1. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Chapter 16 Organizational Behavior Nelson & Quick 6th edition Organizational Culture

2. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Organizational (Corporate) Culture Organizational (Corporate) Culture - Organizational (Corporate) Culture - a pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization

3. Levels of Organizational Culture s Artifacts - symbols of culture in the physical and social work environment Values Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave Assumptions - d eeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved

4. Organizational Culture Levels Visible, often not decipherable Greater level of awareness Taken for granted Invisible Preconscious Reprinted with permission from Edgar H. Schein, Organizational Culture and Leadership: A Dynamic View. Copyright © 1985 Jossey-Bass Inc, a subsidiary of John Wiley & Sons, Inc. Artifacts Personal enactment Ceremonies and rites Stories Ritual Symbols Values Testable in the physical environment Testable only by social consensus Basic Assumptions Relationship to environment Nature of reality, time, and space Nature of human nature Nature of human activity Nature of human relationships Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved

5. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Functions of Organizational Culture Culture provides a sense of identity to members and increases their commitment to the organization Culture is a sense-making device for organization members Culture reinforces the values in the organization Culture serves as a control mechanism for shaping behavior

6. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved AdaptivePerspective StrongCulturePerspective FitPerspective Theories about the relationship between organizational culture and performance

7. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved An organizational culture with a consensus on the values that drive the company and with an intensity that is recognizable even to outsiders Strong cultures facilitate performance because They are characterized by goal alignment They create a high level of motivation because of shared values by the members They provide control without the oppressive effects of bureaucracy StrongCulturePerspective

8. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Argument that a culture is good only if it fits the industry’s or the firm’s strategy. Organizational characteristics that may affect culture Customer requirements Competitive environment Societal expectations FitPerspective Useful to explain short term but not long term performance Indicates the difficulty of changing culture quickly but doesn’t explain how firms can adapt to environmental change.

9. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved An organizational culture that encourages confidence and risk taking among employees, has leadership that produces change, and focuses on the changing needs of customers Adaptive Nonadaptive Most managers care about themselves, their work group, or an associated product Most managers care about customers, stockholders, and employees Managers tend to behave somewhat insularly, politically, and bureaucratically Managers pay close attention to all their constituencies, esp. customers Core Values Common Behavior Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Corporate Culture and Performance by John P. Kotter and James L Heskett. Copyright © 1992 by Kotter Associates, Inc. and James L. Heskett. AdaptivePerspective

10. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Five Most Important Elements in Managing Culture What leaders pay attention to How leaders react to crises How leaders behave How leaders allocate rewards How leaders hire and fire individuals

11. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Organizational Socialization Organizational socialization - Organizational socialization - the process by which newcomers are transformed from outsiders to participating, effective members of the organization

12. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Socializationas CulturalCommunication Socialization as Cultural Communication Core values are transmitted to new organization members through –the role models they interact with –the training they receive –the behavior they observe being rewarded and punished

13. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved SituationsThatMayRequire CulturalChanges Situations That May Require Cultural Changes ReasonsThatChangeIsDifficult Reasons That Change Is Difficult Assumptions are often unconscious Culture is deeply ingrained and behavioral norms and rewards are well learned Merger or acquisition Employment of people from different countries

14. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved CulturalModificationsinthe CurrentBusinessEnvironment Cultural Modifications in the Current Business Environment Support for a global view of business Reinforcement of ethical behavior Empowerment of employees to excel in product and service quality Photos courtesy of Clips Online, © 2008 Microsoft Corporation

15. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved SupportforaGlobal Support for a Global ViewofBusiness View of Business Create a clear and simple mission statement Create systems that ensure effective information flow Create “matrix minds” among managers Develop global career paths Use cultural differences as major assets Implement worldwide management education and team development programs Photos courtesy of Clips Online, © 2008 Microsoft Corporation

16. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Clear communication of the boundaries of ethical conduct Selection of employees who support the ethical culture Reward of ethical behavior Conspicuous punishment of members who engage in unethical behavior Reinforcementof Reinforcement of EthicalBehavior Ethical Behavior Photos courtesy of Clips Online, © 2008 Microsoft Corporation

17. Copyright ©2009 South-Western, a division of Cengage Learning All rights reserved Empowerment unleashes employees’ creativity Empowerment requires eliminating traditional hierarchical notions of power –Involve employees in decision making –Remove obstacles to their performance –Communicate the value of product and service quality EmpowermentofEmployees to Excel in Product and Service Quality Empowerment of Employees to Excel in Product and Service Quality Photos courtesy of Clips Online, © 2008 Microsoft Corporation