Chapter 8 Organizational Culture, Structure and Design

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Chapter 8 Organizational Culture, Structure and Design McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All Right Reserved

Organizational Culture: “the way we do things around here” Important for employee morale, happiness, retention and productivity It is an invisible force that leads you into compliance with the organizational culture Email culture or face to face? Fast pace or relaxed? Company’s DNA (policies, rumors, stories, traditions, rituals)

What Is an Organizational Culture? system of shared beliefs and values that develops within an organization and guides the behavior of its members Also called corporate culture

Four Types of Organizational Culture Clan culture employee-focused values flexibility rather than stability encourages collaboration among employees Adhocracy culture attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace

Four Types of Organizational Culture Market culture focused on the external environment driven by competition and a strong desire to deliver results Hierarchy culture apt to have a formalized structured work environment aimed at achieving effectiveness through a variety of control mechanisms

The Three Levels of Organizational Culture Level 1: Observable artifacts physical manifestations such as manner of dress, awards, myths and stories about the company visible behavior exhibited by managers and employees

The Three Levels of Organizational Culture Level 2: Espoused Values Espoused values explicitly stated values and norms preferred by an organization Enacted values represent the values and norms actually exhibited in the organization

The Three Levels of Organizational Culture Level 3: Basic Assumptions represent the core values of the organization’s culture those taken for granted and highly resistant to change

How Employees Learn Culture Symbol an object, act, quality, or event that conveys meaning to others Story narrative based on true events, which is repeated – and sometimes embellished upon – to emphasize a particular value

How Employees Learn Culture Hero person whose accomplishments embody the values of the organization Rites and rituals activities and ceremonies, planned an unplanned, that celebrate important occasions and accomplishments in the organization’s life

Ways Cultures Become Embedded in Organizations Formal statements Slogans & sayings Stories, legends, & myths Leader reaction to crises Role modeling, training, & coaching Physical design

Ways Cultures Become Embedded in Organizations (cont.) Rewards, titles, promotions, & bonuses Organizational goals & performance criteria Measurable & controllable activities Organizational structure Organizational systems & procedures

Organization Chart

Common Elements of Organizations Common purpose - unifies employees or members and gives everyone an understanding of the organization’s reason for being Coordinated effort – the coordination of individual effort into group wide effort Division of labor – arrangement of having discrete parts of a task done by different people

Common Elements of Organizations Hierarchy of authority - control mechanism for making sure the right people do the right things at the right time Unity of command Span of control - refers to the number of people reporting directly to a given manager Narrow, wide