1. ©2007 Prentice Hall Organizational Behavior: An Introduction to Your Life in Organizations Chapter 17 Organizational Culture

2. ©2007 Prentice Hall Preview Why is organizational culture so important to companies? How do you discover an organization’s culture? How do managers use organizational culture to improve organizational effectiveness? What happens when organizations with different cultures merge? How do you change an existing organizational culture? How can you find an organizational culture in which you will thrive?

3. ©2007 Prentice Hall Why is organizational culture so important to companies? An organization’s culture is its system of shared values and norms, along with related behaviors Dominant culture: the system of values and norms held by most members Subcultures: formal and informal groups and networks that may subscribe to some of these values and norms, but also have their own Counter-cultures: those subcultures whose values and norms oppose those of the dominant culture of the company

4. ©2007 Prentice Hall Where do organizational cultures originate? Three historical design factors: the personality and values of the founder, the historic period in which the company was founded, and the historic size of the company The norms and values that typify organizations of different sizes The business the company is in and the national and regional cultures in which the company is embedded

5. ©2007 Prentice Hall What is the difference between culture and climate? Climate refers to organizational members’ perceptions of an organization’s policies, practices and procedures Researchers are still figuring out precisely how organizational climate differs from organizational culture Perhaps the two concepts cannot really be differentiated

6. ©2007 Prentice Hall How does national culture affect organizational culture? Organizations reflect what the society they operate in emphasizes, for example, conformity or individualism National cultures whose members prefer to avoid uncertainties tend to have companies with closed-system, bureaucratic cultures

7. ©2007 Prentice Hall What companies have built a reputation around their corporate cultures? Lincoln Electric Southwest Airlines IBM Hewlett Packard Goldman Sachs Starbucks Infamous cultures: Enron and Arthur Anderson

8. ©2007 Prentice Hall What do you need to know to discover an organization’s culture? A company’s culture exists on four levels:  Level 1: Behaviors and artifacts  Level 2: Shared perspectives  Level 3: Awareness  Level 4: Unconscious assumptions

9. ©2007 Prentice Hall How do new employees learn an organization’s culture? Organizational socialization: the process by which new members’ values, norms and behaviors align with those of the organization and permit them to participate as members of the organization Three stages:  Anticipatory socialization: impressions formed from company’s literature and interaction with interviewers, current employees, and other applicants  Encounter: the newcomer confronts the realities of your new organization  Metamorphosis: the newcomer attempts to become an accepted member of the culture by learning new attitudes and behaviors or modifying existing ones to conform

10. ©2007 Prentice Hall How does culture motivate performance? Strong cultures, where the shared values and norms are clear, consistent and comprehensive and values are intensely held and widely shared have a modest positive relationship to performance Cultural fit as a bureaucracy, market culture or clan can positively affect performance if it matches the situation

11. ©2007 Prentice Hall How does culture create commitment? Organizational commitment, as you will recall, is being involved with, identifying with, and having an emotional attachment to one’s organization Strong cultures enhance commitment There is a strong relationship between worker commitment and higher returns for shareholders

12. ©2007 Prentice Hall How does culture integrate organizational units? Creating a sense of community reduces competition and increases cooperation among organizational subunits (popular, but not accepted by all researchers) Create a superordinate culture, which is a strong organizational culture with which all nationalities can identify (hard to do because of differences in national cultures)

13. ©2007 Prentice Hall How does culture motivate ethical behavior? Reconciling professional and personal value systems: being able to fulfill personal values on the job improves job satisfaction Designing organizational cultures to encourage moral expression Designing cultures to value diversity

14. ©2007 Prentice Hall How does organizational culture enhance corporate branding? Corporate branding: the process by which a distinct identity is created for a company Employer branding: creating the same experience for employees that a company promises to its customers Cause branding: a company is associated with supporting particular social causes

15. ©2007 Prentice Hall How does culture enhance service? The emotions displayed by employees are related to how customers feel and how they evaluate the quality of the service they receive Employees believing they are supported by their organization is important for job satisfaction and organizational commitment

16. ©2007 Prentice Hall How can managers foster acculturation? Acculturation is “the process by which two or more cultures come into contact and resolve the conflict that arises as a result of this contact” Four modes for merging cultures:  Assimilation  Integration  Separation  Deculturation

17. ©2007 Prentice Hall What is the effect of merging business systems on merging organizational cultures? Business systems are the company’s particular methods and technologies for doing business It is believed that cultural integration can only be accomplished when a moderate or full level of business systems integration is also part of the plan

18. ©2007 Prentice Hall How do you change an existing organizational culture? Target:  organizational values and norms  the managerial culture  organizational heroes  organizational myths and stories  organizational rites, rituals, and taboos  cultural symbols and other aspects of objective culture

19. ©2007 Prentice Hall What kind of culture do you prefer? Individuals differ on whether they prefer cultures that have a concern for people or cultures that have a concern for goal accomplishment Finding a cultural fit is a straightforward matter if you know your own personality and get an accurate, complete overview of a company’s culture

20. ©2007 Prentice Hall Will you face a glass ceiling? The glass ceiling is the invisible barrier between middle and top management positions that is said to exist for women and other minorities Companies that are seriously interested in developing women & minorities as top managers should make several cultural interventions

21. ©2007 Prentice Hall Apply what you have learned A Once World Class Company: Arthur Andersen Advice from the Pro’s Gain Experience Can you solve this manager’s problem?

22. ©2007 Prentice Hall Summary – Why is organizational culture so important to companies? An organization’s culture may affect a company’s profitability, and it acts as a subtle control mechanism on employee behavior Subcultures and counter-cultures create both productive and counterproductive conflict in an organization Cultures originate in the historical foundations of the company, the business the company is in, and the company’s national and regional origins Some companies have built their reputations, in part, around their organizational cultures

23. ©2007 Prentice Hall Summary – How do you discover an organization’s culture? A company’s culture exists on four levels:  behaviors and artifacts  shared perspectives on rules and norms  general awareness of ideals, standards and goals  unconscious assumptions Employees learn a company’s culture through the process of organizational socialization

24. ©2007 Prentice Hall Summary – How do managers use organizational culture to improve organizational effectiveness? Strong organizational cultures are where the norms and values of the company are clear and comprehensive, and values are intensely held and widely shared Strong organizational cultures may enhance individual and company performance; they can also lead a company energetically in the wrong direction They may enhance corporate branding through the processes of employer branding and cause branding

25. ©2007 Prentice Hall Summary – What happens when organizations with different cultures merge? Companies that merge go through one of these processes for acculturation:  Assimilation  Integration  Separation  Deculturation Performing a bicultural audit before the merger can help avoid acculturative stress and merger failure.

26. ©2007 Prentice Hall Summary – How do you change an existing organizational culture? Once established, cultures are hard to change Companies that do try to change their cultures emphasize new policies, new rituals, and new ways of leading Typically they hire people who fit into the new culture

27. ©2007 Prentice Hall Summary – How can you find an organizational culture in which you will thrive? Individuals have cultural preferences Sometimes you do not fit into your company’s corporate culture or subculture, a fact that may create serious career consequences