CultureCultureChapter 18Chapter 18
Organizational Behavior: ManagingPeople and Organizations,
Ninth EditionGregory Moorhead, Ricky W. Griffin
18–2 © 2010 South-Western, a part of Cengage Learning
Chapter Learning Objectives
• Define organization culture, explain how it affects employee behavior, and understand its historical roots.
• Describe how to create organization culture.
• Describe two different approaches to culture in organizations.
• Identify emerging issues in organization culture.
• Discuss the important elements of managing the organizational culture.
After studying this chapter you should be able to:
18–3 © 2010 South-Western, a part of Cengage Learning
The Nature of Organization Culture
• Why Study Culture? It is assumed that organizations with a strong culture
perform at higher levels than those without a strong culture
• Organizational Culture A set of values held by individuals in a firm that help
employees understand acceptability of actions
• Culture ValuesAre often taken for granted (implicit)May not be made explicit (i.e., not written down)Are communicated through symbolic means
18–4 © 2010 South-Western, a part of Cengage Learning
Table 18.1 Definitions of Organization Culture
Definition Source
“A belief system shared by an organization’s members” J. C. Spender, “Myths, Recipes and Knowledge-Bases in Organizational Analysis” (Unpublished manuscript, Graduate School of Management, University of California at Los Angeles, 1983), p. 2.
“Strong, widely shared core values” C. O’Reilly, “Corporations, Cults, and Organizational Culture: Lessons from Silicon Valley Firms” (Paper presented at the Annual Meeting of the Academy of Management, Dallas, Texas, 1983), p. 1.
“The way we do things around here” T. E. Deal and A. A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, MA: Addison-Wesley, 1982), p. 4.
“The collective programming of the mind” G. Hofstede, Culture’s Consequences: International Differences in Work-Related Values (Beverly Hills, CA: Sage, 1980), p. 25.
“Collective understandings” J. Van Maanen and S. R. Barley, “Cultural Organization: Fragments of a Theory” (Paper presented at the Annual Meeting of the Academy of Management, Dallas, Texas, 1983), p. 7.
“A set of shared, enduring beliefs communicated through a variety of symbolic media, creating meaning in people’s work lives”
J. M. Kouzes, D. F. Caldwell, and B. Z. Posner, “Organizational Culture: How It Is Created, Maintained, and Changed” (Presentation at OD Network National Conference, Los Angeles, October 9, 1983).
“A set of symbols, ceremonies, and myths that communicates the underlying values and beliefs of that organization to its employees”
W. G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge (Reading, MA: Addison-Wesley, 1981), p. 41.
“A dominant and coherent set of shared values conveyed by such symbolic means as stories, myths, legends, slogans, anecdotes, and fairy tales”
T. J. Peters and R. H. Waterman Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Harper & Row, 1982), p. 103.
“The pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration”
E. H. Schein, “The Role of the Founder in Creating Organizational Culture,” Organizational Dynamics, Summer 1985, p. 14.
18–5 © 2010 South-Western, a part of Cengage Learning
The Nature of Organization Culture (cont’d)
Historical Foundations
Historical Foundations
AnthropologyAnthropology
Social Psychology
Social Psychology
SociologySociology
EconomicsEconomics
18–6 © 2010 South-Western, a part of Cengage Learning
Organization Culture Versus Climate
• Organization CultureThe historical context within which a situation occurs
and the impact of this context on the behaviors of employees
• Difficult to alter in the short-run• Means through which people in the organization learn and
communicate organization acceptability (values and norms)
• Organization ClimateThe current situations in an organization and the
linkages among work groups, employees, and work performance
• Easier for management to manipulate in order to directly affect the behavior of employees
18–7 © 2010 South-Western, a part of Cengage Learning
Table 18.2 Creating Organization Culture
Creating Organization Culture
Step 1—Formulate Strategic Values
Step 2—Develop Cultural Values
Step 3—Create Vision
Step 4—Initiate Implementation Strategies
Step 5—Reinforce Cultural Behaviors
18–8 © 2010 South-Western, a part of Cengage Learning
Creating the Organization Culture
• Establish ValuesStrategic values
• The basic beliefs about an organization’s environment that shape its strategy.
Cultural values• The values that employees need to have
and act on for the organization to act on the strategic values.
• Create VisionCreate a picture of the organization
that portrays how the strategic and cultural values will combine to create the future.
Digital Vision at Getty Images®
18–9 © 2010 South-Western, a part of Cengage Learning
Creating the Organization Culture (cont’d)
• Initiate Implementation StrategiesTake actions founded on the strategic and cultural
values to accomplish the vision.
• Reinforce Cultural BehaviorsUse formal reward systems to encourage desired
employee behaviors
Tell stories that epitomizing cultural values
Conduct ceremonies and rituals that emphasize right actions by employees
18–10 © 2010 South-Western, a part of Cengage Learning
Approaches to Describing Organization Culture: The Ouchi Framework
Typical United States
firms
Typical United States
firms
Typical Japanese
firms
Typical Japanese
firms
Type Z United States
firms
Type Z United States
firms
The Ouchi FrameworkThe Ouchi Framework
18–12 © 2010 South-Western, a part of Cengage Learning
Table 18.4 The Peters and Waterman Framework
Attributes of an Excellent Firm
1. Bias for action
2. Stay close to the customer
3. Autonomy and entrepreneurship
4. Productivity through people
5. Hands-on management
6. Stick to the knitting
7. Simple form, lean staff
8. Simultaneously loose and tight organization
18–13 © 2010 South-Western, a part of Cengage Learning
Emerging Issues in Organization Culture: Innovation
• InnovationThe process of creating and doing new things that are
introduced into the marketplace as products, processes, or services
Radical Innovation
Radical Innovation
Systems Innovation
Systems Innovation
Incremental Innovation
Incremental Innovation
Types of InnovationTypes of Innovation
18–14 © 2010 South-Western, a part of Cengage Learning
Emerging Issues in Organization Culture: Innovation (cont’d)
• New VenturesRequire entrepreneurship and
good management Intrapreneurship
• Entrepreneurial activity that takes place within the context of a large organization
Entrepreneur’s profile• Need for achievement• Desire to assume responsibility• Willing to take risks• Focus on concrete results
Digital Vision at Getty Images®
18–15 © 2010 South-Western, a part of Cengage Learning
Emerging Issues in Organization Culture: Innovation (cont’d)
• Corporate Research
Supports existing businesses to provide incremental innovations and to explore potential new technology bases
Is responsible for keeping the company’s products and processes technologically advanced
Corporate culture can be instrumental in fostering environment for creativity and innovation
18–16 © 2010 South-Western, a part of Cengage Learning
Emerging Issues in Organization Culture (cont’d)
• Empowerment Is enabling workers to set their own work goals, make
decisions, solve problems within their sphere of responsibility and authority
• Appropriate Cultures (Goffee and Jones)Factors that may determine the appropriate type of
culture appropriate for an organization:
• The nature of the value chain
• The dynamism of the environment
18–17 © 2010 South-Western, a part of Cengage Learning
Managing Organization Culture
Taking advantage of
existing culture
Taking advantage of
existing culture
Teaching organization
culture
Teaching organization
culture
Changing organization
culture
Changing organization
culture
Elements of Managing Organization Culture
Elements of Managing Organization Culture
18–18 © 2010 South-Western, a part of Cengage Learning
Managing Organization Culture (cont’d)
• Taking Advantage of the Existing Culture
Easier and faster to alter employee behaviors within the existing culture than it is to change existing history, traditions, and values
Managers must be aware and understand the organization’s values
Managers can communicate their understanding to lower-level individuals
18–19 © 2010 South-Western, a part of Cengage Learning
Managing Organization Culture (cont’d)
• Teaching Organization CultureOrganizational socialization
• Is the process through which employees learn about the firm’s culture and pass their knowledge and understanding on to others
Organizational mechanisms
• Are examples of organization culture that employees see in more experienced employees’ behaviors
– Corporate pamphlets and formal training sessions
18–20 © 2010 South-Western, a part of Cengage Learning
Managing Organization Culture (cont’d)
• Changing the Organization CultureManaging symbols
• Substituting stories and myths that support the new cultural values for those that support old ones
Culture can be difficult to change when upper management inadvertently reverts to old behaviors
• The Stability of ChangeNew values and beliefs must be seen as stable and
influential as old ones
Changing value systems requires enormous effort because value systems tend to be self-reinforcing
18–21 © 2010 South-Western, a part of Cengage Learning
Organizational Behavior in Action
• After reading the chapter:
Why do organizations lose the innovative aspects of their organizational culture?
What should managers do to turn climate into culture in new organizations?
What are the effects of technology on culture in organizations?
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