Prepared by Charlie CookThe University of West Alabama

© 2012 South-Western, a part of Cengage LearningAll rights reserved.

Mary Jane Reyes-AmaradoLiezl Vicoy Jama

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18.1Definitions 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(Unpublished manuscript, Graduate School of Management, University of California at Los Angeles, 1983), p. 2.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.

Culture

Values

Symbols

Vision

Norms

Beliefs

Systems

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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 Values

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

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Organizational Culture

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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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The Nature of Organization Culture (cont’d)

Historical Foundations

Anthropology

Social Psychology

Sociology

Economics

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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 Values–Strategic 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 Vision–Create a picture of the organization that portrays how the

strategic and cultural values will combine to create the future.

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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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Approaches to Describing Organization Culture:

The Ouchi Framework

William G. "Bill" Ouchi (born 1943) is an American professor and author in the field of business management.

Ouchi first came to prominence for his studies of the differences between Japanese and American companies and management styles.His first book in 1981 summarized his observations. Theory Z: How American Management Can Meet the Japanese Challenge and was a New York Times best-seller for over five months.His second book, The M Form Society: How American Teamwork Can Recapture the Competitive Edge, examined various techniques implementing that approach.Ouchi also came up with his three approaches to control in an organization's management:Market controlBureaucratic controlClan control

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Approaches to Describing Organization Culture:

The Ouchi Framework

Typical United States

firms

Typical Japanese

firms

Type Z United States

firms

The Ouchi Framework

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18.3 The Ouchi Framework

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18.4 The Peters and Waterman Framework

Attributes of an Excellent Firm1. 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

• Innovation–The process of creating and doing new things that are

introduced into the marketplace as products, processes, or services

Radical Innovation

Systems Innovation

Incremental Innovation

Types of Innovation

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

• New Ventures–Require 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

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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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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

Teaching organization

culture

Changing organization

culture

Elements of Managing Organization Culture

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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 Culture–Organizational 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 Culture–Managing 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 Change–New 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