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Chapter 16 Organizational Culture

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  1. 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 16 -1 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -2 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  4. Organizational Culture - Defined Pattern of shared values and beliefs that produce certain norms of behavior 16 -3 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  5. Basic Underlying Assumptions Uncovering Levels of Culture Visible organizational structures and processes Artifacts Espoused Values Strategies, goals, philosophies Unconscious, taken-for-granted beliefs, perceptions, thoughts, and feelings 16 -4 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -5 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  7. Functions of Organizational Culture • Provide a sense of identity • Generate commitment • Helps make sense of occurrences • Control mechanism 16 -6 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -7 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  9. Strong Cultures - Defined Strong cultures have core values and beliefs that are intensely held, more widely shared and more ordered than weak cultures 16 -8 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -9 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  11. 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 Strong Cultures 16 -10 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  12. Strong Cultures and Performance • Strong Culture • Focus on Key Constituencies • Leadership at all Levels High Performance 16 -11 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  13. People Strategy Culture Organization’s task Environment The Importance of Fit 16 -12 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  14. Transmitting Culture Via • Socialization • Stories • Symbols • Jargon • Rituals and Ceremonies • Statements of Principles 16 -13 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  15. Socialization - Defined Socialization is the systematic process by which organizations bring new members into their cultures 16 -14 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  16. Seven Steps of Socialization Reinforcing folklore 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 16 -15 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -16 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -17 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  19. Increased Performance Compliance Trust in managers Cooperation with coworkers Organizational citizenship behavior Decreased Less turnover Less absenteeism Less employee silence Less counterproductive behaviors …Outcomes of Organizational Justice 16 -18 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -19 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -20 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -21 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -22 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  24. Large Renewal Continuing maturity Decline Size Small 1. Entrepreneurial Stage 2. Collectivity Stage 3. Formalization Stage 4. Elaboration Stage Organization Stages of Development 16 -23 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner

  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 16 -24 Organizational Behavior: An Experiential Approach 8/E Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner