals, especially those that are financial and market based (e.g., sales growth, profitability and market share) • Hard driving competitiveness dominates • Profits orientation and quantifiable performance goals prevail • Minimal informal social pressure on members • Superior interactions with subordinates focus on performance-reward (economic) agreement and resource allocations

13. Organizational Subculture • Exists when assumptions, values, and norms are shared by some—but not all—organizational members

14. Organizational Subculture • Reasons Executives Give for Failed Mergers Inability to manage target business Clash of management styles/egos Inability to implement changein new organization Reason for merger failure Synergies were overstated Incompatible cultures 0 10 20 30 40 50 60 Percent of executives who state reason as primary explanation for merger failures Percent

15. Organizational Subculture • Departments and divisions within the organization have their own subcultures • Occupational subcultures • Geographically based subcultures • Subcultures created by managers Positive cultures are created by managers who: • recognize personal milestones, such as birthdays and employment anniversaries; • hold public celebrations for professional achievements; • sponsor picnics and parties; and • listen to their employees and recognize the efforts they put into work

16. Organizational Subculture • Diverse workforce demographics create subcultures • Ethnicity • Age • Gender and other demographics

17. Organizational Subculture: Snapshot “My first conscious exposure to racism occurred when I came back to the States and went to public school. One of the children said something—I don’t remember now what—but I remember what my grandmother said to me: ‘They tried to put you in a box. Don’t ever let anybody put you in a box.’” Clifton R. Wharton, Jr., Former Chairman and CEO, TIAA-CREF

18. Managing Cultural Diversity and Inclusion • Cultural diversity: encompasses the full mix of the cultures and subcultures to which members of the workforce belong

19. Managing Cultural Diversity and Inclusion • Organization goals for managing cultural diversity include: • Legal compliance • Creating a positive culture for employees • Create greater economic value for the organization

20. Managing Cultural Diversity and Inclusion: Snapshot “HP is committed to building a work environment where everyone has an opportunity to fully participate in creating business success…We address our commitment [to diversity] through development programs targeted to the next generation of HP leaders, work-life initiatives for our employees, recruiting of diverse talent, and other efforts that help employees and managers foster an inclusive work environment. Additionally, we establish diversity goals to create accountability and drive our success. By weaving diversity into the fabric of our company, we create a mind-set in every employee and manager that will allow them to think consciously about diversity and inclusion in everything they do.” Emily Duncan, VP Culture and Diversity, Hewlett-Packard

21. Managing Cultural Diversity and Inclusion: Process of Change • Diagnosis: Before managers begin to design new approaches to managing diversity, they must understand how current practices affect the amount and nature of diversity • Vision: Leaders must formulate and articulate a clear vision to persuade others to join them (continued)

22. Managing Cultural Diversity and Inclusion: Process of Change (cont'd) • Involvement: For the plan to be effective, those who are affected must buy into it • Timing: Planned organization change usually follows an evolutionary—not revolutionary—path

23. HarassmentTraining Seminar Managing Cultural Diversity and Inclusion: Diversity Training • Awareness training: designed to provide accurate information about the many subcultures present in the organization • Harassment training: aimed at ensuring that employees understand the meaning of harassment and the actions the company will take when someone complains of being harassed

24. Managing Cultural Diversity and Inclusion • Create Family-Friendly Work Places • Survey employees • Offer options to meet employees’ needs • Consider child-care initiatives • Consider elder-care initiatives • Hold Managers Accountable

25. Managing Cultural Diversity and Inclusion: Challenges • Managing the reactions of the members of the dominate culture, who may feel that they have lost some of the power they previously had • Synthesizing the diversity of opinions from individuals and using them as the basis for reaching meaningful agreement on issues • Avoiding real and perceived tokenism and quota systems