Chapter 16 Organizational Culture Identify the three levels of culture and the roles they play in an organization. Evaluate the four functions of culture within an organization. Explain the relationship between organizational culture and performance. Describe five ways leaders reinforce organizational culture. Describe the three stages of organizational socialization and the ways culture is communicated in each step. Discuss how managers assess their organization’s culture. Explain actions managers can take to change organizational culture. Identify the challenges organizations face developing positive, cohesive cultures. Learning Outcomes © 2011 Cengage Learning. All rights reserved.

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 © 2011 Cengage Learning. All rights reserved. 2

© 2011 Cengage Learning. All rights reserved. Learning Objective 1 Identify the three levels of culture and the roles they play in an organization. © 2011 Cengage Learning. All rights reserved.

Levels of Organizational Culture 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 Levels of Organizational Culture Assumptions – deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things © 2011 Cengage Learning. All rights reserved.

Organizational Culture Artifacts – symbols of culture in the physical and social work environment Visible, often not decipherable Values Espoused: what members of an organization say they value Enacted: reflected in the way individuals actually behave Greater level of awareness Assumptions – deeply held beliefs that guide behavior and tell members of an organization how to perceive and think about things 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. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Types of Artifacts Personal Enactment Ceremonies and Rites Stories About the boss About getting fired About relocating About promotions About crisis situations About status considerations Rituals Symbols © 2011 Cengage Learning. All rights reserved.

Beyond the Book: Identifying Norms This exercise asks you to identify campus norms at your university. Every organization or group has a set of norms that help determine individuals’ behavior. A norm is an unwritten rule for behavior in a group. When a norm is not followed, negative feedback is given. It may include negative comments, stares, harassment, and exclusion. 1. As a group, brainstorm all the norms you can think of in the following areas: Dress Classroom behavior; Studying; Weekend activities; Living arrangements; Campus activities; Dating; Relationships with faculty; Eating on campus versus off campus; Transportation 2. How did you initially get this information? 3. What happens to students who don’t follow these norms? 4. What values can be inferred from these norms? SOURCE: Dorothy Marcic, “Identifying Behavioral Norms.” Organizational Behavior: Experiences and Cases (St. Paul, MN: West Publishing, 1989). Reprinted by permission. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 2 Evaluate the four functions of culture within an organization. © 2011 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 of the organization Culture serves as a control mechanism for shaping behavior © 2011 Cengage Learning. All rights reserved.

Beyond the Book: NetApp’s Culture of Openness What is the key to success at NetApp? According to top executives, it’s openness. Everyone, including the CEO, works in an open cubicle. Information is shared freely. Every two weeks, employees meet with the Vice President to share their perspectives. In addition, NetApp shows employees that they are valuable and cared for through flexible scheduling, and sponsorship of volunteer activities. NetApp’s culture of openness and trust has made it one of Fortune magazine’s “Best Companies to Work For.” The data storage and management company NetApp has survived the dot-com crash and has enjoyed tremendous success under long-time CEO Dan Warmenhoven. Top executives at NetApp are quick to credit the open, trusting culture for the company’s success—and employees agree, catapulting NetApp to the top of Fortune’s “Best Companies to Work For” list. A culture of trust and openness gives NetApp a distinct competitive advantage. The office design supports these values. Everyone, including the CEO, works in an open air cubicle. Information is shared fully and openly. A Vice President’s Forum is held every two weeks in which information about the company and the economy is shared, but its main purpose is for the VP to hear what’s on the mind of NetApp employees. Key to the culture is the commitment to simplicity and common sense. Bureaucracy is at a minimum, and products are designed in order to do the job as simply as possible for customers. A twelve-page travel policy was canned in favor of a simple statement asking employees to use their common sense. Recruiting is done to attract brilliant people to the organization, and care is taken to let employees know how brilliant and appreciated they are. NetApp provides exciting work, provides flexible scheduling for work–life balance, and encourages volunteer efforts in the community. Five paid days off are given to each employee for volunteer work. Unique benefits are provided, too, like adoption aid and autism coverage. NetApp’s culture of trust, openness, simplicity, and common sense has garnered not only recognition, but highly performing employees and loyal customers, both keys to competitive advantage. SOURCES: R. Levering and M. Moskowitz, “And the Winners Are….” Fortune, February 2, 2009, 67–78; http://greatplacetowork.com/best/100best-2009/100best2009-netapp.php © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 3 Explain the relationship between organizational culture and performance. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Theories on the relationship between organizational culture and performance Strong Culture Perspective Fit Perspective Adaptive Perspective © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Strong Culture an organizational culture with a consensus on the values that drive the company and with an intensity that is recognizable even to outsiders © 2011 Cengage Learning. All rights reserved.

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 © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Fit Perspective a culture is good only if it fits the industry or the firm’s strategy © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Fit Perspective Three particular industry characteristics affect culture: Competitive environment Customer requirements Societal expectations © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Adaptive Culture an organizational culture that encourages confidence and risk taking among employees, has leadership that produces change, and focuses on the changing needs of customers © 2011 Cengage Learning. All rights reserved.

Adaptive vs. Nonadaptive Cultures © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 4 Describe five ways leaders reinforce organizational culture. © 2011 Cengage Learning. All rights reserved.

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 © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 5 Describe the three stages of organizational socialization and the way culture is communicated in each step. © 2011 Cengage Learning. All rights reserved.

Organizational Socialization the process by which newcomers are transformed from outsiders to participating, effective members of the organization © 2011 Cengage Learning. All rights reserved.

Organizational Socialization Process

[Socialization Process] 1. [Anticipatory Socialization] – all of the learning that takes place prior to the newcomer’s first day on the job 2. [Encounter] – newcomer learns the tasks associated with the job, clarifies roles, and establishes new relationships at work 3. [Change and Acquisition] – newcomer begins to master the demands of the job © 2011 Cengage Learning. All rights reserved.

Outcomes of Socialization Newcomers who are successfully socialized should exhibit: Good performance High job satisfaction Intention to stay with organization Low levels of distress symptoms High level of orgnaizational commitment © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 6 Discuss how managers assess their organization’s culture. © 2011 Cengage Learning. All rights reserved.

Organizational Culture Inventory Focuses on behaviors that help employees fit into the organization and meet coworker expectations Uses Maslow’s hierarchy of needs to measure twelve cultural styles © 2011 Cengage Learning. All rights reserved.

Kilmann-Saxton Culture-Gap Survey Focuses on what actually happens in the organization and the expectations of others Two underlying dimensions – technical/human and time. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Triangulation the use of multiple methods to measure organizational culture © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Learning Objective 7 Explain actions managers can take to change organizational culture. © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Cultural Changes With rapid environmental changes such as globalization, workforce diversity and technological innovation, the fundamental assumptions and basic values that drive the organization may need to be altered. © 2011 Cengage Learning. All rights reserved.

Why is Change Difficult? Assumptions are often unconscious Culture is deeply ingrained and behavioral norms and rewards are well learned © 2011 Cengage Learning. All rights reserved.

Interventions for Changing Organizational Culture

© 2011 Cengage Learning. All rights reserved. Learning Objective 8 Identify the challenges organizations face developing positive, cohesive cultures. © 2011 Cengage Learning. All rights reserved.

Challenges to Developing Positive, Cohesive Culture Merger or Acquisition Developing a global organizational culture Developing an ethical organizational culture Developing a culture of empowerment and quality © 2011 Cengage Learning. All rights reserved.

Beyond the Book: Six Guidelines to Creating a Global Culture Create a clear and simple mission statement Create systems that ensure an effective flow of information Broaden managers’ minds to allow them to think globally Develop global career paths Use cultural differences as a major asset Implement worldwide management education and team development programs **Following are six specific guidelines for managers who want to create a global culture: 1. Create a clear and simple mission statement. A shared mission can unite individuals from diverse cultural backgrounds. 2. Create systems that ensure an effective flow of information. Coordination councils and global task forces can be used to ensure that information flows throughout the geographically dispersed organization are consistent. 3. Create “matrix minds” among managers; that is, broaden managers’ minds to allow them to think globally. IBM does this through temporary overseas assignments. Managers with international experience share that experience when they return to the home organization. 4. Develop global career paths. This means ensuring not only that home country executives go overseas but also that executives from other countries rotate into service in the home office. 5. Use cultural differences as a major asset. The former Digital Equipment Corporation (now part of Hewlett-Packard), for example, transferred its research and development functions to Italy to take advantage of the free-flowing Italian management style that encouraged creativity. Its manufacturing operations went to Germany, which offered a more systematic management style. 6. Implement worldwide management education and team development programs. Unified training efforts that emphasize corporate values can help establish a shared identity among employees. These guidelines are specifically aimed at multinational organizations that want to create a global corporate culture, but other organizations can also benefit from. Companies that want to broaden employees’ views or to use the diversity of their workforce as a resource will find several of these recommendations advantageous. © 2011 Cengage Learning. All rights reserved.

Review the section, “Basic Design Dimensions Review the section, “Basic Design Dimensions.” Which dimensions does this scene show or imply? 2. Can you sense the division of labor represented by Senator Hawkins and Alan Smith? Corrine Whitman does not appear in this scene but is also part of a division of labor. 3. Review the five structural configurations described in the chapter. Which of those configurations best describes the likely structure of Senator Hawkins’ office? Which configurations do not apply? Why? Rendition U.S. government operatives haul Anwar El-Ibrahimi (Omar Metwally) off his flight from Cape Town, South Africa, after it arrives in Washington, D.C. He is a suspected terrorist whom the government sends to North Africa for torture and interrogation. CIA analyst Douglas Freeman (Jake Gyllenhaal) reacts negatively to the torture techniques and urges El-Ibrahimi’s release. This scene opens with a night shot of the Washington Monument. It follows Kahlid’s (Moa Khouas) discussion with Hamadi (Hassam Ghancy), the leader of a terrorist group. Congressional aide Alan Smith (Peter Sarsgaard) says in a voice-over, “She called you?” referring to Corrine Whitman (Meryl Streep), head of U.S. intelligence. She authorized the extraordinary rendition of El-Ibrahimi. Alan Smith, earlier in the film, pressed her for El-Ibrahimi’s release and his return to the United States. This scene does not explicitly discuss organizational structure, but you can infer several aspects of structure from the scene.