Organizational Theories and Culture: Understanding, Creating, and Changing

2. Learning Objectives • Explain the organization theories of open systems, information processing, contingency, ecology, and learning. • Present the modern horizontal, network, and virtual designs of organizations. • Define organizational culture and its characteristics. • Relate how an organizational culture is created. • Describe how an organizational culture is maintained. • Explain some ways of changing organizational culture.

3. Introduction • Organization structure represents the skeletal framework for organizational behavior. • Consists of very flexible networks. • Recognizes the interaction of information technology and people. • Cultural context that the organization provides for organizational behavior.

4. Organization Theory • Historical roots - Chester Barnard. • Cooperative system is contingent on the human participants’ • Ability to communicate • Willingness to serve • Strive toward a common purpose • Organization as an open system • input → transformation process → output

5. Organization Theory Continued • Information processing view of organizations • External and internal uncertainties. • Become a networked, information processing systems. • Contingent and ecological organization theories • Learning organization represents the latest thinking in organization theory and compatible with the new paradigm environment.

6. Organization Theory Continued • A learning organization • Single loop learning • Double loop learning • Organizational behavior in the learning organization. • Associated with employees’ reacting to environmental changes and characterized by human-oriented cultural values. • Learning organizations in action.

7. Characteristics of Learning Organizations

8. Traditional versus Learning Organizations

9. Modern Organization Designs • Horizontal organizations • Relevant to today’s environmental needs for flexibility, speed, and cooperation. • Network designs • Involves a unique combination of strategy, structure, and management processes. • Virtual organization • Temporary network of companies that come together quickly to exploit fast-changing opportunities.

10. Traditional Hierarchical versus the Network Organization

11. The Contrast Between the Hierarchical and Network Organization

12. Example of a Virtual Organization

13. Organizational Culture Context • Definition and characteristics • Recognize the importance of shared norms and values that guide organizational participants’ behavior. • Uniformity of culture • Organizational culture, a common perception held by the organization’s members. • Dominant culture • Subculture

14. Creating and Maintaining a Culture • How organizational cultures start • Common steps include the formation of an idea, a core group, action plan, and implementation. • Maintaining cultures through steps of socialization • Selection of entry-level personnel • Placement on the job • Job mastery

15. Steps of Organizational Culture Socialization

16. Creating and Maintaining a Culture Continued • Maintaining cultures through steps of socialization (continued) • Measuring and rewarding performance • Adherence to important values • Reinforcing the stories and folklore • Recognition and promotion

17. Creating and Maintaining a Culture Continued • Changing organizational culture • Case of mergers and acquisitions • Focus areas: structure, politics, and emotions. • Case of emerging relationship enterprises • Success dependent on trust, communication, and negotiation skills. • Guidelines for change • Caution: pragmatically changing an organizational culture affects almost every aspect of the business.

18. Questions ?