CultureCultureChapter 18Chapter 18

Organizational Behavior: ManagingPeople and Organizations,

Ninth EditionGregory Moorhead, Ricky W. Griffin

18–2 © 2010 South-Western, a part of Cengage Learning

Chapter 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.

After studying this chapter you should be able to:

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The Nature of Organization Culture

• Why Study Culture? It is assumed that organizations with a strong culture

perform at higher levels than those without a strong culture

• Organizational Culture A set of values held by individuals in a firm that help

employees understand acceptability of actions

• Culture ValuesAre often taken for granted (implicit)May not be made explicit (i.e., not written down)Are communicated through symbolic means

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Table 18.1 Definitions of Organization Culture

Definition Source

“A belief system shared by an organization’s members” J. C. Spender, “Myths, Recipes and Knowledge-Bases in Organizational Analysis” (Unpublished manuscript, Graduate School of Management, University of California at Los Angeles, 1983), p. 2.

“Strong, widely shared core values” C. O’Reilly, “Corporations, Cults, and Organizational Culture: Lessons from Silicon Valley Firms” (Paper presented at the Annual Meeting of the Academy of Management, Dallas, Texas, 1983), p. 1.

“The way we do things around here” T. E. Deal and A. A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, MA: Addison-Wesley, 1982), p. 4.

“The collective programming of the mind” G. Hofstede, Culture’s Consequences: International Differences in Work-Related Values (Beverly Hills, CA: Sage, 1980), p. 25.

“Collective understandings” J. Van Maanen and S. R. Barley, “Cultural Organization: Fragments of a Theory” (Paper presented at the Annual Meeting of the Academy of Management, Dallas, Texas, 1983), p. 7.

“A set of shared, enduring beliefs communicated through a variety of symbolic media, creating meaning in people’s work lives”

J. M. Kouzes, D. F. Caldwell, and B. Z. Posner, “Organizational Culture: How It Is Created, Maintained, and Changed” (Presentation at OD Network National Conference, Los Angeles, October 9, 1983).

“A set of symbols, ceremonies, and myths that communicates the underlying values and beliefs of that organization to its employees”

W. G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge (Reading, MA: Addison-Wesley, 1981), p. 41.

“A dominant and coherent set of shared values conveyed by such symbolic means as stories, myths, legends, slogans, anecdotes, and fairy tales”

T. J. Peters and R. H. Waterman Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Harper & Row, 1982), p. 103.

“The pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration”

E. H. Schein, “The Role of the Founder in Creating Organizational Culture,” Organizational Dynamics, Summer 1985, p. 14.

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The Nature of Organization Culture (cont’d)

Historical Foundations

Historical Foundations

AnthropologyAnthropology

Social Psychology

Social Psychology

SociologySociology

EconomicsEconomics

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Organization Culture Versus Climate

• Organization CultureThe 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 and

communicate organization acceptability (values and norms)

• Organization ClimateThe 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

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Table 18.2 Creating Organization Culture

Creating Organization Culture

Step 1—Formulate Strategic Values

Step 2—Develop Cultural Values

Step 3—Create Vision

Step 4—Initiate Implementation Strategies

Step 5—Reinforce Cultural Behaviors

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Creating the Organization Culture

• Establish ValuesStrategic values

• The basic beliefs about an organization’s environment that shape its strategy.

Cultural values• The values that employees need to have

and act on for the organization to act on the strategic values.

• Create VisionCreate a picture of the organization

that portrays how the strategic and cultural values will combine to create the future.

Digital Vision at Getty Images®

18–9 © 2010 South-Western, a part of Cengage Learning

Creating the Organization Culture (cont’d)

• Initiate Implementation StrategiesTake actions founded on the strategic and cultural

values to accomplish the vision.

• Reinforce Cultural BehaviorsUse formal reward systems to encourage desired

employee behaviors

Tell stories that epitomizing cultural values

Conduct ceremonies and rituals that emphasize right actions by employees

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Approaches to Describing Organization Culture: The Ouchi Framework

Typical United States

firms

Typical United States

firms

Typical Japanese

firms

Typical Japanese

firms

Type Z United States

firms

Type Z United States

firms

The Ouchi FrameworkThe Ouchi Framework

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Table 18.3 The Ouchi Framework

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Table 18.4 The Peters and Waterman Framework

Attributes of an Excellent Firm

1. Bias for action

2. Stay close to the customer

3. Autonomy and entrepreneurship

4. Productivity through people

5. Hands-on management

6. Stick to the knitting

7. Simple form, lean staff

8. Simultaneously loose and tight organization

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Emerging Issues in Organization Culture: Innovation

• InnovationThe process of creating and doing new things that are

introduced into the marketplace as products, processes, or services

Radical Innovation

Radical Innovation

Systems Innovation

Systems Innovation

Incremental Innovation

Incremental Innovation

Types of InnovationTypes of Innovation

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Emerging Issues in Organization Culture: Innovation (cont’d)

• New VenturesRequire entrepreneurship and

good management Intrapreneurship

• Entrepreneurial activity that takes place within the context of a large organization

Entrepreneur’s profile• Need for achievement• Desire to assume responsibility• Willing to take risks• Focus on concrete results

Digital Vision at Getty Images®

18–15 © 2010 South-Western, a part of Cengage Learning

Emerging Issues in Organization Culture: Innovation (cont’d)

• Corporate Research

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

Is responsible for keeping the company’s products and processes technologically advanced

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

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Emerging Issues in Organization Culture (cont’d)

• Empowerment Is enabling workers to set their own work goals, make

decisions, solve problems within their sphere of responsibility and authority

• Appropriate Cultures (Goffee and Jones)Factors that may determine the appropriate type of

culture appropriate for an organization:

• The nature of the value chain

• The dynamism of the environment

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Managing Organization Culture

Taking advantage of

existing culture

Taking advantage of

existing culture

Teaching organization

culture

Teaching organization

culture

Changing organization

culture

Changing organization

culture

Elements of Managing Organization Culture

Elements of Managing Organization Culture

18–18 © 2010 South-Western, a part of Cengage Learning

Managing Organization Culture (cont’d)

• Taking Advantage of the Existing Culture

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

Managers must be aware and understand the organization’s values

Managers can communicate their understanding to lower-level individuals

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Managing Organization Culture (cont’d)

• Teaching Organization CultureOrganizational socialization

• Is the process through which employees learn about the firm’s culture and pass their knowledge and understanding on to others

Organizational mechanisms

• Are examples of organization culture that employees see in more experienced employees’ behaviors

– Corporate pamphlets and formal training sessions

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Managing Organization Culture (cont’d)

• Changing the Organization CultureManaging symbols

• Substituting stories and myths that support the new cultural values for those that support old ones

Culture can be difficult to change when upper management inadvertently reverts to old behaviors

• The Stability of ChangeNew values and beliefs must be seen as stable and

influential as old ones

Changing value systems requires enormous effort because value systems tend to be self-reinforcing

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Organizational Behavior in Action

• After reading the chapter:

Why do organizations lose the innovative aspects of their organizational culture?

What should managers do to turn climate into culture in new organizations?

What are the effects of technology on culture in organizations?