Chapter 22: Cultivating Organizational Culture

layers of organizational culture

-Shared Assumptions -Cultural Values -Shared Behaviors -Cultural Symbols

constructive actions by leaders to help create an organizational culture that encourages ethical behavior

-be realistic in setting values and goals regarding employment relationships. Do not promise what the organization cannot deliver -encourage input from throughout the organization regarding appropriate values and ethical practices for implementing the culture. Choose values that represent the views of both employees and leaders -opt for a strong culture that encourages and rewards diversity and principled dissent, such as grievance or complaint mechanisms or other internal review procedures -provide training programs for leaders and teams on adopting and implementing the organization's ethical values. These programs should stress the underlying ethical and legal principles and cover the practical aspects of carrying out ethical procedural guidelines

types of organizational culture

-clan culture: flexible/internal -entrepreneurial culture: flexible/external -bureaucratic culture: stable/internal -market culture: stable/external

guidelines for fostering a culturally diverse workforce

-clearly stated and widely understood mission -different perspectives and approaches to work need to be valued -different perspectives create both learning opportunities and challenges -culture emphasizes high standards of performance and ethics from everyone -culture stimulated personal development -culture encourages openness -culture makes employees feel valued

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 -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 -rewards tied to monthly, quarterly, and annual performance goals based on profits, revenues, and/or market share

common types of retaliation towards whistle-blowers

-coworkers not associating with the person -pressure from coworkers to stop complaint -withholding of information needed to perform the job -poor performance appraisal and/or denial of a promotion -reassignment to a different job with less desirable duties -reassignment to a different job -tighter scrutiny of daily work by management -verbal harassment or intimidation

two challenges that confront every organization that form an organizational culture in response

-external adaptation and survival -internal integration

possible unsuccessful outcomes of the socialization process

-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

possible successful 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

internal integration involves addressing the following issues:

-language and concepts: identify methods of communication and developing a shared meaning for key values -group and team boundaries: establish criteria for membership in groups and teams -power and status: determine rules for acquiring, maintaining, and losing power and status -rewards and punishments: develop systems for encouraging desirable behaviors and discouraging undesirable behaviors

attributes of a bureaucratic culture

-long-term concerns are predictability, efficiency, and stability -customers value standardized goods and routine 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

attributes of a clan culture

-members understand that contributions to the organization exceed any contractual agreements -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 -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

external adaptation and survival requires leaders to consider and address the following issues:

-mission and strategy: identify the purpose of the organization and select strategies to pursue this mission -goals: set specific targets to achieve -means: determine how to pursue the goals, including selecting an organizational structure and reward system -measurement: establish criteria to measure how well individuals, teams, and departments are accomplishing their goals

hidden elements of culture

-norms -values -assumptions

relationships between culture and 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 the success or failure of firms during the next decade -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 difficult to change, organizational cultures can be made more performance enhancing if leaders understand what sustains a culture

observable elements of culture

-practices -stories -language -symbols -socialization

rites and ceremonies that sustain organizational culture

-rites of passage: facilitate transition into new roles; minimize differences in way roles are carried out -rites of degradation: reduce power and reaffirm proper behavior -rites of enhancement: enhance power and identity; emphasize the value of proper behavior -rites of integration: encourage common feelings that bind members together

dynamics 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

steps employees take to reduce unethical behavior

-secretly or publicly report unethical actions to a higher level within the organization -secretly or publicly report unethical actions to someone outside the organization -secretly or publicly threaten an offender or a responsible leader with reporting unethical actions -quietly or publicly refuse to implement an unethical order or policy

common types of wrongdoing by whistle-blowers

-stealing -waste -mismanagement -safety problems and violations -sexual harassment -unfair discrimination -financial reporting -legal violations

attributes of an entrepreneurial 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

how cultures emerge

-top management: agrees on shared assumptions of human behavior; develops a shared vision of cultural values -behaviors: employees behave in ways that are consistent with shared values and assumptions -results: financial performance; market share; employee commitment -culture: strong culture emerges; traditions are maintained; socialization practices for new employees emerge

what successfully changing organizational culture requires

-understanding the old culture first because a new culture can't be developed unless leaders and employees understand where they are starting from -providing support for employees and teams who have ideas for a better culture and are willing to act on those ideas -finding the most effective subculture in the organization and using it as an example from which employees can learn -not attacking culture head-on unless the organization is rapidly failing, but finding ways to help employees and teams do their jobs more effectively -treating the vision of a new culture as a guiding principle for change, not as a miracle cure -recognizing that top leadership commitment to significant organization-wide cultural change may take several years -living the new culture by leaders early on because actions speak louder than words

steps in the organizational socialization process

1) careful selection (removal of candidates who do not "fit" culture) 2) challenging early work assignments 3) training to develop capabilities consistent with the culture 4) rewards that sustain the culture 5) adoption of cultural value policies (removal of employees who deviate the culture) 6) rituals, taboos, rites, and stories to reinforce culture 7) role model to sustain culture

three reasons why changing a culture is so hard

1) cultures give employees and organizational identity; it tells customers and others what the organization stands for 2) culture provides stability 3) culture helps focus its employees' behaviors

four key ideas on the effects of organizational culture on employee behavior and performance

1) knowing the culture of an organization allows employees to understand both the firm's history and current methods of operation 2) organizational culture can foster commitment to corporate philosophy and values 3) organizational culture, through its norms, serves as a control mechanism to channel behaviors toward desired behaviors and away from undesired behaviors 4) certain types of organizational cultures may be related directly to greater effectiveness and productivity than others

basic approach for sustaining an organization's culture

1) the organization hires individuals who seem to fit its culture 2) the organization sustains its culture by removing employees who consistently or markedly stray from accepted behaviors and activities

culture might be modified by changing:

1) what leaders and teams pay attention to 2) how crises are handled 3) criteria for recruiting new members 4) criteria for allocating rewards 5) criteria for promotion within the organization 6) organizational rites, ceremonies, and stories

the most powerful indicators of the organization's culture

1) what leaders and teams pay attention to, measure, and control 2) the ways in which leaders (particularly top leaders) react to critical incidents and organizational crises 3) managerial and team role modeling, teaching, and coaching 4) criteria for allocating rewards and status 5) criteria for recruitment, selection, promotion, and removal from the organization 6) organizational rites, ceremonies, and stories

psychological contract

A person's overall set of expectations regarding what they will contribute to the organization and what the organization will provide in return; it is an understanding reached between the person and the organization

clan culture

Tradition, loyalty, personal commitment, extensive socialization, teamwork, self-management, and social influence; members share feelings of pride in membership and have a strong sense of identification

market culture

achievement of measurable and demanding goals, especially those that are financial and market based (ex: sales growth, profitability, and market share); the relationship between individual and organization is contractual (obligations are agreed upon in advance)

organizational cultural values

collective beliefs, assumptions, and feelings about what things are good, normal, rational, and valuable

bureaucratic culture

formality, rules, standard operating procedures, and hierarchical coordination

entrepreneurial culture

high levels of risk taking and creativity; there is a commitment to experimentation, innovation, and being on the leading edge; it creates change

external adaptation and survival

how the organization will find a niche in and cope with its constantly changing external environment

shared behaviors

include norms, and are more visible and somewhat easier to change than values

organizational rites and ceremonies

planned activities or rituals that have personal and emotional meaning to employees

whistle-blowing

the disclosure by current or former employees of illegal, immoral, or illegitimate organizational practices to people or organizations that may be able to change the practice

internal integration

the establishment and maintenance of effective working relationships among the members of an organization

socialization

the process by which older members of a society transmit to younger members the social skills and knowledge needed to function effectively in that society

organizational culture

the shared and learned values, beliefs, and attitudes of an organization's members

organizational socialization

the systematic process by which an organization brings new employees into its culture

subcultures

when multiple cultures are present within an organization

cultural values

words (jargon or slang), gestures, and pictures or other physical objects that carry a particular meaning within a culture