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Chapter 16 Organizational Culture

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1 Chapter 16 Organizational Culture
Essentials of Organizational Behavior 12e Stephen P. Robbins & Timothy A. Judge Chapter 16 Organizational Culture

2 After studying this chapter, you should be able to:
Define organizational culture and describe its common characteristics. Compare the functional and dysfunctional effects of organizational culture on people and the organization. Identify the factors that create and sustain an organization’s culture. Show how culture is transmitted to employees. Demonstrate how an ethical culture can be created. Show how national culture may affect the way organizational culture is transported to a different country.

3 Organizational Culture
Organizational culture: A system of shared meaning held by members that distinguishes the organization from other organizations Organizational culture is an important concept in studying how organizations behave. Culture is defined as a common perception held by the members of the organization or a sense of shared meaning.

4 Seven Characteristics of Organizational Culture
Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability Seven primary characteristics define organizational culture. They are: innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness and stability.

5 Culture Is a Descriptive Term
Job Satisfaction Organizational culture is concerned with how employees perceive an organization’s culture, not whether or not they like it Descriptive Measures affective responses to the work environment: concerned with how employees feel about the organization Evaluative Culture is concerned with the way employees perceive their culture, not whether they like it or not. Job satisfaction, in contrast, is evaluative in nature and gets at how employees respond to certain factors in their work context.

6 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 Most large organizations have both a dominant culture and several subcultures. The dominant culture reflects the core values that are shared by the majority of employees in the organization. Subcultures reflect common problems or experiences shared by employees in the same department or location.

7 Strong 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 A strong culture is one in which the core values are intensely held and shared by most. Strong cultures will have a great influence on the behavior of members and increase cohesiveness which should result in lower employee turnover.

8 Culture’s Five Basic Functions
Defines boundaries Conveys a sense of identity Generates commitment beyond oneself Enhances social stability Sense-making and control mechanism Cultures take on distinct functions. Cultures define the boundary between one organization and others. They also convey a sense of identity for the members of the organization. If the cultures are strong they can facilitate a continuous commitment to something larger than self-interest over an extended period of time. Cultures also help people know what to expect in the organization and can thereby enhance the stability of the social system. Culture can also serve as a sense-making and control mechanism for fitting employees into the organization.

9 Culture as a Liability Barrier to change Barrier to diversity
Culture is slow to change – even in a dynamic environment Barrier to diversity Culture seeks to minimize diversity Can embed prevalent bias and prejudice Barrier to acquisitions and mergers Most mergers fail due to cultural incompatibility Culture can also be a hindrance to an organization. A company can become institutionalized when people value the organization more than what they provide. When cultures are strong they can become a barrier to change as their values may not align with the values needed to embrace or facilitate the change. Cultures that may pressure employees to conform can be a barrier to hiring, developing, and promoting a diverse workforce. Finally, if a merger or acquisition occurs one of the most difficult things to do is to merge the two cultures. Many mergers fail because of culture clashes.

10 Creating Culture Ultimate source of an organization’s culture is its founders Founders create culture in three ways By hiring and keeping those who think and feel the same way they do Indoctrinating and socializing those employees to their way of thinking and feeling Acting as a role model and encouraging employees to identify with them Cultures start from the very beginning of the organization with the founders. Founders will tend to hire and keep employees who view things in a similar fashion. They will also try to get employees to think about things the way they do and socialize them to their point of view and ways of doing things. This is done so that the founders’ behavior will become the behavior to model after in order to succeed in the organization and to fit in.

11 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 A culture is kept alive in three main ways. The first is to find those who fit into the culture and hire them. Second, it is critical that top management establish norms of behavior by how they act. Finally, socialization into the culture helps new employees adapt to the way things are done.

12 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 The socialization process involves a few steps. The employee will learn about the organization through literature, interviews and other people in the prearrival stage. Once the employee starts interacting with other employees, the employee enters the encounter stage where he or she sees what the organization is really like. Expectations are measured against reality during this stage, and a misalignment may emerge. During the third stage, metamorphosis, the new employee adjusts to the organization and work.

13 Dimensions of Socialization Programs
Intense Programs Moderate Programs 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 There are a number of possible socialization programs. Each organization needs to select one that best fits its culture. When the socialization process matches an organization’s culture it will have positive outcomes including higher productivity, greater commitment, and lower turnover.

14 How Organization 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 Organizational cultures begin with the founder of the organization, and continues through the hiring of people who see things similarly and are enforced through top management and socialization.

15 How Employees Learn Culture
Culture is transmitted to employees through: Stories – provide explanations Rituals – reinforce key values Material symbols – convey importance Language – identify and segregate members Employees learn the organizational culture through a number of avenues. They can gain an understanding of culture by hearing stories that present the past and provide explanations for current practices. Rituals, or repetitive sequences of activities, can reinforce the key values of the organization and provide insight into the culture. Material symbols such as dress codes, formal or informal, office size or style and perks for key employees can denote who is important in an organization. Language is another way to learn about organizational culture as employees will express themselves in certain ways to indicate membership in the organization.

16 Creating an Ethical Organizational Culture
A strong culture with high risk tolerance, low- to-moderate 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 As cultures are created, it is important to incorporate ethics into cultural norms early on. Certain characteristics will help develop high ethical standards such as a high tolerance for risk so people are not afraid to make mistakes; low to moderate in aggressiveness so that unethical behaviors are avoided, and a focus on the means as well as the outcomes so that ethics is embedded in both. Managers must be visible role models and communicate ethical expectations. Training on ethical behavior and guidelines must be done and ethical acts must be rewarded while unethical acts need to be punished. In addition, protective mechanisms must be in place to assist the workers in behaving ethically.

17 Creating a Positive Organizational Culture
A positive culture is one that emphasizes Building on employee strengths Rewarding more than punishing Emphasizing vitality and growth of the employee A positive organizational culture is one that builds on employee strengths so that employees can develop and grow. It also rewards more than it punishes, so employees are not afraid to try new things and feel good about what they are contributing. Finally it emphasizes individual vitality and growth so that employees are operating at full potential.

18 Global Implications National and organizational cultures
Organizations exist in a global context Must be aware of local and national cultures Suggestions and observations Organizations heavily dependent on foreign markets and labor National culture does influence organizational culture All managers must be culturally sensitive Organizational culture still exists within a local culture, and that can’t be ignored. It is important that managers increase their ability to become more culturally sensitive through active listening, adjusting communication to the culture in which they are operating, and avoiding controversial topics in their discussions.

19 Implications for Managers
Changing organizational culture is not easy, expect it to take years Hire people who “fit” Ensure that employees know the right way to do their job Work to create an ethical culture Cultures begin with the founders of the organization and are very difficult to change once they become embedded. In order to maximize employee outcomes it is important to hire people who fit in the organization and help them become socialized into the corporate culture. Managers can reinforce culture through their actions. If you want to change an established culture it will take a long time.

20 Keep in Mind… Organizational culture develops over time and reflects deeply held values to which employees are strongly committed Ethical and positive organizational cultures can be created – methods differ National culture influences organizational culture As you think about culture remember that organizational culture depends on employees perceptions. However, with effort ethical and positive organizational cultures can be created, although the methods will vary by context. National culture can influence organizational culture and should be taken into consideration when making cultural changes.

21 Summary Defined organizational culture and described its common characteristics. Compared the functional and dysfunctional effects of organizational culture on people and the organization. Explained the factors that created and sustained an organization’s culture. Showed how culture was transmitted to employees. Demonstrated how an ethical culture could be created. Showed how national culture might affect the way organizational culture is transported to a different country.

22 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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