Organizational Culture A set of values, beliefs, & assumptions shared by members of an organization Culture influences employee attitudes & behavior Culture can be a source of sustainable competitive advantage Managers can influence (but not control) culture
Where does culture come from? Founder’s values Industry dynamics National culture Attraction – Selection – Attrition cycle
Understanding Organizational Culture Antecedents Founder’s values Industry & business environment National culture Senior leaders’ vision and behavior Organizational Structure & Practices Reward systems Organizational design Organizational Culture Observable artifacts Espoused values Basic assumptions Group & Social Processes Socialization Mentoring Decision making Group dynamics Communication Influence & empowerment Leadership Organizational Outcomes Effectiveness Innovation & stress Collective Attitudes & Behavior Work attitudes Job satisfaction Motivation
Layers of Organizational Culture Observable Artifacts – Physical manifestation of values: Acronyms Manner of dress Stories Rituals, etc.
Layers of Culture (continued) Espoused Values: explicitly stated set of preferred values – Concepts or beliefs – Pertain to desirable end-states or behaviors – Transcend situations – Guide the behaviors and decision-making – Ordered by relative importance Enacted values: values that actually exist
Layers of Culture (continued) Basic Assumptions – Unobservable underlying assumptions – Taken for granted – not explicitly stated or analyzed – People may not be conscious of them – Resistant to change – Inconsistent behavior is hard to imagine
Four Functions of Organizational Culture 3-9
Four Functions of Org. Culture Organizational Identity – Establishes the company’s business philosophy – Ideally, employees will share the values Facilitate Collective Commitment – Everyone knows what’s really important – Peer pressure Social System Stability – Helps you know what to expect from others Sensemaking – Helps individuals make sense of novel situations
Competing Values Framework 3-11
Opposing/Competing Values One company can have aspects of all four CVF culture types The CVF culture types compete or contradict each other – Create paradoxes Too much (too little) of any one culture type can create weaknesses Managing the paradoxes is the key
Changing Culture Changing people’s minds & values Can target artifacts, values, or assumptions Must be aligned with vision & strategic plan – “Culture eats strategy for breakfast. You can have the best plan in the world, and if the culture isn’t going to let it happen, it’s going to die on the vine” Mark Fields, President, The Americas, Ford Motor Co.
Culture Change Mechanisms Formal statements Design of physical work space Slogans Training Rewards Stories Measurement & Control Leader reactions to crisis Organizational Structure
Organizational Socialization Process by which new employees learn an organization’s culture Three-Phase Model of Organizational Socialization
Phase I: Anticipatory Socialization Occurs before you join the company Perceptions about different companies or different industries Unrealistic expectations are a danger – Realistic Job Preview (RJP) RJP is related to lower expectations, higher performance, and less turnover.
Phase II: Encounter Once you start the new job Orientation programs Training – Org. policies & procedures – Norms, values, culture, expectations
Phase III: Change & Acquisition New employee masters their new job Requires a good understanding of expectations Confidence
Mentoring A good tool to ingrain the culture in new employees Gives new employees a social connection to the organization What mentors do: – Coach, give exposure, protect, get challenging assignments, role model
Developing Networks Diversity of development relationships – The number of different people that you’re networked with – The various social systems from which the relationships come i.e., work, school, family, etc. Developmental relationship strength – The quality of those relationships
D2 D1 P Receptive D2 D1 P Traditional Entrepreneurial P Opportunistic Developmental Relationship Strength Weak TiesStrong Ties D1 D2 D3 D4 Low Range High Range Developmental Relationship Diversity Key: D = developer P = protege P D1 D2 D3 D4 Developmental Networks Associated with Mentoring 3-22
Importance of Social Networks Mentored employees have: – Higher pay, more promotions, more organizational knowledge, better job performance, more skilled People with the broadest digital networks were 7% more productive than those without such networks