Module 9: Key Dimensions of Organizational Culture

Changing the look and feel of the workplace

A workplace "makeover" can have a profound impact on change. Visual cues can quickly and effectively let employees know that they are encouraged to gather around a large table in a shared work area, or that managers in an open environment are available for questions and collaboration.

Aggressive

Although some companies value cooperation, others value aggressive competition. Stratasys, a maker of 3D printers, has been willing to make enemies in order to survive and thrive. Stratasys expanded rapidly through growth, takeovers, and mergers to gain a dominant position in the 3D printer industry. Sometimes, Stratasys' aggressive approach has gotten the company into legal battles—but the company has continued to perform well.

Team-oriented

Employees who like to collaborate and cooperate with team members do well in team-oriented companies. Whole Foods, for example, expects its employees to function as members of teams—and to support other members of the team when necessary. This creates strong, solid relationships within working groups.

Changing leaders who present barriers to change

It's hard for employees to make change when their own managers are resistant to new ideas. When leadership is standing in the way of positive change, upper management may have to "clean house" by dismissing managers who, for personal or political reasons, are unwilling to bend.

Industry

It's one thing to be creative, innovative, and fun in the hospitality or entertainment business. But that type of culture won't work well in an industry that's built around regulations and policies that cannot be changed or bent. Industries such as pharmaceuticals and nuclear power require attention to detail and cannot tolerate a "creative" approach to following rules. True, a pharmaceutical company can be people-oriented to a degree, but its willingness to support the individual needs of employees must be secondary to its absolute compliance with regulations and the law.

Recruiting

To find employees who will fit into the corporate culture, recruiters must look in the right places. When looking for upper-level managers, recruiters should look at corporations with a similar culture to their own. When looking for entry-level employees, recruiters should tap college programs or websites that reflect their corporate culture.

Excellent communication

That's the key conclusion of a 2016 study, "Where Change Management Fails," from Robert Half Management Resources. This survey of 300 senior managers found that most change efforts failed in the implementation stage—on shoals of broken or inadequate communication.[1]

Onboarding

The "onboarding" process is really a new employee orientation process. During onboarding, human resources personnel help the new employee get to know company policies and practices. It's during onboarding, for example, that a new employee may learn that each team puts together a skit for the company holiday party or that bonuses can be earned as a result of exceeding sales goals.

Changing reward systems and corporate symbols

To let employees know things have really changed, it may be necessary to change incentives. For example, if a company has rewarded individual achievement but wants to see a cultural switch to teamwork, it may need to reward team accomplishments. Similarly, the company may need to change the visual symbols it uses t

Diversity enhances image

Today's marketplace is diverse; so, too, are customers. When a company can present itself as diverse, clients and buyers respond positively.

Training

Training can be both formal and informal. Whereas formal training may teach new employees how to use company software or systems, informal training may involve one-on-one conversations with peers and managers. During those conversations, new employees learn how the company culture manifests itself in the workplace. For example, they may learn that everyone—even bad players—take part in departmental softball games, or that recycling is a "must" in the lunchroom. All these subtle bits of information add up to an understanding of corporate culture.

Founders

When a company is founded, there is usually a single individual or group of individuals involved. The founder or founders have a vision for their new company—and that vision helps to form the corporate culture. In some cases, the founder is very intentional about creating a particular culture; he or she may actually want to create a business in which, for example, innovation or teamwork is valued. in other cases, the founder's personality unintentionally forms the culture. Some individual founders have such strong personalities and values that the company continues to reflect their goals even as it grows—and even after the founder dies. Walt Disney, for example, modeled leadership, teamwork, and innovation so that, even today, the Disney Corporation is built around the values and assumptions of its founder. Another good example of the way that founders' values create corporate culture is Ben and Jerry's Ice Cream. Founders Ben Cohen and Jerry Greenfield started out to create a company with strong social values—and they succeeded. The company started in 1978, but even today the company continues to focus on sustainability, environmental activism, social activism, and charity.

According to a 2012 Reuters article with the headline "Prostitute scandal challenges U.S. Secret Service's proud culture," "U.S. Secret Service agents are...drilled almost from Day One on the need for probity, discretion and solid morals." But thirteen agents were caught hiring prostitutes and partying in Mexico. What most likely went wrong?

When corporate culture is not intentional, the culture winds up being disjointed or even antagonistic

Diversity improves morale

When employees of all backgrounds and abilities feel valued, they are more likely to be loyal, engaged, and productive. Employees are also more likely to feel a sense of pride and belonging when they are associated with an employer that clearly cares about the well-being of all.

Hiring

When interviewing job candidates, managers and human resources managers must spend some time assessing the candidate's assumptions and values. Is this person a collaborator or a competitor? Are candidates detail-oriented or innovative? Candidates whose personal assumptions and values match the corporate culture are much more likely to help maintain that culture over time.

Training programs

When organizational culture is the source of unethical or unsafe practices, training can be the key to change. The same is true for changes related to customer service. The Midas auto repair chain, for example, used training to help employees better empathize with customers' needs and concerns.

Create a sense of urgency

Why should employees change their habits, systems, or ways of doing business? If there's no emergency, employees are likely to resist change. But what if your business is likely to fail if you don't reinvent some of your culture and practices? In 1993, IBM was facing just such a crisis. Lou Gerstner, IBM's CEO, made it clear to employees that the situation was truly dire: change or die. In a short time, IBM shifted from being an old-fashioned, stuck-in-the-past footnote to a future-facing, innovative organization.

At The Ritz-Carlton, the Credo and The Employee Promise are displayed in common areas and in each office. In addition, all employees—known as "our ladies and gentlemen"—have a pyramid on their desk that shows the annual goals, vision, mission, and motto. The pyramids are

artifacts. The pyramid is an artifact. What is written on the pyramid reflects what the organization values.

General Motors had long-running problems with Chevy Cobalt ignition switches. The switches could disable the emergency airbags, causing accidental deaths. The GM culture discouraged anyone from stepping up and addressing the problem. Mary Barra, the new CEO, made a public commitment to change. After an investigation, two senior managers left the company in 2014. By ________, GM was better able to move forward.

changing leaders

Between 2014 and 2017, General Motors paid more than $2 billion in fines, penalties, and settlements due to faulty ignition switches, a flaw that led to vast recalls and at least 124 deaths. The fault was identified in 2002, but it took GM engineers and managers a decade to fix it. An independent consultant hired to investigate attributed this to a culture that rewarded conformity and silenced bad news. Senior executives were forced to investigate and fire employees after widespread media reports. These executives

lacked an adequate sense of urgency

Goldman Sachs is a white-shoe investment bank. The firm does well by maintaining close connections throughout the business, investment, and political worlds and staying well-informed. Hank Paulsen, a former CEO, became the U.S. Secretary of the Treasury and managed the Treasury during the Great Recession of 2008-2009. To maintain its connections, Goldman hires people

of varied backgrounds

In 2013, Microsoft was losing ground to Google and Amazon. CEO Steve Ballmer announced changes aimed at the culture. His letter asked for "more emphasis on teamwork and collaboration, more emphasis on employee growth and development" and announced "no more curve [or ratings.] ... Managers and leaders will have flexibility to allocate [compensation] in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget." Ballmer used ________ to foster culture change.

the reward system

In 2000, AOL and Time Warner merged. The deal was valued at $350 billion. Ten years later, Time Warner sold AOL for about $3 billion. Mr. Parson, the president of Time Warner before the merger, said afterward that "The business model sort of collapsed under us, and then finally this cultural matter. . . . It was beyond certainly my abilities to figure out how to blend the old media and the new media culture. They were like different species, and in fact, they were species that were inherently at war." "Culture" here means:

the shared values, attitudes and beliefs thta determine the organization's operating behavior

Diversity improves outreach

Employees from different parts of the world or different communities can help a corporation to understand and reach out to new markets.

A ________ workforce may offer more creative approaches or solutions to problems.

diverse

Former Senate Majority Leader George Mitchell responded to a white supremacist rally in Charlottesville, Virginia, with this argument: "Amazon was created by Jeff Bezos, whose adoptive father was born in Cuba. Google was co-founded by Sergey Brin, who was born in Russia. Would we be a better country if they had not been admitted? Of equal importance, what are the chances that if Steve Jobs had lived his life in Syria he would have created Apple? Or Jeff Bezos in Cuba? Or Sergey Brin in Russia?" He argued that

diversity is America's strength

Studies show financial advantages to diversity in senior management. But the promotion process tends to suppress expressed differences. To be seriously considered for promotion to a top-level management position in many U.S. companies, individuals must assimilate to the company's culture. Companies can manage this through

employee training and diversity-oriented company policies

Half of the total revenue generated by S&P 100 firms is from outside the US. Qualcomm, a telecommunications equipment company, gets about 87 percent of its revenue internationally and has enjoyed average revenue growth of over 25 percent for the past 10 years. In order to serve its customers, Qualcomm should focus on hiring

employees with a range of backgrounds and skill sets to connect with its diverse customers

Some of the visible clues to a company's culture are

how employees dress, snack areas and candy jars, and plaques and awards.

Stable

Employees at a stable corporation know exactly who is in charge, who to report to, and what they are expected to accomplish. Kraft Foods, for example, is a very stable organization with a strong bureaucracy. Although it is consistent, however, Kraft is not known for innovation or creativity.

Managing Change

Excellent communications, changing leaders who present barriers to change, training programs, changing reward systems and corporate symbols, changing the look and feel of the workplace

Role modeling

If the need for organizational change is communicated from the top down, it must be modeled from the top down as well. When a corporate leader is truly committed to change, he or she becomes a guiding light for the entire organization. A leader can model change through public actions such as press conferences or presentations. More significant, however, are actions that show that the leader is truly taking his or her own ideas to heart. Not only is it inspiring to see a leader taking his or her own advice to heart, but it's also helpful to see what the change really looks like. Robert Iger, who became CEO of Disney, was concerned that innovation was fading. To show his commitment to cultural change, he jumped in to provide hands-on help with game creation.

People-oriented

If you work for a people-oriented corporation, you can expect the company to care about you. They value fairness and are supportive of individuals' rights and dignity. Software company SAS is a good example of a people-oriented company that offers employees a wide range of individualized benefits, including on-site childcare. CEO Jim Goodnight's philosophy is, "Treat employees like they make a difference, and they will." The result: a loyal and dedicated workforce.

Innovative

Individuals who want opportunities to invent new products or services should consider working for companies such as W.L. Gore and Associates, maker of GORE-TEX, or 3M. These companies not only encourage innovation but give employees company time to work on their own projects. This approach can result in a wide range of exciting new products developed by engineers or scientists working on their own.

Detail-oriented

Not surprisingly, detail-oriented companies are all about meticulous attention to details. These companies tend to be in customer-oriented industries in which such precision is valued. For example, Four Seasons hotels are dedicated to providing customers with exactly the service they prefer, and they keep records on each guest's experiences, preferences, and expectations. Employees working for Four Seasons must have an eye for detail and thrive on keeping meticulous records

Changing leaders

Once a company has made a commitment to change, it's important that all members of the senior management team understand and embrace the change. In some cases, individuals may dig in their heels and refuse to change their practices. When this happens, the company has little choice but to terminate their employment.

Outcome-oriented

Outcome-oriented businesses are all about results. At RE/MAX, for example, employees are trained to sell products, and they are evaluated on their sales performance. RE/MAX, short for "Real Estate Maximums," is an American international real estate company that operates through a franchise system. The company has held the number-one market share in the United States and Canada since 1999.

Diversity enhances creativity

People from different places, ethnicities, and lifestyles can bring fresh ideas to an older corporation. Could a product be made to appeal to a whole new demographic? How might a particular service be advertised to a new ethnic market or the disabled community? By including people of different backgrounds in the conversation, managers get valuable insights into different points of view.

Methods for Maintaining Corporate Culture

Recruiting, Hiring, Onboarding, Training

Amazon competes with low prices, selection, quick deliveries, and easy returns. Employees know they succeed through efficiency improvements in any part of the process. Customers rely on Amazon for prices, selection, and easy service. What does this illustrate about the relationship between Amazon's culture and brand?

The culture and the brand reinforce each other

Visible Signs of Culture

how employees dress, snack areas and candy jars, plaques and awards, mission statement, events and rituals, physical layout and decor

Google researches the effectiveness of its teams. Scott Page, a professor of complex systems, political science, and economics at the University of Michigan, showed Google that "homogeneous teams . . . are the land of B+. . . . The key to successfully building a team is to make sure that it is equipped with a wide range of tools to tackle tough problems. . . . If you want an A, you've got to have a diverse team." How does Google primarily benefit from diverse teams like the ones Page describes?

With diverse backgrounds and experiences, Google engineers can come up with more creative solutions to problems.

Mergers can be difficult because of cultural differences between firms. In 2008, Bank of America bought Merrill Lynch, a stockbroker. Their cultures and pay packages were starkly different. After the merger, in 2009, leading brokers of Merrill began departing for friendlier waters. Some went to Morgan Stanley, and some became independent brokers. The rating agency, Standard & Poor's, called the departures a "cause for concern," adding that "if brokerage attrition picks up, the acquisition becomes less valuable." Divided cultures in one firm can be

a competitive disadvantage

In The Wealth of Nations, Adam Smith wrote, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." On Wall Street, New York's financial district, The Wealth of Nations is the unspoken gospel. Every employee expects to share in any profit he creates, and incentive plans are set up to reinforce this. Wall Street has

a deep-seated assumption about free markets and how people behave

Johnson & Johnson is an American multinational manufacturer of medical devices, pharmaceuticals, and consumer packaged goods. Its credo, on a stone at the entrance to headquarters, says that stockholders come fourth, after customers, employees, and communities. The credo is

a statement of values

Americans generally expect meetings to start on time, and some will show up early so they don't delay the start of the meeting. Employees from Latin American or Caribbean countries may not take appointment times as strictly. You may be annoyed when they delay the start of a meeting by 15 minutes, but it could be business as usual for them. A diverse workforce requires

an agreement covering all appropriate behavior.

Organizational Culture Profile (OCP)

an instrument initially developed by consultants Charles A. O'Reilly III, Jennifer Chatman, and David F. Caldwell to assess person-organization fit. In theory, employees should have the same basic cultural assumptions and values as the company for which they work.

Corporate culture is rooted in

an organization's goals, strategies, structure, and approaches to labor, customers, investors, and the greater community

According to Robert Half Management Resources, most change efforts fail because of

inadequate communication

To deliberately initiate culture change at company is an uphill struggle. Most employees tend to return to familiar ways of doing business. To succeed, executives need to

create a sense of urgency, model the changes that they want, and show commitment to the new culture.

Initiating change

create a sense of urgency, role modeling, changing leaders

In the Organizational Culture Profile (OCP), companies can be scored on seven dimensions that reflect their culture. These include

detail-oriented, aggressive, and people-oriented

seven dimensions of culture

detail-oriented, innovative, aggressive, outcome-oriented, stable, people-oriented, team-oriented

JAMF is a software company offering enterprise management systems, which help manage the security and software updates to all of a company's computers. A new employee at JAMF spends the first 3 weeks in training, called Zero Month. The training covers the company history, relationships with customers and other employees, and the products. People walk out of JAMF's Zero Month saying, "I can't believe I'm part of an organization in which culture is that important." As a result of the training, JAMF has a 90%+ retention rate of employees and a 95%+ retention rate of customers. This training is an example of

onboarding.

Warby Parker has been making and selling prescription glasses online since 2010. It designs its own glasses and sells directly to customers, cutting out the middleman and keeping prices low. It works to ensure the entire team works well together by insisting everyone helps keep break areas clean or sending random employees out to lunch together. Warby Parker culture is

people-oriented

Companies make choices in their HR processes that can help maintain the culture. The processes include

recruiting, hiring, and training

USAA, an insurance company for military families, asks employees to identify with their customers. According to BusinessWeek, their initial training involves reviewing deployment letters like the ones soldiers get telling them to get their affairs in order before reporting for duty on a specific day and time, eating MREs (meals ready to eat) like the ones soldiers eat, and reading real letters from soldiers in the field to their families back home. At USAA,

the corporate culture reinforces the brand, which emphasizes service to military families

It took Boeing 6 years to produce the first 787 aircraft, and it will take another 6 years to break even from the $32 billion investment. Design engineers may move on even before the plane leaves the ground. The company needs people and a culture that works for a future longer than the average career today. The culture is shaped by

the industry

Netflix's pioneering approach to culture, like not needing permission to take time off or its policy of no annual employee reviews, is meant to attract "fully formed adults" who are okay with the business being run like a pro-sports team rather than a family. To make sure candidates get the message, Netflix includes a long manifesto, "Culture at Netflix," on their website. This statement represents

the values level of culture

Apple and Microsoft are competitors in selling computer operating systems, the MAC OS and Windows. Yet they have very different cultures and values. Apple is known for design and attention to detail. Microsoft is aggressive, launching products before they are finished. Both cultures reflect

their founders

E.H. Schein Organizational Culture and Leadership

three levels of corporate culture: assumptions, values, artifacts

The investment portfolio staff earn millions in profits by anticipating near-term market movements. The programmers tend to come in late and work late. Their goals are saving thousands of dollars through cost reductions. Differences in ________ can create friction over decisions that make little sense to the other group.

work styles