Download - Copyright © Houghton Mifflin Company. All rights reserved. CHAPTER EIGHTEEN Organization Culture

Copyright © Houghton Mifflin Company. All rights reserved.

CHAPTER EIGHTEEN

Organization Culture

Copyright © Houghton Mifflin Company. All rights reserved. 18 | 2

Learning Objectives

• Define organization culture, explain how it affects employee behavior, and understand its historical roots

• Describe how to create organization culture

• Describe two different approaches to culture in organizations

• Identify emerging issues in organization culture

• Discuss the important elements of managing the organizational culture


The Nature of Organization Culture

• Organizational Culture Defined– Culture is some set of values held by individuals

in a firm that help employees understand acceptability of actions

– Culture values often are taken for granted• They are not made explicit in a manual or training

program

– Communication of values is done through symbolic means


Table 18.1 Definitions of Organization Culture



• Historical Foundations– Anthropology: Study of human cultures

– Sociology: Study of people in social systems

– Social Psychology: Study of groups and the influence of social factors on individuals

– Economics: Study of creating economic advantage



• Culture versus Climate– Organization culture: Refers to historical context

within which a situation occurs and the impact of this context on the behaviors of employees

• Difficult to alter in the short-run• Means through which people in the organization

learn/communicate organization acceptability (values/norms)


• Culture versus Climate– Organization climate: Refers to current

situations in an organization and the linkages among work groups, employees, and work performance

• Easier for management to manipulate in order to directly affect the behavior of employees



Creating the Organization Culture

• Process of Creating an Organization: Culture-Linking Strategic-Cultural Values

– Steps in Creating Organization Culture1. Formulate strategic values

2. Develop cultural values

3. Create vision

4. Initiate implementation strategies

5. Reinforce cultural behaviors


Approaches to Describing Organization Culture

• The Ouchi Framework*- William G. Ouchi– Analyzed Three Types of Firms

• Typical U.S. firms• Typical Japanese firms• Type Z U.S. firms

* William G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge (Reading, MA: Addison-Wesley, 1981).



• The Ouchi Framework: William G. Ouchi• Type Z U.S. firms

– Committed to retaining employees– Evaluate workers’ performance based on qualitative and

quantitative information– Emphasize broad career paths– Exercise control through informal/implicit mechanisms– Require that decision making occur in groups– Are committed to full information-sharing– Expect individuals to take responsibility for decisions– Emphasize concern for people


Table 18.3 The Ouchi Framework



• The Peters-Waterman* Approach– Attributes of an Excellent Firm

• Bias for action

• Stay close to the customer

• Autonomy and entrepreneurship

• Productivity through people

• Hands-on management

• Stick to the knitting

• Simple form, lean staff

• Simultaneously loose and tight organization

*Thomas J. Peters and Robert H. Waterman Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Harper & Row, 1982).


Emerging Issues in Organization Culture

• Innovation: The process of creating and doing new things that are introduced into the marketplace as products, processes, or services– Types

• Radical innovation• New ventures• Corporate research



• Innovation (cont.)

• Radical innovation– Major breakthroughs that change or create whole

industries– Systems innovation: Creates a new functionality by

assembling parts in new ways– Incremental innovation: Continues the technical

improvement and extends the applications of radical and systems innovations


• Innovation (cont.)• Radical innovation

• New ventures– Require entrepreneurship and good management– Intrapreneurship: Entrepreneurial activity that takes

place within the context of a large organization– Entrepreneur’s profile

• Needs achievement• Desires to assume responsibility• Willing to take risks• Focuses on concrete results




• Innovation (cont.)

• Radical innovation• New ventures• Corporate research

– Supports existing businesses to provide incremental innovations and to explore potential new technology bases

– Responsible for keeping the company’s products/ processes technologically advanced

– Corporate culture can be instrumental in fostering environment for creativity and innovation



• Empowerment– The process of enabling workers to set their own

work goals, make decisions, solve problems within their sphere of responsibility and authority



• Appropriate Cultures– Goffee and Jones*: The nature of the value chain

and the dynamism of the environment are two factors that may determine what type of culture is appropriate for a particular organization

*Rob Goffee and Gareth Jones, “Organizational Culture,” in Organization 21C: Someday All Organizations Will Lead This Way, et. Subir Chowdhury (Upper Saddle River, NJ: Financial Times-Prentice Hall, 2003), pp. 273-290.


Managing Organization Culture

• Elements of Managing Organization Culture– Taking advantage of

the existing culture

– Teaching organization culture

– Changing the organization culture

Source: © Royalty Free/Triangle Images/ Getty Images



• Elements of Managing Organization Culture– Taking advantage of the existing culture

• Easier/faster to alter employee behaviors within the existing culture than it is to change existing history/traditions/values

• Managers must be aware/understand the organization’s values

• Managers can communicate their understanding to lower-level individuals



• Elements of Managing Organization Culture– Taking advantage of the existing culture– Teaching organization culture

• Organizational socialization: Process through which employees learn about the firm’s culture and pass their knowledge/understanding on to others

• Organizational mechanisms:– Examples employees see in experienced people’s

behavior– Corporate pamphlets and formal training sessions



• Elements of Managing Organization Culture– Taking advantage of the existing culture– Teaching organization culture– Changing the organization culture

• Managing symbols: Substitute stories/myths that support new cultural values for those that support old ones

• The difficulty of change– Upper management inadvertently reverts to old behavior

• The stability of change– New values/beliefs are as stable/influential as old ones– Value systems tend to be self-reinforcing– Changing value systems requires enormous effort

Download - Copyright © Houghton Mifflin Company. All rights reserved. CHAPTER EIGHTEEN Organization Culture

Top Related