Prepared by Michael K. McCuddy Valparaiso University

1. Presentation Slidesto AccompanyOrganizational Behavior10th EditionDon Hellriegel and John W. Slocum, Jr. Prepared by Michael K. McCuddy Valparaiso University Chapter 15—Cultivating Organizational Culture

2. Learning Objectives for Cultivating Organizational Culture • Explain how organizational cultures are formed, sustained, and changed • Describe four types of organizational culture • Discuss how organizational culture can influence ethical behaviors of managers and employees • Explain why fostering cultural diversity is important • Describe the process of organizational socialization and its affect on culture Chapter 15: Cultivating Organizational Culture

3. Components of Organizational Culture • Routine ways of communicating • Norms shared by individuals and teams • Dominant values held by an organization • Guiding philosophy for management’s policies and decision making • Rules of the game for getting along in the organization • Climate of the organization Chapter 15: Cultivating Organizational Culture

4. Layers of Organizational Culture Cultural Symbols Shared Behaviors Cultural Values Shared Assumptions Chapter 15: Cultivating Organizational Culture

5. Issues Associated withExternal Adaptation and Survival • Identifying the organization's primary mission and selecting strategies to pursue it • Setting specific targets • Determining how to pursue the goals, including selecting an organizational structure and reward system • Establishing criteria to measure how well individuals, teams, and departments are accomplishing their goals Chapter 15: Cultivating Organizational Culture

6. Issues Associated withInternal Integration • Identifying methods of communication and developing a shared meaning for important concepts • Establishing criteria for membership in groups and teams • Determining rules for acquiring, maintaining, and losing power and status • Developing systems for encouraging desirable behaviors and discouraging undesirable behaviors Chapter 15: Cultivating Organizational Culture

7. How Cultures Emerge • Top Management • Agrees on shared assumptions of human behavior • Develops a shared vision of cultural values • Culture • Strong culture emerges • Traditions are maintained • Socialization practices for new employees • Behaviors • Employees behave in ways that are consistent with shared values and assumptions • Results • Financial performance • Market share • Employee commitment Chapter 15: Cultivating Organizational Culture

8. Methods of MaintainingOrganizational Culture • Methods of Maintaining Organizational Culture • What managers and teams pay attention to • Reactions to organizational crises • Managerial role modeling • Criteria for rewards • Criteria for selection and promotion • Organizational rites, ceremonies, stories Removal of employees who deviate from the culture Recruitment of employees who fit the culture Organizational Culture Chapter 15: Cultivating Organizational Culture

9. Organizational Rites and Ceremonies POSSIBLE CONSEQUENCES TYPE EXAMPLE Rites of passage Basic training, U.S. Army Facilitate transition into new roles; minimize differences in way roles are carried out Rites of degradation Firing a manager Reduce power and identity; reaffirm proper behavior Enhance power and identity; emphasize value of proper behavior Rites of enhancement Mary Kay Cosmetics Company ceremonies Encourage common feelings that bind members together Rites of integration Office party Source: Adapted from Trice, H. M., and Beyer, J. M. The Cultures of Work Organizations. Englewood Cliffs, N.J.: Prentice-Hall, 1993, 111. Chapter 15: Cultivating Organizational Culture

10. Requirements for Successfully Changing Organizational Culture • Understand the old culture first • Support employees and teams who have ideas for a better culture and are willing to act on those ideas • Find the most effective subculture in the organization and use it as a model • Help employees and teams do their jobs more effectively • Use the vision of a new culture as a guide for change • Recognize that significant cultural change takes time • Live the new culture Chapter 15: Cultivating Organizational Culture

11. Framework of Types of Cultures Flexible Clan Culture Entrepreneurial Culture Formal Control Orientation Bureaucratic Culture Market Culture Stable Internal External Forms of Attention Source: Adapted from Hooijberg, R., and Petrock, F. On cultural change: Using the competing values framework to help leaders execute a transformational strategy. Human Resource Management, 1993, 32, 29-50; Quinn, R. E. Beyond Rational Management: Mastering the Paradoxes and Competing Demands of High Performance. San Francisco: Jossey-Bass, 1988. Chapter 15: Cultivating Organizational Culture

12. Attributes of a Bureaucratic Culture • Long-term concerns are predictability, efficiency, and stability • Members value standardized goods and services • Managers view their roles as being good coordinators, organizers, and enforcers of written rules and standards • Tasks, responsibilities, authority, rules, and processes are clearly defined Chapter 15: Cultivating Organizational Culture

13. Attributes of a Clan Culture • Members understand that contributions to the organization exceed any contractual agreements • A clan culture achieves unity with a long and thorough socialization process • Members share feelings of pride in membership, as well as feelings of personal ownership of a business, a product, or an idea Chapter 15: Cultivating Organizational Culture

14. Attributes of a Clan Culture • Peer pressure to adhere to important norms is strong • Success is assumed to depend substantially on sensitivity to customers and concern for people • Teamwork, participation, and consensus decision making are believed to lead to success Chapter 15: Cultivating Organizational Culture

15. Attributes of anEntrepreneurial Culture • There is a commitment to experimentation, innovation, and being on the leading edge • This culture does not just quickly react to changes in the environment—it creates change • Effectiveness depends on providing new and unique products and rapid growth • Individual initiative, flexibility, and freedom foster growth and are encouraged and well rewarded Chapter 15: Cultivating Organizational Culture

16. Attributes of a Market Culture • Contractual relationship between individual and organization • Independence and individuality are valued and members are encouraged to pursue their own financial goals • Does not exert much social pressure on an organization’s members, but when it does, members are expected to conform Chapter 15: Cultivating Organizational Culture

17. Attributes of a Market Culture • Superiors’ interactions with subordinates largely consist of negotiating performance–reward agreements and/or evaluating requests for resource allocations • Has a weak socialization process • Few economic incentives are tied directly to cooperating with peers • Often tied to monthly, quarterly, and annual performance goals based on profits Chapter 15: Cultivating Organizational Culture

18. Organizational Uses of Culture • Organizational culture has the potential to enhance organizational performance, individual satisfaction, and a variety of expectations, attitudes, and behaviors in organizations • If an organization’s culture is not aligned with the changing expectations of internal and/or external stakeholders, the organization’s effectiveness can decline Chapter 15: Cultivating Organizational Culture

19. Organizational Uses of Culture • Organizational culture and performance are related, although the evidence regarding the exact nature of this relationship is mixed • Organizational culture affects employee behavior and performance • Assessing which attributes of an organization’s culture need to be preserved and which ones need to be modified is a constant organization need Chapter 15: Cultivating Organizational Culture

20. Relationship Between Cultureand Performance • Organizational culture can have a significant impact on a firm’s long-term economic performance • Organizational culture will probably be an even more important factor in determining success or failure of firms during the next decade Chapter 15: Cultivating Organizational Culture

21. Relationship Between Cultureand Performance • Organizational cultures that inhibit strong long-term financial performance are not rare; they develop easily, even in firms that are filled with reasonable and intelligent people • Although tough to change, organizational cultures can be made more performance enhancing if managers understand what sustains a culture Chapter 15: Cultivating Organizational Culture

22. Effects of Organizational Culture onEmployee Behavior and Performance • Allows employees to understand the firm’s history and current methods of operation • Fosters commitment to corporate philosophy and values • Serves as a control mechanism for employee behaviors • Certain cultural types may produce greater effectiveness and productivity Chapter 15: Cultivating Organizational Culture

23. Effects of Organizational Cultureon Ethical Behavior • A culture emphasizing ethical norms provides support for ethical behavior • Top managers play a key role in fostering ethical behavior by exhibiting correct behavior • The presence or absence of ethical behavior in managerial actions both influences and reflects the culture Chapter 15: Cultivating Organizational Culture

24. How Employees Can ChangeUnethical Behavior • Secretly or publicly reporting unethical actions to a higher level within the organization • Secretly or publicly reporting unethical actions to someone outside the organization • Secretly or publicly threatening an offender or responsible manager with reporting unethical actions • Quietly or publicly refusing to implement an unethical order or policy Chapter 15: Cultivating Organizational Culture

25. Actions for Creating a Culture that Encourages Ethical behavior • Be realistic in setting values and goals regarding employee relationships • Encourage input from organization members regarding appropriate values and practices for implementing the culture • Opt for a “strong” culture that encourages and rewards diversity and principled dissent • Provide training on adopting and implementing the organization’s values Chapter 15: Cultivating Organizational Culture

26. Guidelines for ManagingCultural Diversity • Organization members must: • Understand the nature of diversity and value a variety of opinions and insights • Recognize the learning opportunities and challenges presented by the expression of different perspectives • The organizational culture must: • Foster expectations for high standards of performance and ethics for everyone • Stimulate personal development • Encourage openness • Make workers feel valued • The organization must have a well-articulated and widely understood mission Chapter 15: Cultivating Organizational Culture

27. Slide 15.22Steps in Socialization 7. Role model to sustain culture 6. Rituals, taboos, rites, and stories to reinforce culture 5. Adoption of cultural value policies Removal of employees who deviate from culture 4. Rewards that sustain the culture 3. Training to develop capabilities consistent with culture 2. Challenging early work assignments Removal of candidates who do not “fit” culture 1. Careful selection Chapter 15: Cultivating Organizational Culture

28. Slide 15.23Possible Outcomes of the Socialization Process • Job satisfaction • Role clarity • High work motivation • Understanding of culture, perceived control • High job involvement • Commitment to organization • Tenure • High performance • Internalized values • Job dissatisfaction • Role ambiguity and conflict • Low work motivation • Misunderstanding, tension, perceived lack of control • Low job involvement • Lack of commitment to organization • Absenteeism, turnover • Low performance • Rejection of values Successful socialization is reflected in: Unsuccessful socialization is reflected in: Chapter 15: Cultivating Organizational Culture