1. Organizational Culture
Chapter 16
Organizational Culture

2. Objectives Define organizational culture and explain its function
Explain how organizational culture evolves and is transmitted
Contrast the characteristics of strong and weak cultures
Explain the relationship between strong cultures and high performance
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3. …Objectives Describe the importance of organizational justice
Explain the impact of organizational culture in mergers
Describe how leaders can manage culture
Identify the four stages in the organizational life cycle
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4. Organizational Culture - Defined
Pattern of shared values and beliefs that produce certain norms of behavior
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5. Uncovering Levels of Culture
Visible organizational structures and processes
Artifacts
Espoused Values
Strategies, goals, philosophies
Unconscious, taken-for-granted beliefs, perceptions, thoughts, and feelings
Basic Underlying Assumptions
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6. Types f Cultures
Dominant culture – manifests the values shared by a majority of the organization's members
Subculture – shares the dominant culture’s core values as well as other values that characterize their own department, geographical unit, etc.
Counterculture – its values are in opposition to those of the dominant culture
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Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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7. Functions of Organizational Culture
Provide a sense of identity
Generate commitment
Helps make sense of occurrences
Control mechanism
Organizational Behavior: An Experiential Approach 8/E
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8. Sources of Culture
Beliefs, values and assumptions of founders, leaders
Learning experiences of group members as their organization evolves
New beliefs, values, and assumptions brought in by new members and leaders
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9. Strong Cultures - Defined
Strong cultures have core values and beliefs that are intensely held, more widely shared and more ordered than weak cultures
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10. Characteristics of Strong Cultures
Easily identified dominant values
Selection process targets people who fit the culture
Socialization and training teach newcomers “the ropes”
Employees who don’t fit are fired
Rewards for acting in accordance with cultural values
Leaders and managers send clear signals about desired values and norms
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11. Strong Cultures Advantages High performance under certain conditions
Clear sense of purpose
More value-driven decision making
Employee commitment
Loyalty
Pride
Disadvantages
Pressure for conformity
Resistance to change
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12. Strong Cultures and Performance
Focus on Key Constituencies
Leadership at all Levels
High Performance
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13. The Importance of Fit People Strategy Culture Organization’s task
Environment
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14. Transmitting Culture Via
Socialization
Stories
Symbols
Jargon
Rituals and Ceremonies
Statements of Principles
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15. Socialization - Defined
Socialization is the systematic process by
which organizations bring new members into
their cultures
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16. Seven Steps of Socialization
Humility-inducing
experiences
Careful selection
of candidates
In-the-trenches
training
Careful attention
to rewards & control
systems
Consistent role
models
Careful adherence
to core values
Reinforcing
folklore
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17. Organizational Justice
Distributive Justice - Fair distribution of resources (pay, rewards, promotions and dispute resolutions)
Procedural Justice - Fair decision-making procedures regarding resource distribution
Interactional Justice - Fair treatment from others
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18. Outcomes of Organizational Justice
Higher performance
Compliance
Trust
Cooperation with coworkers
Organizational citizenship behavior
Less turnover
Less absenteeism
Less employee silence
Less counterproductive behaviors
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19. …Outcomes of Organizational Justice
Increased
Performance
Compliance
Trust in managers
Cooperation with coworkers
Organizational citizenship behavior
Decreased
Less turnover
Less absenteeism
Less employee silence
Less counterproductive behaviors
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20. Mergers and Culture 50% failure rate on mergers and acquisitions
To ensure a successful merger
Analyze cultural compatibility of both organizations beforehand
Develop shared values rather than imposing the values of one firm on the other
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21. How Leaders Create and Modify Culture – Primary Mechanisms
What they regularly pay attention to, measure, and control
Their reaction to critical incidents and crises
Criteria used to allocate scarce resources
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22. …How Leaders Create and Modify Culture
Deliberate role modeling, teaching, and
coaching
Criteria for allocating rewards and status
Criteria for recruitment, selection, promotion and termination
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23. How Leaders Create and Modify Culture - Secondary Mechanisms
Organizational design
Systems and procedures
Rites and rituals
Design of physical space, facades, buildings
Stories about important events and people
Formal statements of organizational philosophy, creeds, and charters
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24. Organization Stages of Development
Size
Small
Large 1.
Entrepreneurial Stage 4.
Elaboration Stage 3.
Formalization Stage 2.
Collectivity Stage
Renewal
Decline
Continuing maturity
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25. How Can You Renew a Mature Organization?
Instill a customer perspective and focusing on customer demands
Increase their capacity for change
Alter both hardware and software within the organization
Create empowered employees who act as leaders at all organizational levels
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