Written Report in Organizing

7/27/2019 Written Report in Organizing

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TRACE COLLEGE

Los Baos, Laguna

BE 311

Organizing

Job Design and Work Schedules

Organization Structure, Culture, and Change

Submitted by:

Alcaria, Ana Victoria

Beltran, Nikixandra

Carbonell, Jonathan

Smagula, Bertoni

Wong, Ingrid

Tapia, Christian

Submitted to:

Ms. Karla Pacificador

Instructor


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A. FOUR MAJOR DIMENSIONS OF JOB DESIGN PLUS JOB SPECIALIZATION AND JOB

DESCRIPTION

A useful starting point in understanding job design is to examine the major

dimensions or components of jobs.

Job design is the process of laying out job responsibilities and duties and

describing how they are to be performed.

Job specialization is the degree to which a jobholder performs only a limited

number of tasks. Specialists handle a narrow range of tasks especially well. High

occupational-level specialists include the investment consultant who specializes in

municipal bonds and the surgeon who concentrates on liver transplants.

The job description is a written statement of the key features of a job and the

activities required to perform it effectively. Sometimes a description must be modified to

fit basic principles of job design. For example, the job description of a customer-service

representative might call for an excessive amount of listening to complaints, thus

creating too much stress.

"The Four Job Dimensions and Their Sub-Dimensions"

Task Characteristics

Work-scheduling autonomy Decision-making autonomy Work-methods autonomy Task variety Task significance Task identity Feedback from the job


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Knowledge Characteristics

Job complexity Information processing Problem solving Skill variety Specialization

Social Characteristics

Social support Initiated interdependence Received interdependence Interaction outside organization Feedback from others

Contextual Characteristics

Ergonomics Physical demands Work conditions Equipment use

Task Characteristics

Task characteristics focus on how the work itself is accomplished and the range

and nature of the tasks associated with a particular job. A task characteristic for a

manager at a steel mill might be using a spreadsheet to make a time-series analysis of

the demand for recycled steel by manufacturers of washing machines.


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Autonomy: in general refers to how much freedom and independence the

incumbent has to carry out his or her work assignment. The freedom aspect includes (a)

work scheduling, (b) decision making, and (c) work methods. A steel manager with high

autonomy might decide when to do the forecast, make decisions based on the

forecast, and choose the method for making the forecast (maybe not using a

spreadsheet).

Task variety: refers to the degree to which the job requires the worker to use a

wide range of tasks, such as the steel-mill manager making forecasts, selecting

employees, and motivating workers.

Task significance: indicates the extent to which a job influences the lives or workof others, whether inside or outside the organization. Because the steel our manager

helps produce is contained in the vehicles and home appliances of many people, the

managers job has high task significance.

Task identity: reflects the extent to which a job involves a whole piece of work

that can readily be identified. An audiologist who administers hearing tests to customers

in a shopping mall has high task identity.


Analyst who performs financial analysis that only contributes to a larger report

has low task identity.

Feedback: from job refers to the extent to which the job provides direct and

clear information about task performance. The focus is on feedback directly from the

job itself, as opposed to feedback from others. An installer of satellite TV hasconsiderable feedback because before leaving the customers home, he or she knows

if the rig is working. One of the potential frustrations in a managers job is that the

manager does not know right away if he or she has done any good, such as in

attempting to motivate workers.


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Knowledge Characteristics

An obvious job dimension is the demand for knowledge, skill, and ability placed

on a job holder because of the activities built into the job.

Ex. The security person at the door of a bar must know the difference between a

valid I.D. card and a fake I.D. card. A chief financial officer must understand the various

ways in which profits might be stated.

Job complexity: refers to the degree to which the job tasks are complex and

difficult to perform. Work that involves complex tasks requires high- level skills and is

mentally demanding and challenging. Even some basic jobs, such as a productiontechnicians, have become more complex because of the math and computer skills

required to carry out these jobs. Most managerial positions involve high complexity,

including the many skills described in Chapter 1 and throughout this book.

Information processing: refers to the degree to which a job requires attending to

and processing data and information. (Information is the result of making data useful,

such as making sense of a survey about customer satisfaction.) Some jobs require

higher levels of monitoring and processing information than others. As managers dash

about consulting their BlackBerry, a high level of information processing is required. A

students life is filled with processing information, as is the life of a professional -level

worker in any field.

Problem solving: refers to the degree to which a job requires unique ideas or

solutions, and it also involves diagnosing and solving no routine problems andpreventing or fixing errors. Creativity is often required to perform effective problem

solving. Without problem-solving skills, a worker could be replaced by software or a

handbook. Managers and professional-level workers are essentially problem solvers, yet

some managerial jobs require heavier problem solving than others. For example, the


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CEO of Ford Motor Company at one time had to solve the problem of how to make the

automotive division profitable.

Skill variety: refers to the extent to which a job requires the incumbent to use a

variety of skills to perform the work. Skill variety and task variety are not the same thing

because the use of multiple skills is different from the performance of multiple tasks. Your

task might be to assemble a PowerPoint presentation, and you would need a variety of

skills to perform this one task. Among the skills would be keyboarding, operating

software, data analysis, and being artistic.

Specialization: refers to the extent to which a job involves performing specialized

tasks or possessing specialized knowledge and skills. Depth of knowledge and skill isrequired to be an effective municipal-bond analyst or brain surgeon. A managers job is

typically that of a generalist rather than a specialist, yet the manager is most likely a

specialist on the way to becoming a manager. A basic example would be a

purchasing specialist later becoming a purchasing manager. Later, we add a few more

comments about job specialization to highlight its importance in defining jobs and

careers.

Social characteristics

Relate to the interpersonal aspects of a job or the extent to which the job

requires interaction with others.

Social support: refers to the degree to which a job involves the opportunity for

advice and assistance from others in the workplace. Social support often contributes to

the job holders well-being, as in being able to turn to coworkers for technicalassistance.

Interdependence: reflects the degree to which the job depends on othersand

others depend on the job-to accomplish the task.


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Ex. Visualize a team putting together a proposal for a large government contract to

build an airplane. The various team members must provide input about manufacturing

time and cost figures, such as the quality of a particular component being somewhat

dependent on how much money is available for its manufacture.

Interaction outside the organization refers to how much the job requires the employee

to interact and communicate with people outside the organization.

Ex. Customer contact workers obviously interact with outsiders, and so do C-level

managers such as a CFO speaking with Wall Street financial analysts.

Feedback: from others refers to the extent to which other workers in theorganization provide information about performance. Supervisors and coworkers are

typical sources of feedback, yet feedback can also be received from those outside the

immediate work area. For example, a senior manager might encounter a specialist in

the hallway and say, Jackie, I heard youre doing a great job for us. Keep up the good

work.

Contextual characteristics

Refer to the setting or environment of the job, such as working in extreme

temperatures.

Ergonomics: indicates the degree to which a job allows correct posture or

movement.

Example A chicken cutter in a poultry factory might suffer from tendonitis as a

result of the repetitive movements, whereas most managerial jobs do not riskergonomics problems except for too much keyboarding and mouse utilization.

Physical demands: refer to the level of physical activity or effort required for the

job, particularly with respect to physical strength, endurance, effort, and activity.


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Example The job of a furniture mover obviously has high physical demands;

however, many managerial positions have heavier physical demands than outsiders

imagine. Among these demands can be travelling a lot, which requires endurance,

lugging a heavy laptop computer and accessories, standing for long hours at a trade

show, and working long hours.

Work conditions: relate directly to the environment in which the work is per-

formed, including the presence of health hazards, noise, temperature, and cleanliness

of the workplace. A project manager on a building site faces more environmental

challenges than does his or her counterpart working in a climate-controlled office.

Equipment use: is a sub-dimension of contextual characteristics that reflects thevariety and complexity of the technology and equipment incorporated into the job.

Although managers are not ordinarily considered equipment operators, they often

make use of computers, printers, personal digital assistants, telephones, pocket

calculators, and even coffee pots.

B. Job Enrichment and the Job Characteristics Model

Job enrichment is an approach to including more challenge and responsibility in

jobs to make them more appealing to most employees. At its best, job enrichment

gives workers a sense of ownership, responsibility, and accountability for their work.

Because job enrichment leads to a more exciting job, it often increases employee job

satisfaction and motivation. People usually work harder at tasks they find enjoyable and

rewarding, just as they put effort into a favorite hobby. The general approach to

enriching a job is to build into it more planning and decision making, controlling, andresponsibility. Most managers have enriched jobs; most data entry specialists do not.

Characteristics of an Enriched Job the design of an enriched job includes as

many of the characteristics in the following list as possible, based on the pioneering

work of Frederick Herzberg and on updated research. Job characteristics model, a


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method of job enrichment that focuses on the task and interpersonal dimensions of a

job.

C. Describe Job Involvement, Enlargement, and Rotation

Job Involvement

The degree to which an employee is engaged in and enthusiastic about

performing rehire work. Business managers are typically well aware that efforts to

promote job involvement among staff ten to par off substantially since employees will

be more l ikely to assist in furthering their company's objects.

Job Enlargement

A job technique in which the number of tasks associated with a job is increased

(and appropriate training provided) to add greater to activities, thus reducing

monotony. Job enlargement is considered a horizontal restructuring method in that the

job is enlarged by adding related tasks. Job enlargement may also result in greater

workforce flexibility.

Job Rotation

A job design technique in which employees are moved between two or mow

jibs in a planned manner. The objective is to expose the employees to different

experiences and wider variety of skills to enhance job satisfaction and to cross-train

them.

D. Explain how workers use job crafting to modify their jobs


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Job crafting refers to the physical and mental changes individuals make in the

task or relationship aspects of their job. Three common types of job crafting include (1)

the number and types of job tasks, (2) the interactions with others on the job, and (3)

ones view of the job.

E. Summarize the various modified work schedule.

A modified workscheduleis any formal departure from the traditional hours of

work, excluding shift work and staggered work hours. Shift work presents enough unique

managerial challenges to warrant discussion here. Modified work schedules includeflexible working hours, a compressed workweek, job sharing, telecommuting, and part-

time and temporary work.

Bureaucracy as an Organization Structure

Organization Structure

- It is an arrangement of people and tasks to accomplish organizational goals. Thestructure specifies who reports to whom and who does what, and it is also a

method for implementing a strategy or for accomplishing the purpose of the

organization.

Bureaucracy

- A rational, systematic and precise form of organization in which rules, regulations,and techniques of control are specifically defined. Think of bureaucracy as the

traditional form organization; other structures are variation of, or supplements to,

bureaucracy. Do not confuse the word bureaucracy with bigness. Although

most big organizations are bureaucratic, small firms can also follow the

bureaucratic model.

Principles of Organization in a Bureaucracy


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1. Hierarchy of Authority- The dominant characteristic of a bureaucracy is that each lower organizational

unit is controlled and supervised by a higher one. The person granted the most

formal authority occupies the top place of the hierarchy.

2. Unity of Command- The states that each subordinate receives assigned duties from one superior only

and is accountable to that superior.

3. Task Specialization- The organizations designate separate divisions or departments such as new

product development, customer service and information technology. Workers

assigned to these organizational units employ specialized knowledge and skills

that contribute to the overall effectiveness of the firm

4. Responsibilities and Job Descriptions- Bureaucracies are characterized by rules that define the responsibilities of

employees. In a highly bureaucratic organization, each employee follows a

precise job description and therefore knows his or her job expectations. Defined


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in writing lets managers know what is expected of them and what limits are set to

their authority.

5. Line and Staff Functions- Line functions involve the primary purpose of an organization or its primary

outputs.

- Staff functions assist the line functions.Advantages of Bureaucracy

- The organizational members know who is responsible-

Everyone knows who has the authority to make a particular decision

Disadvantage of Bureaucracy

- A bureaucracy can be rigid in handling people and problems. Its well-intendedrules and regulations sometimes create inconvenience and inefficiency.

What is Departmentalization?

- It was the process of subdividing work into departments.- It has frequently used forms: Functional, Geographic and Product-Service

Functional Departmentalization

- Defines departments by the function each one performs, such as accounting orpurchasing. Dividing work according to activity is the traditional way of

organizing the efforts of people. In a functional organization, each department

carries out a specialized activity such as information processing, purchasing,

sales, accounting or maintenance.


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Advantage

- Functional departmentalization works particularly well when large batches ofwork must be processed on a recurring basis and when the expertise of specialist

is required.

Disadvantage

- The people within a unit may not communicate sufficiently with workers in otherunits.

Geographic Departmentalization

- Arrangement of departments according to the geographic area or territoryserved. In this organization structure, people performing all the activities for a firm

in a given geographic area report to one manager who often has a title such as

Regional Vice President. Marketing divisions often use territorial

departmentalization; the sales force may be divided into northeastern,

southeastern, Midwestern, northwestern and southwestern regions.

Advantage

- It allows for decision making at a local level, where the personnel are mostfamiliar with the problems and the local culture, including tastes in fashion,

product styling and food.

Disadvantage


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- Arrangement can be quite expensive because of duplication of cost and effort.For instance, each region may build service departments that duplicate

activities carried out at headquarters. A bigger problem arises when top-level

management experiences difficulty controlling the performance of field units. To

deal with this problem, many multinational corporations supplement the

geographic structure by coordinating functional activities across regions.

Product - Service Departmentalization

- Arrangement of departments according to the products or services theyprovide. When specific products or services are so important that the units that

create and support them almost become independent companies, product

service departmentalization makes sense.

- Organizing by product line offer numerous benefits; employees focus on aproduct or service, which allows each division or department the maximum

opportunity to grow and prosper.

Advantage

- Sales representatives are assigned to one product or service group in which theybecome experts, rather than being sales generalists

Disadvantage

- It can be expensive because of duplication of effort, and top-levelmanagement may find it difficult to control the separate units.


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Modification of Bureaucratic Organization

Project and Matrix Organization Flat Structure, Downsizing and Outsourcing Horizontal Structure Informal Structure and Communication Network Power Sharing at the Highest Level

The Project and Matrix Organization

A project organization is a temporary group of specialists working under one

manager to accomplish a fixed objective, offers one widely used solution to this

problem. And it is used extensively on military, aerospace, construction, motion picture,

and computer industries. Project management is so widespread that software has been

developed to help managers plot out details and make all tasks visible. The project

managers is a central figure in getting major tasks accomplished, such as seeing a new

product to completion and serve as a linking pin between an organization providing

service and the client.

A matrix organization is the best-known application of project management, a

project structure superimposed on a functional structure. It evolved to capitalize on the

advantages of project and functional structures while minimizing their disadvantages.

Matrix Structure Organization

Personnel assigned to a projectall report to two managers: a

project head and a functional

manager.


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The advantages of Matrix Structure Organization

Individuals can be chosen according to the needs of the project. The use of a project team that is dynamic and able to view problems in a

different way as specialists have been brought together in a new environment. Project managers are directly responsible for completing the project within a

specific deadline and budget.

The disadvantages of Matrix Structure Organization

A conflict of loyalty between line managers and project managers over theallocation of resources.

Projects can be difficult to monitor if teams have a lot of independence. Costs can be increased if more managers (i.e. project managers) are created

through the use of project teams.

Flat Structures, Downsizing, and Outsourcing

In creating flat structure, downsizing, and outsourcing, it simplified an

organization structure by reducing the number of layers that typically makes an

organization less bureaucratic.

Flat Structure is a form of organization with relatively few layers of management, making

it less bureaucratic.

Two reasons why it acts as less bureaucratically:

Fewer available managers review the decisions of other workers. A shorter chain of command means that managers and workers at lower

levels can make decisions more independently.

Important consequence: Leaves the remaining managers with a larger span of

control.

(Span of Control - the number of workers reporting directly to a manager.)


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A large span of control works best with competent and efficient managers and

group members. When group members do relatively similar work, the manager

can supervise more people.

Flat Structure Organization

Advantages of Flat Structure Organization

Less costly because it has only few managers. It creates fewer levels of management. Quick decisions and actions can be taken because it has only a few levels of

management.

Fast and clear communication is possible among these few levels ofmanagement.

Subordinates are free from close and strict supervision and control. It is more suitable for routine and standardized activities. Superiors may not be too dominating because of large numbers of subordinates.

Disadvantages of Flat Structure Organization

There are chances of loose control because there are many subordinates underone manager.

The discipline in the organization may be bad due to lose control.


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The relations between the superiors and subordinates may be bad. Close andinformal relations may not be possible.

There may be problems of team work because there are many subordinatesunder one manager.

It may create problems of coordination between various subordinates. Efficient and experienced superiors are required to manage a large number of

subordinates.

It may not be suitable for complex activities. The quality of performance may be bad.

Downsizing reducing the size of a company by eliminating workers and/or divisions

within the company. Corporate downsizing is often the result of poor economicconditions and/or the companys need to cut jobs in order to lower costs or maintain

profitability. It may occur when one company merges with another, a product or

service is cut, or the economy falters. It also occurs when employers want to

streamline a company this refers to corporate restructuring in order to increase profit

and maximize efficiency.

It can be expensive and the costs associated that must be considered are:

severance pay supplements to early retirement plans, disability claims lowered productivity

To help the company in the long run:

It should be part of a business strategy to improve the company, not just astopgap measure to save money.

Eliminating low-volume and no-value activities. Keeping the future work requirements in mind. Sensible criteria should be used to decide which workers to let go.


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Offer assistance in finding new employment or reorienting their career.

Comprehensive Principle: Involve employees in the resizing process.

Outsourcing is the contracting out of a business process to a third-party. By outsourcing,

a company can reduce its need for employees and physical assets and their

associated costs.

Major justification: A company is likely to profit when it focuses its effort onactivities it performs best, while noncore activities such as human

resources, payroll processing, and information systems are performed by

outside experts.Homeshoring - A rapidly growing development in outsourcing, moving

customer service into workers homes as a form of telecommuting.

The Horizontal Structure (Organization by Team and Process)

A horizontal structure is the arrangement of work by multidisciplinary teams that

are responsible for accomplishing a process.

In a horizontal organization, even though specialists are assigned to theteam, they are expected to understand one anothers tasks and perform

some of those tasks as needed.


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among employees that can lead to innovative ideas. The maps can point to areas

where workers should be collaborating but are not. In this way the maps help facilitate

knowledge sharing. The maps can also be used to pinpoint the interactions one

manager has, so he or she can give the information to a successor.

Power Sharing at the Highest Level of Management

A slight deviation from the bureaucratic structure is to share power in the

executive suite by having the chairperson position separate from the CEO; another

option is to have co-CEOs.

The CEO allows concentrating on managing the company and spendingless time interacting with other members of the board and focuses on

operations.

The chairperson is free to focus on long-term strategy.

Disadvantage:

It leads to confusion in leadership.

A person who is an outstanding manager and leader and highly ethical can

probably hold both posts of chairperson and CEO. When the job is perceived as too big

for one person to handle, it is possible to divide the responsibilities of the CEO position. In

the co-CEOs form of power sharing, two executives work together as a team and make

joint decisions.

Unique Feature of Various Organization Structures


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Key Factors That Influence the Selection of an Organization Structure

The most effective structure depends on key factors:

1. Strategy and goals. ~ Most influential factor.2. Technology. ~ High technology favors a flexible structure, whereas low

technology favors bureaucracy.

3. Size. ~ Large size often moves a company toward bureaucracy.4. Financial Condition of the firm. ~ influence structure because flatter structures

lower costs.

5. Environmental Stability. ~ An unstable environment favors a flexible structure.

Organization Structure, Culture and Change

DELEGATION, EMPOWERMENT, AND DECENTRALIZATION

Collective effort would not be possible, and organizations could not grow and

prosper, if a handful of managers did all the work themselves. In recognition of this fact,

managers divide up their work. Subdividing work through the process of

departmentalization has already been described. The section that follows will discuss

subdivision of work using the chain of command through delegation, empowerment,

and decentralization.

Delegation of Responsibility and Empowerment

Delegation refers to assigning formal authority and responsibility for

accomplishing a specific task to another person. If managers do not delegate any of


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their work, they are acting as individual contributorsnot true managers. Some

managers are hesitant to delegate because they dislike giving up control, which

explains why control freaks are poor at delegation. Delegation relates closely to

empowerment, the process by which managers share power with group members,

thereby enhancing employees feelings of personal effectiveness. Delegation is a

specific way of empowering employees and increasing motivation.

A major goal of delegation is the transfer of responsibility as a means of

increasing ones own productivity. At the same time, delegation allows team members

to develop by learning how to handle responsibility and become more productive.

Even though a manager may hold a group member responsible for a task, final

accountability belongs to the manager. (To be accountable is to accept credit or

blame for results.) If the group member fails miserably, the manager must accept thefinal blame; the manager chose the person who failed. Delegation and empowerment

lie at the heart of effective management.

For example, a study was conducted with management teams in 102 hotel

properties in the United States. A major finding was that empowering leadership

increased the sharing of job knowledge among employees and increased effective

teamwork. In turn, the improved knowledge sharing and teamwork were related to

good performance.

Following the five suggestions presented next improves the managers chance of

increasing productivity by delegating to and empowering individuals and teams.

(Note that teams as well as individuals can be the unit of delegation and power

sharing.)

1. Assign duties to the right people. The chances for effective delegation and

empowerment improve when capable, responsible, well-motivated group members

receive the delegated tasks. The manager must be aware of the strengths and

weaknesses of staff members to delegate effectively. However, if the purpose of

delegation is to develop a group member, the present capabilities of the person


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receiving the delegated tasks are less important. The manager is willing to accept some

mistakes as the cost of development.

2. Delegate the whole task and step back from the details. In the spirit of job

enrichment, a manager should delegate an entire task to one subordinate rather than

dividing it among several. So doing gives the group member complete responsibility,

enhances motivation, and gives the manager more control over results. After the whole

task is delegated, step back from the details. If a manager cannot let go of details, he

or she will never be effective at delegation or empowerment.

3. Give as much instruction as needed. Some group members will require highly

detailed instructions, while others can operate effectively with general instructions.Many delegation and empowerment failures occur because instruction was insufficient.

Dumping is the negative term given to the process of dropping a task on a group

member without instructions. Under ideal circumstances, delegating should be an

opportunity for coaching employees and sharing skills with them.

4. Retain some important tasks for yourself. Managers should retain some high-

output or sensitive tasks for themselves. In general, the manager should handle any task

that involves the survival of the unit or employee discipline. However, which tasks the

manager should retain always depends on the circumstances. Strategic planning is

ordinarily not delegated except to obtain input from group members. Sales managers

often keep one or two key accounts for themselves.

5. Obtain feedback on the delegated task. A responsible manager does not

delegate a complex assignment to a subordinate and then wait until the assignment is

complete before discussing it again. Managers must establish checkpoints andmilestones to obtain feedback on progress.

Decentralization


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Decentralization is the extent to which authority is passed down to lower levels in

an organization. It comes about as a consequence of managers delegating work to

lower levels. The term also refers to decentralization by geography. Geographic

decentralization often results in passing down authority; managers in the decentralized

units are granted decision-making authority. Unless so noted, this text uses the term

decentralization in reference to authority. Centralization is the extent to which authority

is retained at the top of the organization. Decentralization and centralization lie on two

ends of a continuum. No firm operates as completely centralized or decentralized.

How much control top management wants to retain determines how much an

organization is decentralized. Organizations favor decentralization when a large

number of decisions must be made at lower organizational levels, often in response tocustomer needs. Johnson & Johnson, the medical and personal care products giant,

favors decentralization, in part, because the company consists of a collection of

different businesses, many with vastly different customer requirements. Division

management is much more aware of these needs than are people at company

headquarters. In general, a centralized firm exercises more control over organization

units than a decentralized firm. Many firms centralize and decentralize operations

simultaneously. Certain aspects of their operations are centralized, whereas others are

decentralized. Rapid-service franchise restaurants such as Subway, Long John Silvers,

and Wendys illustrate this trend. Central headquarters exercises tight control over such

matters as menu selection, food quality, and advertising.

Individual franchise operators, however, make human resource decisions such as

hiring. An advanced technique of juggling the forces of centralization and

decentralization simultaneously is for decentralized units to remain somewhat

autonomous, yet cooperate with each other for the common good.

For example, the basic structure of Johnson & Johnson is a decentralized firm

with 204 nearly autonomous units organized into three divisions: drugs, medical and

diagnostic devices, and consumer products (such as Band-Aids and Johnsons Baby

Powder). J&J is considered by many to be the reference company for decentralization.

The current emphasis at J&J is for the autonomous divisions to cooperate with each


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other to achieve better products. For example, sutures from one division are coated

with drugs from another to help prevent infections.

Microsoft Corp. is another company in which top-level management has

searched for ways to get better cooperation across divisions in order to enhance

innovation. According to CEO Steve Ballmer, Microsoft tries to find the right balance

between being a conglomerate and a monolithic operating company (highly

centralized).

Organizational Culture

Organization structure has sometimes been referred to as the hard side of how afirm operates; understanding the soft side of an organization is also essential.

Organizational culture (or corporate culture) is the system of shared values and beliefs

that actively influence the behavior of organization members. The term shared implies

that many people are guided by the same values and that they interpret these values

in the same way. Values develop over time and reflect a firms history and traditions. Its

important to understand organizational culture because it is a major factor in the

success of any company. In the words of Douglas R. Conant, the dynamic CEO of

Campbell Soup Co., If you want to be a sustainably good company, you have to

have a sustainably good culture.

This section describes significant aspects of organizational culture: how it is

learned and its determinants, dimensions, consequences, and management and

maintenance.

Determinants of Organizational Structure

Many forces shape a firms culture. Often its origin lies in the values,

administrative practices, and personality of the founder or founders. The leaders vision

can have a heavy impact on culture; John Chambers dreamed of Cisco Systems

becoming one of the worlds greatest companies in history. Steve Jobs, the co-founder


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of Apple Inc., exemplifies how a leaders personality can help influence the culture.

Jobs is recognized as a high-tech visionary who has attracted many talented people to

his companies. (Jobs has also served as CEO of Pixar, but his influence is greater at

Apple.) Jobs pronounced personal traits and behaviors (arrogance and smugness) spill

over to the culture of Apple; most workers believe that they are part of a superior group

of people and that whatever they produce is outrageously good.

Part of the culture is to denounce the competition. The culture in which a society

operates helps determine the culture of the firm. Sooner or later, societys norms, beliefs,

and values find their way into the firm. Societal values are communicated through such

means as the media, conversations, and education. The emphasis on sexual and racial

equality in U.S. society has become incorporated into the value culture of manyemployers. The emphasis on collegiality translates into harmony and cooperation in the

workplace at many Scandinavian companies, including Nokia. Another perspective on

national culture is that the introduction of values from another society into a retail

business can be a competitive advantage.

For example, the Korean values of high quality, reliability, and spotless factories

have helped fuel the success of the Hyundai and Kia car brands in the United States.

The industry to which a firm belongs helps shape its culture. For example, a public

utility will have a culture different from a food manufacturer of comparable size. Heavy

competition and low profit margins may force the food manufacturer to operate at a

faster pace than the utility, which usually competes with only several other util ities.

Dimensions of Organizational Culture

The dimensions of organizational culture help explain the subtle forces that

influence employee actions. In addition to the dominant culture of a firm, thesubculture also influences behavior. A subculture is a pocket in which the organizational

culture differs from the dominant culture and from other pockets of subculture. A

frequently observed difference in subcultures can be found between the marketing

and production groups, even in such matters as dress and behavior. The marketing


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people are likely to be more style conscious and people oriented. Six dimensions

significantly influence organizational culture.

1. Values. Values provide the foundation of any organizational culture. The

organizations philosophy expressed through values guides behavior on a day-to-day

basis. Representative values of a firm might include ethical behavior, concern for

employee welfare, a belief that the customer is always right, a commitment to quality,

and a belief in the importance of equality and independence. An emphasis on

teamwork is another key value.

A pervasive value is the importance of formality. For example, a heavily

bureaucratic culture believes strongly in formality, including following procedures andprotocol. Another value of significance is an emphasis on truthfulness and candor. In a

culture characterized by candor, workers resist telling others what they want to hear.

2. Relative diversity. The existence of an organizational culture assumes some

degree of homogeneity. Nevertheless, organizations differ in terms of how much

deviation can be tolerated. Many firms are highly homogeneous; executives talk in a

similar manner and even look alike. Those executives promote people from similar

educational backgrounds and fields of specialty into key jobs. The diversity of a culture

reflects itself in the dress code. Some organizations insist on uniformity of dress, requiring

men to wear a jacket and tie when interacting with customers or clients. Strongly

encouraging all workers to conform to dress-down Fridays discourages diversity.

3. Resource allocations and rewards. The allocation of money and other

resources exerts a critical influence on culture. The investment of resources sends amessage to people about what is valued in the firm. If a customer-service department is

fully staffed and nicely furnished, employees and customers can assume that the

company values customer service.


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4. Degree of change. The culture in a fast-paced, dynamic organization differs

from that of a slow paced, stable one. A highly competitive environment might

encourage a fast-paced climate. Top-level managers, by the energy or lethargy of

their stance, send signals about how much they welcome innovation. The degree of

change influences whether a culture can take root and how strong that culture can

be.

5. A sense of ownership. The movement toward employee stock ownership

creates an ownership culture and inspires workers to think and act like owners. An

ownership culture increases loyalty, improves work effort, and aligns worker interests

with those of the company. An ownership culture can be reflected in such everyday

actions as conserving electricity, making gradual improvements, and not toleratingsloppiness by coworkers.

An ownership culture can backfire, however, if employee wealth stays flat or

decreases as a result of stock ownership.

6. Strength of the culture. The strength of the culture, or how much influence it

exerts, emerges partially as a by-product of the other dimensions.

A strong culture guides employees in everyday actions. It determines, for

example, whether an employee will inconvenience himself or herself to satisfy a

customer. Without a strong culture, employees are more likely to follow their own whims;

they may decide to please customers only when convenient. A research study with 123

organizations found that the climate (or culture) tended to be strongest when it was

unambiguous, either clearly bureaucratic or clearly flexible.

These dimensions represent a formal and systematic way of understandingorganizational culture. In practice, people use more glib expressions in describing

culture, as illustrated in Exhibit 8-10.

How Workers Learn the Culture


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Employees learn the organizational culture primarily through socialization, the

process of coming to understand the values, norms, and customs essential for adapting

to the organization. Socialization is a method of indoctrinating employees into the

organization in such a way that they perpetuate the culture. The socialization process

takes place mostly by imitation and observation.

Another important way in which workers learn the culture is through the

teachings of leaders, as implied in the cultural dimension of resource allocations and

rewards. Organizational members learn the culture to some extent by observing what

leaders pay attention to, measure, and control. Suppose a coworker of yours is praised

publicly for doing community service. You are likely to conclude that an important part

of the culture is to help people outside the company. Senior executives will sometimespublicly express expectations that help shape the culture of the firm, such as

demanding data-driven decision making. Workers also learn the culture by hearing

repeated stories that illustrate company values. For example, at FedEx workers hear

stories about how someone went beyond the call of duty to deliver a package during

a storm, or how a driver rescued a person caught in a flood. The value illustrated is

outstanding service to customers and the community.

Consequences and Implications of Organizational Culture

The attention to organizational culture stems from its pervasive impact on

organizational effectiveness.

Exhibit 8-11 outlines several key consequences of organizational culture. The right

organizational culture contributes to gaining competitive advantage and therefore

achieving financial success. The consistently strong performance of Google can be

partially attributed to its culture that values intelligence, imagination, and hard work.

The right organizational culture can enhance productivity, quality, and morale. A

culture that emphasizes productivity and quality encourages workers to be more

productive and quality conscious. A synthesis of many studies found that organizational


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culture is related to quality practices related to attitudes (such as top management

support for quality). These practices, in turn, were related to manufacturing

performance.

A culture that values the dignity of human beings fosters high morale and job

satisfaction. A corporate culture that encourages creative behavior contributes to

innovation, as described in Chapter 5 about problem solving and decision making.

Amazon chief executive Jeff Bezos notes that a culture of experimentation is crucial in

a fast-changing world. He says, Invention always leads you down paths that people

think are weird.

At times a culture that facilitates high quality and business success can becomesmug and complacent, believing that it cannot fail. A recent example is Toyota, a

company envied for its manufacturing techniques. Toyota was subject to the largest

automobile recall in history in 2010. The problems related to both uncontrolled

acceleration and brake problems. Analysts describe a Toyota management team

culture characterized by self-love and arrogance that had become too insular to

handle the flawed vehicle problem.

The company had received some warnings about accelerator problems

stemming back to 2002. Another cultural problem might have been that managers and

workers in Japanese corporations have a difficult time delivering bad news to

executives. Also, there is shame and embarrassment associated with admitting to

problems in a company noted for exceptional product quality.

Managing and Sustaining the Culture

After a new CEO is appointed, the person typically makes a public statementsuch as this: My number-one job is to change the culture. A manager might do the

following to bring about change and assure that a healthy corporate culture is

maintained.


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example, if the culture emphasizes data-driven decision making and a highly

disciplined approach to management, act in this manner to survive and prosper.

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