Essentials of Organizational Behavior Fourteenth Edition Chapter 16

After studying this chapter you should be able to: 1. Describe the common characteristics of organizational culture. 2. Compare the functional and dysfunctional effects of organizational culture on people and the organization. 3. Identify the factors that create and sustain an organization’s culture. 4. Show culture is transmitted to employees. 5. Describe the similarities and differences in creating an ethical culture, a positive culture, and a spiritual culture. 6. Show national culture may affect the way organizational culture is interpreted. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Organizational Culture • Organizational culture: A system of shared meaning held by members that distinguishes the organization from other organizations Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Characteristics of Organizational Culture 1. 2. 3. 4. 5. 6. 7. Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Culture Is a Descriptive Term Culture Job Satisfaction • Organizational culture • Measures affective is concerned with how responses to the work employees perceive an environment: organization’s culture, concerned with how not whether or not they employees feel about like it the organization • Descriptive • Evaluative Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Do Organizations Have Uniform Cultures? • The 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 of members – Subcultures mirror the dominant culture but may add to or modify the core values Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Strong versus Weak Cultures • In a strong culture, the organization’s core values are both intensely held and widely shared • Strong cultures will: – Have great influence on the behavior of members – Increase cohesiveness – Result in lower employee turnover Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Culture versus Formalization • High formalization creates predictability, orderliness, and consistency • A strong culture achieves the same end without the need for written documentation Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

The Functions of Culture • • • Defines boundaries Conveys a sense of identity Generates commitment beyond oneself Enhances social stability Sense-making and control mechanism Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Culture Creates Climate • Organizational climate: The shared perceptions organizational members have about their organization and work environment – Positive climate is linked to higher customer satisfaction and financial performance Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

The Ethical Dimension • Ethical work climate (EWC): Shared concept of right and wrong behavior in the workplace that reflects the true values of the organization and shapes the ethical decision making of its members Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Culture and Sustainability • Sustainability: Organization practices that can be sustained over a long period of time because the tools or structures that support them are not damaged by the processes Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Culture and Innovation • Culture and innovation: Innovative companies are characterized by their open, unconventional, collaborative, vision-driven, and accelerating cultures • Culture as an asset: Culture can contribute to an organization’s bottom line Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Culture as a Liability • Institutionalization Behaviors and habits go unquestioned – can stifle innovation • Barriers to change Culture is slow to change – even in a dynamic environment • Barriers to diversity Culture seeks to minimize diversity Can embed prevalent bias and prejudice • Barriers to acquisitions and mergers Cultural incompatibility can be a problem Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

How a Culture Begins • Ultimate source of an organization’s culture is its founders • Founders create culture in three ways 1. Hiring and keeping those who think and feel the same way they do 2. Indoctrinating and socializing those employees to their way of thinking and feeling 3. Acting as a role model and encouraging employees to identify with them Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Keeping a Culture Alive • Selection: seek out those who fit in • Top management: establish norms of behavior by their actions • Socialization: help new employees adapt to the existing culture Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

A Socialization Model • Pre-arrival: initial knowledge about the organization and own unique ideas • Encounter: exposed to the organization • Metamorphosis: member changed to fit within the organization Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Entry Socialization Options • Formal: new workers separated for training • Collective: group basis • Fixed: planned activities • Serial: role models used • Divestiture: strip away characteristics to build up new ones • Informal: new workers immediately put to work • Individual: one-on-one • Variable: no timetables • Random: on your own • Investiture: accepts and confirms existing characteristics Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Summary: How Cultures Form • Success in employee socialization depends on management’s selection of socialization methods and the closeness of new employees’ values to those of the organization Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

How Employees Learn Culture • Culture is transmitted to employees through: – Stories: provide explanations – Rituals: reinforce key values – Material symbols: convey importance, degree of egalitarianism desired, and appropriate behaviors – Language: identify and segregate members Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Creating an Ethical Organizational Culture • A strong culture with high risk tolerance, low-tomoderate aggressiveness, and a focus on means as well as outcomes is most likely to shape high ethical standards – – – Managers must be visible role models Communicate ethical expectations Provide ethical training Visibly reward ethical acts and punish unethical ones Provide protective mechanisms Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Creating a Positive Organizational Culture • A positive organizational culture emphasizes: – – Building on employee strengths Rewarding more than punishing Encouraging vitality and growth Recognizing outside context Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

A Spiritual Culture • Workplace spirituality: recognizes that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community • Characteristics of a spiritual organization: – – Benevolence Strong sense of purpose Trust and respect Openmindedness Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

The Global Context • Organizational culture can reflect national culture and it can transcend national boundaries – Managers need to be culturally sensitive: § § Talk in a low tone Speak slowly Listen more Avoid discussing religion and politics • Ethical decision making can be culture-bound Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

Impact on Employee Performance and Satisfaction Copyright © 2018, 2016, 2014 Pearson Education, Inc.

Implications for Managers • Realize that an organization’s culture is relatively fixed in the short term. • Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. • Understand that employees’ performance and socialization depend to a considerable degree on their knowing what to do and not do. • You can shape the culture of your work environment. • Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.