Download Chapter Eighteen - Dr.Mahmood Asad

University of Bahrain
College of Business Administration
MGT 233: Organizational Behavior
Managing People and Organization
chapter 18 : Culture
Dr.Mahmood Asad
MGT233
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Chapter Learning Objectives
After studying this chapter you should be able to:
 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.
Dr.Mahmood Asad
MGT233
19–2
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 Values
– Are often taken for granted (implicit)
– May not be made explicit (i.e., not written down)
– Are communicated through symbolic means
Dr.Mahmood Asad
MGT233
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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(Unpublished manuscript, Graduate School of Management, University of California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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MGT233
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The Nature of Organization Culture (cont’d)
Anthropology
Sociology
Historical
Foundations
Social
Psychology
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Economics
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The Nature of Organization Culture (cont’d)
•
Historical Foundations. The roots of research on organization culture can be traced to the contributions of the
various social science disciplines
•
1. Anthropological Contributions. Anthropologists study human cultures in terms of the values, symbols, and
stories that people in society use to bring order and meaning to their lives. Anthropologists usually study cultures
through in-depth interviews and observations of real organization life.
•
2. Sociological Contributions. Sociologists have centered on the categorization of social system structure through
systematic interviews, questionnaires, and other quantitative research methods. This sociological tradition was
used in the major recent studies of organization culture, including Ouchi’s Theory Z, Deal and Kennedy’s Corporate
Culture, and Peters and Waterman’s In Search of Excellence.
•
•
•
3. Social Psychology Contributions. Social psychologists have concentrated on the creation and manipulation of
symbols and stories in the development of organization culture. This research has been conducted mainly through
surveys, observations, and statistics.
4. Economics Contributions. Economic contributions have been based on the economic performance of a firm.
Researchers have attempted to link organization culture to economic performance using methods such as
mathematical modeling and statistics.
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MGT233
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Organization Culture Versus Climate
 Organization Culture
◦ The 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 Climate
◦ The 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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MGT233
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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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MGT233
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Creating the Organization Culture
Establish Values
1. Strategic values : The basic beliefs about an
organization’s environment that shape its strategy.
2. Cultural values: The values that employees need to
have and act on for the organization to act on the strategic
values.
Create Vision : The vision creates the picture of what the
organization will be like at some point in the future. It portrays
how the strategic and cultural values combine to create the
future.
Digital Vision at Getty
Images®
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MGT233
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Creating the Organization Culture (cont’d)
• Initiate Implementation Strategies
– Take actions founded on the strategic and cultural values to
accomplish the vision.
• Reinforce Cultural Behaviors
– Use 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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MGT233
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Approaches to Describing Organization Culture:
The Ouchi Framework
The Ouchi
Framework
Typical
United States
firms
Dr.Mahmood Asad
Typical
Japanese
firms
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Type Z
United States
firms
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Table 18.3: The Ouchi Framework
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MGT233
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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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MGT233
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Emerging Issues in Organization
Culture: Innovation
• Innovation
–
is the process of creating and doing new things that are introduced into the marketplace as
products, processes, or services. Innovation involves every aspect of managing technology,
from research through development, manufacturing, and marketing. Two major risks
associated with innovation are that (1) a new innovation will fail to produce the results
expected and (2) a competitor will get a new innovation to the market first
Types of Innovation
Radical
Innovation
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Systems
Innovation
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Incremental
Innovation
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Types of Innovation.
• Innovation can be radical, systems, or incremental.
• a) Radical innovation represents a major breakthrough that changes
or creates whole industries.
• b) Systems innovation creates a new functionality by assembling
parts in new ways.
• c) Incremental innovation continues the technical improvement and
extends the applications of radical and systems innovations.
Dr.Mahmood Asad
MGT233
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Emerging Issues in Organization
Culture: Innovation (cont’d)
New Ventures
New Ventures. New ventures based on innovation of any of the three types
require entrepreneurship, or good leadership, to make the new idea a
technological reality and a marketing success. The profile of the entrepreneur
typically includes the need for achievement, a desire to assume responsibility, a
willingness to take risks, and a focus on concrete results. The organization can
foster entrepreneurship by fostering behaviors such as fanaticism, commitment,
and acceptance of chaos. Intrapreneurship is entrepreneurial activity that occurs
within the organization. It is most effective when it is a part of everyday life in the
organization and occurs throughout the organization rather than only in the
research and development department. Entrepreneurial activity that takes place
within the context of a large organization
Entrepreneur’s profile
1. Need for achievement
2. Desire to assume responsibility
3. Willing to take risks
4. Focus on concrete results
Dr.Mahmood Asad
MGT233
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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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MGT233
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Emerging Issues in Organization Culture
(cont’d)
 Empowerment
 is the process of enabling workers to set their own goals, make decisions, and
solve problems within their spheres of responsibility and authority.
 2. Empowerment is complex because managers and employees are typically not
trained to do that, and training can take a lot of time and practice.
 3. Empowerment is more than letting employees participate in making a few
decisions. It means really letting them have control, responsibility, and authority
over meaningful decisions.
 4. Empowerment means liberating employees to do what is best for the company
without fear of the boss watching over them too closely.
 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.
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MGT233
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Managing Organization Culture
Elements of Managing
Organization Culture
Taking
advantage of
existing culture
Dr.Mahmood Asad
Teaching
organization
culture
MGT233
Changing
organization
culture
19–19
Managing Organization Culture (cont’d)
• Taking Advantage of the Existing Culture
• 1. Most managers are not in a position to create an organization culture:
rather, they must work within the cultural values that already exist.
• 2. To take advantage of the existing culture, managers must first become
fully aware of the values in that culture and of which behaviors or actions
those values support.
• 3. This understanding of the existing culture can then be used to evaluate
the performance of others in the firm.
• 4. Articulating these values can be useful in correcting the behavior of
others.
• 5. Over time, subordinates who come to understand and accept the firm’s
culture will require less supervision.
Dr.Mahmood Asad
MGT233
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Managing Organization Culture (cont’d)
• Teaching Organization Culture
• 1. Socialization is the process through which individuals
become social beings, that is, go from being children to adults
in society.
• 2. Organizational socialization is the process through which
employees learn about their firm’s culture and pass their
knowledge and understanding on to others.
• 3. The socialization of workers in organizations is
accomplished through a number of mechanisms, including
pamphlets, training programs, and the provision of role
models of preferred behaviors.
Dr.Mahmood Asad
MGT233
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Managing Organization Culture (cont’d)
• Changing the Organization Culture
– A company that has performance-reducing values
should change its organization culture. The
cultural change process consists of several
elements.
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MGT233
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Managing Organization Culture (cont’d)
•
1. Managing Symbols. Research suggests that organization culture is understood and
communicated through the use of stories and other symbolic media. Thus, managers
interested in changing their organizations’ culture should attempt to substitute stories and
myths that support new cultural values for existing symbolic devices. They can do this by
creating situations that generate new stories.
•
2. The Difficulty of Change. The process of changing a firm’s culture is long and difficult. One
problem is that senior managers sometimes make mistakes and revert to old patterns of
behavior.
•
3. The Stability of Change. The process of changing a firm’s culture starts with a need for
change and moves through a transition period when efforts to adopt new values and beliefs
are made. In the long run, the firm that succeeds in changing its culture will find the new
values and beliefs as stable, influential, and important as the values in the previous culture.
Value systems tend
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MGT233
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Organizational Behavior in Action
– 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
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MGT233
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