18* 2012 South-Western, a part of Cengage LearningAfter studying this chapter you should be able to:Define organization culture, explain how it affects employee behavior, and understand its historical roots.Describe how to create organization culture.Describe two different approaches to culture in organizations.Identify emerging issues in organization culture.Discuss the important elements of managing the organizational culture.Chapter Learning Objectives

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18* 2012 South-Western, a part of Cengage LearningThe Nature of Organization CultureWhy Study Culture?It is assumed that organizations with a strong culture perform at higher levels than those without a strong cultureOrganizational Culture A set of values held by individuals in a firm that help employees understand acceptability of actionsCulture ValuesAre often taken for granted (implicit)May not be made explicit (i.e., not written down)Are communicated through symbolic means

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18* 2012 South-Western, a part of Cengage Learning18.1Definitions of Organization Culture

Definition Source A belief system shared by an organizations members J. C. Spender, Myths, Recipes and Knowledge-Bases in Organizational Analysis (Unpublished manuscript, Graduate School of Management, University of California at Los Angeles, 1983), p. 2. Strong, widely shared core values C. OReilly, Corporations, Cults, and Organizational Culture: Lessons from Silicon Valley Firms (Paper presented at the Annual Meeting of the Academy of Management, Dallas, Texas, 1983), p. 1. The way we do things around here T. E. Deal and A. A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, MA: Addison-Wesley, 1982), p. 4. The collective programming of the mind G. Hofstede, Cultures Consequences: International Differences in Work-Related Values (Beverly Hills, CA: Sage, 1980), p. 25. Collective understandings J. Van Maanen and S. R. Barley, Cultural Organization: Fragments of a Theory (Paper presented at the Annual Meeting of the Academy of Management, Dallas, Texas, 1983), p. 7. A set of shared, enduring beliefs communicated through a variety of symbolic media, creating meaning in peoples work lives J. M. Kouzes, D. F. Caldwell, and B. Z. Posner, Organizational Culture: How It Is Created, Maintained, and Changed (Presentation at OD Network National Conference, Los Angeles, October 9, 1983). A set of symbols, ceremonies, and myths that communicates the underlying values and beliefs of that organization to its employees W. G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge (Reading, MA: Addison-Wesley, 1981), p. 41.A dominant and coherent set of shared values conveyed by such symbolic means as stories, myths, legends, slogans, anecdotes, and fairy tales T. J. Peters and R. H. Waterman Jr., In Search of Excellence: Lessons from Americas Best-Run Companies (New York: Harper & Row, 1982), p. 103. The pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration E. H. Schein, The Role of the Founder in Creating Organizational Culture, Organizational Dynamics, Summer 1985, p. 14.

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18* 2012 South-Western, a part of Cengage LearningThe Nature of Organization Culture (contd)

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18* 2012 South-Western, a part of Cengage LearningOrganization Culture Versus ClimateOrganization CultureThe historical context within which a situation occurs and the impact of this context on the behaviors of employeesDifficult to alter in the short-runMeans through which people in the organization learn and communicate organization acceptability (values and norms)Organization ClimateThe current situations in an organization and the linkages among work groups, employees, and work performanceEasier for management to manipulate in order to directly affect the behavior of employees

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18* 2012 South-Western, a part of Cengage Learning18.2Creating Organization CultureCreating Organization CultureStep 1Formulate Strategic ValuesStep 2Develop Cultural ValuesStep 3Create VisionStep 4Initiate Implementation StrategiesStep 5Reinforce Cultural Behaviors

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18* 2012 South-Western, a part of Cengage LearningCreating the Organization CultureEstablish ValuesStrategic valuesThe basic beliefs about an organizations environment that shape its strategy.Cultural valuesThe values that employees need to have and act on for the organization to act on the strategic values.Create VisionCreate a picture of the organization that portrays how the strategic and cultural values will combine to create the future.

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18* 2012 South-Western, a part of Cengage LearningCreating the Organization Culture (contd)Initiate Implementation StrategiesTake actions founded on the strategic and cultural values to accomplish the vision.Reinforce Cultural BehaviorsUse formal reward systems to encourage desired employee behaviorsTell stories that epitomizing cultural valuesConduct ceremonies and rituals that emphasize right actions by employees

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18* 2012 South-Western, a part of Cengage LearningApproaches to Describing Organization Culture: The Ouchi Framework

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18* 2012 South-Western, a part of Cengage Learning18.3The Ouchi Framework

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18* 2012 South-Western, a part of Cengage Learning18.4The Peters and Waterman FrameworkAttributes of an Excellent FirmBias for actionStay close to the customerAutonomy and entrepreneurshipProductivity through peopleHands-on managementStick to the knittingSimple form, lean staffSimultaneously loose and tight organization

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18* 2012 South-Western, a part of Cengage LearningEmerging Issues in Organization Culture: InnovationInnovationThe process of creating and doing new things that are introduced into the marketplace as products, processes, or services

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18* 2012 South-Western, a part of Cengage LearningEmerging Issues in Organization Culture: Innovation (contd)New VenturesRequire entrepreneurship and good managementIntrapreneurshipEntrepreneurial activity that takes place within the context of a large organizationEntrepreneurs profileNeed for achievementDesire to assume responsibilityWilling to take risksFocus on concrete results

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18* 2012 South-Western, a part of Cengage LearningEmerging Issues in Organization Culture: Innovation (contd)Corporate ResearchSupports existing businesses to provide incremental innovations and to explore potential new technology basesIs responsible for keeping the companys products and processes technologically advancedCorporate culture can be instrumental in fostering environment for creativity and innovation

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18* 2012 South-Western, a part of Cengage LearningEmerging Issues in Organization Culture (contd)EmpowermentIs enabling workers to set their own work goals, make decisions, solve problems within their sphere of responsibility and authorityAppropriate Cultures (Goffee and Jones)Factors that may determine the appropriate type of culture appropriate for an organization:The nature of the value chainThe dynamism of the environment

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18* 2012 South-Western, a part of Cengage LearningManaging Organization Culture

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18* 2012 South-Western, a part of Cengage LearningManaging Organization Culture (contd)Taking Advantage of the Existing CultureEasier and faster to alter employee behaviors within the existing culture than it is to change existing history, traditions, and valuesManagers must be aware and understand the organizations valuesManagers can communicate their understanding to lower-level individuals

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18* 2012 South-Western, a part of Cengage LearningManaging Organization Culture (contd)Teaching Organization CultureOrganizational socializationIs the process through which employees learn about the firms culture and pass their knowledge and understanding on to othersOrganizational mechanismsAre examples of organization culture that employees see in more experienced employees behaviorsCorporate pamphlets and formal training sessions

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18* 2012 South-Western, a part of Cengage LearningManaging Organization Culture (contd)Changing the Organization CultureManaging symbolsSubstituting stories and myths that support the new cultural values for those that support old onesCulture can be difficult to change when upper management inadvertently reverts to old behaviorsThe Stability of ChangeNew values and beliefs must be seen as stable and influential as old onesChanging value systems requires enormous effort because value systems tend to be self-reinforcing

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18* 2012 South-Western, a part of Cengage LearningOrganizational Behavior in ActionAfter reading the chapter:Why do organizations lose the innovative aspects of their organizational culture?What should managers do to turn climate into culture in new organizations?What are the effects of technology on culture in organizations?

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