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Ch10 - Organizational Culture and Ethical Values

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Joel Marcus

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Chapter 10 Organizational Culture & Ethical Values Organizational Culture Social Capital refers to the quality of interactions among people and whether they share a common perspective influencing how people work together and treat one another.  When relationships inside and outside the organization are built on trust, honesty, and respect a spirit of goodwill exists and people willingly cooperate to achieve mutual benefits.  High levels of social capital enable frictionless social interactions and exchanges that help to facilitate smooth organizational functioning. What is Culture?  Culture is the set of values, norms, guiding beliefs, and understandings that is shared by members of organization.  Organizational culture exists at two levels: o Observable symbols, stories, behaviours, dress, and physical settings o Underlying values, assumptions, beliefs, attitudes, and feelings Emergence and Purpose of Culture  Culture provides members with a sense of organizational identity and generates in them a commitment to beliefs and values that are larger than themselves.  Culture begins with a founder or leader who articulates and implements particular ideas and values as a vision, philosophy, or business strategy; when these values lead to success they are institutionalized.  Culture serves two critical functions: o Internal integration – members develop a collective identity and know how to work together effectively. o External adaptation – how the organization meets foals and deals with outsiders. Interpreting Culture  Rites and Ceremonies – elaborate, planned activities that make up a special event and are often conducted for the benefit of an audience; reinforce specific values; types of rite: passage, enhancement, renewal, integration.  Stories – narratives based on true events that are frequently shared among organizational employees and told to new employees to inform them about an organization.  Symbols – something that represents another thing.  Language – specific slogan, saying, metaphor, or other form of language to convey special meaning to employees. Organizational Design & Culture Organizational culture should reinforce the strategy and structural design that the organization needs to be effective within its environment. Focus on two specific dimensions: (1) The extent to which the competitive environment requires flexibility or stability and; (2) The extent to which the organization’s strategic focus and strengths are internal or external. The Adaptability Culture is characterized by strategic focus on the external environment through flexibility and change to meet customer needs.  Encourages entrepreneurial values, norms, and beliefs that support the capacity of the organization to detect, interpret, and translate signals from the environment into new behaviour responses.  Reacts quickly to environment, and creates change.  Values: innovation, creativity, and risk taking. The Mission Culture is characterized by emphasis on a clear vision of the organization’s purpose and on the achievement of goals to help achieve the purpose.  Concerned with serving specific customers in the external environment, but without need for rapid change.  Due to stable environment goals can be communicated and employees measured accordingly.  High level of competitiveness and profit orientation in some cases. The Clan Culture has a primary focus on the involvement and participation of the organization’s members and on rapidly changing expectations from the external environment.  Focus on the needs of employees as the route to high performance.  Involvement and participation create a sense of responsibility and ownership and greater sense of commitment to the organization. The Bureaucratic Culture has an internal focus and a consistency orientation for a stable environment.  Culture supports a methodical approach to doing business.  High level of consistency, conformity, and collaboration among members.  Succeeds by being highly integrated and efficient. A Culture of Discipline  Level 5 leadership – characterized by a complete lack of personal ego, coupled with strong will and ambition for success of the company. Values of selfishness, greed, and arrogance have to place in the company.  The right values – building a culture based on freedom and responsibility, but within a framework of organizational purpose, goals, and systems.  The right people in the right jobs – look for self disciplined people who embody values that fit the culture.  Knowing where to go – deep understanding of three things: o What they can be the best at o What they are deeply passionate about o What makes economic sense for the organization Culture Strength and Organizational Subcultures  Culture Strength refers to the degree of agreement among members of an organization about the importance of specific values.  A strong culture is associated with the frequent use of ceremonies, symbols, stories, heroes, and slogans and an emphasis on selection and socialization of employees.  Subcultures develop to reflect the common goals, problems, and experiences that members of a team, department, or other unit share. Organizational Culture, Learning, & Performance Strong adaptive cultures incorporate the following values: 1. The whole is more important than the parts, and
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