Chap 008

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, All Rights Reserved.

Chapter Eight

Organizational Culture,

Structure, and Design

Building Blocks of the

Organization

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What Is an Organizational Culture?

• Organizational culture

system of shared beliefs and values that

develops within an organization and

guides the behavior of its members

Also called

corporate culture

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Four Functions of Organizational Culture

Figure 8.1

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Ways Cultures Become Embedded in Organizations

1. Formal statements

2. Slogans & sayings

3. Stories, legends, & myths

4. Leader reaction to crises

5. Role modeling, training, & coaching

6. Physical design

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Ways Cultures Become Embedded in Organizations (cont.)

7. Rewards, titles, promotions, & bonuses

8. Organizational goals & performance

criteria

9. Measurable & controllable activities

10.Organizational structure

11.Organizational systems & procedures

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What is an Organization?

• Organization

a system of consciously coordinated

activities or forces of two or more people

For-profit, nonprofit, mutual-benefit

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The Organization Chart

• Organization Chart

box-and-lines illustration showing the

formal lines of authority and the

organization’s official positions or work

specializations

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Organization Chart

Figure 8.2Example for a hospital

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Line and Staff

Figure 8.3

Line have solid lines, staff

have dotted lines

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Basic Types of Organizational Structures

• Simple structure

authority is centralized in a single person

with few rules and low work specialization

• Functional structure

people with similar occupational

specialties are put together in formal

groups

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Basic Types of Organizational Structures

• Divisional structure

people with diverse occupational specialties

are put together in formal groups by similar

products, customers or geographic regions

• Matrix structure

an organization combines functional and

divisional chains of command in a grid so that

there are two command structures-vertical

and horizontal

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Basic Types of Organizational Structures

• Team-based structure

workgroups are used to improve horizontal

relations and solve problems throughout the

organization

• Network structure

the organization has a central core that is

linked to outside independent firms by

computer connections

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Team-based Structure

Figure 8.8

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Mechanistic vs. Organic Organizations

Table 8.1

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Stages in the Life of an Organization

Stage 1: Birth stage – the organization is

created

Stage 2: Youth stage – growth and expansion

Stage 3: Midlife stage – period of growth

evolving into stability

Stage 4: Maturity stage -organization

becomes very bureaucratic, large, and

mechanistic

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REVISION

1. (p. 240) The "social glue" that binds shareholders with the organization's Board of Directors is called organizational culture.

TRUE OR FALSE

FALSE

• Organizational culture is the "social glue" that binds members of the organization together.

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2. (p. 241) Pfizer Pharmaceuticals, with its culture that manages failure and disappointment, and of helping drug researchers live for the small victories in discovering new drugs for various diseases, is an example of an adhocracy.

TRUE OR FALSE

TRUE

• An adhocracy culture has an external focus and values flexibility. This type of culture attempts to create innovative products (new drugs) by being adaptable, creative, and quick to respond to changes in the marketplace. Employees are encouraged to take risks and experiment with new ways of getting things done (drug research).

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3. (p. 241) Visible culture consists of values,

beliefs, and assumptions.

TRUE OR FALSE

FALSE

• At the most visible level, organizational culture is

expressed in observable artifacts—physical

manifestations such as manner of dress,

awards, myths and stories about the company,

rituals and ceremonies, and decorations, as well

as visible behavior exhibited by managers and

employees.

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4. (p. 243) The pink Cadillac that Mary Kay

presents to the best salespeople of its

cosmetic line is an example of a symbol.

TRUE FALSE

TRUE

• A symbol is an object, act, quality, or event

that conveys meaning to others. The pink

Cadillac conveys excellence in personal

selling in the Mary Kay organization.

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5. (p. 247) Roberto opened a new restaurant in Miami called Cuban Isle. He wanted to be sure a culture of service and excellence was embedded in his new organization so he posted the values of the organization in the kitchen and in the dining room. Roberto is teaching his organization the culture by this action.

TRUE OR FALSE

TRUE

• There are eleven ways that those who found a business and the managers who follow them use to teach the values, beliefs, expectations, behaviors, and business philosophy that constitute the organization's culture. One is making a formal statement of the organization's values as Roberto did.

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