McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 16 Organizational Culture

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-2 Corporate Culture Hits Schwab Executives at Charles Schwab & Co. underestimated the influence of organizational culture on behavior when they acquired U.S. Trust AP/Wide World Photos.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-3 Organizational Culture Defined The basic pattern of shared values and assumptions governing the way employees within an organization think about and act on problems and opportunities. AP/Wide World Photos.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-4 Elements of Organizational Culture Unconscious, taken-for-granted perceptions or beliefs Mental models of ideals Shared assumptions Conscious beliefs Evaluate what is good or bad, right or wrong Shared values ArtifactsArtifacts Stories/legends Rituals/ceremonies Organizational language Physical structures/décor Stories/legends Rituals/ceremonies Organizational language Physical structures/décor Visible Invisible (below the surface)

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-5 Meaning of Cultural Content Cultural content refers to the relative ordering of beliefs, values, and assumptions. Example: Software company SAS Institute has an employee-focused culture that emphasizes work-life balance. An organization emphasizes only a handful of values out of dozens or hundreds of values that exist.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-6 Organizational Subcultures Located throughout the organization Can enhance or oppose (countercultures) firm’s dominant culture Two functions of countercultures: –provide surveillance and critique, ethics –source of emerging values

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-7 Mayo Clinic Deciphers its Culture To decipher its culture and identify ways to reinforce it at the two newer sites, the Mayo Clinic retained an anthropologist who shadowed employees, joined physicians on patient visits, and posed as a patient to observe what happens in waiting rooms. Courtesy of the Mayo Clinic

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-8 Artifacts: Stories and Legends Social prescriptions of desired (undesired) behavior Provides a realistic human side to expectations Most effective stories and legends: –Describe real people –Assumed to be true –Known throughout the organization –Are prescriptive

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16-9 Artifacts: Rituals and Ceremonies Rituals –programmed routines –(eg., how visitors are greeted) Ceremonies –planned activities for an audience –(eg., award ceremonies)

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Artifacts: Organizational Language Words used to address people, describe customers, etc. Leaders use phrases and special vocabulary as cultural symbols –eg. Referring to “clients” rather than “customers” Language also found in subcultures –eg. Whirlpool’s “PowerPoint culture”

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Artifacts: Physical Structures/Symbols Building structure -- may shape and reflect culture –Example: Oakley’s “interplanetary headquarters” looks like a vault, representing the eyewear and clothing company’s protective culture Office design conveys cultural meaning –Furniture, office size, wall hangings

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Benefits of Strong Corporate Cultures Strong Organizational Culture Social Control Improves Sense-Making Social Glue

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Problems with Strong Cultures 1.Culture content might be misaligned with the organization’s environment. 2.Strong cultures may focus on mental models that could be limiting 3.Strong cultures suppress dissenting values from subcultures.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Adaptive Organizational Cultures External focus -- firm’s success depends on continuous change Focus on processes more than goals Strong sense of ownership Proactive --seek out opportunities

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Org Culture and Ethics Executives view org culture as one of three main influences on business ethics Organizational culture also an ethical problem when it is very strong --corporate cults

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Bicultural Audit Part of due diligence in merger Minimizes risk of cultural collision by diagnosing companies before merger Three steps in bicultural audit: 1.Examine artifacts 2.Analyze data for cultural conflict/compatibility 3.Identify strategies and action plans to bridge cultures

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Merging Organizational Cultures Assimilation Deculturation Acquired company embraces acquiring firm’s cultural values Acquiring firm imposes its culture on unwilling acquired firm Integration Cultures combined into a new composite culture Separation Merging companies remain separate with their own culture

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Strengthening Organizational Culture

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Whole Foods Spreads its Culture When expanding operations, Whole Foods Market maintains its culture through a ‘yoghurt culture’ strategy. This is a socialization process in which current employees who carry the grocer’s unique culture are transferred to new stores so recently-hired employees learn and embrace that culture more quickly.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Organizational Socialization Defined The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization.

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Socialization: Learning & Adjustment Learning Process –Newcomers make sense of the organization’s physical, social, and strategic/cultural dynamics Adjustment Process –Newcomers need to adapt to their new work environment New work roles New team norms New corporate cultural values

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Stages of Socialization Pre-Employment Stage Encounter Stage Role Management Insider Changing roles and behavior Resolving conflicts Insider Changing roles and behavior Resolving conflicts Newcomer Testing expectations Newcomer Testing expectations Outsider Gathering information Forming psychological contract Outsider Gathering information Forming psychological contract

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide IndividualAttractsOrganization IndividualSelectsOrganization OrganizationAttractsIndividual OrganizationSelectsIndividual C D Pre-employment Socialization Conflicts B A A: Firm “sells” the job and company, hides negative info B: Applicant polishes up the résumé to look good C: Applicant avoids asking important questions that may be awkward (e.g. pay) D: Company avoids using valid selection tests that might scare away applicants

McShane/Von Glinow OB4e© 2008 The McGraw-Hill Companies, Inc. All rights reserved. Slide Realistic Job Previews A balance of positive and negative information about the job and work context Benefits of RJPs –Less turnover, higher job performance –Less reality shock –Vaccination effect –Builds loyalty

McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 16 Organizational Culture