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Organizational Culture

McGraw-Hill/Irwin McShane/Von Glinow OB 5e

Copyright 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Re-aligning Dells Organizational Culture

Dells winning culture, which emphasized cost efficiency and competitiveness, became more of a liability as the market moved toward a preference for style and innovation.
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Organizational Culture Defined

The basic pattern of shared values and assumptions governing the way employees within an organization think about and act on problems and opportunities.

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Artifacts of organizational culture

Elements of Organization al Culture


Organizational culture

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Content of Organizational Culture

The relative ordering of values.


A few dominant values Example: Dell -- efficiency and competitiveness

Problems with measuring org culture


Oversimplifies diversity of possible values Ignore shared assumptions Adopts an integration perspective

An organizations culture is fuzzy:


Diverse subcultures (fragmentation)
Values exist within individuals, not work units

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Organizational Culture Profile


Org Culture Dimensions
Innovation
Stability Respect for people Outcome orientation Attention to detail Team orientation Aggressiveness

Dimension Characteristics
Experimenting, opportunity seeking, risk taking, few rules, low cautiousness Predictability, security, rule-oriented Fairness, tolerance Action oriented, high expectations, results oriented Precise, analytic Collaboration, people-oriented Competitive, low emphasis on social responsibility
Source: OReilly et al (1991)
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Organizational Subcultures

Dominant culture -- most widely shared values and assumptions Subcultures


Located throughout the organization

Can enhance or oppose (countercultures) firms

dominant culture

Two functions of countercultures:


provide surveillance and critique, ethics
source of emerging values

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Cirque du Soleils Risky Culture

Cirque du Soleils founders promote a risktaking and creative corporate culture. They frequently take gambles on new forms of creativity and initiatives.
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Artifacts in Organizational Culture

Observable symbols and signs of culture Physical structures, ceremonies, language, stories Maintain and transmit organizations culture Not easy to decipher artifacts -- need many of them
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Artifacts: Stories and Legends

Social prescriptions of desired (undesired) behavior Provides a realistic human side to expectations Most effective stories and legends:
Describe real people Assumed to be true

Known throughout the organization


Are prescriptive

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Artifacts: Rituals and Ceremonies

Rituals
programmed routines
(eg., how visitors are greeted)

Ceremonies
planned activities for an audience (eg., award ceremonies)

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Artifacts: Organizational Language

Words used to address people, describe customers, etc.


Leaders use phrases and special vocabulary as cultural symbols Language also found in subcultures

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Artifacts: Physical Structures/Symbols

Building structure -- may shape and reflect culture Office design conveys cultural meaning
Furniture, office size, wall hangings

Courtesy of Microsoft Corp.

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Organizational Culture Strength


How widely and deeply employees hold the companys dominant values and assumptions Strong cultures exist when:
most employees understand/embrace the

dominant values values and assumptions are institutionalized through well-established artifacts culture is long lasting -- often traced back to founder

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Functions of Strong Corporate Cultures


Culture strength advantages depend on:
Environment fit Not cult-like Adaptive culture

Functions of Strong Cultures


Control system Social glue Sense-making

Organizational Outcomes
Org performance Employee well-being

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Contingencies of Org Culture & Performance

Effect of organizational culture strength on organizational performance is moderate Need to consider contingencies:
1. Ensure culture-environment fit 2. Avoid strength to level of corporate cult - Cults restrict mental models, suppress subcultures 3. Create an adaptive culture - External focus, process focus, ownership, proactive

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Merging Cultures: Bicultural Audit


Part of due diligence in merger Minimizes risk of cultural collision by diagnosing companies before merger Three steps in bicultural audit:
1. Examine artifacts 2. Analyze data for cultural conflict/compatibility 3. Identify strategies and action plans to bridge cultures

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Merging Organizational Cultures


Assimilation
Acquired company embraces acquiring firms cultural values

Deculturation

Acquiring firm imposes its culture on unwilling acquired firm

Integration

Cultures combined into a new composite culture

Separation

Merging companies remain separate with their own culture

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Changing/Strengthening Organizational Culture

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Changing/Strengthening Organizational Culture


1.

Actions of Founders/Leaders
Org culture sometimes reflects the

founders personality Transformational Leaders can reshape culture -- organizational change practices
2.

Aligning Artifacts
Artifacts keep culture in place

e.g., building structure, communicating

stories, transferring culture carriers

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Changing/Strengthening Organizational Culture


3.

Introducing Culturally Consistent Rewards


Rewards are powerful artifacts reinforce

culturally-consistent behavior
4.

Attracting, Selecting, Socializing Employees


Attraction-selection-attrition theory

Socialization practices

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Attraction-Selection-Attrition Theory
Organizations become more homogeneous (stronger culture) through:
Attraction -- applicants self-select and weed out

companies based on compatible values


Selection -- Applicants selected based on values

congruent with organizations culture


Attrition -- Employee quite or are forced out when

their values oppose company values

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Lindblads Shipshape Socialization


Lindblad Expeditions cant afford to have crew members jump ship soon after starting the job, so the adventure cruise company gives applicants a DVD showing a realistic picture of what its like to work on board. This realistic job preview is one part of the companys socialization process.

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Organizational Socialization Defined


The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization.

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Socialization: Learning & Adjustment


Learning Process
Newcomers make sense of the organizations

physical, social, and strategic/cultural dynamics

Adjustment Process
Newcomers need to adapt to their new work

environment
- New work roles

- New team norms


- New corporate cultural values

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Stages of Socialization
Pre-Employment Stage
Outsider Gathering information Forming psychological contract

Encounter Stage
Newcomer Testing expectations

Role Management
Insider Changing roles and behavior Resolving conflicts

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Improving Organizational Socialization

Realistic job preview (RJP)


A balance of positive and negative information

about the job and work context

Socialization agents
Supervisors technical information, performance

feedback, job duties Coworkers ideal when accessible, role models, tolerant, and supportive

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Organizational Culture

McGraw-Hill/Irwin McShane/Von Glinow OB 5e

Copyright 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

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