16 Organizational Culture McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc All rights reserved Corporate Culture Hits Schwab Executives at Charles Schwab & Co underestimated the influence of organizational culture on behavior when they acquired U.S Trust AP/Wide World Photos McShane/Von Glinow OB4e Slide 16-2 © 2008 The McGraw-Hill Companies, Inc All rights reserved 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 AP/Wide World Photos McShane/Von Glinow OB4e Slide 16-3 © 2008 The McGraw-Hill Companies, Inc All rights reserved Elements of Organizational Culture Artifacts • • • • Stories/legends Rituals/ceremonies Organizational language Physical structures/décor Visible Shared values • Conscious beliefs • Evaluate what is good or bad, right or wrong Invisible (below the surface) Shared assumptions • Unconscious, taken-for-granted perceptions or beliefs • Mental models of ideals McShane/Von Glinow OB4e Slide 16-4 © 2008 The McGraw-Hill Companies, Inc All rights reserved Meaning of Cultural Content • Cultural content refers to the relative ordering of beliefs, values, and assumptions • Example: Software company SAS Institute has an employeefocused culture that emphasizes work-life balance • An organization emphasizes only a handful of values out of dozens or hundreds of values that exist McShane/Von Glinow OB4e Slide 16-5 © 2008 The McGraw-Hill Companies, Inc All rights reserved Organizational 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 McShane/Von Glinow OB4e Slide 16-6 © 2008 The McGraw-Hill Companies, Inc All rights reserved Mayo Clinic Deciphers its Culture Courtesy of the Mayo Clinic To decipher its culture and identify ways to reinforce it at the two newer sites, the Mayo Clinic retained an anthropologist who shadowed employees, joined physicians on patient visits, and posed as a patient to observe what happens in waiting rooms McShane/Von Glinow OB4e Slide 16-7 © 2008 The McGraw-Hill Companies, Inc All rights reserved 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 McShane/Von Glinow OB4e Slide 16-8 © 2008 The McGraw-Hill Companies, Inc All rights reserved Artifacts: Rituals and Ceremonies • Rituals – programmed routines – (eg., how visitors are greeted) • Ceremonies – planned activities for an audience – (eg., award ceremonies) McShane/Von Glinow OB4e Slide 16-9 © 2008 The McGraw-Hill Companies, Inc All rights reserved Artifacts: Organizational Language • Words used to address people, describe customers, etc • Leaders use phrases and special vocabulary as cultural symbols – eg Referring to “clients” rather than “customers” • Language also found in subcultures – eg Whirlpool’s “PowerPoint culture” McShane/Von Glinow OB4e Slide 16-10 © 2008 The McGraw-Hill Companies, Inc All rights reserved Artifacts: Physical Structures/Symbols • Building structure may shape and reflect culture – Example: Oakley’s “interplanetary headquarters” looks like a vault, representing the eyewear and clothing company’s protective culture • Office design conveys cultural meaning – Furniture, office size, wall hangings McShane/Von Glinow OB4e Slide 16-11 © 2008 The McGraw-Hill Companies, Inc All rights reserved Benefits of Strong Corporate Cultures Social Control Strong Organizational Culture Social Glue Improves Sense-Making McShane/Von Glinow OB4e Slide 16-12 © 2008 The McGraw-Hill Companies, Inc All rights reserved Problems with Strong Cultures Culture content might be misaligned with the organization’s environment Strong cultures may focus on mental models that could be limiting Strong cultures suppress dissenting values from subcultures McShane/Von Glinow OB4e Slide 16-13 © 2008 The McGraw-Hill Companies, Inc All rights reserved Adaptive Organizational Cultures • External focus firm’s success depends on continuous change • Focus on processes more than goals • Strong sense of ownership • Proactive seek out opportunities McShane/Von Glinow OB4e Slide 16-14 © 2008 The McGraw-Hill Companies, Inc All rights reserved Org Culture and Ethics • Executives view org culture as one of three main influences on business ethics • Organizational culture also an ethical problem when it is very strong corporate cults McShane/Von Glinow OB4e Slide 16-15 © 2008 The McGraw-Hill Companies, Inc All rights reserved Bicultural Audit • Part of due diligence in merger • Minimizes risk of cultural collision by diagnosing companies before merger • Three steps in bicultural audit: Examine artifacts Analyze data for cultural conflict/compatibility Identify strategies and action plans to bridge cultures McShane/Von Glinow OB4e Slide 16-16 © 2008 The McGraw-Hill Companies, Inc All rights reserved Merging Organizational Cultures Assimilation Deculturation Acquired company embraces acquiring firm’s cultural values Acquiring firm imposes its culture on unwilling acquired firm Integration Cultures combined into a new composite culture Separation Merging companies remain separate with their own culture McShane/Von Glinow OB4e Slide 16-17 © 2008 The McGraw-Hill Companies, Inc All rights reserved Strengthening Organizational Culture McShane/Von Glinow OB4e Slide 16-18 © 2008 The McGraw-Hill Companies, Inc All rights reserved Whole Foods Spreads its Culture When expanding operations, Whole Foods Market maintains its culture through a ‘yoghurt culture’ strategy This is a socialization process in which current employees who carry the grocer’s unique culture are transferred to new stores so recently-hired employees learn and embrace that culture more quickly McShane/Von Glinow OB4e Slide 16-19 © 2008 The McGraw-Hill Companies, Inc All rights reserved Organizational Socialization Defined The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization McShane/Von Glinow OB4e Slide 16-20 © 2008 The McGraw-Hill Companies, Inc All rights reserved 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 McShane/Von Glinow OB4e Slide 16-21 © 2008 The McGraw-Hill Companies, Inc All rights reserved Stages of Socialization Pre-Employment Pre-Employment Stage Stage Encounter Encounter Stage Stage Role Role Management Management •• Outsider Outsider •• Newcomer Newcomer •• Insider Insider •• Gathering Gathering information information •• Testing Testing expectations expectations •• Changing Changing roles roles and and behavior behavior •• Forming Forming psychological psychological contract contract McShane/Von Glinow OB4e •• Resolving Resolving conflicts conflicts Slide 16-22 © 2008 The McGraw-Hill Companies, Inc All rights reserved Pre-employment Socialization Conflicts A: Firm “sells” the job and company, hides negative info B: Applicant polishes up the résumé to look good Individual Attracts Organization B C C: Applicant avoids asking important questions that may be awkward (e.g pay) D: Company avoids using valid selection tests that might scare away applicants McShane/Von Glinow OB4e Organization Attracts Individual D A Individual Selects Organization Slide 16-23 Organization Selects Individual © 2008 The McGraw-Hill Companies, Inc All rights reserved Realistic Job Previews • A balance of positive and negative information about the job and work context • Benefits of RJPs – Less turnover, higher job performance – Less reality shock – Vaccination effect – Builds loyalty McShane/Von Glinow OB4e Slide 16-24 © 2008 The McGraw-Hill Companies, Inc All rights reserved 16 Organizational Culture McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc All rights reserved  ... influence of organizational culture on behavior when they acquired U.S Trust AP/Wide World Photos McShane/Von Glinow OB4e Slide 16-2 © 2008 The McGraw-Hill Companies, Inc All rights reserved Organizational. .. McGraw-Hill Companies, Inc All rights reserved Organizational Socialization Defined The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume... McGraw-Hill Companies, Inc All rights reserved Elements of Organizational Culture Artifacts • • • • Stories/legends Rituals/ceremonies Organizational language Physical structures/décor Visible