Management Course: Discussion Topic 11

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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Re-aligning Dell’s Organizational Culture

Dell’s “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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Organizational culture

Artifacts of organizational culture

Elements of 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 organization’s culture is fuzzy:
• Diverse subcultures (“fragmentation”)
• Values exist within individuals, not work units

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Organizational Culture Profile

Source: O’Reilly 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) firm’s dominant culture
• Two functions of countercultures:
• provide surveillance and critique, ethics
• source of emerging values

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Cirque du Soleil’s Risky Culture

Cirque du Soleil’s founders promote a risk-taking 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 organization’s 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 company’s 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

Functions of
Strong Cultures

• Control system
• Social glue
• Sense-making

Organizational
Outcomes

• Org performance
• Employee well-being

Culture strength advantages depend on:

• Environment fit
• Not cult-like
• Adaptive culture

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Contingencies of Org Culture & Performance

• Effect of organizational culture strength on organizational performance is moderate
• Need to consider contingencies:

Ensure culture-environment fit

Avoid strength to level of corporate cult

• Cults restrict mental models, suppress subcultures

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

Deculturation

Acquired company embraces acquiring firm’s cultural values

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

Actions of Founders/Leaders

• Org culture sometimes reflects the founder’s personality
• Transformational Leaders can reshape culture -- organizational change practices

Aligning Artifacts

• Artifacts keep culture in place
• e.g., building structure, communicating stories, transferring culture carriers

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Changing/Strengthening Organizational Culture

Introducing Culturally Consistent Rewards

• Rewards are powerful artifacts – reinforce culturally-consistent behavior

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 organization’s culture
• Attrition -- Employee quite or are forced out when their values oppose company values

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Lindblad’s Shipshape Socialization

Lindblad Expeditions can’t 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 it’s like to work on board. This realistic job preview is one part of the company’s 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 organization’s 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

Role Management

• Insider
• Changing roles and behavior
• Resolving conflicts

Encounter
Stage

• Newcomer
• Testing
  expectations

Pre-Employment
Stage

• Outsider
• Gathering information
• Forming psychological contract

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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