chapter fourteen organization culture. copyright © houghton mifflin company. all rights...

Chapter Fourteen

Organization Culture

Copyright © Houghton Mifflin Company. All rights reserved. 14-2

Chapter Objectives

• Define organization culture and explain how it affects employee behavior.

• Explain how to create an organization culture.• Discuss two different approaches to

describing culture in organizations.• Identify important emerging issues in

organization culture.• Discuss the key elements of managing the

organization culture.


The Nature of Organization Culture

• Organization Culture– The set of shared values, often taken for

granted and communicated through stories and other symbolic means

– These help the organization’s employees understand which actions are considered acceptable and which unacceptable.


Historical Foundations

• Anthropological Contributions– The study of human cultures and cultural

phenomena. – Anthropologists seek to understand how the

values and beliefs that make up a society’s culture affect the structure and functioning of that society.

• Sociological Contributions– The study of people in social systems such as

organizations and societies. – Sociologists have long been interested in the

causes and consequences of culture.


Historical Foundations (continued)

• Social Psychology Contributions– A branch of psychology that includes the study of

groups and the influence of social factors on individuals.

• Economics Contributions– The study of organization culture that attempts to

link the cultural attributes of firms with their performance rather than simply describing the cultures of companies as the sociological and anthropological perspectives do.


Culture Versus Climate

• Organizational Climate– Refers to current situations in the

organization and the linkages among work groups, employees, and work performance

• Organizational Culture– Refers to the historical context within which

a situation occurs and the impact of this context on the behavior of employees


Creating an Organization Culture

• Step 1: Formulate Strategic Values– Strategic values – the basic beliefs about an

organization’s environment that shape its strategy

• Step 2: Develop Cultural Values– Cultural values – the values that employees need

to have and act on for the organization to implement its strategic values

• Step 3: Create A Vision– Vision – a picture of what an organization will look

like at some point in the future


Creating an Organization Culture (continued)

• Step 4: Initiate Implementation Strategies– Implementation Strategies – many factors,

including developing organization design to recruiting and training employees who share the values and will carry them out

• Step 5: Reinforce Cultural Behaviors– The act of monitoring and encouraging these

behaviors of employees as they act out the cultural values and implement the organization’s strategies


The Ouchi Framework

• Ouchi formulated the notion of the “Type Z” firm.– Ouchi argued that the cultures of typical

Japanese firms and U.S. Type Z firms are very different from those of typical U.S. firms, and that these differences explain the success of many Japanese firms and U.S. Type Z firms and the difficulties in typical U.S. firms.


Table 14.2: The Ouchi Framework


The Peters and Waterman Approach

• In their bestseller In Search of Excellence, Tom Peters and Robert Waterman focused even more explicitly than Ouchi on the relationship between organizational culture and performance.– They chose a sample of highly successful

U.S. firms and sought to describe the management practices that led to their success.


Table 14.3: The Peters and Waterman Framework


Emerging Issues in Organizational Culture

• Innovation– The process of creating and doing new

things that are introduced into the marketplace as products, processes, or services.

– It involves every aspect of the organization, from research through development, manufacturing, and marketing.


Types of Innovation

• Radical Innovation– A major breakthrough that changes or creates

whole industries

• Systems Innovation– Functionality created by assembling parts in new

ways

• Incremental Innovation– Continued technical improvements and an

extension of the applications of radical systems innovations


New Ventures

• New ventures based on innovation require entrepreneurship and good management to work.

• Entrepreneurship – can occur inside or outside large organizations

• Intrapreneurship – entrepreneurial activity within the organization


Corporate Research

• Corporate Research– The most common means of developing

innovation in the traditional organization– It is set up to:

• support existing businesses• provide incremental innovations in the organization’s

business• explore potential new technology bases

– The corporate culture can be instrumental in fostering an environment in which creativity and innovation occur.


Procedural Justice

• Procedural Justice– The extent to which the dynamics of an

organization’s decision making processes are judged to be fair by those most affected by them.

• Especially in the U.S., employees are demanding more say in determining work rules and in matters pertaining to health and safety on the job and the provision of certain benefits for all employees.

– The lack of procedural justice may lead to less compliant attitudes on the part of lower-level managers.


Managing Organization Culture

• Two Key Fact About Culture:– Organizational cultures differ among firms– Different organizational cultures affect a firm’s

performance

• Three Elements of Managing Organizational Culture:– Taking advantage of the existing culture– Teaching organization culture– Changing the organization culture


Taking Advantage of the Existing Culture

• To take advantage of an existing cultural system, managers must be fully aware of the culture’s values and what behaviors or actions those values support.

• This understanding can be used to evaluate the performance of others in the firm.

• Articulating organizational values can be useful in managing others’ behaviors.


Teaching the Organization Culture: Socialization

• Socialization– The process through which individuals become

social beings

• Organizational Socialization– The process through which employees learn about

the firm’s culture and pass their knowledge and understanding on to others.

• Employees are socialized into organizations just as people are socialized into societies; they come to know over time what is acceptable in the organization and what is not, how to communicate with their feelings, and how to interact with others.


Changing the Organization Culture

• Managing Symbols– Research suggests that organization culture is

understood and communicated through the use of stories and other symbolic media.

• If this is correct, managers interested in changing cultures should attempt to substitute stories and myths that support new cultural values for those that support old ones.

• The Difficulty of Change– Changing a firm’s culture is a long and difficult

process.


Changing the Organization Culture (continued)

• The Stability of Change– The process of changing a firm’s culture

starts with a need for change and moves through a transition period in which efforts are made to adopt new values and beliefs.

– In the long run, a firm that successfully changes its culture will find the new values and beliefs are as stable and influential as the old ones.

chapter fourteen organization culture. copyright © houghton mifflin company. all rights...

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