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Organizational Behaviour: Concepts, Controversies, Applications
Eighth Canadian Edition
Chapter 10
Organizational Culture
Copyright © 2019 Pearson Canada Inc.
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Copyright © 2019 Pearson Canada Inc.
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1
Chapter Outline (1 of 3)
What Is Organizational Culture?
Definition of Organizational Culture
Levels of Culture
Culture’s Functions
Culture Creates Climate
The Ethical Dimension of Culture
Do Organizations Have Uniform Cultures?
Strong vs. Weak Cultures
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found under “SnapShot Summary” at the end of the chapter.
2
Chapter Outline (2 of 3)
Reading an Organization’s Culture
Stories
Rituals
Material Symbols
Language
Creating and Sustaining Culture
How a Culture Begins
Keeping a Culture Alive
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found under “SnapShot Summary” at the end of the chapter.
3
Chapter Outline (3 of 3)
The Liabilities of Organizational Culture
Barrier to Change
Barrier to Diversity
Barrier to Mergers and Acquisitions
Changing Organizational Culture
Creating an Ethical Organizational Culture
Creating a Positive Organizational Culture
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found under “SnapShot Summary” at the end of the chapter.
4
Learning Outcomes
Describe the common characteristics of organizational culture.
Compare the functional effects of organizational culture on people and the organization.
Identify the factors that create and sustain an organization’s culture.
Show how culture is transmitted to employees.
Demonstrate how an ethical organizational culture can be created.
Describe a positive organizational culture.
Copyright © 2019 Pearson Canada Inc.
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This material is found at the beginning of the chapter.
5
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.”
Copyright © 2019 Pearson Canada Inc.
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LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
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Organizational Culture (1 of 2)
Refers to a system of shared meaning held by members that distinguishes the organization from other organizations
Copyright © 2019 Pearson Canada Inc.
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LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
Organizational culture is the pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization.
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Organizational Culture (2 of 2)
Seven primary characteristics of an organization’s culture:
Innovation and risk-taking
Attention to detail
Outcome orientation
People orientation
Team orientation
Aggressiveness
Stability
Copyright © 2019 Pearson Canada Inc.
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LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
Note: The following two slides provide specific speaking notes on these characteristics.
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Characteristics of Organizational Culture (1 of 2)
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
Copyright © 2019 Pearson Canada Inc.
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LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
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Characteristics of Organizational Culture (2 of 2)
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.
Copyright © 2019 Pearson Canada Inc.
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LO1; Material pertinent to this discussion is found under “What is Organizational Culture?”
10
Exhibit 10-1 Contrasting Organizational Cultures
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found under “What is Organizational 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 helps them make sense of the organization
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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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.
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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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.
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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Ethical Dimension of Culture (1 of 2)
Organizational cultures are not ethically neutral
Ethical work climate (EWC)
Forms over time as part of the organizational climate
Shared concept of right and wrong behaviour in the workplace
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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Ethical Dimension of Culture (2 of 2)
Ethical climate theory (ECT) and Ethical climate index (ECI)
Categorize and measure the ethical dimensions of organizational cultures
Ethical climate reflects the true values of the organization and shapes the ethical decision-making of its members
Five climate categories most prevalent:
Instrumental
Caring
Independence
Law and code
Rules
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
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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
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
Most organizations have a dominant culture and numerous sets of subcultures. The first expresses the core values that are shared by a majority of members. Subcultures develop to reflect common problems, situations, or experiences that members face such as department or geographical differentiation.
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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 their members
Build cohesiveness, loyalty, and organizational commitment
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “What is Organizational Culture?”
18
Reading an Organization’s Culture
Stories
Rituals
Material Symbols
Language
Copyright © 2019 Pearson Canada Inc.
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LO2; Material pertinent to this discussion is found under “Reading An Organization’s Culture?”
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How Organizational Cultures Form
Copyright © 2019 Pearson Canada Inc.
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LO3; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
As with most creations, culture begins with the organization's founders, who have a major impact in establishing the early culture. They are unconstrained by previous customs, their small size usually facilitates the founders’ imposing their vision on other organization members, and they also have biases on how to get the idea fulfilled. They have a vision or mission of what the organization should be.
Get the students in the class who have some work experience to tell the “creation stories” of organizations in which they have worked and discuss how those stories fit in with the organizational culture.
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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
Copyright © 2019 Pearson Canada Inc.
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LO4: Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
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A Socialization Model (1 of 2)
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
Copyright © 2019 Pearson Canada Inc.
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LO4; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
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A Socialization Model (2 of 2)
Copyright © 2019 Pearson Canada Inc.
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LO4; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
Socialization can be conceptualized as a process composed of three stages:
Pre-arrival: This first stage encompasses all the learning that occurs before a new member joins the organization.
Encounter: In this second stage, the new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge.
Metamorphosis: In this third stage, relatively long-lasting changes take place. The new employee masters the skills required for his or her job, successfully performs his or her new roles, and makes the adjustments to his or her work group’s values and norms.
This three-stage process has an impact on the new employee’s work productivity, commitment to the organization’s objectives, and eventual decision to stay with the organization. The exhibit depicts this process.
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Entry Socialization Options (1 of 2)
Formal vs. Informal
Individual vs. Collective
Fixed vs. Variable
Serial vs. Random
Investiture vs. Divestiture
Copyright © 2019 Pearson Canada Inc.
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LO4; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
Note: This is an introductory slide. The next slide provides the Exhibit on this concept as speaking notes.
Formal vs. Informal: The more a new employee is segregated from the ongoing work setting and differentiated in some way to make explicit his or her role as newcomer, the more formal socialization is.
Individual vs. Collective: New members can be socialized individually. This describes how it’s done in many professional offices. They can also be grouped together and processed through an identical set of experiences, as in military boot camp.
Fixed vs. Variable: This refers to the time schedule in which newcomers make the transition from outsider to insider. A fixed schedule establishes standardized stages of transition. Variable schedules give no advanced notice of their transition timetable. Variable schedules describe the typical promotion system, where one is not advanced to the next stage until he or she is “ready.”
Serial vs. Random: Serial socialization is characterized by the use of role models who train and encourage the newcomer. Apprenticeship and mentoring programs are examples. In random socialization, role models are deliberately withheld. The new employee is left on his or her own to figure things out.
Investiture vs. Divestiture: Investiture socialization assumes that the newcomer’s qualities and qualifications are the necessary ingredients for job success, so these qualities and qualifications are confirmed and supported. Divestiture socialization tries to strip away certain characteristics of the recruit. Fraternity and sorority “pledges” go through divestiture socialization to shape them into the proper role.
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Entry Socialization Options (2 of 2)
Copyright © 2019 Pearson Canada Inc.
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LO4; Material pertinent to this discussion is found under “Creating and Sustaining Culture?”
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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
Copyright © 2019 Pearson Canada Inc.
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LO5; Material pertinent to this discussion is found under “The Liabilities of Organizational Culture”
Culture as a liability occurs when the shared values are not in agreement with those that will further the organization's effectiveness. This occurs when the environment is dynamic, and the entrenched culture may no longer be appropriate.
The culture at Enron became a liability as individuals put more and more effort into pretending that everything was going well.
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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
Copyright © 2019 Pearson Canada Inc.
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LO5; Material pertinent to this discussion is found under “The Liabilities of Organizational Culture.”
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Changing Organizational Culture (1 of 2)
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.
Copyright © 2019 Pearson Canada Inc.
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LO5; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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Changing Organizational Culture (2 of 2)
Change is most likely when most or all of the following conditions exist:
A dramatic crisis
Turnover in leadership
Young and small organizations
Weak culture
Copyright © 2019 Pearson Canada Inc.
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LO5; Material pertinent to this discussion is found under “Changing Organizational Culture.”
29
Creating an Ethical Culture (1 of 2)
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
Copyright © 2019 Pearson Canada Inc.
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LO6; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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Creating an Ethical Culture (2 of 2)
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
Copyright © 2019 Pearson Canada Inc.
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LO6; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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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
Copyright © 2019 Pearson Canada Inc.
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LO7; Material pertinent to this discussion is found under “Changing Organizational 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.
Copyright © 2019 Pearson Canada Inc.
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LO7; Material pertinent to this discussion is found under “Changing Organizational Culture.”
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Summary
Reward systems generally signal the parts of the organization that are valued.
Culture can have both positive and negative effects on organizations.
Organizational culture can make change difficult, if not impossible.
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found at the end of the chapter.
34
OB at Work: For Review
What is organizational culture, and what are its common characteristics?
What are the functional effects of organizational culture on people and the organization?
What factors create and sustain an organization’s culture?
How is culture transmitted to employees?
How can an ethical organizational culture be created?
What is a positive organizational culture?
Copyright © 2019 Pearson Canada Inc.
10 - ‹#›
Material pertinent to this discussion is found at the end of the chapter.
35
OB at Work: For Managers (1 of 2)
Realize that an organization’s culture is relatively fixed in the short term. To effect change, involve top management and strategize a long-term plan.
Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. Not surprisingly, “misfits” have considerably higher turnover rates.
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found at the end of the chapter.
36
OB at Work: For Managers (2 of 2)
Understand that employees’ performance and socialization depend to a considerable degree on their knowing what to do and not do. Train your employees well and keep them informed of changes to their job roles.
Be aware that your company’s organizational culture may not be “transportable” to other countries. Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas.
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found at the end of the chapter.
37
Breakout Group Exercises
Form small groups to discuss the following:
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?
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?
Have you or has 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?
Copyright © 2019 Pearson Canada Inc.
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Material pertinent to this discussion is found at the end of the chapter.
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