Organizational Culture

After studying this chapter, you should be able to:

1. 2. 3. 4. 5. 6. 7. 8. Define the common characteristics making up organizational culture Contrast strong and weak cultures Identify the functional and dysfunctional effects of organizational culture on people List the factors that maintain an organizations culture Identify and describe the phases of organizational socialization Clarify how employees learn an organizations culture Explain how an ethical culture can be established Characterize a customer-responsive culture

Organizational culture
Set of key characteristics that the organization values that distinguishes the organization from other organizations

Characteristics of Organizational Culture

1. 2. 3. 4. 5. 6. 7. Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability

Culture is a Descriptive Term

Organizational culture is concerned with how employees perceive the seven characteristics of an organizations culture, not whether or not they like them

Do Organizations Have Uniform Cultures?

A dominant culture expresses the core values that are shared by a majority of the organizations members Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences that members face

Strong vs. Weak Cultures

In a strong culture, the organizations core values are both intensely held and widely shared Strong cultures will:
Have great influence on the behavior of its members Result in lower employee turnover

Organizational Culture vs. National Culture

National culture has a greater impact on employees than does their organizations culture Expect that organizations hire employees who are a good fit with the organizations dominant culture even though they may not fit the national culture

Cultures Functions
Boundary-defining role Conveys a sense of identity Facilitates the generation of commitment Enhances social system stability Sense-making and control mechanism

Culture as a Liability
Shared values do not agree with organizations effectiveness Dilemma of hiring a diverse workforce but wanting people to fit into a single culture Cultural incompatibility in mergers and acquisitions

How a Culture Begins

Ultimate source of an organizations culture is its founders Culture is created in three ways:
Founders hire and keep those who think and feel the same way they do They indoctrinate and socialize these employees to their way of thinking and feeling Their behavior acts as a role model encouraging employees to identify with them

Keeping a Culture Alive

Selection seek out those who would fit in Top Management Senior executives establish norms of behavior through what they say and do Socialization help new employees adapt to the culture

How Employees Learn Culture

Stories Rituals Material Symbols Language

Managing Cultural Change

Cultural change is most likely to take when the following conditions exist:
Dramatic crisis exists or is created Turnover in leadership Young and small organization Weak culture

Creating an Ethical Organizational Culture

Be a visible role model Communicate ethical expectations Provide ethical training Visibly reward ethical acts and punish unethical ones Provide protective mechanisms

Creating a Customer Responsive Culture

Companies recognize this is the path to customer loyalty and long-term profitability Variables that are routinely evident:
Type of employees Low formalization Widespread use of empowerment Good listening skills Role clarity Organizational citizenship behavior

Managerial Action to Make Culture More Customer Responsive

Selection Training Structural design Empowerment Leadership Performance evaluation Reward systems

Implications for Managers

Create the culture you want when the organization is small If established culture needs to be changed, expect it to take years

Summary
1. 2. 3. 4. 5. 6. 7. 8. Defined the common characteristics making up organizational culture Contrasted strong and weak cultures Identified the functional and dysfunctional effects of organizational culture on people Listed the factors that maintain an organizations culture Identified and described the phases of organizational socialization Clarified how employees learn an organizations culture Explained how an ethical culture can be established Characterized a customer-responsive culture