MGT 5314 CH 14

Enacted values

are apparent when watching executives and other employees in action, including their decisions, where they focus their attention and resources, how they behave toward stakeholders, and the outcomes of those decisions and behavior

"elephant trades"

are apparently large investment transactions with huge profit potential, so the investment firm allegedly encourages its salespeople to go "elephant hunting" (seeking out these large trades from clients)

Values

are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations

Organizational Culture

The values and assumptions shared within an organization

Realistic Job Review (RJP)

A method of improving organizational socialization in which job applicants are given a balance of positive and negative information about the job and work context

The three main contingencies are

(1) whether the culture content is aligned with the environment; (2) whether the culture is moderately strong, not cultlike; and (3) whether the culture incorporates an adaptive culture

shared assumptions

- A deeper element that some experts believe is the essence of corporate culture. - are nonconscious, taken-for-granted perceptions or ideal prototypes of behavior that are considered the correct way to think and act toward problems and opportunities - are so deeply ingrained that you probably wouldn't discover them by surveying employees. - by observing employees, analyzing their decisions, and debriefing them on their actions would these assumptions rise to the surface.

Organizational Culture Assumptions, Values, and Artifacts: Shared Values

- Conscious beliefs - Evaluate what is good or bad, right or wrong

Stages of Organizational Socialization: Socialization outcomes

- Higher motivation - Higher loyalty - Higher satisfaction - Lower stress - Lower turnover

Stages of Organizational Socialization: Preemployment Socialization (Outsider)

- Learn about the organization and job - Form employment relationship expectations

Organizational Culture Assumptions, Values, and Artifacts: Shared Assumptions

- Nonconscious, taken-for- granted beliefs -Implicit mental models, ideal prototypes of behavior

Organizational Culture Assumptions, Values, and Artifacts: Artifacts of Organizational Culture

- Physical Structures - Language - Rituals and Ceremonies - Stories and legends

Stages of Organizational Socialization: Role Management (Insider)

- Strengthen work relationships - Practice new role behaviors - Resolve work- nonwork conflict

Stages of Organizational Socialization: Encounter (Newcomer)

- Test expectations against perceived realities

Strategies for Changing and Strengthening Organizational Culture:

- Use attraction, selection, and socialization for cultural "fit" - Actions of founders and leaders - Align artifacts with the desired culture - Introduce culturally consistent rewards/ recognition - Support workforce stability and communication

Potential Benefits and Contingencies of Culture Strength: Functions of strong cultures

- control system - social glue - sense making

Workspace Design and Organizational Culture: Controlling and competitive cultures

- more individual space - more formal than informal space - high/ medium enclosure - more fixed environment - more structured, symmetrical layout

Workspace Design and Organizational Culture: Collaborative and creative cultures

- more team space - informal spaces - low/ medium enclosure - Flexible environment - organic layout

Potential Benefits and Contingencies of Culture Strength: Organizational outcomes

- organizational performance - employee well-being

Potential Benefits and Contingencies of Culture Strength: Benefits of culture strength depend upon

- whether culture content fits the environment - Moderate, not cultlike, strength - An adaptive culture

Bicultural Audit

A process of diagnosing cultural relations between companies and determining the extent to which cultural clashes will likely occur

Culture Strength Is Not the Level of a Cult

A second contingency is the degree of culture strength. Various experts suggest that companies with very strong cultures—known as corporate "cults"—may be less effective than companies with moderately strong cultures.38 One reason why corporate cults may undermine organizational effectiveness is that they lock people into mental models, which can blind them to new opportunities and unique problems. The effect of these very strong cultures is that people overlook or incorrectly define subtle misalignments between the organization's activities and the changing environment.

Separation

A separation strategy occurs when the merging companies agree to remain distinct entities with minimal exchange of culture or organizational practices. This strategy is most appropriate when the two organizations are in unrelated industries or operate in different countries, because the most appropriate cultural values tend to differ by industry and national culture. This strategy is also relevant when applied to the corporate cultures of diversified conglomerates. The cultural separation strategy is rare, however. Executives in acquiring firms usually have difficulty keeping their hands off the acquired firm. According to one estimate, only 15 percent of mergers leave the acquired company as a stand-alone unit.

Learning Orientation

A set of beliefs and norms in which people are encouraged to question past practices, learn new ideas, experiment putting ideas into practice, and view mistakes as part of the learning process

Attraction- Selection- Attrition (ASA) Theory

A theory stating that organizations have a natural tendency to attract, select, and retain people with values and personality characteristics consistent with the organization's character, resulting in a more homogeneous organization and a stronger culture

Culture Is an Adaptive Culture

A third condition influencing the effect of culture strength on organizational effectiveness is whether the culture content includes an adaptive culture.39 An adaptive culture embraces change, creativity, open-mindedness, growth, and learning. Organizational leaders across many industries increasingly view an adaptive culture as an important ingredient for the organization's long-term success. "

Integration

A third strategy is to combine the two or more cultures into a new composite culture that preserves the best features of the previous ones. Integration is slow and potentially risky because there are many forces preserving the existing cultures. Still, this strategy should be considered when the companies have relatively weak cultures or when their cultures include several overlapping values. Integration works best when the cultures of both merging companies could be improved, which motivates employees to adopt the best cultural elements of the separate entities. Incorporating the best cultural elements of the original companies signals that employees from both firms have meaningful values for the combined organization. "Find one thing in the organization that was good and use it as a cornerstone for a new culture," advises a respected executive who led several mergers and acquisitions. "People don't want to work for an organization for years and then be told its rubbish."

Strategies for Merging Different Organizational Cultures: Assimilation

Acquired company embraces acquiring firm's culture Works best when... Acquired firm has weak culture and acquiring firm's culture is strong and successful

Strategies for Merging Different Organizational Cultures: Deculturation

Acquiring firm imposes its culture on unwilling acquired firm Works best when... Rarely works- may be necessary only when acquired firm's culture is dysfunctional but its employees aren't yet aware of the problems

Organizational Culture Profile Dimensions and Characteristics: Outcome orientation

Action-Oriented, high expectations, results-oriented

LO 14-5 Describe five strategies for changing and strengthening an organization's culture, including the application of attraction- selection-attrition theory.

An organization's culture begins with its founders and leaders, because they use personal values to transform the organization. The founder's activities are later retold as organizational stories. Companies also introduce artifacts as mechanisms to maintain or change the culture. A related strategy is to introduce rewards and recognition practices that are consistent with the desired cultural values. A fourth method to change and strengthen an organization's culture is to support workforce stability and communication. Stability is necessary because culture exists in employees. Communication activities improve sharing of the culture. Finally, companies strengthen and change their culture by attracting and selecting applicants with personal values that fit the company's culture, by encouraging those with misaligned values to leave the company, and by engaging in organizational socialization—the process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization.

Adaptive Culture

An organizational culture in which employees are receptive to change, including the ongoing alignment of the organization to its environment and continuous improvement of internal processes

LO 14-2 Describe four categories of artifacts through which corporate culture is deciphered

Artifacts are the observable symbols and signs of an organization's culture. Four broad categories of artifacts include organizational stories and legends, rituals and ceremonies, language, and physical structures and symbols. Understanding an organization's culture requires the assessment of many artifacts because they are subtle and often ambiguous

Deculturation

Assimilation is rare. Employees usually resist organizational change, particularly when they are asked to adopt significantly different personal and corporate values. Under these conditions, some acquiring companies apply a deculturation strategy by imposing their culture and business practices on the acquired organization. The acquiring firm strips away reward systems and other artifacts that support the old culture. People who cannot adopt the acquiring company's culture often lose their jobs. Deculturation may be necessary when the acquired firm's culture doesn't work, even when employees in the acquired company aren't convinced of this. However, this strategy is difficult to apply effectively because the acquired firm's employees resist the cultural intrusions from the buying firm, thereby delaying or undermining the merger process

Organizational Culture Profile Dimensions and Characteristics: Aggressiveness

Competitive, low emphasis on social responsibility

Organizational Culture Profile Dimensions and Characteristics: Team orientation

Collaboration, people- oriented

"strong" culture

Culture strength refers to how widely and deeply employees understand and embrace the organization's dominant values and assumptions

Organizational Culture Profile Dimensions and Characteristics: Innovation

Experimenting, opportunity seeking, risk taking, few rules, low cautiousness

Organizational Culture Profile Dimensions and Characteristics: Respect for people

Fairness, Tolerance

Selection

How well the person "fits in" with the company's culture is often a factor in deciding which job applicants to hire.63 Zappos carefully selects applicants whose personal values are aligned with the company's values. The applicant is first assessed for technical skills and experience at the online shoe and clothing retailer, then the applicant receives "a separate set of interviews purely for culture fit," says CEO Tony Hsieh. Unusual methods are sometimes applied to estimate an applicant's cultural fit. For example, to determine an applicant's humility (one of Zappos' core values), staff ask the Zappos-hired driver how well he or she was treated by the applicant during the drive to the company's headquarters in Las Vegas.

The study distilled these espoused values down to nine categories.

Integrity (appeared most often), teamwork, innovation, respect, quality, safety, community, communication, hard work

What does an adaptive culture look like?

It is one in which employees recognize that the organization's survival and success depends on their ability to discover emerging changes in the external environment and to adapt their own behavior to those changes.

Attraction

Job applicants engage in self-selection by avoiding prospective employers whose values seem incompatible with their own values.62 They look for subtle artifacts during interviews and through public information that communicate the company's culture. Some organizations often encourage this self-selection by actively describing their cultures.

Strategies for Merging Different Organizational Cultures: Integration

Merging companies combine the two or more cultures into a new composite culture Works best when... Existing cultures at both firms are relatively weak or have overlapping values and can be improved

Strategies for Merging Different Organizational Cultures Separation

Merging companies remain distinct entities with minimal exchange of culture or organizational practices Works best when... Firms operate successfully in different businesses requiring different cultures

LO 14-4 Compare and contrast five strategies for merging organizational cultures.

Organizational culture clashes are common in mergers and acquisitions. This problem can be minimized by performing a bicultural audit to diagnose the compatibility of the organizational cultures. The four main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation.

LO 14-1 Describe the elements of organizational culture and discuss the importance of organizational subcultures

Organizational culture consists of the values and assumptions shared within an organization. Shared assumptions are nonconscious, 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. Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. Organizations differ in their cultural content, that is, the relative ordering of values. There are several classifications of organizational culture, but they tend to oversimplify the wide variety of cultures and completely ignore the underlying assumptions of culture. Organizations have subcultures as well as the dominant culture. Subcultures maintain the organization's standards of performance and ethical behavior. They are also the source of emerging values that replace misaligned core values.

LO 14-3 Discuss the importance of organizational culture and the conditions under which organizational culture strength improves organizational performance.

Organizational culture has three main functions: as a form of social control, as the "social glue" that bonds people together, and as a way to help employees make sense of the workplace. Companies with strong cultures generally perform better than those with weak cultures, but only when the cultural content is appropriate for the organization's environment. Also, the culture should not be so strong that it drives out dissenting values, which may form emerging values for the future. Organizations should have adaptive cultures in which employees support ongoing change in the organization and their own roles.

Sense making

Organizational culture helps employees to make sense of 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. For instance, research has found that sales employees in companies with stronger organizational cultures have clearer role perceptions and less role-related stress

Control system

Organizational culture is a deeply embedded form of social control that influences employee decisions. Culture Strength and behavior. Culture is pervasive and operates almost invisibly. Think of it as an automatic pilot, nonconsciously directing employees so their behavior is consistent with organizational expectations. For this reason, some writers describe organizational culture as a compass that points everyone in the same direction.

Social glue

Organizational culture is the social glue that bonds people together and makes them feel part of the organizational experience. Employees are motivated to internalize the organization's dominant culture because it fulfills their need for social identity. This social glue attracts new staff and retains top performers. It also becomes the common thread that holds employees together in global organizations. "The values of the company are really the bedrock—the glue which holds the firm together," emphasizes Nandan Nilekani, cofounder and non-executive chairman of Infosys, India's second-largest information technology company.

LO 14-6 Describe the organizational socialization process and identify strategies to improve that process

Organizational socialization is the process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization. It is a process of both learning and adjustment. During this process, job applicants and newcomers develop and test their psychological contract—personal beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (the employer). Employees typically pass through three socialization stages: preemployment, encounter, and role management. To manage the socialization process, organizations should introduce realistic job previews (RJPs) and recognize the value of socialization agents in the process. These RJPs give job applicants a realistic balance of positive and negative information about the job and work context. Socialization agents provide information and social support during the socialization process.

Attrition.

People are motivated to seek environments that are sufficiently congruent with their personal values and to leave environments that are a poor fit. This occurs because person-organization values congruence supports their social identity and minimizes internal role conflict. Even if employees aren't forced out, many quit when values incongruence is sufficiently high. Several companies (Zappos, G Adventures, etc.) will even pay newcomers to quit within the first few weeks of employment if the newcomers conclude that their personal values conflict with the company's culture.

Ceremonies

Planned displays of organizational culture, conducted specifically for the benefit of an audience

Organizational Culture Profile Dimensions and Characteristics: Attention to Detail

Precise, analytic

Organizational Culture Profile Dimensions and Characteristics: Stability

Predictability, Security, Rule-Oriented

Stage 3: Role Management

Role management, the third stage of organizational socialization, really begins during preemployment socialization, but it is most active as employees make the transition from newcomers to insiders. They strengthen relationships with coworkers and supervisors, practice new role behaviors, and adopt attitudes and values consistent with their new positions and the organization. Role management also involves resolving the conflicts between work and nonwork activities, including resolving discrepancies between their personal values and those emphasized by the organizational culture.

How many corporate cultures are there?

Several models and measures classify organizational culture into a handful of easy-to-remember categories

Stage 2: Encounter

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 how well their preemployment expectations fit reality. Many companies fail that test, resulting in reality shock—the stress that results when employees perceive discrepancies between their preemployment expectations and on-the-job reality.77 Reality shock doesn't necessarily occur on the first day; it might develop over several weeks or even months as newcomers form a better understanding of their new work environment.

Psychological Contract

The individual's beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (typically an employer)

Artifacts

The observable symbols and signs of an organization's culture

Organizational Socialization

The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization

Rituals

The programmed routines of daily organizational life that dramatize the organization's culture

Studies report only a moderately positive relationship between culture strength and organizational effectiveness.

The reason for this weak link is that strong cultures improve organizational effectiveness only under specific conditions

Reality Shock

The stress that results when employees perceive discrepancies between their pre employment expectations and on-the-job reality

Stage 1: Preemployment Socialization

Think back to the months and weeks before you began working in a new job (or attending a new school). You actively searched for information about the company, formed expectations about working there, and felt some anticipation about fitting into that environment. The preemployment socialization stage encompasses all the learning and adjustment that occurs before the first day of work. In fact, a large part of the socialization adjustment process occurs during this stage.

Culture Content Is Aligned with the External Environment

Whether a strong culture is an effective culture partly depends on the degree of alignment of the culture's dominant values and assumptions with the external environment. If the culture is congruent with the environment, then employees are more motivated and have clearer role perceptions to practice behaviors that improve the organization's interaction with its environment. But when the culture is misaligned with the environment, a strong culture encourages decisions and behaviors that can undermine the organization's connection with its stakeholders.

Is it possible to change an organization's culture?

Yes, but doing so isn't easy, the change rarely occurs quickly, and often the culture ends up changing (or replacing) corporate leaders.

countercultures

because they embrace values and assumptions that directly oppose the organization's dominant culture. It is also possible that some organizations (including some universities, according to one study) consist of subcultures with no decipherable dominant culture at all

deculturation strategy

by imposing their culture and business practices on the acquired organization.

Organizational Culture...

defines what is important and unimportant in the company and, consequently, directs everyone in the organization toward the "right way" of doing things. You might think of organizational culture as the company's DNA—invisible to the naked eye, yet a powerful template that shapes what happens in the workplace.

organizational comprehension

effective socialization supports newcomers * It accelerates development of an accurate cognitive map of the physical, social, strategic, and cultural dynamics of the organization. Ideally, this learning should be distributed over time to minimize information overload

"respect" category,

for instance, includes the specific values of diversity, inclusion, development, empowerment, and dignity

Organizational socialization is

is a process of both learning and adjustment. It is a learning process because newcomers try to make sense of the company's physical workplace, social dynamics, and strategic and cultural environment * also an adjustment process because individuals need to adapt to their new work environment. They develop new work roles that reconfigure their social identity, adopt new team norms, and practice new behaviors

An organization's culture is defined by

its enacted values, not its espoused values

subcultures

located throughout their various divisions, geographic regions, and occupational groups.

Assimilation

occurs when employees at the acquired company willingly embrace the cultural values of the acquiring organization. Typically, this strategy works best when the acquired company has a weak culture that is either similar to the acquiring company's culture or is dysfunctional, whereas the acquiring company's culture is strong and aligned with the external environment. The cultural assimilation strategy seldom produces cultural clashes because the acquiring firm's culture is highly respected and the acquired firm's culture is either weak or somewhat similar to the other culture.

Six core "PRIIDE" values:

passion, respect, integrity, innovation, delivery, empowerment

"muppet" label

seems to reveal a culture with a derogatory view of clients. When this language use became public, Goldman Sachs scanned its internal emails for the "muppet" label and warned employees not to use the term

The dominant culture is usually (but not always)

supported by senior management. Cultural values and assumptions can also persist in spite of senior management's desire for another culture.

dominant culture,

that is, the values and assumptions shared most consistently and widely by the organization's members

companies have weak cultures when

the dominant values are held mainly by a few people at the top of the organization, employees lack awareness or agreement on the meaning of those values, the values and assumptions are unstable over time or highly varied across the organization, and the culture is difficult to interpret from artifacts.

espoused values

the values that corporate leaders hope will eventually become the organization's culture, or at least the values they want others to believe guide the organization's decisions and actions

Values are enacted when

they actually guide and influence decisions and behavior. * They are values put into practice.

In the context of organizational culture,

values are discussed as shared values

Values are "shared"

when employees hold a similar understanding of them and internalize them as part of their personal set of values

shared values

which are values that people within the organization or work unit have in common and place near the top of their hierarchy of values