Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-1 Essentials of Organizational Behavior, 10/e Stephen P. Robbins & Timothy A. Judge Chapter 15 Organizational Culture

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-2 After studying this chapter, you should be able to: 1.Define organizational culture and describe its common characteristics. 2.Compare the functional and dysfunctional effects of organizational culture on people and the organization. 3.Explain the factors that create and sustain an organization’s culture. 4.Show how culture is transmitted to employees. 5.Demonstrate how an ethical culture and a positive culture can be created. 6.Show how national culture may affect the way organizational culture is transported to a different country.

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-3 Organizational Culture A system of shared meaning held by members that distinguishes the organization from other organizations Composed of seven key characteristics

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-4 Seven Characteristics of Organizational Culture 1.Innovation and Risk Taking 2.Attention to Detail 3.Outcome Orientation 4.People Orientation 5.Team Orientation 6.Aggressiveness 7.Stability

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-5 Culture Is a Descriptive Term Culture Organizational culture is concerned with how employees perceive an organization’s culture, not whether or not they like it Descriptive Job Satisfaction Measures affective responses to the work environment: concerned with how employees feel about the organization Evaluative

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-6 Do Organizations Have Uniform Cultures? The dominant culture expresses the core values that are shared by a majority of the organization’s members Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences of members Subcultures mirror the dominant culture but may add to or modify the core values

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-7 Strong Cultures In a strong culture, the organization’s core values are both intensely held and widely shared Strong cultures will:  Have great influence on the behavior of its members  Increase cohesiveness  Result in lower employee turnover

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-8 Culture Versus Formalization Both seek predictability, orderliness, and consistency Culture controls by increasing behavioral consistency Formalization controls through policies and written documentation Strong cultures can be a substitute for formalization

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall 15-9 Culture’s Five Basic Functions Defines Boundaries Conveys a Sense of Identity Generates Commitment Beyond Oneself Enhances Social Stability Sense-making and Control Mechanism

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Culture as a Liability Barrier to Change  Culture is slow to change – even in a dynamic environment Barrier to Diversity  Culture seeks to minimize diversity  Can embed prevalent bias and prejudice Barrier to Acquisitions and Mergers  Most mergers fail due to cultural incompatibility

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Creating Culture Ultimate source of an organization’s culture is its founders Founders create culture in three ways:  By hiring and keeping those who think and feel the same way they do  Indoctrinating and socializing those employees to their way of thinking and feeling  Acting as a role model and encouraging employees to identify with them

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Keeping a Culture Alive Selection – seek out those who fit in Top Management – establish norms of behavior by their actions Socialization – help new employees adapt to the existing culture

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall A Socialization Model Pre-arrival –initial knowledge about the organization and own unique ideas Encounter – exposed to the organization Metamorphosis – member changed to fit within the organization

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Dimensions of Socialization Programs Intense Programs Formal – new workers separated for training Collective – group basis Fixed – planned activities Serial – role models used Divestiture – strip away characteristics to build up new ones Moderate Programs Informal – new workers immediately put to work Individual – one-on-one Variable – no timetables Random – on your own Investiture – accepts and confirms existing characteristics

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall How Organization Cultures Form Success in employee socialization depends on management’s selection of socialization method and the closeness of new employees’ values to those of the organization

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall How Employees Learn Culture Culture is transmitted to employees through:  Stories – provide explanations  Rituals – reinforce key values  Material Symbols – convey importance  Language – identify and segregate members

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Creating an Ethical Organizational Culture A strong culture with high risk tolerance, low-to-moderate aggressiveness, and focuses on means as well as outcomes is most likely to shape high ethical standards  Managers must be visible role models  Communicate ethical expectations  Provide ethical training  Visibly reward ethical acts and punish unethical ones  Provide protective mechanisms

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Creating a Positive Organizational Culture A positive culture is one that emphasizes the following: Building on Employee Strengths Rewarding More Than Punishing Emphasizing Vitality and Growth of the Employee

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Global Implications National and Organizational Cultures: Organizations exist in a global context Must be aware of local and national cultures Suggestions and Observations: Organizations heavily dependent on foreign markets and labor National culture does influence organizational culture All managers must be culturally sensitive

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Implications for Managers Create the culture you want when the organization is small and new If established culture needs to be changed, expect it to take years

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Keep in Mind… Organizational culture is concerned with how employees perceive the culture, not whether or not they like it Ethical and positive organizational cultures can be created – methods differ National culture influences organizational culture

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall Summary 1.Defined organizational culture and described its common characteristics. 2.Compared the functional and dysfunctional effects of organizational culture on people and the organization. 3.Explained the factors that created and sustained an organization’s culture. 4.Showed how culture was transmitted to employees. 5.Demonstrated how an ethical culture and a positive culture could be created. 6.Showed how national culture might affect the way organizational culture is transported to a different country.

Copyright ©2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.