Chapter 10 Organizational Culture Organizational Behaviour 5 th

Chapter Outline • What Is Organizational Culture? • Reading an Organization’s Culture • Creating and Sustaining Culture • The Liabilities of Culture • Changing Organizational Culture 10 -2

Organizational Culture 1. What is the purpose of organizational culture? 2. How do you read an organization’s culture? 3. How do you create and maintain culture? 4. Can organizational culture have a downside? 5. How do you change culture? 10 -3

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. ” Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -4

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. 10 -5

Exhibit 10 -1 Layers of Culture Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn.

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. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -7

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. 10 -8

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. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -9

Exhibit 10 -2 Contrasting Organizational Cultures Organization A • Managers must fully document all decisions. • Creative decisions, change, and risks are not encouraged. • Extensive rules and regulations exist for all employees. • Productivity is valued over employee morale. • Employees are encouraged to stay within their own department. • Individual effort is encouraged. Organization B • Management encourages and rewards risk-taking and change. • Employees are encouraged to “ run with ” ideas, and failures are treated as “ learning experiences. ” • Employees have few rules and regulations to follow. • Productivity is balanced with treating its people right. • Team members are encouraged to interact with people at all levels and functions. • Many rewards are team based. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -10

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. – 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. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -11

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. 10 -12

Reading an Organization’s Culture • Stories • Rituals • Material Symbols • Language Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -13

Exhibit 10 -3 How Organizational Cultures Form Philosophy of organization's founders Top management Organization's culture Selection criteria Socialization 10 -14

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. 10 -15

Exhibit 10 -5 A Socialization Model Socialization Process Outcomes Productivity Pre-arrival Encounter Metamorphosis Commitment Turnover 10 -16

Exhibit 10 -6 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. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -17

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. 10 -18

Strategies For Merging Cultures • Assimilation – The entire new organization is determined to take on the culture of one of the merging organizations. • Separation – Organizations remain separate and cultures are maintained. • Integration – A new hybrid culture is formed. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -19

Key Steps Before a Merger • Potential merger partners could conduct a bicultural audit. • The management team could bridge existing culture gaps by: – Defining a structure that is appropriate for both teams. – Implementing an appropriate management style. – Reinforcing internal communication to ensure employees are aware of changes that will occur. – Getting agreement on performance criteria and evaluations. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -20

Changing Organizational Culture 1. Have top-management people become positive role models, setting the tone through their behaviour. 2. Create new stories, symbols, and rituals to replace those currently in vogue. 3. Select, promote, and support employees who espouse the new values that are sought. 4. Redesign socialization processes to align with the new values. 10 -21

Changing Organizational Culture 5. Change the reward system to encourage acceptance of a new set of values. 6. Replace unwritten norms with formal rules and regulations that are tightly enforced. 7. Shake up current subcultures through transfers, job rotation, and/or terminations. 8. Work to get peer group consensus through utilization of employee participation and creation of a climate with a high level of trust. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -22

Creating an Ethical Culture • Be a visible role model. • Communicate ethical expectations. • Provide ethics training. • Visibly reward ethical acts and punish unethical ones. • Provide protective mechanisms Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -23

Creating a Positive Organizational Culture • Building on employee strengths • Rewarding more than punishing. • Emphasizing vitality and growth. • Limits of positive culture. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -24

Summary and Implications 1. What is the purpose of organizational culture? – 2. How do you read an organization’s culture? – 3. 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? – 5. Artifacts, such as stories, rituals, material symbols, and language, can be used to help read an organization’s culture. How do you create and maintain culture? – 4. Organizational culture provides stability and gives employees a clear understanding of “the way things are done around here. ” A strong culture can have a negative effect, including “pressurecooker” 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. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -25

OB at Work Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright ©

For Review 1. What are the levels of organizational culture? 2. How can an outsider assess an organization’s culture? 3. How is language related to organizational culture? 4. Can an employee survive in an organization if he or she rejects its core values? Explain 5. What defines an organization’s subcultures? Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -27

For Review 6. What benefits can socialization provide for the organization? For the new employee? 7. Describe four cultural types and the characteristics of employees who fit best with each. 8. How can culture be a liability to an organization? 9. How does a strong culture affect an organization’s efforts to improve diversity? 10. Identify the steps a manager can take to implement culture change in an organization. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -28

For Critical Thinking 1. Is socialization brainwashing? Explain. 2. If management sought a culture characterized as innovative and autonomous, what might its socialization program look like? 3. Can you identify a set of characteristics that describes your college’s or university’s culture? Compare them with what several of your peers have noted. How closely do they agree? 4. “We should be opposed to the manipulation of individuals for organizational purposes, but a degree of social uniformity enables organizations to work better. ” Do you agree or disagree with this statement? What are its implications for organizational culture? Discuss. 5. Today’s workforce is increasingly made up of part-time or contingent employees. Is organizational culture really important if the workforce is mostly temporary employees? Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -29

Point-Counter. Point • Why Culture Doesn’t • When Culture Can Change s Culture develops over many years, and becomes part of how the organization thinks and feels. s Selection and promotion policies guarantee survival of culture. s Top management chooses managers who are likely to maintain culture. s There is a dramatic crisis. s There is a turnover in leadership. s The organization is young and small. s There is a weak culture. Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -30

Breakout Group Exercises • Form small groups to discuss the following: 1. Choose two courses that you are taking this term, ideally in different faculties, and describe the culture of the classroom in each. What are the similarities and differences? What values about learning might you infer from your observations of culture? 2. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you conclude that the organization had a strong or weak culture? 3. Have you or someone you know worked somewhere the culture was strong? What was your reaction to that strong culture? Did you like that environment, or would you prefer to work where there is a weaker culture? Why? Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed. Copyright © 2010 Pearson Education Canada 10 -31