1. Copyright © 2016 Pearson Canada Inc.
CHAPTER 10
Organizational Culture
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2. Organizational Culture
Refers to a system of shared meaning held by members that distinguishes the organization from other organizations
LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
Organizational culture is the pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization. Seven key characteristics of what the organization values capture the essence of culture: (1) innovation and risk taking, (2) attention to detail, (3) outcome orientation, (4) people orientation, (5) team orientation, (6) aggressiveness, and (7) stability.
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3. Characteristics of Organizational Culture
Innovation and risk-taking
The degree to which employees are encouraged to be innovative and take risks.
Attention to detail
The degree to which employees are expected to exhibit precision, analysis, and attention to detail.
Outcome orientation
The degree to which management focuses on results or outcomes rather than on technique and process.
People orientation
The degree to which management decisions take into consideration the effect of outcomes on people within the organization.
LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
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4. Characteristics of Organizational Culture
Team orientation
The degree to which work activities are organized around teams rather than individuals.
Aggressiveness
The degree to which people are aggressive and competitive rather than easygoing.
Stability
The degree to which organizational activities emphasize maintaining the status quo in contrast to growth.
LO!; Material pertinent to this discussion is found under “What is Organizational Culture?”
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5. Exhibit 10-1 Contrasting Organizational Cultures
Material pertinent to this discussion is found under “What is Organizational Culture?”
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6. Copyright © 2016 Pearson Canada Inc.
Levels of Culture
Artifacts
Aspects of an organization’s culture that you see, hear, and feel.
Beliefs
The understandings of how objects and ideas relate to each other.
Values
The stable, long-lasting beliefs about what is important.
Assumptions
The taken-for-granted notions of how something should be in an organization.
LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
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7. Exhibit 10-2 Layers of Culture
LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
The layers of culture include
Displayed Layer
1) Artifacts
Aspects of an organization’s culture that you see, hear, and feel.
Hidden Layer
2) Beliefs
The understandings of how objects and ideas relate to each other.
3) Values
The stable, long-lasting beliefs about what is important.
4) Assumptions
The taken-for-granted notions of how something should be in an organization.
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8. Copyright © 2016 Pearson Canada Inc.
Culture’s Functions
Social glue that helps hold an organization together.
Enhances social system stability and provides appropriate standards for what employees should say or do.
Boundary-defining.
Conveys a sense of identity for organization members.
Facilitates commitment to something larger than one’s individual self-interest.
Guides and shapes the attitudes and behaviour of employees and serves as a “sense-making” and control mechanism.
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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9. Decentralized Organizations & Culture
Today’s trend toward decentralized organizations makes culture more important than ever, but it also also makes establishing a strong culture more difficult.
Employees organized in teams may show greater allegiance to their team and its values than to the values of the organization as a whole.
In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult.
Strong leadership that communicates frequently about common goals and priorities is especially important in innovative organizations.
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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10. Culture Creates Climate
Organizational climate
refers to the shared perceptions organizational members have about their organization and work environment.
team spirit at the organizational level
When everyone has the same general feelings about what is important or how well things are working, the effect of these attitudes will be more than the sum of the individual parts.
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?.”
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11. Ethical Dimension of Culture
Organizational cultures are not ethically neutral
Ethical work climate (EWC)
Forms over time as part of the organizational climate
Shared concept of right and wrong behaviour in the workplace
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?.”
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12. Ethical Dimension of Culture
Ethical climate theory (ECT) and Ethical climate index (ECI)
Categorize and measure the ethical dimensions of organizational cultures
Ethical climate reflects the true values of the organization and shapes the ethical decision-making of its members
Five climate categories most prevalent:
Instrumental
Caring
Independence
Law and code
Rules
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?.”
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13. Do Organizations Have Uniform Cultures?
Organizational culture represents a common perception held by the organization members.
Core values or dominant (primary) values are accepted throughout the organization.
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.
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?.”
Most organizations have a dominant culture and numerous sets of subcultures. The first expresses the core values that are shared by a majority of members. Subcultures develop to reflect common problems, situations, or experiences that members face such as department or geographical differentiation.
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14. Strong vs. Weak Cultures
Strong Cultures
the organization’s core values are both intensely held and widely shared.
have a great influence on the behaviour of its members
builds cohesiveness, loyalty, and organizational commitment
LO2; Material pertinent to this discussion is found under “What is Organizational Culture?.”
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15. Reading an Organization’s Culture
Stories
Rituals
Material Symbols
Language
LO2; Material pertinent to this discussion is found under “Reading An Organization’s Culture?”
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16. Copyright © 2016 Pearson Canada Inc.
Exhibit 10-3 How Organizational Cultures Form
LO3; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
As with most creations, culture begins with the organization's founders, who have a major impact in establishing the early culture. They are unconstrained by previous customs, their small size usually facilitates the founders’ imposing their vision on other organization members, and they also have biases on how to get the idea fulfilled. They have a vision or mission of what the organization should be.
Instructor can get students in the class who have some work experience to tell the ‘creation stories’ of organizations in which they have worked and discuss how those stories fit in with the organizational culture.
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17. Keeping a Culture Alive
Selection
Identify and hire individuals who will fit in with the culture.
Top Management
Senior executives establish and communicate the norms of the organization.
Socialization
Organizations need to teach the culture to new employees.
LO4: Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
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18. Copyright © 2016 Pearson Canada Inc.
A Socialization Model
Prearrival stage
explicitly recognizes that each individual arrives with a set of values, attitudes, and expectations about both the work to be done and the organization.
Encounter Stage
confronts the possibility that expectations—of the job, co-workers, and the organization in general—may differ from reality.
Metamorphosis Stage
the new employee changes or goes through the metamorphosis stage. Outcomes: Productivity, Commitment, Turnover
LO4; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
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19. Exhibit 10-4 A Socialization Model
LO4; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
Socialization can be conceptualized as a process composed of three stages:
Pre-arrival: This first stage encompasses all the learning that occurs before a new member joins the organization.
Encounter: In this second stage, the new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge.
Metamorphosis: In this third stage, the relatively long-lasting changes take place. The new employee masters the skills required for his or her job, successfully performs his or her new roles, and makes the adjustments to his or her work group’s values and norms.
This three-stage process has an impact on the new employee’s work productivity, commitment to the organization’s objectives, and eventual decision to stay with the organization. The exhibit depicts this process.
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20. The Liabilities of Organizational Culture
Culture can have dysfunctional aspects in some instances.
Barrier to Change
When organization is undergoing change, culture may impede change.
Barrier to Diversity
Strong cultures put considerable pressure on employees to conform.
Barrier to Mergers and Acquisitions
Merging the cultures of two organizations can be difficult, if not impossible.
LO5; Material pertinent to this discussion is found under “The Liabilities of Organizational Culture”
Culture as a Liability occurs when the shared values are not in agreement with those that will further the organization's effectiveness. This occurs when the environment is dynamic, and the entrenched culture may no longer be appropriate.
The culture at Enron became a liability as individuals put more and more effort into pretending that everything was going well.
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21. Strategies For Merging Cultures
Assimilation
The entire new organization is determined to take on the culture of one of the merging organizations.
Separation
Organizations remain separate and cultures are maintained.
Integration
A new hybrid culture is formed.
LO5; Material pertinent to this discussion is found under “The Liabilities of Organizational Culture”
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22. Changing Organizational Culture
Trying to change the culture of an organization is quite difficult and requires that many aspects of the organization change at the same time, especially the reward structure.
Culture is such a challenge to change because it often represents the established mindset of employees and managers.
LO5; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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23. Changing Organizational Culture
Change is most likely when most or all of the following conditions exist:
A dramatic crisis
Turnover in leadership
Young and small organizations
Weak culture
LO5; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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24. Creating an Ethical Culture
Be a visible role model.
Employees will look to the actions of top management as a benchmark for appropriate behaviour.
Communicate ethical expectations.
Minimize ethical ambiguities by creating and disseminating an organizational code of ethics.
Provide ethics training.
Set up seminars, workshops, and similar ethics training programs.
Visibly reward ethical acts and punish unethical ones.
Include in managers’ performance appraisals a point-by-point evaluation of how their decisions measured against the organization’s code of ethics.
Provide protective mechanisms.
Provide formal mechanisms so employees can discuss ethical dilemmas and report unethical behaviour without fear of reprimand.
LO6; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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25. Creating a Positive Organizational Culture
Building on employee strengths
Rewarding more than punishing.
Emphasizing vitality and growth.
Limits of positive culture.
LO7; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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26. Copyright © 2016 Pearson Canada Inc.
Summary
Reward systems generally signal the parts of the organization that are valued.
2. Culture can have both positive and negative effects on organizations.
3. Organizational culture can make change difficult, if not impossible.
Material pertinent to this discussion is found at the end of the chapter.
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27. Copyright © 2016 Pearson Canada Inc.
OB at Work: For Review
1. What is organizational culture, and what are its common characteristics?
2. What are the functional effects of organizational culture on people and the organization?
3. What factors create and sustain an organization’s culture?
4. How is culture transmitted to employees?
5. What are the liabilities of organizational culture?
6. How can an ethical organizational culture be created?
7. What is a positive organizational culture?
Material pertinent to this discussion is found at the end of the chapter.
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28. OB at Work: For Managers
■ Realize that an organization’s culture is relatively fixed in the short term. To effect change, involve top management and strategize a long-term plan.
■ Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. Not surprisingly, “misfits” have considerably higher turnover rates.
Material pertinent to this discussion is found at the end of the chapter.
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29. OB at Work: For Managers
■ Understand that employees’ performance and socialization depend to a considerable degree on their knowing what to do and not do. Train your employees well and keep them informed of changes to their job roles.
■ Be aware that your company’s organizational culture may not be “transportable” to other countries. Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas.
Material pertinent to this discussion is found at the end of the chapter.
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