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Chapter 15

Chapter 15 - Organizational Culture .docx

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McGill University
Management Core
MGCR 222
Ruthanne Huising

Christie Wei Winter 2013 Ruthanne Huising MGCR 222 Chapter 15- Organizational culture Defining Organizational Culture: Organizational culture is a system of shared meaning held by members that distinguishes the organization from other organizations 7 Characteristics: 1) innovation and risk taking: - degree to which employees are encouraged to be innovative and take risks 2) Attention to detail - expected to exhibit precision, analysis and attention to detail 3) Outcome orientation - degree to which management focuses on results/outcomes, not the process 4) people orientation - degree to which management considers the effect of outcomes on people within the organization 5) team orientation - degree to which work activities are organized around teams rather than individuals 6) Aggressiveness - aggressive and competitive vs easygoing 7) Stability - degree to which organizational activities emphasize maintaining the status quo in contrast to growth Organizational culture –how employees perceive the characteristics of an organization’s culture  descriptive term, not evaluative - individuals with different backgrounds or at different levels in the organization should have similar perceptions of organizational culture - most organizations will have dominant culture and a few subcultures Dominant culture  expresses the core values shared by a majority of the organization’s members, giving it a distinct personality Subcultures  reflect common problems, situations or experiences faced by groups of members in the same department or location (additional values unique to the department) - organization with just multiple subcultures would not have a very powerful culture overall  lacks the “shared meaning” aspect of culture that makes it powerful to shaping and influencing behavior Strong vs Weak Cultures - organization’s core values are intensely held and widely shared - high degree of sharedness and intensity  internal climate of high behavioral control (ex. Nordstrom employees know what is expected of time, high culture vs Macy’s which has struggled through an identity crisis) - strong culture = reduced employee turnover Christie Wei Winter 2013 Ruthanne Huising MGCR 222 o demonstrates high employee agreement with what the organization represents  builds cohesiveness, loyalty and organizational commitment Culture vs Formalization - creates predictability, orderliness, and consistency - achieves same end without need for written documentation o management needs to put in less effort to develop formal rules and regulations to guide employee behavior  culture is internalized Function of Cultures: 1) boundary defining  distinguishes one organization from others 2) conveys sense of indentity for organization members 3) increases commitment to organization rather than individual self-interest 4) increases stability of social system –acts as social glue 5) sense-marking and control mechanism –guiding and shaping employee’s attitudes and behavior  strong culture more important in decentralized organizations, but more difficult to establish - shared meaning can point everyone in the same direction - employees might have greater loyalty to their team and values, rather than the values of the organization as a whole - difficult to establish strong culture in virtual organizations, lack of face-to-face contact - need strong leadership to frequently communicate common goals - an employee’s fit with an organizational culture influences their change of success - companies want employees that will maintain their image Culture creates climate - Organizational climate  shared perceptions organizational members have about their organization and work environment (ex. Team spirit on organizational level) - shared attitudes on organization’s objectives, results etc. creates synergy more than the sum of the individual parts - psychological climate was strongly related to individuals’ level of job satisfaction, involvement, commitment and motivation - positive workplace climate = linked to higher customer satisfaction and financial performance Dimensions of climate: - safety, justice, diversity, customer service etc. - influences a) individual performance, employees might feel more supported b) habits adopted, ex. Climate of safety would make employees more likely to wear gloves Dysfunctional aspects of culture Institutionalization of organization - institutionalized  when an organization is valued for itself and not for the goods or services it produces - doesn’t go out of business even when its goals are no longer relevant - accepted behavior becomes self evident  unquestioned habits Christie Wei Winter 2013 Ruthanne Huising MGCR 222 o might hinder innovation Barriers to change - culture can hinder change if shared values might not be good to increase organization’s effectiveness o esp if organization is changing Barriers to diversity - strong cultures might eliminate the advantage of having a diverse employee body (age, gender, disability etc) - new employees will assimilate, decreasing diverse behaviors and unique strengths - puts pressure on employees to conform - culture might encourage behaviors (ex. Racism) that undermines formal corporate policies Barriers to acquisitions and merges - issue of cultural compatibility during M&A’s becoming more of an issue o the compatibility of the 2 organization’s culture has large effect on the outcome of the M&A  58% of mergers fail to reach value goals set by top managers, mainly due to conflicting organizational cultures Creating and Sustaining Culture How a culture begins: - founders: past actions and how successful they were. They determine the vision of the organization and can impose it on the young, small organization Culture creation: 3 ways 1) founders hire and keep only employees who think and feel the same what they do 2) founders indoctrinate and socialize these employees to their way of thinking and feeling 3) founders own behavior encourage employees to indentify with them and internalize their beliefs, values and assumptions Keeping Culture Alive: - practices determined by culture keep the culture alive o gives employees a similar set of experiences o ex. Selection process, performance evaluation criteria, training, development activities, promotion procedures etc.  those who accept the culture are rewarded, those who don’t are penalized and expelled 3 main forces for sustaining a culture: 1) selection - selection  process of indentifying and hiring individuals with the knowledge, skills and abilities to perform successfully - have values that align with those of the
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