1. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin Organizational Culture Ch. 8A Management A Practical Introduction Angelo Kinicki & Brian K. Williams

2. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 2 Learning objectives  Define organizational culture for the invisible level and visible level  Explain why organizational culture is important  Describe the four functions of organizational culture and explain how culture can enhance performance  Suggest how culture can be embedded in an organization

3. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 3 8.1 What Kind Of Organizational Culture Will You Be Operating In? WHAT IS AN ORGANIZATIONAL CULTURE?  Organizational culture (also called corporate culture) is a system of shared beliefs and values that develops within an organization and guides the behavior of its members  It is the organization’s personality There are two levels of corporate culture:  At the invisible level, the core culture consists of values, beliefs, and assumptions  Core culture might be associated with “it’s the way we do things around here”

4. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 4 8.1 What Kind Of Organizational Culture Will You Be Operating In?  At the visible level, culture is expressed in symbols, stories, heroes, and rites and rituals where:  -symbols are objects, acts, qualities, or events that convey meaning to others  -stories are narratives based on true events which are repeated and sometimes embellished to emphasize a particular value  -heroes are people whose accomplishments embody the values of the organization  -rites and rituals are the activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization’s life

5. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 5 8.1 What Kind Of Organizational Culture Will You Be Operating In? WHY IS CULTURE IMPORTANT?  Culture serves four important functions: 1. Culture provides an opportunity to reinforce the company’s message 2. Culture helps to get everyone on board 3. Culture helps companies manage conflict and change effectively 4. Culture helps employees understand why the company does what it does and how it will achieve its long term goals

6. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 6 8.1 What Kind Of Organizational Culture Will You Be Operating In? Figure 8.1: Four Functions Of Organizational Culture

7. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 7 8.2 Developing High-Performance Cultures WHAT ORGANIZATIONAL CULTURE ENHANCES ECONOMIC PERFORMANCE? There are three perspectives of how culture can enhance performance: 1. The strength perspective assumes that the strength of a corporate culture is related to a firm’s long-term financial success 2. The fit perspective assumes that an organization’s culture must align or fit with its business or strategic context 3. The adaptive perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes  Studies show that in the long-term, financial performance is highest for firms with an adaptive culture

8. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 8 8.2 Developing High-Performance Cultures HOW CAN CULTURE BE EMBEDDED IN AN ORGANIZATION?  The values and beliefs of a culture are shared with members of the organization using a variety of mechanisms: 1. Formal Statements - culture can be embedded in an organization through formal statements of philosophy, mission, vision, and values 2. Slogans & Sayings - corporate cultures can be promoted through slogans and sayings 3. Stories, Legends, & Myths - telling stories, legends, and myths can help embed desirable values in an organization 4. Leader Reactions to Crises - how top managers respond to critical incidents sends a message to employees

9. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 9 8.2 Developing High-Performance Cultures 5. Role Modeling, Training, & Coaching - organizational culture can be promoted through role modeling, training programs, teaching, and coaching 6. Physical Design - the physical design of workspaces, buildings, and so on can also help embed corporate culture 7. Rewards, Titles, Promotions, & Bonuses - companies use rewards, status symbols, promotions, and so on to encourage desirable organizational behavior 8. Organizational Goals & Performance Criteria - desired organizational behavior and goals can be promoted through criteria for recruiting, selecting, promoting, and dismissing people 9. Measurable & Controllable Activities - companies can measure and control certain activities to foster a certain culture 10. Organizational Structure - how an organization is structured can send a clear message about its organizational culture 11. Procedures For Self-Development - procedures can be established to help employees develop according to organizational goals

10. Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin 10 Key terms  Adaptive perspective  Common purpose  Fit perspective  Hero  Organization  Organizational culture  Rites and rituals  Story  Strength perspective  Symbol