Organizational Culture

McGraw-Hill/IrwinMcShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

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Re-aligning Dell’s Organizational Culture

Dell’s “winning” culture, which emphasized cost efficiency and competitiveness, became more of a liability as the market moved toward a preference for style and innovation.

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Organizational Culture Defined

The basic pattern of shared values and assumptions governing the way employees within an organization think about and act on problems and opportunities.

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OrganizationaOrganizational culturel culture

Artifacts of organizational culture

Elements of Organizational Culture

Elements of Organizational Culture

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Content of Organizational Culture The relative ordering of values.

• A few dominant values• Example: Dell -- efficiency and competitiveness

Problems with measuring org culture• Oversimplifies diversity of possible values• Ignore shared assumptions• Adopts an “integration” perspective

An organization’s culture is fuzzy:• Diverse subcultures (“fragmentation”)• Values exist within individuals, not work units

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Organizational Culture ProfileOrg Culture Dimensions Dimension Characteristics

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

Stability Predictability, security, rule-orientedRespect for people Fairness, tolerance

Outcome orientation

Action oriented, high expectations, results oriented

Attention to detail Precise, analytic

Team orientation Collaboration, people-oriented

Aggressiveness Competitive, low emphasis on social responsibility

Source: O’Reilly et al (1991)

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Organizational Subcultures

Dominant culture -- most widely shared values and assumptions

Subcultures• Located throughout the organization• Can enhance or oppose (countercultures) firm’s

dominant culture

Two functions of countercultures:• provide surveillance and critique, ethics• source of emerging values

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Cirque du Soleil’s Risky Culture

Cirque du Soleil’s founders promote a risk-taking and creative corporate culture. They frequently take gambles on new forms of creativity and initiatives.

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Artifacts in Organizational Culture

Observable symbols and signs of culture Physical structures, ceremonies, language, stories Maintain and transmit organization’s culture Not easy to decipher artifacts -- need many of them

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Artifacts: Stories and Legends

Social prescriptions of desired (undesired) behavior

Provides a realistic human side to expectations

Most effective stories and legends:• Describe real people • Assumed to be true• Known throughout the organization• Are prescriptive

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Artifacts: Rituals and Ceremonies

Rituals• programmed routines • (eg., how visitors are greeted)

Ceremonies• planned activities for an audience• (eg., award ceremonies)

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Artifacts: Organizational Language

Words used to address people, describe customers, etc.

Leaders use phrases and special vocabulary as cultural symbols

Language also found in subcultures

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Artifacts: Physical Structures/Symbols Building structure -- may shape and reflect

culture Office design conveys cultural meaning

• Furniture, office size, wall hangings

Courtesy of Microsoft Corp.

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Organizational Culture Strength

How widely and deeply employees hold the company’s dominant values and assumptions

Strong cultures exist when:• most employees understand/embrace the

dominant values• values and assumptions are institutionalized

through well-established artifacts• culture is long lasting -- often traced back to

founder

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Functions of Strong Corporate Cultures

Functions ofFunctions ofStrong CulturesStrong Cultures

Functions ofFunctions ofStrong CulturesStrong Cultures

• Control system• Social glue• Sense-making

• Control system• Social glue• Sense-making

OrganizationalOrganizationalOutcomesOutcomes

OrganizationalOrganizationalOutcomesOutcomes

• Org performance• Employee well-being

• Org performance• Employee well-being

Culture strength Culture strength advantages depend on:advantages depend on:

Culture strength Culture strength advantages depend on:advantages depend on:

• Environment fit• Not cult-like• Adaptive culture

• Environment fit• Not cult-like• Adaptive culture

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Contingencies of Org Culture & Performance

Effect of organizational culture strength on organizational performance is moderate

Need to consider contingencies:1. Ensure culture-environment fit

2. Avoid strength to level of corporate cult- Cults restrict mental models, suppress subcultures

3. Create an adaptive culture- External focus, process focus, ownership, proactive

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Merging Cultures: Bicultural Audit

Part of due diligence in merger

Minimizes risk of cultural collision by diagnosing companies before merger

Three steps in bicultural audit:1. Examine artifacts

2. Analyze data for cultural conflict/compatibility

3. Identify strategies and action plans to bridge cultures

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Merging Organizational Cultures

AssimilationAssimilation

DeculturationDeculturation

Acquired company embraces acquiring firm’s cultural values

Acquiring firm imposes its culture on unwilling acquired firm

IntegrationIntegrationCultures combined into a new composite culture

SeparationSeparationMerging companies remain separate with their own culture

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Changing/Strengthening Organizational Culture

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Changing/Strengthening Organizational Culture1. Actions of Founders/Leaders

• Org culture sometimes reflects the founder’s personality

• Transformational Leaders can reshape culture -- organizational change practices

2. Aligning Artifacts• Artifacts keep culture in place• e.g., building structure, communicating

stories, transferring culture carriers

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Changing/Strengthening Organizational Culture3. Introducing Culturally Consistent

Rewards• Rewards are powerful artifacts – reinforce

culturally-consistent behavior

4. Attracting, Selecting, Socializing Employees

• Attraction-selection-attrition theory• Socialization practices

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Attraction-Selection-Attrition Theory

Organizations become more homogeneous (stronger culture) through:

• Attraction -- applicants self-select and weed out companies based on compatible values

• Selection -- Applicants selected based on values congruent with organization’s culture

• Attrition -- Employee quite or are forced out when their values oppose company values

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Lindblad’s Shipshape SocializationLindblad Expeditions can’t

afford to have crew members

jump ship soon after starting

the job, so the adventure cruise

company gives applicants a

DVD showing a realistic picture

of what it’s like to work on

board. This realistic job preview

is one part of the company’s

socialization process.

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Organizational Socialization Defined

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

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Socialization: Learning & Adjustment

Learning Process• Newcomers make sense of the organization’s

physical, social, and strategic/cultural dynamics

Adjustment Process• Newcomers need to adapt to their new work

environment- New work roles- New team norms- New corporate cultural values

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Stages of Socialization

Role Role ManagementManagement

Role Role ManagementManagement

• Insider

• Changing roles and behavior

• Resolving conflicts

• Insider

• Changing roles and behavior

• Resolving conflicts

EncounterEncounterStageStage

EncounterEncounterStageStage

• Newcomer

• Testingexpectations

• Newcomer

• Testingexpectations

Pre-EmploymentPre-EmploymentStageStage

Pre-EmploymentPre-EmploymentStageStage

• Outsider

• Gathering information

• Forming psychological contract

• Outsider

• Gathering information

• Forming psychological contract

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Improving Organizational Socialization

Realistic job preview (RJP)• A balance of positive and negative information

about the job and work context

Socialization agents• Supervisors– technical information, performance

feedback, job duties• Coworkers – ideal when accessible, role models,

tolerant, and supportive

Organizational Culture

14-28McGraw-Hill/IrwinMcShane/Von Glinow OB 5e

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.