Chapter 18

Organizational Culture and Cultural Diversity

Learning Goals

1. Describe the core elements of a culture

2. Compare and contrast four types of organizational culture

3. Discuss why subcultures exist in organizations

4. Describe several activities for successfully managing diversity

Culture: the unique pattern of shared assumptions, values, and norms that shape the socialization, symbols, language, narratives, and practices of a group of people

Shared assumptions: the underlying thoughts and feelings that members of a culture take for granted and believe to be true

Value: a basic belief about something that has considerable importance and meaning to individuals and is stable over time

Norms: rules that govern the behaviors of group members

Symbol: anything visible that can be used to represent an abstract shared value or something having special meaning

Socialization: a process by which new members are brought into a culture

Language: a shared system of vocal sounds, written signs, and/or gestures used to convey special meanings among members of a culture

Narratives: the unique stories, sagas, legends, and myths in a culture

Practices

Taboos: culturally forbidden behaviorsCeremonies: elaborate and formal

activities designed to generate strong feelings

Taboos: culturally forbidden behaviorsCeremonies: elaborate and formal

activities designed to generate strong feelings

Internal ExternalFocus of Attention

Stable

Flexible

For

mal

Con

trol

Ori

enta

tion

ClanCulture

ClanCulture

EntrepreneurialCulture

EntrepreneurialCulture

BureaucraticCulture

BureaucraticCulture

MarketCultureMarketCulture

Behavior of employees is governed by formal rules and standard operating procedures, and coordination is achieved through hierarchical reporting relationships

Behavior of employees is governed by formal rules and standard operating procedures, and coordination is achieved through hierarchical reporting relationships

Focuses on predictability, efficiency, and stability

Focuses on predictability, efficiency, and stability

Tasks, responsibilities, and authority clearly spelled out

Tasks, responsibilities, and authority clearly spelled out

Internal Focus Internal Focus

Behaviors of employees are shaped by tradition, loyalty, personal commitment, extensive socialization, and self-management

Formal rules and procedures minimized

High sense of member obligation and identity to the organization

Long and thorough socialization process Mentors and role models

Strong peer pressure Internal focus

Andres Smith, Accountant, Analytic Graphics, Inc., Easton, Pennsylvania

“There’s a family mentality here as opposed to just being another number. That trickles

down from the top. He [the CEO] knows everyone’s name and says ‘hi’ everyday

when I see him during morning workouts at the gym.”

External focus and flexibility create an environment that encourages risk taking, dynamism, and creativity

Encouraged and rewarded Encouraged and rewarded

Commitment to experimentation, innovation, and being on the leading edge

Creates change and quickly reacts to change

Individual initiative, flexibility, and freedom seen as fostering growth

Values and norms reflect the importance of achieving measurable and demanding goals, especially those that are financial and market based (e.g., sales growth, profitability and market share)

Market Culture

Hard driving competitiveness dominates

Profits orientation and quantifiable performance goals prevail

Minimal informal social pressure on members

Superior interactions with subordinates focus on performance-reward (economic) agreement and resource allocations

Exists when assumptions, values, and norms are shared by some—but not all—organizational members

Inability to manage target business

Clash of management styles/egos

Inability to implement changein new organization

Synergies were overstated

Incompatible culturesRea

son

for

mer

ger

fail

ure

Percent of executives who state reason as primary explanation for merger failures

Reasons Executives Give for Failed Mergers

0 10 20 30 40 50 60

Percent

Departments and divisions within the organization have their own subcultures

Occupational subcultures Geographically based subcultures Subcultures created by managers

Positive cultures are created by managers who: recognize personal milestones, such as birthdays and

employment anniversaries; hold public celebrations for professional

achievements; sponsor picnics and parties; and listen to their employees and recognize the efforts

they put into work

Diverse workforce demographics create subcultures

EthnicityEthnicity

AgeAge

Gender and other demographicsGender and other demographics

“My first conscious exposure to racism occurred when I came back to the States and went to public school. One of the children said something—I don’t remember now what—but I remember what my grandmother said to me: ‘They tried to put you in a box. Don’t ever let anybody put you in a box.’”

Clifton R. Wharton, Jr., Former Chairman and CEO, TIAA-CREF

Cultural diversity: encompasses the full mix of the cultures and subcultures to which members of the workforce belong

Organization goals for managing cultural diversity include:

Legal compliance

Creating a positive culture for employees

Create greater economic value for the organization

“HP is committed to building a work environment where everyone has an opportunity to fully participate in creating business success…We address our commitment [to diversity] through development programs targeted to the next generation of HP leaders, work-life initiatives for our employees, recruiting of diverse talent, and other efforts that help employees and managers foster an inclusive work environment. Additionally, we establish diversity goals to create accountability and drive our success. By weaving diversity into the fabric of our company, we create a mind-set in every employee and manager that will allow them to think consciously about diversity and inclusion in everything they do.”

Emily Duncan, VP Culture and Diversity, Hewlett-Packard

Diagnosis: Before managers begin to design new approaches to managing diversity, they must understand how current practices affect the amount and nature of diversity

(continued)

Vision: Leaders must formulate and articulate a clear vision to persuade others to join them

Involvement: For the plan to be effective, those who are affected must buy into it

Timing: Planned organization change usually follows an evolutionary—not revolutionary—path

Managing Cultural Diversity and Inclusion: Diversity Training

Awareness training: designed to provide accurate information about the many subcultures present in the organization

Harassment training: aimed at ensuring that employees understand the meaning of harassment and the actions the company will take when someone complains of being harassed

HarassmentTrainingSeminar

Create Family-Friendly Work Places

Hold Managers Accountable

Survey employees

Offer options to meet employees’ needs

Consider child-care initiatives

Consider elder-care initiatives

Managing the reactions of the members of the dominate culture, who may feel that they have lost some of the power they previously had

Synthesizing the diversity of opinions from individuals and using them as the basis for reaching meaningful agreement on issues

Avoiding real and perceived tokenism and quota systems