1. Chapter Fourteen
Organization Culture

2. Chapter Objectives
Define organization culture and explain how it affects employee behavior.
Explain how to create an organization culture.
Discuss two different approaches to describing culture in organizations.
Identify important emerging issues in organization culture.
Discuss the key elements of managing the organization culture.
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3. The Nature of Organization Culture
The set of shared values, often taken for granted and communicated through stories and other symbolic means
These help the organization’s employees understand which actions are considered acceptable and which unacceptable.
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4. Historical Foundations
Anthropological Contributions
The study of human cultures and cultural phenomena.
Anthropologists seek to understand how the values and beliefs that make up a society’s culture affect the structure and functioning of that society.
Sociological Contributions
The study of people in social systems such as organizations and societies.
Sociologists have long been interested in the causes and consequences of culture.
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5. Historical Foundations (continued)
Social Psychology Contributions
A branch of psychology that includes the study of groups and the influence of social factors on individuals.
Economics Contributions
The study of organization culture that attempts to link the cultural attributes of firms with their performance rather than simply describing the cultures of companies as the sociological and anthropological perspectives do.
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6. Culture Versus Climate
Organizational Climate
Refers to current situations in the organization and the linkages among work groups, employees, and work performance
Organizational Culture
Refers to the historical context within which a situation occurs and the impact of this context on the behavior of employees
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7. Creating an Organization Culture
Step 1: Formulate Strategic Values
Strategic values – the basic beliefs about an organization’s environment that shape its strategy
Step 2: Develop Cultural Values
Cultural values – the values that employees need to have and act on for the organization to implement its strategic values
Step 3: Create A Vision
Vision – a picture of what an organization will look like at some point in the future
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8. Creating an Organization Culture (continued)
Step 4: Initiate Implementation Strategies
Implementation Strategies – many factors, including developing organization design to recruiting and training employees who share the values and will carry them out
Step 5: Reinforce Cultural Behaviors
The act of monitoring and encouraging these behaviors of employees as they act out the cultural values and implement the organization’s strategies
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9. Ouchi formulated the notion of the “Type Z” firm.
The Ouchi Framework
Ouchi formulated the notion of the “Type Z” firm.
Ouchi argued that the cultures of typical Japanese firms and U.S. Type Z firms are very different from those of typical U.S. firms, and that these differences explain the success of many Japanese firms and U.S. Type Z firms and the difficulties in typical U.S. firms.
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10. Table 14.2: The Ouchi Framework
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11. The Peters and Waterman Approach
In their bestseller In Search of Excellence, Tom Peters and Robert Waterman focused even more explicitly than Ouchi on the relationship between organizational culture and performance.
They chose a sample of highly successful U.S. firms and sought to describe the management practices that led to their success.
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12. Table 14.3: The Peters and Waterman Framework
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13. Emerging Issues in Organizational Culture
Innovation
The process of creating and doing new things that are introduced into the marketplace as products, processes, or services.
It involves every aspect of the organization, from research through development, manufacturing, and marketing.
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14. Types of Innovation Radical Innovation Systems Innovation
A major breakthrough that changes or creates whole industries
Systems Innovation
Functionality created by assembling parts in new ways
Incremental Innovation
Continued technical improvements and an extension of the applications of radical systems innovations
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15. Entrepreneurship – can occur inside or outside large organizations
New Ventures
New ventures based on innovation require entrepreneurship and good management to work.
Entrepreneurship – can occur inside or outside large organizations
Intrapreneurship – entrepreneurial activity within the organization
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16. Corporate Research Corporate Research
The most common means of developing innovation in the traditional organization
It is set up to:
support existing businesses
provide incremental innovations in the organization’s business
explore potential new technology bases
The corporate culture can be instrumental in fostering an environment in which creativity and innovation occur.
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17. Procedural Justice Procedural Justice
The extent to which the dynamics of an organization’s decision making processes are judged to be fair by those most affected by them.
Especially in the U.S., employees are demanding more say in determining work rules and in matters pertaining to health and safety on the job and the provision of certain benefits for all employees.
The lack of procedural justice may lead to less compliant attitudes on the part of lower-level managers.
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18. Managing Organization Culture
Two Key Fact About Culture:
Organizational cultures differ among firms
Different organizational cultures affect a firm’s performance
Three Elements of Managing Organizational Culture:
Taking advantage of the existing culture
Teaching organization culture
Changing the organization culture
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19. Taking Advantage of the Existing Culture
To take advantage of an existing cultural system, managers must be fully aware of the culture’s values and what behaviors or actions those values support.
This understanding can be used to evaluate the performance of others in the firm.
Articulating organizational values can be useful in managing others’ behaviors.
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20. Teaching the Organization Culture: Socialization
The process through which individuals become social beings
Organizational Socialization
The process through which employees learn about the firm’s culture and pass their knowledge and understanding on to others.
Employees are socialized into organizations just as people are socialized into societies; they come to know over time what is acceptable in the organization and what is not, how to communicate with their feelings, and how to interact with others.
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21. Changing the Organization Culture
Managing Symbols
Research suggests that organization culture is understood and communicated through the use of stories and other symbolic media.
If this is correct, managers interested in changing cultures should attempt to substitute stories and myths that support new cultural values for those that support old ones.
The Difficulty of Change
Changing a firm’s culture is a long and difficult process.
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22. Changing the Organization Culture (continued)
The Stability of Change
The process of changing a firm’s culture starts with a need for change and moves through a transition period in which efforts are made to adopt new values and beliefs.
In the long run, a firm that successfully changes its culture will find the new values and beliefs are as stable and influential as the old ones.
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