© 2007 Dr Gerald Grant 1 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing BUSI 3103 Introduction to Organizational Theory Aareni Uruthi Chapter Seven - Creating and Managing Organizational Culture

© 2007 Dr Gerald Grant 2 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Learning Objectives: (Part 1/2) qDifferentiate between values & norms. qUnderstand how culture is shared in an organization by its members. qDescribe how individuals learn culture formally (how the organization intends it), vs. informally (by observing what takes place).

© 2007 Dr Gerald Grant 3 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Learning Objectives: (Part 2/2) qIdentify the 4 building blocks or foundations of an organization's culture, that account for cultural differences. qUnderstand how an organization's culture, like its structure, can be influenced by management. qDiscuss an important outcome of an organization's culture: its stance on corporate social responsibility.

© 2007 Dr Gerald Grant 4 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing What is Organization Culture? – Definitions: (Part 1/2) qOrganization Culture: The set of shared values, norms, & beliefs that guide organization members’ interactions with each other & with people outside the organization qValues: General criteria, standards, or guiding principles that people use to determine which types of behaviours, events, situations, & outcomes are desirable or undesirable. qTerminal value: A desired end state or outcome that people seek to achieve.

© 2007 Dr Gerald Grant 5 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing What is Organization Culture? – Definitions: (Part 2/2) qInstrumental Value: A desired mode or pattern of behaviour. qNorms: Standards or styles of behaviour considered acceptable or typical for a group of people.

© 2007 Dr Gerald Grant 6 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Cultural Transmission to the Membership: qSocialization: The process by which members learn & internalize values & norms of an organization's culture. qRole Orientation: The characteristic way in which newcomers respond to a situation. qInstitutionalized Role Orientation: Results when individuals are taught to respond to a new context in the same way that existing organization members respond. qIndividualized Role Orientation: Results when individuals are allowed & encouraged to be creative & experiment with changing norms & values for an organization to achieve values.

© 2007 Dr Gerald Grant 7 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing 6 Tactics for Socializing Newcomers qCollective vs. Individual qFormal vs. Informal qSequential vs. Random qFixed vs. Variable qSerial vs. Disjunctive qDivestiture vs. Investiture

© 2007 Dr Gerald Grant 8 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Stories, Ceremonies, & Organization Language: qCultural values are often evident in the stories, ceremonies, language, & artifacts within an organization qFormal history & informal lore comprise culture. qBoth entry into & exit from organizations comprise culture. qCeremonial rites communicate norms & values.

© 2007 Dr Gerald Grant 9 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Where Does Organization Culture Come From?: qThe source of organization culture develops from the interaction of 4 factors: The personal & professional character of employeesThe personal & professional character of employees Their organization ethicsTheir organization ethics Property rights given by the organization to employeesProperty rights given by the organization to employees The structure of the organizationThe structure of the organization

© 2007 Dr Gerald Grant 10 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Characteristics of People Within the Organization: qThe ultimate source of organization culture is the people who make up the organization qPeople are often attracted to an organization, if an organization's. values match their own, & vice versa. qOver time, people who do not fit in, leave. qThus, people inside the organization become more & more similar. Like hires like. qConversely, this is why some organizations seek to diversify.

© 2007 Dr Gerald Grant 11 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Factors Influencing the Development of Organization Ethics:

© 2007 Dr Gerald Grant 12 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Organizational Ethics: qMany cultural values derive from the personality & beliefs of the founder & top managers. qAn organization can purposefully develop some cultural values to control member’s behaviour. qEthical values fall into this category. qFor example, companies may choose how & when to inform employees of impending layoffs.

© 2007 Dr Gerald Grant 13 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Property Rights: qProperty Rights: The rights that an organization gives to its members to receive & use organization resources. qManagers receive strong rights because they are unlikely to be motivated to work hard solely on behalf of the organization & its stakeholders. qWorkers receive the weakest rights, with their rights to use organization resources linked to their level of control over tasks.

© 2007 Dr Gerald Grant 14 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Common Property Rights Given to Managers & the Workforce:

© 2007 Dr Gerald Grant 15 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Organization Structure: (Part 1/3) qOrganization Structure: is the 4th source of culture values. It’s the formal system of task & authority relationships established to coordinate & control organization activities. qAn organization's. structure can promote cultural values that foster integration & coordination. Out of stable tasks & roles emerge shared norms & rules that help reduce communication problems, prevent distortion of information & speed information flow.

© 2007 Dr Gerald Grant 16 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Can organizational culture be managed? q qTo change the organization might need to q q Redesign the structure q qRevise property rights it uses to motivate and reward employees. q qNeed to change people at the top level q qNote: many studies have demonstrated that norms and values are stable and resist to change.

© 2007 Dr Gerald Grant 17 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Forms of Socially Responsible Behaviour:

© 2007 Dr Gerald Grant 18 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Social Responsibility: qSocial Responsibility: a manager’s duty or obligation to make decisions that nurture, protect, enhance, & promote the welfare & well-being of stakeholders & society as a whole. qThe strength of an organization's. commitment to social responsibility ranges from low to high.

© 2007 Dr Gerald Grant 19 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Advantages to Social Responsibility: qWorkers & society benefit as organizations, rather than government, & bear some costs of helping workers. qIf all organizations adopted a caring approach & agreed to act in a way that promoted the interests of their employees, a climate of caring would pervade. qCompanies that act responsibly toward their stakeholders benefit from increasing business & see their profits rise.

© 2007 Dr Gerald Grant 20 Slides adapted from those developed by A. John Joyner, Wilfrid Laurier University for Pearson Publishing Why Shouldn’t Organizations Act Responsibly? : qSome people argue that business has only one kind of responsibility: to use resources for activities that increase its profits, thus rewarding shareholders. qSome organizations only pay lip service to their ethical code, resulting in managers, who, when facing an ethical dilemma, seek to protect their own interests first, later worrying about how other stakeholders may be affected.