Chapter 14 Organisational Culture Learning Objectives 14 1

Chapter 14 Organisational Culture

Learning Objectives 14. 1 Describe the elements of organisational culture and discuss the importance of organisational subcultures 14. 2 List four categories of artefacts through which corporate culture is deciphered 14. 3 Discuss the importance of organisational culture and the conditions under which organisational culture strength improves organisational performance 14. 4 Compare and contrast four strategies for merging organisational cultures 14. 5 Identify four strategies for changing or strengthening an organisation’s culture, including the application of attraction-selection-attrition theory. 14. 6 Describe the organisational socialisation process and identify strategies to improve that process Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -2

Wesfarmers’ Organisational Culture Wesfarmers’ awardwinning corporate culture has helped Coles to become a serious competitor in the retail food business Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -3

Organisational Culture Defined • The basic pattern of shared values and assumptions shared within the organisation • Defines what is important and unimportant • Company’s DNA—invisible, yet powerful template that shapes employee behaviour Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -4

Elements of Organisational Culture Artifacts of organisational culture Organisational culture Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -5

Content of Organisational Culture • The relative ordering of values – A few dominant values – Example: Wesfarmers—integrity, openness, boldness and accountability. • Problems measuring organisational culture – Oversimplifies diversity of possible values – Ignores shared assumptions – Adopts an ‘integration’ perspective • An organisation’s culture is fuzzy: – Diverse subcultures (‘fragmentation’) – Values exist within individuals, not work units Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -6

Organisational Culture Profile Org Culture Dimensions Dimension Characteristics Innovation Experimenting, opportunity seeking, risk taking, few rules, low cautiousness Stability Predictability, security, rule-oriented Respect for people Fairness, tolerance Outcome orientation Action oriented, high expectations, results oriented Attention to detail Precise, analytic Team orientation Collaboration, people-oriented Aggressiveness Competitive, low emphasis on social responsibility Source: O’Reilly et al (1991) Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -7

Organisational Subcultures • Dominant culture—most widely shared values and assumptions • Subcultures – Located throughout the organisation – Can enhance or oppose (countercultures) firm’s dominant culture • Two functions of countercultures: – Provide surveillance and critique, ethics – Source of emerging values Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -8

Artefacts of Organisational Culture • Observable symbols and signs of culture • Physical structures, ceremonies, language, stories • Maintain and transmit organisation’s culture • Need many artefacts to accurately decipher a company’s culture Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -9

Artefacts: Stories and Legends • Social prescriptions of desired (or dysfunctional) behaviour • Provides a realistic human side to expectations • Most effective stories and legends: – – Describe real people Assumed to be true Known throughout the organisation Are prescriptive Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -10

Artefacts: Rituals and Ceremonies • Rituals – Programmed routines (e. g. how visitors are greeted) • Ceremonies – Planned activities for an audience (e. g. award ceremonies) Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -11

Artefacts: Organisational Language • Words used to address people, describe customers, etc. • Leaders use phrases and special vocabulary as cultural symbols • Language also found in subcultures Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -12

Artefacts: Physical Structures and Symbols • Building structure—may shape and reflect culture • Office design conveys cultural meaning – Furniture, office size, wall hangings Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -13

Organisational Culture Strength • How widely and deeply employees hold the company’s dominant values and assumptions • Strong cultures exist when: – Most employees understand/embrace the dominant values – Values and assumptions are institutionalised through well-established artefacts – Culture is long lasting—often traced back to founder Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -14

Functions of Strong Corporate Cultures Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc.

Contingencies of Organisational Culture and Performance • Organisational culture strength moderately predicts organisational performance • Need to consider contingencies: – Ensure culture-environment fit – Avoid corporate ‘cult’ strength – Create an adaptive culture Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -16

News Corporation’s ‘Whatever it Takes’ Culture According to various observers and government officials, Rupert Murdoch’s powerful media empire has a ‘whatever it takes’ corporate culture that has tacitly encouraged staff to cross ethical and legal boundaries Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -17

Organisational Culture and Ethics • Ethical values become embedded in an organisation’s dominant culture • To create a more ethical organisation, leaders need to work on the embedded culture that steers employee behaviour Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -18

Merging Cultures: Bicultural Audit • Part of due diligence in merger • Minimises cultural collision by diagnosing companies • Three steps in bicultural audit: – Identify cultural artefacts – Analyse data for cultural conflict or compatibility – Identify strategies and action plans to bridge cultures Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -19

Merging Organisational Cultures Assimilation Acquired company embraces acquiring firm’s cultural values Deculturation Acquiring firm imposes its culture on unwilling acquired firm Integration Cultures combined into a new composite culture Separation Merging companies remain separate with their own culture Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -20

Changing/Strengthening Organisational Culture Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns,

Changing/Strengthening Organisational Culture continued • Actions of founders/leaders – Organisational culture sometimes reflects the founder’s personality – Transformational leaders can reshape culture— organisational change practices • Aligning artefacts – Artefacts keep culture in place – e. g. create memorable events, communicating stories, transferring culture carriers Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -22

Changing/Strengthening Organisational Culture continued • Introducing culturally consistent rewards – Rewards are powerful artefacts—reinforce culturally-consistent behaviour • Attracting, selecting, socialising employees – Attraction-selection-attrition theory – Socialisation practices Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -23

Attraction-Selection-Attrition Theory • Organisations become more homogeneous (stronger culture) through: – Attraction: applicants self-select and weed out companies based on compatible values – Selection: applicants selected based on values congruent with organisation’s culture – Attrition: employees quit or are forced out when their values oppose company values Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -24

Organisational Socialisation Defined The process by which individuals learn the values, expected behaviours and social knowledge necessary to assume their roles in the organisation Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -25

Socialisation: Learning and Adjustment • Learning process – Newcomers make sense of the organisation’s physical, social and strategic/cultural dynamics • Adjustment process – Newcomers need to adapt to their new work environment § New work roles § New team norms § Newcomers with diverse experience adjust better Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -26

Stages of Socialisation Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns,

Facebook’s Landing Teams Facebook instils its unique corporate culture at new sites by parachuting in a ‘Landing Team’ of current employees. The Landing Team carefully selects applicants for their compatibility with Facebook’s culture and coaches newcomers on the Facebook way of life Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -28

Improving Organisational Socialisation • Realistic job preview (RJP) – A balance of positive and negative information about the job and work context • Socialisation agents – Supervisors: technical information, performance feedback, job duties – Co-workers: ideal when accessible, role models, tolerant and supportive Copyright © 2013 Mc. Graw-Hill Australia Pty Ltd Mc. Shane, Olekalns, Travaglione, Organisational Behaviour, 4 e 14 -29

Chapter 14 Organisational Culture