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Describe the important functions that a strong corporate culture can serve in making a company successful.

A strong corporate culture potentially increases a company's success by serving three important functions: Control system. Organizational culture is a deeply embedded form of social control that influences employee decisions and behavior. Social glue. Employees are motivated to internalize the organization's dominant culture because this helps fulfill their need for social identity. Sense-making. Organizational culture assists the sense-making process. It helps employees understand what goes on and why things happen in the company. Corporate culture also makes it easier for them to understand what is expected of them and to interact with other employees who know the culture and believe in it.

Describe the process of organizational socialization.

Along with selecting people with compatible values, companies maintain strong cultures through the process of organizational socialization. Organizational socialization refers to the process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization. If a company's dominant values are clearly communicated, job candidates and new hires are more likely to internalize these values quickly and deeply. Socialization is an important process for absorbing corporate culture as well as helping newcomers to adjust to co-workers, work procedures, and other corporate realities.

How do companies address the issue of reality shock for new employees?

Companies improve the socialization process by providing a realistic job preview (RJP) - a balance of positive and negative information about the job and work context. An RJP helps job applicants decide for themselves whether their skills, needs, and values are compatible with a job and organization. Although RJPs scare away some applicants, they tend to reduce turnover and increase job performance. This occurs because RJPs help applicants develop more accurate preemployment expectations, which in turn minimize reality shock. RJPs represent a type of vaccination by preparing employees for the more challenging and troublesome aspects of work life.

What element is construed as the "essence of culture?"

Corporate culture consists of a deeper element - some experts believe it is really the essence of culture - called shared assumptions. These are unconscious taken-for-granted perceptions or beliefs that have worked so well in the past that they are considered the correct way to think and act toward problems and opportunities. Shared assumptions are so deeply ingrained that you probably wouldn't discover them by surveying employees. Only by observing employees, analyzing their decisions, and debriefing them about their actions would these assumptions rise to the surface.

Does corporate culture really make a difference?

Does corporate culture really make a difference? The answer is yes . . . potentially. Various studies indicate that companies with strong cultures are more likely to be successful, but only under a particular set of conditions. The explanation of how organizational culture influences corporate prosperity and employee well-being has a few twists and turns, which we walk through in this section.

What occurs in an adaptive culture?

First and foremost, adaptive cultures have an external focus. Employees hold a common mental model that the organization's success depends on continuous change to support stakeholders. Second, employees in adaptive cultures pay as much attention to organizational processes as they do to organizational goals. They engage in continuous improvement of internal processes. Third, employees in adaptive cultures have a strong sense of ownership. They assume responsibility for the organization's performance. In other words, they believe "it's our job" rather than "it's not my job."

What type of leader is better suited for employing change to a company's culture?

Founders establish an organization's culture, but they and subsequent CEOs can sometimes reshape that culture if they apply transformational leadership concepts. Transformational leaders alter and strengthen organizational culture by communicating and enacting their vision of the future.

What are the key components that define an organization's culture?

Organizational culture consists of the values and assumptions shared within an organization. It defines what is important and unimportant in the company and consequently directs everyone in the organization toward the "right way" of doing things.

When two companies merge, what should be done to minimize the impact of two cultures becoming one?

Organizational leaders can minimize cultural collisions and fulfill their duty of due diligence by conducting a bicultural audit. A bicultural audit diagnoses cultural relations between companies and determines the extent to which cultural clashes will likely occur. The bicultural audit process begins by identifying cultural differences between the merging companies. Next the bicultural audit data are analyzed to determine which differences between the two firms will result in conflict and which cultural values provide common ground on which to build a cultural foundation in the merged organization. The final stage involves identifying strategies and preparing action plans to bridge the two organizations' cultures.

How do rituals and ceremonies reinforce the culture?

Rituals are the programmed routines of daily organizational life that dramatize an organization's culture. They include how visitors are greeted, how often senior executives visit subordinates, how people communicate with each other, how much time employees take for lunch, and so on. Ceremonies are more formal artifacts than rituals. Ceremonies are planned activities conducted specifically for the benefit of an audience. This would include publicly rewarding (or punishing) employees or celebrating the launch of a new product or newly won contract.

What purpose do subcultures serve in an organization?

Subcultures, particularly countercultures, potentially create conflict and dissension among employees, but they also serve two important functions. First, they maintain the organization's standards of performance and ethical behavior. Employees who hold countercultural values are an important source of surveillance and critique over the dominant order. They encourage constructive conflict and more creative thinking about how the organization should interact with its environment. The second function of subcultures is that they are the spawning grounds for emerging values that keep the firm aligned with the needs of customers, suppliers, society, and other stakeholders.

What happens when an employee experiences "reality shock?"

The first day on the job typically marks the beginning of the encounter stage of organizational socialization. This is the stage in which newcomers test their prior expectations with the perceived realities. Many companies fail the test because newcomers often believe that their employers are not delivering the promised employment experience. To varying degrees these people have experienced reality shock - the stress that results when employees perceive discrepancies between their preemployment expectations and on-the-job reality. The larger the gap, the stronger the reality shock. Along with experiencing unmet expectations, reality shock occurs when newcomers are overwhelmed by the experience of sudden entry into a new work environment.

Briefly describe some of the strategies for merging organizational cultures.

The four main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation. Assimilation occurs when employees at the acquired company willingly embrace the cultural values of the acquiring organization. Companies apply a deculturation strategy by imposing their culture and business practices on the acquired organization. The acquiring firm strips away artifacts and reward systems that support the old culture. A third strategy is to combine the cultures into a new composite culture that preserves the best features of the previous ones. A separation strategy occurs if the merging companies agree to remain distinct entities with minimal exchange of culture or organizational practices.

Define the term "artifact" as it applies to shaping an organization's culture.

We decipher organizational culture indirectly through artifacts. Artifacts are the observable symbols and signs of an organization's culture, such as the way visitors are greeted, the organization's physical layout, and how employees are rewarded. Some experts suggest that these artifacts are the essence of organizational culture, whereas others view artifacts as symbols or indicators of culture. Either way, artifacts are important because, as we will learn later, they reinforce and potentially support changes to an organization's culture.

Explain the difference between "espoused values" and "enacted values."

What companies say they value - their espoused values - isn't necessarily what they actually value (called enacted values). Even if an organization's dozen or so top executives embrace the stated values, they are not necessarily the values held by most people throughout the organization. Enacted values, on the other hand, represent the values that people actually rely on to guide their decisions and actions. These values-in-use are apparent by watching people in action. An organization's culture consists of these enacted values, not espoused values.

Explain what is meant by the phrase, "We shape our buildings; thereafter, they shape us."

Winston Churchill once said, "We shape our buildings; thereafter, they shape us." The former British prime minister was reminding us that buildings both reflect and influence an organization's culture. The size, shape, location, and age of buildings might suggest a company's emphasis on teamwork, environmental friendliness, flexibility, or any other set of values. Even if the building doesn't make much of a statement, there is a treasure trove of physical artifacts inside. Desks, chairs, office space, and wall hangings (or lack of them) are just a few of the items that might convey cultural meaning.