Chapter # 2 - 1Copyright © 2013 Pearson Canada Inc. Chapter # 10 - 1Copyright © 2013 Pearson...

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Chapter # 2 - 1 Copyright © 2013 Pearson Canada Inc. Chapter # 10 - 1 Copyright © 2013 Pearson Canada Inc. 10

Transcript of Chapter # 2 - 1Copyright © 2013 Pearson Canada Inc. Chapter # 10 - 1Copyright © 2013 Pearson...

Page 1: Chapter # 2 - 1Copyright © 2013 Pearson Canada Inc. Chapter # 10 - 1Copyright © 2013 Pearson Canada Inc. 10.

Chapter #

2 - 1Copyright © 2013 Pearson Canada Inc.

Chapter #

10 - 1Copyright © 2013 Pearson Canada Inc.

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Chapter Outline• What Is Organizational Culture?

– Definition of Organizational Culture– Levels of Culture– Culture’s Functions– Culture Creates Climate– Do Organizations Have Uniform Cultures? – Strong vs. Weak Cultures

• Reading an Organization’s Culture– Stories – Rituals– Material Symbols– Language

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Chapter Outline• Creating and Sustaining Culture

– How a Culture Begins– Keeping a Culture Alive

• The Liabilities of Organizational Culture– Barrier to Change– Barrier to Diversity– Barrier to Mergers and Acquisitions

• Changing Organizational Culture– Creating an Ethical Culture– Creating a Positive Organizational Culture

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Learning Outcomes

1. What is the purpose of organizational culture?

2. How do you read an organization’s culture?3. How do you create and maintain

organizational culture?4. Can organizational culture have a

downside?5. How do you change organizational culture?

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Henry Mintzberg on Culture

• “Culture is the soul of the organization — the beliefs and values, and how they are manifested. I think of the structure as the skeleton, and as the flesh and blood. And culture is the soul that holds the thing together and gives it life force.”

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Organizational Culture

• Refers to a system of shared meaning held by members that distinguishes the organization from other organizations

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Organizational Culture• Seven primary characteristics of an organization’s

culture:– Innovation and risk-taking. – Attention to detail. – Outcome orientation. – People orientation. – Team orientation.– Aggressiveness. – Stability.

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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.

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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.

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Exhibit 10-1 Contrasting Organizational Cultures

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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.

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Exhibit 10-2 Layers of Culture

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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.

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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.

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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.

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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.

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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

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Reading an Organization’s Culture

• Stories

• Rituals

• Material Symbols

• Language

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Exhibit 10-3 How Organizational Cultures Form

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Creating & Sustaining Culture: 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.

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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

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Exhibit 10-5 A Socialization Model

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Exhibit 10-6 Entry Socialization Options

• Formal vs. Informal

• Individual vs. Collective

• Fixed vs. Variable

• Serial vs. Random

• Investiture vs. Divestiture

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Exhibit 10-6 Entry Socialization Options

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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.

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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.

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Key Steps Before a Merger• Potential merger partners could conduct a

bicultural audit. • The management team could bridge existing

culture gaps by: – Defining a structure that is appropriate for both teams.– Implementing an appropriate management style.– Reinforcing internal communication to ensure

employees are aware of changes that will occur.– Getting agreement on performance criteria and

evaluations.

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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.

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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.

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Creating a Positive Organizational Culture

• Building on employee strengths

• Rewarding more than punishing.

• Emphasizing vitality and growth.

• Limits of positive culture.

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Global Implications• Organizational cultures often reflect national

culture. • When an organization opens up operations in

another country, it ignores the local culture at its own risk.

• Management of ethical behaviour is one area where national culture can rub up against corporate culture.– Many strategies for improving ethical behaviour are

based on the values and beliefs of the host country.

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Summary and Implications1. What is the purpose of organizational culture?

– Organizational culture provides stability and gives employees a clear understanding of “the way things are done around here.”

2. How do you read an organization’s culture?– Artifacts, such as stories, rituals, material symbols, and language,

can be used to help read an organization’s culture.3. How do you create and maintain culture?

– An organization’s culture is derived from the philosophy of its founders. It is communicated by managers and employees are socialized into it.

4. Can organizational culture have a downside?– A strong culture can have a negative effect, including “pressure-

cooker” cultures, barriers to change, difficulty in creating an inclusive environment, and hindering mergers and acquisitions.

5. How do you change organizational culture?– It is important to change the reward structure and to work carefully

to change employee beliefs.

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OB at Work: For Review

1. What are the levels of organizational culture?

2. Why do subcultures develop in an organization?

3. Can an employee survive in an organization if he or she rejects its core values? Explain.

4. How can an outsider assess an organization’s culture?

5. How is language related to organizational culture?

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OB at Work: For Review

6. What benefits can socialization provide for the organization? For the new employee?

7. How does a strong culture affect an organization’s efforts to improve diversity?

8. Identify the steps a manager can take to implement culture change in an organization.

7. What is a positive organizational culture?

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OB at Work: For Critical Thinking1. Is socialization brainwashing? Explain.2. If management sought a culture characterized as innovative

and autonomous, what might its socialization program look like?

3. Can you identify a set of characteristics that describes your college’s or university’s culture? Compare them with what several of your peers have noted. How closely do they agree?

4. “We should be opposed to the manipulation of individuals for organizational purposes, but a degree of social uniformity enables organizations to work better.” Do you agree or disagree with this statement? What are its implications for organizational culture? Discuss.

5. Today’s workforce is increasingly made up of part-time or contingent employees. Is organizational culture really important if the workforce is mostly temporary employees?

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Point-CounterPoint

• Why Culture Doesn’t ChangeCulture develops over many

years, and becomes part of how the organization thinks and feels.

Selection and promotion policies guarantee survival of culture.

Top management chooses managers who are likely to maintain culture.

• When Culture Can Change

There is a dramatic crisis.There is a turnover in

leadership.The organization is young

and small.There is a weak culture.

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Breakout Group Exercises

• Form small groups to discuss the following:1. Choose two courses that you are taking this term, ideally in

different faculties, and describe the culture of the classroom in each. What are the similarities and differences? What values about learning might you infer from your observations of culture?

2. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you conclude that the organization had a strong or weak culture?

3. Have you or someone you know worked somewhere where the culture was strong? What was your reaction to that strong culture? Did you like that environment, or would you prefer to work where there is a weaker culture? Why?