What Is an Organization?A consciously coordinated social unit, composed of a group of people, which functions on a relatively continuous basis to achieve a common goal or set of goals.

Organizational CultureOrganizational culture set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about and reacts to its various environments A common perception held by the organization s members; a system of shared meaning.

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.

Organizational Culture The pattern of shared values, beliefs and assumptions considered to be the appropriate way to think and act within an organization. Culture is shared Culture helps members solve problems Culture is taught to newcomers Culture strongly influences behaviour

Organizational Culture Characteristics Passed on to new employees through the process of socialization Influences our behavior at work Operates at different levels

Organizational Culture Shaped by four components: Founder s values Industry and business environment National culture Senior leaders visions

How Organizational Culture Forms

Philosophy of organization's founders

Top management Selection criteria Socialization Organization's culture

Elements of Strong Culture Widely shared philosophy Concern for individuals Recognition of heroes Belief in ritual and ceremony Well-understood sense of the informal rules and expectations Belief that what employees do is important to others

Cultures can be strong and weak Strong cultures can be both good and bad help people make sense of what s going on Weak cultures do not provide workers with a sense of belonging

Embedding Organizational Culture1. 2. 3. 4. Formal statements The design of physical space Slogans, language, acronyms, and sayings Deliberate role modeling, training programs, teaching and coaching 5. Explicit rewards, status symbols (e.g., titles), and promotion criteria

Embedding Organizational Culture6. Stories, legends, and myths about key people and events 7. The organizational activities, processes, or outcomes that leaders pay attention to, measure, and control 8. Leader reactions to critical incidents and organizational crises 9. The workflow and organizational structure 10. Organizational systems and procedures 11. Organizational goals and the associated criteria used for recruitment, selection, development, promotion, layoffs, and retirement of people

Exhibit 9-1 Layers of Culture

Artifacts of Organizational Culture

Material Symbols Language Rituals Stories

Organizational Culture

Beliefs Values Assumptions

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

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.

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.

Wal-Mart s 10-foot Rule One of our secrets to customer service is the 10-foot rule, handed down to us by our founder, Sam Walton. During his many store visits, he encouraged associates to take a pledge with him: "I want you to promise that whenever you come within 10 feet of a customer, you will look him in the eye, greet him, and ask him if you can help him." This pledge is what we call our "10-foot attitude," and it was something Sam had practiced since childhood.

From Walmart.com

Types of Organizational Culture

Constructive Passive-defensive Aggressive-defensive

Types of Organizational CultureConstructive Employees are encouraged to interact with others Associated with achievement, self-actualizing, humanistic-encouraging, and affiliative

Types of Organizational CulturePassive-defensive Employees must interact with others in ways that do not threaten their own job security Associated with approval, convention, dependent, and avoidance

Types of Organizational CultureAggressive-defensive Employees approach tasks in forceful ways to protect their status and job security Associated with oppositional power, is competitive and perfectionistic

Outcomes Associated with Organizational Culture1. Significantly correlated with employee behavior and attitudes 2. Organizational commitment, job satisfaction, intention to quit, and turnover impacted 3. Did not predict financial performance 4. Mergers frequently failed due to incompatible cultures

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.

Culture s Functions Culture is the social glue that helps hold an organization together by providing appropriate standards for what employees should say or do. It has a boundary-defining role. It conveys a sense of identity for organization members. It facilitates the generation of commitment to something larger than one s individual self-interest. It enhances social system stability. It serves as a sense-making and control mechanism that guides and shapes the attitudes and behaviour of employees.

Culture as a Liability Culture can have dysfunctional aspects in some instances Culture as a Barrier to Change When organization is undergoing change, culture may impede change

Culture as a Barrier to Diversity Strong cultures put considerable pressure on employees to conform

Culture as a Barrier to Mergers and Acquisitions Merging the cultures of two organizations can be difficult, if not impossible

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

How to Change Culture Have top-management people become positive role models, setting the tone through their behaviour. Create new stories, symbols, and rituals to replace those currently in vogue. Select, promote, and support employees who espouse the new values that are sought. Redesign socialization processes to align with the new values.

How to Change Culture Change the reward system to encourage acceptance of a new set of values. Replace unwritten norms with formal rules and regulations that are tightly enforced. Shake up current subcultures through transfers, job rotation, and/or terminations. Work to get peer group consensus through utilization of employee participation and creation of a climate with a high level of trust.

Contrasting Organizational CulturesOrganization A Managers must fully document all decisions. Creative decisions, change, and risks are not encouraged. Extensive rules and regulations exist for all employees. Productivity is valued over employee morale. Employees are encouraged to stay within their own department. Individual effort is encouraged.

Organization B Management encourages and rewards risk-taking and change. Employees are encouraged to run with ideas, and failures are treated as learning experiences. Employees have few rules and regulations to follow. Productivity is balanced with treating its people right. Team members are encouraged to interact with people at all levels and functions. Many rewards are team based.

Point-CounterPoint Why Culture Doesn t Changes Culture develops over many years, and becomes part of how the organization thinks and feels s Selection and promotion policies guarantee survival of culture s Top management chooses managers likely to maintain culture

When Culture Can Changes There is a dramatic crisis s There is a turnover in leadership s The organization is young and small s There is a weak culture

Summary and Implications Employees form an overall subjective perception of the organization based on such factors as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organization s culture or personality. These favourable or unfavourable perceptions then affect employee performance and satisfaction, with the impact being greater for stronger cultures.

Just as people s personalities tend to be stable over time, so too do strong cultures. This makes strong cultures difficult for managers to change.

Summary and Implications One of the more important managerial implications of organizational culture relates to selection decisions. Hiring individuals whose values don't align with those of the organization is not good.

An employee's performance depends to a considerable degree on knowing what he should or should not do.

HR Implications: Creating an Ethical Culture Visibly reward ethical acts and punish unethical ones. Performance appraisals should consider how decisions and behaviour measure against the organization s code of ethics.

Provide protective mechanisms. Employees need to be able to discuss ethical dilemmas and report unethical behaviour without fear of punishment.

ORGANISATION BEHAVIOUR

ORGANISATION BEHAVIOUR

Organisation Behaviour is concerned with the study of what people do in an organisation and how that behaviour affects the performance of the organisation.(Robbins: 1998,9)

Organizational Behaviour . . . a field of study that investigates the impact that individuals, groups and structure have on behaviour within organizations, for the purpose of applying such knowledge toward improving an organization s effectiveness.

ORGANISATION BEHAVIOURThe study of Organisational Behaviour involves: consideration of the interaction among the formal structure (organisational context in which the process of management takes place) the tasks to be undertaken the technology employed and the methods of carrying out work the behaviour of people the process of management the external environment

ORGANISATION BEHAVIOURInterrelated dimensions influencing behaviour: The Individual - working environment should satisfy individual needs as well as attainment of organisational goals. The Group - formal and informal. Understanding of groups complements a knowledge of individual behaviour. The Organisation - impact of organisation structure and design, and patterns of management, on behaviour. The Environment - technological and scientific development, economic activity, governmental actions.

Why Do We Study OB? To learn about yourself and how to deal with others You are part of an organization now, and will continue to be a part of various organizations Organizations are increasingly expecting individuals to be able to work in teams, at least some of the time Some of you may want to be managers or entrepreneurs

Challenges Facing the WorkplaceOrganizational Level Productivity Developing Effective Employees Global Competition Managing in the Global Village

Group Level Working With Others Workforce Diversity

Workplace

Individual Level Job Satisfaction Empowerment Behaving Ethically

Today s Challenges in the Workplace Challenges at the Individual Level Job Satisfaction Empowerment Behaving Ethically

Challenges at the Group Level Working With Others Workforce Diversity

Today s Challenges in the Workplace Challenges at the Organizational Level Productivity Developing Effective Employees Absenteeism Turnover Organizational Citizenship

Competition From the Global Environment Managing and Working in a Global Village

Productivity Productivity A performance measure including effectiveness and efficiency

Effectiveness Achievement of goals

Efficiency The ratio of effective work output to the input required to produce the work

Effective Employees Absenteeism Failure to report to work

Turnover Voluntary and involuntary permanent withdrawal from the organization

Organizational citizenship behaviour Discretionary behaviour that is not part of an employee s formal job requirements, but is helpful to the organization

The Rigour of OB OB looks at consistencies What is common about behaviour, and helps predictability?

OB is more than common sense Systematic study, based on scientific evidence

OB has few absolutes OB takes a contingency approach Considers behaviour in context

Beyond Common Sense Systematic Study Looking at relationships, attempting to attribute causes and effects and drawing conclusions based on scientific evidence Behaviour is generally predictable There are differences between individuals There are fundamental consistencies There are rules (written & unwritten) in almost every setting

Summary and Implications OB is a field of study that investigates the impact that individuals, groups, and structure have on behaviour within an organization. OB focuses on improving productivity, reducing absenteeism and turnover, and increasing employee job satisfaction and organizational commitment. OB uses systematic study to improve predictions of behaviour.