Org Culture 5

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Robbins: Organizational Behavior Chapter Eighteen

ORGANIZATIONAL CULTURE

LEARNING OBJECTIVES

After studying this chapter, students should be able to:

1. Describe institutionalization and its relationship to organizational culture.2. Define the common characteristics making up organizational culture.3. Contrast strong and weak cultures.4. Identify the functional and dysfunctional effects of organizational culture on people and the organization.5. Explain the factors determining an organizations culture.6. List the factors that maintain an organizations culture.7. Clarify how culture is transmitted to employees.8. Outline the various socialization alternatives available to management.9. Describe a customer-responsive culture.10. Identify characteristics of a spiritual culture.

CHAPTER OVERVIEW

Exhibit 18-7 depicts organizational culture as an intervening variable. Employees form an overall subjectiveperception of the organization based on such factors as degree of risk tolerance, team emphasis, and support ofpeople. This overall perception becomes, in effect, the organizations culture or personality. These favorable orunfavorable perceptions then affect employee performance and satisfaction, with the impact being greater forstronger cultures.

Just as peoples personalities tend to be stable over time, so too do strong cultures. This makes strong culturesdifficult for managers to change. When a culture becomes mismatched to its environment, management will wantto change it. However, as the Point-Counterpoint debate for this chapter demonstrates, changing anorganizations culture is a long and difficult process. The result, at least in the short term, is that managers shouldtreat their organizations culture as relatively fixed.

One of the more important managerial implications of organizational culture relates to selection decisions. Hiring

individuals whose values do not align with those of the organization is likely to lead to employees who lackmotivation and commitment and who are dissatisfied with their jobs and the organization. Not surprisingly,employee misfits have considerably higher turnover rates than individuals who perceive a good fit.We should also not overlook the influence socialization has on employee performance. An employeesperformance depends to a considerable degree on knowing what he should or should not do. Understanding theright way to do a job indicates proper socialization. Furthermore, the appraisal of an individuals performanceincludes how well the person fits into the organization. Can he or she get along with coworkers? Does he/shehave acceptable work habits and demonstrate the right attitude? These qualities differ between jobs andorganizations. For instance, on some jobs, employees will be evaluated more favorably if they are aggressive andoutwardly indicate that they are ambitious. On another job, or on the same job in another organization, such anapproach may be evaluated negatively. As a result, proper socialization becomes a significant factor in influencingboth actual job performance and how it is perceived by others.

WEB EXERCISES

At the end of each chapter of this instructors manual, you will find suggested exercises and ideas for researchingthe WWW on OB topics. The exercises Exploring OB Topics on the Web are set up so that you can simplyphotocopy the pages, distribute them to your class, and make assignments accordingly. You may want to assignthe exercises as an out-of-class activity, or as lab activities with your class. Within the lecture notes the graphic

will note that there is a WWW activity to support this material.

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CHAPTER NOTES

Institutionalization: A Forerunner of Culture Notes:

1. Viewing organizations as cultureswhere there is a system of shared meaningamong membersis a relatively recent phenomenon. Until the mid-1980s,organizations were rational means by which to coordinate and control people.

2. Organizations have personalities too, just like individuals:

They can be rigid or flexible, unfriendly or supportive, innovative or

conservative.

General Electric offices and people are different from the offices and

people at General Mills.

Harvard and MIT are in the same businesseducationbut each has a

unique character.

3. The origin of culture as an independent variable affecting an employeesattitudes and behavior can be traced back more than 50 years ago to thenotion of institutionalization.

4. When an organization becomes institutionalized, it is valued for itself, notmerely what it produces:

It acquires immortality.

It redefines itself.

5. Institutionalization produces common understandings about what is appropriateand, fundamentally, meaningful behavior.

6. Acceptable modes of behavior become largely self-evident to its members.This is essentially the same thing that organizational culture does.

What Is Organizational Culture? Notes:

1. Organizational culturea system of shared meaning held by members thatdistinguishes the organization from other organizations.

2. This system of shared meaning is a set of key characteristics that theorganization values. The research suggests seven primary characteristics:

Innovation and risk taking

Attention to detail

Outcome orientation

People orientation

Team orientation

Aggressiveness

Stability

3. Each exists on a continuum from low to high. Appraising the organization onthese gives a composite picture of the organizations culture. This is the basisfor:

Shared understanding that members have.

How things are done.

The way members are supposed to behave.

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A. Culture Is a Descriptive Term Notes:

1. Organizational culture is concerned with how employees perceive itscharacteristics, not if they like them. Research on organizational culture hassought to measure how employees see their organization.

2. Job satisfaction seeks to measure affective responses to the workenvironment, such as how employees feel about the organizations

expectations, reward practices, etc.

3. Organizational culture is descriptive, while job satisfaction is evaluative.

B. Do Organizations Have Uniform Cultures?

1. Individuals with different backgrounds or at different levels in the organizationwill tend to describe the organizations culture in similar terms.

2. There can be subcultures. Most large organizations have a dominant cultureand numerous sets of subcultures.

3. A dominant culture expresses the core values that are shared by a majority:

An organizations culture is its dominant culture. This macro view of culture that gives an organization its distinct

personality.

4. Subcultures tend to develop in large organizations to reflect common problems,situations, or experiences that members face:

Defined by department designations and geographical separation

It will include the core values plus additional values unique to members of

the subculture.

The core values are essentially retained but modified to reflect the

subculture.

5. If organizations had no dominant culture and were composed only of numeroussubcultures, the value of organizational culture as an independent variablewould be significantly lessened:

It is the shared meaning aspect of culture that makes it such a potent

device for guiding and shaping behavior.

We cannot ignore the reality that many organizations also have

subcultures that can influence the behavior of members.

C. Strong vs. Weak Cultures

1. The argument is that strong cultures have a greater impact on employeebehavior and are more directly related to reduced turnover:

The organizations core values are both intensely held and widely shared.

A strong culture will have a great influence on the behavior of its members

because the high degree of shared-ness and intensity creates an internalclimate of high behavioral control.

2. One specific result of a strong culture should be lower employee turnover. Ahigh agreement about what the organization stands for builds cohesiveness,loyalty, and organizational commitment.

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D. Culture vs. Formalization Notes:

1. A strong organizational culture increases behavioral consistency. A strongculture can act as a substitute for formalization.

2. High formalization in an organization creates predictability, orderliness, andconsistency.

3. A strong culture achieves the same end without the need for writtendocumentation. Therefore, formalization and culture are two different roads toa common destination.

E. Organizational Culture vs. National Culture

1. National cultures must be taken into account if accurate predictions are to bemade about organizational behavior in different countries.

2. Does national culture override an organizations culture? The researchindicates that national culture has a greater impact on employees than doestheir organizations culture.

3. This has to be qualified to reflect the self-selection that goes on at the hiringstage. The employee selection process will be used by multinationals to findand hire job applicants who are a good fit to their organizations dominantculture.

What Do Cultures Do? Notes:

A. Cultures Functions

1. It has a boundary-defining role. It creates distinctions between one organizationand others.

2. It conveys a sense of identity for organization members.

3. Culture facilitates commitment to something larger than ones individual self-interest.

4. Culture is the social glue that helps hold the organization together. It enhancessocial system stability.

5. Culture serves as a sense-making and control mechanism that guides andshapes the attitudes and behavior of employees. This last function is ofparticular interest to us:

Culture by definition is elusive, intangible, implicit, and taken for granted.

Every organization develops a core set of assumptions, understandings,

and implicit rules that govern day-to-day behavior in the workplace.

6. The role of culture in influencing employee behavior appears to be increasinglyimportant. The shared meaning of a strong culture ensures that everyone ispointed in the same direction.

7. Who receives a job offer to join the organization, who is appraised as a highperformer, and who gets the promotion is strongly influenced by the individual-organization fit.

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Instructor Note: At this point in the lecture you may want to introduce the TEAM EXERCISE: Rate YourClassroom Culture found in the text and at the end of the chapter notes.

B. Culture as a Liability Notes:

1. We are treating culture in a nonjudgmental manner.

2. Culture enhances organizational commitment and increases the consistency of

employee behavior, but there are potentially dysfunctional aspects of culture.

3. Barrier to change:

Culture is a liability when the shared values are not in agreement with

those that will further the organizations effectiveness. This is most likely tooccur when an organizations environment is dynamic.

This helps to explain the challenges that executives at companies like

Mitsubishi, General Motors, Eastman Kodak, Kellogg, and Boeing havehad in recent years in adapting to upheavals in their environment.

4. Barrier to diversity:

Hiring new employees who, because of race, gender, disability, or other

differences, are not like the majority of the organizations members createsa paradox.

Management wants new employees to accept the organizations core

cultural values but, at the same time, they want to support the differencesthat these employees bring to the workplace.

Strong cultures put considerable pressure on employees to conform. They

limit the range of values and styles that are acceptable.

Organizations seek out and hire diverse individuals because of their

alternative strengths, yet these diverse behaviors and strengths are likelyto diminish in strong cultures.

Strong cultures, therefore, can be liabilities when:b. They effectively eliminate the unique strengths that diverse people

bring to the organization.b. They support institutional bias or become insensitive to people who are

different.

5. Barrier to acquisitions and mergers:

Historically, the key factors that management looked at in making

acquisition/merger decisions:

a. Financial advantagesb. Product synergy

Cultural compatibility has become the primary concern. Whether theacquisition actually works seems to have more to do with how well the twoorganizations cultures match up.

Instructor Note: At this point in the lecture you may want to introduce the MYTH OR SCIENCE: SuccessBreeds Successfound in the text and below. A suggestion for a class exercise follows.

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MYTH OR SCIENCE? Success Breeds Success

Generally speaking, success creates positive momentum. People like being associated with it. Microsoftsincredible success in the 1990s made it a highly desirable place to work, but success often breeds failure,especially in organizations with strong cultures. Organizations that have tremendous successes begin to believein their own invulnerability. The corporate highway is littered with companies that let arrogance undermine

previous successes. JC Penney and Sears once ruled the retail department-store market. Wal-Mart did a prettyeffective job of humbling them. General Motors executives ignored the aggressive efforts by Japanese auto firmsto penetrate its markets. The result? GMs market share has been in a free fall for three decades. Toyota, onceone of those aggressive Japanese firms, itself became a casualty of its own successes. Motorola dominated worldmarkets for semiconductors and analog cellular phones, but the company became arrogant. In the first quarter of2001 it lost $206 million and was cutting 22,000 jobs.

Class Exercise:

1. Assign as an outside research project:2. Divide the class into teams, and assign each team a company that was successful and that failed [some

should be companies that then recovered from failure]. Some suggestions:

Texas Instruments

Woolworth

Chrysler

American Motors

Sears

K-Mart

3. Students should prepare a 10-to 15-minute oral report that summarizes:

The key success factors that made the companies powerful leaders.

Three-to-five major events or factors that changed or reshaped these companies business environment.

The key or major mistakes the company made in dealing with these changes.

Where the company is today. If it failed, why did it fail; if it recovered, what did it do to recover?

4. After students present their reports, discuss the commonalities in these various situations.

Creating and Sustaining Culture Notes:

A. How a Culture Begins

1. An organizations culture comes from what it has done before and the degreeof success it has had. The ultimate source of an organizations culture is itsfounders.

2. The founders of an organization traditionally have a major impact on thatorganizations early culture:

They had the vision; they are unconstrained by previous customs or

ideologies. The small size of new organizations facilitates the founders imposition of

the vision on all organizational members.

3. Culture creation occurs in three ways:

First, founders hire and keep only employees who think and feel the way

the way they do.

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A. How a Culture Begins (cont.) Notes:

Second, they indoctrinate and socialize these employees to their way of

thinking and feeling.

The founders own behavior acts as a role model that encourages

employees to identify with them and thereby internalize their beliefs,values, and assumptions.

4. When the organization succeeds, the founders entire personality becomesembedded in the culture of the organization.

B. Keeping a Culture Alive

1. There are practices within the organization that act to maintain it by givingemployees a set of similar experiences.

2. Three forces play a particularly important part in sustaining a culture: selectionpractices, the actions of top management, and socialization methods.

3. Selection

The explicit goal of the selection process is to identify and hire individuals

who have the knowledge, skills, and abilities to perform the jobs within theorganization successfully.

The final decision as to who is hired will be significantly influenced by the

decision makers judgment of how well the candidates will fit into theorganization.

This results in the hiring of people who have values consistent with those

of the organization.

Additionally, the selection process provides information to applicants about

the organization. Selection, therefore, becomes a two-way street.

Example applicants for entry-level positions in brand management at

Procter & Gamble (P&G). Each encounter seeks corroborating evidenceof the traits that the firm believes correlate highly with what counts forsuccess at P&G.

4. Top management

The actions of top management, what they say and how they behave,

establish norms that filter down through the organization as to:

a. Risk taking.b. How much freedom managers should give their employees.c. What is appropriate dress.d. What actions will pay off in terms of pay raises, promotions, and other

rewards.

5. Socialization

New employees are not fully indoctrinated in the organizations culture.

They are unfamiliar with the organizations culture and are potentially likelyto disturb the beliefs and customs that are in place.

Socialization is the organization helping new employees adapt to its

culture.

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B. Keeping a Culture Alive (cont.) Notes:

All Marines must go through boot camp, where they prove their

commitment. At the same time, the Marine trainers are indoctrinating newrecruits in the Marine way.

At Starbucks, all new employees go through 24 hours of training covering

everything necessary to make them brewing consultants. In addition, theylearn the Starbucks philosophy, the company jargon, and even how to helpcustomers make decisions about beans, grind, and espresso machines.

The most critical socialization stage is at the time of entry into the

organization:

a. This is when the organization seeks to mold the outsider into anemployee.

b. The organization socializes every employee throughout his/her entirecareer.

6. Socialization is a process made up of three stages: pre-arrival, encounter, andmetamorphosis.

The first stage,pre-arrival, encompasses all the learning that occurs beforea new member joins.

The pre-arrival stage recognizes that each individual arrives with a set of

values, attitudes, and expectations about both the work to be done and theorganization:

a. In many jobs, particularly professional work, new members will haveundergone a considerable degree of prior socialization in training andin school.

b. The selection process informs prospective employees about theorganization as a whole and acts to ensure the inclusion of the righttypethose who will fit in.

In the second stage, encounter, the new employee sees what theorganization is really like and confronts the possibility that expectationsand reality may diverge.

a. The individual confronts the possible dichotomy between his/herexpectationsabout his/her job, coworkers, boss, and the organizationin generaland reality.

b. If expectations are accurate, this stage merely reaffirms them.c. Where expectations and reality differ, the new employee must undergo

socialization that will detach him/her from his/her previousassumptions and replace them with another set that the organizationdeems desirable.

d. At the extreme, a new member may become totally disillusioned andresign.

In the third stage, metamorphosis, the relatively long-lasting changes take

place. The new employee masters the skills required for his/her job,successfully performs his/her new roles, and makes the adjustments tohis/her work groups values and norms.

a. The more management relies on socialization programs that areformal, collective, fixed, serial, and emphasize divestiture, the greaterthe likelihood that newcomers differences and perspectives will bestripped away and replaced by standardized and predictablebehaviors.

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B. Keeping a Culture Alive (cont.) Notes:

b. Metamorphosis and the entry socialization process is complete whenthe new member has become comfortable with the organization andhis job.

He has internalized the norms of the organization and his work

group and understands and accepts these norms.

Exhibit 18-4 shows successful metamorphosis should have a

positive impact on the new employees productivity and hiscommitment to the organization, and reduce his propensity toleave the organization.

How Employees Learn Culture Notes:

A. Stories

1. During the days when Henry Ford II was chairman of the Ford Motor Co., themessage was Henry Ford II ran the company.

2. Nordstrom employees are fond of the story when Mr. Nordstrom instructed theclerk to take the tires back and provide a full cash refund. After the customerhad received his refund and left, the perplexed clerk looked at the boss. But,Mr. Nordstrom, we dont sell tires!, I know, replied the boss, but we dowhatever we need to do to make the customer happy.

3. Stories such as these typically contain a narrative of events about theorganizations founders, rule breaking, rags-to-riches successes, reductions inthe workforce, relocation of employees, reactions to past mistakes, andorganizational coping.

4. They anchor the present in the past and provide explanations and legitimacyfor current practices:

For the most part, these stories develop spontaneously.

Some organizations actually try to manage this element of culture learning.

B. Rituals

1. Rituals are repetitive sequences of activities that express and reinforce the keyvalues of the organization, what goals are most important, which people areimportant, and which are expendable.

2. College faculty members undergo a lengthy ritual in their quest for permanentemploymenttenure. The astute faculty member will assess early on in theprobationary period what attitudes and behaviors his or her colleagues wantand will then proceed to give them what they want.

3. One of the best-known corporate rituals is Wal-Marts company chant. W-A-Lsquiggle M-A-R-T! was Sam Waltons way to motivate his workforce.

Instructor Note: At this point in the lecture you may want to introduce the POINTCOUNTER POINT:Organizational Cultures Cant Be Changedfound in the text and at the end of these chapter notes. A suggestionfor a class exercise follows.

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C. Material Symbols Notes:

1. The headquarters of Alcoa does not look like your typical head office operation:

There are few individual offices.

The informal corporate headquarters conveys to employees that Alcoa

values openness, equality, creativity, and flexibility.

2. Some corporations provide their top executives with a variety of expensiveperks. Others provide fewer and less elaborate perks.

3. The layout of corporate headquarters, the types of automobiles top executivesthat are given, and the presence or absence of corporate aircraft are a fewexamples of material symbols.

4. These material symbols convey to employees who is important, the degree ofegalitarianism desired by top management, and the kinds of behavior that areappropriate.

D. Language

1. Many organizations and units use language as a way to identify members of a

culture or subculture. By learning this language, members attest to theiracceptance of the culture and help to preserve it.

2. Organizations, over time, often develop unique terms to describe equipment,offices, key personnel, suppliers, customers, or products that relate to itsbusiness.

3. New employees are frequently overwhelmed with acronyms and jargon that,after six months on the job, have become fully part of their language.

4. Once assimilated, this terminology acts as a common denominator that unitesmembers of a given culture or subculture.

Creating an Ethical Organizational Culture Notes:

1. The content and strength of a culture influences an organizations ethicalclimate and the ethical behavior of its members.

2. An organizational culture most likely to shape high ethical standards is onethats high in risk tolerance, low to moderate in aggressiveness, and focuseson means as well as outcomes.

3. If the culture is strong and supports high ethical standards, it should have avery powerful and positive influence on employee behavior.

4. What can management do to create a more ethical culture?

5. Be a visible role model. Employees will look to top-management behavior as abenchmark for defining appropriate behavior.

6. Communicate ethical expectations. Ethical ambiguities can be minimized bycreating and disseminating an organizational code of ethics.

7. Provide ethical training. Use training sessions to reinforce the organizationsstandards of conduct; to clarify what practices are and are not permissible; andto address possible ethical dilemmas.

8. Visibly reward ethical acts and punish unethical ones. Performance appraisalsof managers should include a point-by-point evaluation of how his or herdecisions measure against the organizations code of ethics.

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Creating an Ethical Organizational Culture (cont.) Notes:

9. Provide protective mechanisms. The organization needs to provide formalmechanisms so that employees can discuss ethical dilemmas and reportunethical behavior without fear of reprimand. This might include creation ofethical counselors, ombudsmen, or ethical officers.

Instructor Note: At this point in the lecture you may want to introduce the OB IN THE NEWS: Enron and theCreation of an Unethical Culture found in the text and below. A suggestion for a class exercise follows.

OB IN THE NEWS Enron and the Creation of an Unethical Culture

Enron Corp., which in December 2001 became the largest-ever US bankruptcy, did not fail solelybecause of improper accounting practices, although that was certainly a major contributor. It also failed because ithad a culture that pushed executives into unethical behavior.

During Enrons heyday in the late 1990s, the press regularly praised the company for its entrepreneurialculture: smart, sassy, creative, and risk-taking. A post-mortem analysis reveals a different culturean unrelentingemphasis on earnings growth and individual initiative. Instead of rewarding new ideas, the company encouragedunethical corner-cutting. How? First, it pressured executives to make their numbers. Second, it instilled lax

controls over how those numbers were created. Third, it bred a yes-man culture among executives. People wereafraid to speak out on questionable practices for fear that it would adversely affect their performance evaluationsand the size of their bonuses. Fourth, bonuses and money became the Almighty God. The company sought outand rewarded people who placed a high value on money. Jeff Skilling, the CEO who created Enrons in-your-faceculture, is quoted as saying all that matters is money. You can buy loyalty with money. Fifth, although managerswere supposed to be graded on teamwork, the culture was heavily built around star players, with little valueattached to team-building. The organization rewarded highly competitive people who were less likely to sharepower, authority, or information. Finally, the company continually set itself wildly optimistic expectations for growthand then drove executives to find ways to meet them. Youve got someone at the top saying the stock price is themost important thing, which is driven by earnings, said one insider. Whoever could provide earnings quicklywould be promoted.

One former Enron employee summed up the Enron culture this way: If your boss was [fudging], and youhave never worked anywhere else, you just assume that everybody fudges earnings. Once you get there and you

realized how it was, do you stand up and lose your job? It was scary. It was easy to get into Well, everybody elseis doing it, so maybe it isnt so bad.

Sources: Based on W. Zellner, Jeff Skilling: Enrons Missing Man, Business Week, February 11, 2002, pp. 3840; and J. A. Byrne, TheEnvironment Was Ripe for Abuse, Business Week, February 25, 2002, pp. 11820.

Class Exercise:1. Organize students into small discussion groups or assign this as a journal activity.2. Ask students to review the case and develop a list of strategies that, if had they been an Enron employee,

they could have employed to not allow themselves to be caught up in the unethical behavior.3. Have students be specificit is not enough to say, It will never happen to me. Some strategies might

include:

Learn how to talk with superiors about these matters in a professional manner.

Recognizing when I disagree with superiors and my value system is threatened

Acknowledge red-flags when they appear. Do not accept rationalizations such as everybody is doing

it.

Develop a close confident outside the organization who I can do an ethical audit with whom would I not

be immediately impacted should I lose my job. Example: minister, trusted friend.

Develop relationships with others in the organization who think like I do in these matters so I do not feel

isolated in my feelings.

Take a class or read about ethical issues to better frame my thoughts.

Always have three months expenses in savings so I have the freedom to leave at a moments notice.

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Robbins: Organizational Behavior Chapter Eighteen4. Put the responses on the board and discuss with the students how difficult these situations can be and how

important it is to have a plan.

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Creating a Customer-Responsive Culture

Most organizations are attempting to create a customer-responsive culturebecause they recognize that this is the path to customer loyalty and long-termprofitability.

Notes:

A. Key Variables Shaping Customer-Responsive Cultures

1. A review of the evidence finds that half-a-dozen variables are routinely evidentin customer-responsive cultures.

2. Firstis the type of employees themselves. Successful, service-orientedorganizations hire employees who are outgoing and friendly.

3. Secondis low formalization. Service employees need to have the freedom tomeet changing customer service requirements. Rigid rules, procedures, andregulations make this difficult.

4. Thirdis an extension of low formalizationit is the widespread use ofempowerment. Empowered employees have the decision discretion to do whatis necessary to please the customer.

5. Fourth is good listening skills. Employees in customer-responsive cultures have

the ability to listen to and understand messages sent by the customer.6. Fifth is role clarity. Service employees act as boundary spanners between the

organization and its customers. They have to acquiesce to the demands ofboth their employer and the customer.

7. Finally, customer-responsive cultures have employees who exhibitorganizational citizenship behavior. They are conscientious in their desire toplease the customer.

B. Managerial Action

1. There are a number of actions that management can take if it wants to make its

culture more customer-responsive.2. Selection

The place to start in building a customer-responsive culture is hiring

service-contact people with the personality and attitudes consistent with ahigh service orientation.

Studies show that friendliness, enthusiasm, and attentiveness in service

employees positively affect customers perceptions of service quality.Managers should look for these qualities in applicants.

3. Training and Socialization

Management is often faced with the challenge of making its current

employees more customer-focused. In such cases, the emphasis will beon training rather than hiring.

The content of these training programs will vary widely but should focus on

improving product knowledge, active listening, showing patience, anddisplaying emotions.

All new service-contact people should be socialized into the organizations

goals and values.

Regular training updates in which the organizations customer focused

values are restated and reinforced is an important strategy.

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B. Managerial Action (cont.) Notes:

4. Structural Design

Organization structures need to give employees more control. This can be

achieved by reducing rules and regulations. Employees are better able tosatisfy customers when they have some control over the serviceencounter.

5. Empowerment

Empowering employees with the discretion to make day-to-day decisions

about job-related activities

6. Leadership

Effective leaders in customer-responsive cultures deliver by conveying acustomer-focused vision and demonstrate by their continual behavior thatthey are committed to customers.

7. Performance Evaluation

Evidence suggests that behavior-based performance evaluations are

consistent with improved customer service. Behavior-based evaluations appraise employees on the basis of how they

behave or acton criteria such as effort, commitment, teamwork,friendliness, and the ability to solve customer problemsrather than on themeasurable outcomes they achieve.

Behavior based evaluations give employees the incentive to engage in

behaviors that are conducive to improved service quality and givesemployees more control over the conditions that affect their performanceevaluations.

8. Reward Systems

If management wants employees to give good service, it has to reward

good service. It should include ongoing recognition and it needs to makepay and promotions contingent on outstanding customer service.

Instructor Note: At this point in the lecture you may want to introduce the CASE EXERCISE: Trying to do theImpossible at GMfound in the text and at the end of the chapter notes. A suggestion for a class exercise follows.

Spirituality and Organizational Culture Notes:

A. What is Spirituality?

1. Workplace spiritualityis notabout organized religious practices. It is not aboutGod or theology.

2. Workplace spiritualityrecognizes that people have an inner life that nourishesand is nourished by meaningful work that takes place in the context ofcommunity.

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B. Why Spirituality Now? Notes:

1. Historical models of management and organizational behavior had no room forspirituality. The myth of rationality assumed that the well-run organizationeliminated feelings.

2. An awareness of spirituality can help you to better understand employeebehavior.

C. Characteristics of a Spiritual Organization

1. Spiritual organizations are concerned with helping people develop and reachtheir full potential.

2. Organizations that are concerned with spirituality are more likely to directlyaddress problems created by work/life conflicts.

3. What differentiates spiritual organizations from their non-spiritual counterparts?

4. Strong Sense of Purpose

Spiritual organizations build their cultures around a meaningful purpose.

For example, Ben & Jerrys Homemade has closely intermeshed socially

responsible behavior into its producing and selling of ice cream.5. Focus on Individual Development

Spiritual organizations recognize the worth and value of people. They are

not just providing jobs. They seek to create cultures in which employeescan continually learn and grow.

Recognizing the importance of people, they also try to provide employment

security.

6. Trust and Openness

Spiritual organizations are characterized by mutual trust, honesty, and

openness. Managers arent afraid to admit mistakes. They tend to be extremely up front with their employees, customers, and

suppliers.

7. Employee Empowerment

Managers in spiritually based organizations are comfortable delegating

authority to individual employees and teams. They trust their employees tomake thoughtful and conscientious decisions.

8. Toleration of Employee Expression

They allow people to be themselvesto express their moods and feelings

without guilt or fear of reprimand.

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D. Criticisms of Spirituality Notes:

1. Critics of the spirituality movement in organizations have focused on twoissues:

First is the question of legitimacy. Specifically, do organizations have the

right to impose spiritual values on their employees?

Second is the question of economics. Are spirituality and profitscompatible?

2. This criticism is undoubtedly valid when spirituality is defined as bringingreligion and God into the workplace. However, the goal is limited to helpingemployees find meaning in their work lives and to use the workplace as asource of community.

3. The issue of whether spirituality and profits are compatible objectives iscertainly relevant for managers and investors in business. A recent researchstudy by a major consulting firm found that companies that introducedspiritually based techniques improved productivity and significantly reducedturnover.

4. Another study found that organizations that provide their employees with

opportunities for spiritual development outperformed those that did not.

5. Other studies also report that spirituality in organizations was positively relatedto creativity, employee satisfaction, team performance, and organizationalcommitment.

QUESTIONS FOR REVIEW

1. Whats the difference between job satisfaction and organizational culture?Answer Organizational culture is concerned with how employees perceive the characteristics of an

organizations culture, not with whether or not they like them. That is, it is a descriptive term. This is importantbecause it differentiates this concept from that of job satisfaction. Research on organizational culture hassought to measure how employees see their organization: Does it encourage teamwork? Does it rewardinnovation? Does it stifle initiative? In contrast, job satisfaction seeks to measure affective responses to thework environment. It is concerned with how employees feel about the organizations expectations, rewardpractices, and the like. Although the two terms undoubtedly have overlapping characteristics, keep in mindthat the term organizational culture is descriptive, whilejob satisfaction is evaluative.

2. Can an employee survive in an organization if he/she rejects its core values? Explain.Answer Organizational culture is a system of shared meaning held by members that distinguishes theorganization from other organizations. This system of shared meaning is a set of key characteristics that theorganization values.

Organizational culture is concerned with how employees perceive its characteristics, not if they like them. Jobsatisfaction seeks to measure affective responses to the work environmenthow employees feel about theorganizations expectations, reward practices, and the like. Therefore, if an individual does not fit theorganizations culture, the individual will have some significant difficulty in surviving, let alone growing. Thedominant culture expresses the core values that are shared by a majority. Not sharing those values placesthe employee on the outside socially and organizationally.

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3. What defines an organizations subcultures?Answer Subcultures tend to develop in large organizations to reflect common problems, situations, orexperiences that members face. They are defined by department designations and geographical separation. Itwill include the core values plus additional values unique to members of the subculture. The core values areessentially retained but modified to reflect the subculture. Many organizations also have subcultures that caninfluence the behavior of members.

4. Contrast organizational culture with national culture.Answer The opening example in the text showed how Japans national culture was closely intertwined withcorporate culture. National cultures must be taken into account if accurate predictions are to be made aboutorganizational behavior in different countries. The research indicates that national culture has a greaterimpact on employees than does their organizations culture. This has to be qualified to reflect the self-selection that goes on at the hiring stage. The employee selection process will be used by multinationals tofind and hire job applicants who are a good fit with their organizations dominant culture.

National culture is ones primary culture generally has deep roots. Organizational culture is something onesubscribes to and may adapt to, and even be somewhat affected by, but only to the degree it fits ones ownnational culture.

5. How can culture be a liability to an organization?Answer While organizational culture enhances organizational commitment and increases the consistency

of employee behavior, there are potentially dysfunctional aspects of culture. It can be a barrier to changewhen the shared values are not in agreement with those that will further the organizations effectiveness. Thisis most likely to occur when an organizations environment is dynamic. It is inherently a barrier to diversitybecause hiring new employees who (because of race, gender, disability, or other differences) are not like themajority of the organizations members creates a paradox. Management wants new employees to accept theorganizations core cultural values but, at the same time, wants to support the differences that theseemployees bring to the workplace. Strong cultures, therefore, can be liabilities when they effectively eliminatethe unique strengths that diverse people bring to the organization or if they support institutional bias orbecome insensitive to people who are different. Finally, strong cultures can be a barrier to acquisitions andmergers. Historically, the key factors that management looked at in making acquisition/merger decisions werefinancial advantages and product synergy. Cultural compatibility has become the primary concern. Whetherthe acquisition actually works seems to have more to do with how well the two organizations cultures matchup.

6. How does a strong culture affect an organizations efforts to improve diversity?Answer It is inherently a barrier to diversity because hiring new employees who (because of race, gender,disability, or other differences) are not like the majority of the organizations members creates a paradox.Management wants new employees to accept the organizations core cultural values but, at the same time,they want to support the differences that these employees bring to the workplace. Strong cultures putconsiderable pressure on employees to conform. They limit the range of values and styles that areacceptable.

An organization can use its strong culture to enhance diversity if it seeks out and hires diverse individualsbecause of their alternative strengths. If they effectively encourage the unique strengths that diverse peoplebring to the organization, they eliminate any institutional bias or insensitivity to people who are different.

7. What benefits can socialization provide for the organization? For the new employee?

Answer Most of the benefits are mutual rather than distinct. New employees are not fully indoctrinated inthe organizations culture. They are unfamiliar with the organizations culture and are potentially likely todisturb the beliefs and customs that are in place. Socialization is the organization helping new employeesadapt to its culture. Metamorphosis and the entry socialization process is complete when the new memberhas become comfortable with the organization and his job. Exhibit 18-2 shows how successfulmetamorphosis should have a positive impact on the new employees productivity and his commitment to theorganization, and reduce his propensity to leave the organization.

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8. How is language related to organizational culture?Answer Many organizations and units within organizations use language as a way to identify members of aculture or subculture. By learning this language, members attest to their acceptance of the culture and, in sodoing, help to preserve it. Organizations, over time, often develop unique terms to describe equipment,offices, key personnel, suppliers, customers, or products that relate to their business. New employees arefrequently overwhelmed with acronyms and jargon that, after six months on the job, have become fully part oftheir language. Once assimilated, this terminology acts as a common denominator that unites members of agiven culture or subculture.

9. How can management create an ethical culture?Answer An organizational culture most likely to shape high ethical standards is one that is high in risktolerance, low to moderate in aggressiveness, and focuses on means as well as outcomes. If the culture isstrong and supports high ethical standards, it should have a very powerful and positive influence on employeebehavior. An organization can create an ethical culture by doing the following:

Be a visible role model. Employees will look to top-management behavior as a benchmark for definingappropriate behavior.Communicate ethical expectations. Ethical ambiguities can be minimized by creating and disseminating anorganizational code of ethics.Provide ethical training. Use training sessions to reinforce the organizations standards of conduct, to clarifywhat practices are and are not permissible, and to address possible ethical dilemmas.

Visibly reward ethical acts and punish unethical ones. Performance appraisals of managers should include apoint-by-point evaluation of how his or her decisions measured against the organizations code of ethics.Provide protective mechanisms. The organization needs to provide formal mechanisms so that employeescan discuss ethical dilemmas and report unethical behavior without fear of reprimand. This might includecreation of ethical counselors, ombudsmen, or ethical officers.

10. What criticisms have been targeted against bringing spirituality to the workplace?Answer Critics of the spirituality movement in organizations have focused on two issues: 1) Doorganizations have the right to impose spiritual values on their employees? and 2) Are spirituality and profitscompatible? This criticism is undoubtedly valid when spirituality is defined as bringing religion and God intothe workplace. However, the goal is limited to helping employees find meaning in their work lives and to usethe workplace as a source of community. The issue of whether spirituality and profits are compatibleobjectives is certainly relevant for managers and investors in business. A recent research study by a majorconsulting firm found that companies that introduced spiritually based techniques improved productivity andsignificantly reduced turnover.

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QUESTIONS FOR CRITICAL THINKING

1. Is socialization brainwashing? Explain.Answer Yes and no. Yes, in that it is helping or coercing the individual into adjusting his/her behavior tomatch the expectations of the organization. On the other hand, socialization is necessary in order to worktogether. Imagine a kindergarten class if the students were not socialized.

No matter how good a job the organization does in recruiting and selection, new employees are not fully

indoctrinated in the organizations culture. Most importantly, because they are unfamiliar with theorganizations culture, new employees are potentially likely to disturb the beliefs and customs that are inplace. The organization will, therefore, want to help new employees adapt to its culture.

2. If management sought a culture characterized as innovative and autonomous, what might its socializationprogram look like?Answer Southwests. They would encourage risk-taking, provide a maximum of freedom to managers andemployees, and tie rewards, raises, and promotions to innovative behavior, initiative, and innovation.

3. Can you identify a set of characteristics that describes your colleges culture? Compare your assessment withthose of several of your peers. How closely do they agree?Answer The answer will vary by school. The key is conducting an open discussion and not reacting tostudents assessments, yet making them defend them with some objective evidence, not just subjective

experience.

4. Todays workforce is increasingly made up of part-time or contingent employees. Is organizational culturereally important if the workforce is mostly comprised of temporaries?Answer It can be argued that organizational culture is particularly important with a temporary or contingentworkforce because it helps to convey a sense of identity for organization members. It is the social glue thathelps hold the organization together and it enhances social system stability. The shared meaning of a strongculture ensures that everyone is pointed in the same direction.

5. We should be opposed to the manipulation of individuals for organizational purposes, but a degree of socialuniformity enables organizations to work better. Do you agree or disagree with this statement? What are itsimplications for organizational culture? Discuss.Answer Students responses will vary.

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POINT-COUNTERPOINT Organizational Cultures Cant Be ChangedPOINT

An organizations culture is made up of relatively stable characteristics. There are a number of forces continuallyoperating to maintain a given culture. These would include written statements about the organizations missionand philosophy, the design of physical spaces and buildings, the dominant leadership style, hiring criteria, pastpromotion practices, entrenched rituals, popular stories about key people and events, the organizations historicperformance evaluation criteria, and the organizations formal structure. Selection and promotion policies areparticularly important devices that work against cultural change. Employees chose the organization because theyperceived their values to be a good fit with the organization. They become comfortable with that fit and willstrongly resist efforts to disturb the equilibrium. Our argument should not be viewed as saying that culture cannever be changed. However, anything less than a crisis is unlikely to be effective in bringing about culturalchange.

COUNTER POINTChanging an organizations culture is extremely difficult, but cultures canbe changed. A dramatic crisis . This is the shock that undermines the status quo and calls into question the relevance of the

current culture. Turnover in leadership . New top leadership, which can provide an alternative set of key values, may be

perceived as more capable of responding to the crisis. Young and small organizations . The younger the organization is, the less entrenched its culture will be.

Weak culture . The more widely held a culture is and the higher the agreement among members on its values,the more difficult it will be to change. Conversely, weak cultures are more amenable to change than strongones.

If the above conditions exist, the following actions may lead to change. New stories and rituals need to be set inplace by top management; employees should be selected and promoted by those who espouse the new values;the reward system needs to be changed to support the new values; and current subcultures need to beundermined through transfers, job rotation, and terminations.

Class Exercise:

1. As a class, discuss and decide what the culture is of your college or university. Students may have a verydifferent perspective than you do as faculty, so choose which organization you are assessingthe onevisible to students or to faculty.

2. Once the culture is identified, discuss with students what would be involved in changing the culture of yourcollege or university. Explain to students, for the sake of the exercise, that they should consider that theculture is in need of change in order to deal with the new dynamics facing institutions of higher education. Youshould choose a contrasting culture to the one identified in the students earlier discussion.

3. This discussion should consider: The current culture and target culture.

What change techniques could be used.

What elements of culture maintenance need to be addressed in the change effort.

Who would resist this change and why.

3. The discussion should help students realize the effort involved in changing organization culture and help themdecide which side of this debate they most identify with.

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TEAM EXERCISE Rate Your Classroom Culture

Purpose: This exercise will raise students awareness of the elements of organizational culture and increase theirsensitivity to the issues involved in evaluating it.Time: 30 minutes

Instructions:1. Listed here are 14 statements. Using the five-item scale (from Strongly Agree to Strongly Disagree), respond

to each statement by circling the number that best represents your opinion.

Strongly StronglyAgree Agree Neutral DisagreeDisagree

a. I feel comfortable challenging statements made by my instructor. 5 4 3 2 1b. My instructor heavily penalizes assignments that are not turned 5 4 3 2 1

in on time.c. My instructor believes that its final results that count. 5 4 3 2 1d. My instructor is sensitive to my personal needs and problems. 5 4 3 2 1e. A large portion of my grade depends on how well I work with 5 4 3 2 1

others in the class.f. I often feel nervous and tense when I come to class. 5 4 3 2 1

g. My instructor seems to prefer stability over change. 5 4 3 2 1h. My instructor encourages me to develop new and different ideas. 5 4 3 2 1i. My instructor has little tolerance for sloppy thinking. 5 4 3 2 1

j. My instructor is more concerned with how I came to a conclusionthan the conclusion itself. 5 4 3 2 1

k. My instructor treats all students alike. 5 4 3 2 1l. My instructor frowns on class members helping each other with 5 4 3 2 1

assignments.m. Aggressive and competitive people have a distinct advantage in 5 4 3 2 1

this class.n. My instructor encourages me to see the world differently. 5 4 3 2 1

Instructions (continued):

2. Calculate your total score by adding up the numbers you circled.3. Your score will fall between 14 and 70.

A high score (49 or above) describes an open, risk-taking, supportive, humanistic, team-oriented, easy-going, growth-oriented culture.

A low score (35 or below) describes a closed, structured, task-oriented, individualistic, tense, and stability-oriented culture.

Note that differences count.

So, a score of 60 is a more open culture than one that scores 50.4. Also, realize that one culture is not preferable over the other.5. The right culture depends on you and your preferences for a learning environment.6. Form teams of five-to-seven members each. Compare your scores.

How closely do they align? Discuss and resolve discrepancies.

Based on your teams analysis, what type of student do you think would perform best in this class?

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CASE EXERCISE Trying to Do the Impossible at GM

Few companies have had a rougher time adapting to a changing environment than General Motors. Thecompany is truly a textbook example of corporate entrenchment. As far back as the 1960s, the writing was on thewall that GMs way of operatingslow, deliberate decision making; layer-upon-layer of hierarchy; focus on cost-cutting rather than on new product design; and management-by-committeewas failing. From a U.S. automobilemarket share of nearly 50 percent in the late 1950s, the company was down to under 30 percent by the year2000. GMs rigid and insular culture, driven by financial considerations, allowed both foreign and domesticcompetitors to steal away customers with new productslike fuel-efficient compacts, minivans, SUVs, and eye-catching roadsters.

A good part of GMs culture can be explained by the companys historic selection and promotion policies.It hired its future executives fresh out of school. They then shaped these recruits into the GM mentality. Thecompany resisted ideas and innovations that were not developed here. Executives firmly believed, to the point ofarrogance, that the GM system was superior to all others. Promotions favored financial and engineering types,and individuals with these backgrounds rose to fill the companys top spots. GM rarely hired senior executivesfrom outside the company ranks. In addition, GM encouraged its executives to socialize off the job with other GMpeople. This further insulated top executives and resulted in a senior management team that saw the worldthrough similar lenses.

In the fall of 2001 GM Chief Executive Richard Wagoner hired former Chrysler executive Robert Lutz asvice chairman. His primary task was to change GMs organizational culture. Wagoner acknowledged that GMsculturedominated by finance-types, engineers, and manufacturing personnelwas content to turn out

unimaginative cars. The committee system (stacked to favor the companys accounting mentality) further hinderedcreative endeavors. For instance, whenever designers and engineers would disagree about a design, theengineers (and their obsession with cost minimization) would always win. This largely explained why thecompanys cars looked boxy and so similar. Wagoner has essentially given Lutz a free hand to do whatever heneeds to change tradition-bound GM.

Lutz faces a formidable task. This is a huge company. Sales are $180 billion a year. It employs 363,000people. This is also the place where the GM nod is endemic: GM lifers usually just nod at the new guy and go ondoing things as they were, but Lutz has the advantage of coming to GM with a sterling reputation. He is a true carguy, who single-handedly pushed through exciting new products at Chrysler like the Viper, the Prowler, and thePT Cruiser.

Lutz has chosen an incremental strategy for implementing change. He is not chopping heads and bringingin loyalists. Rather, he is relying on the same designers and engineers who have been turning out duds for years.He is giving more clout to the designers and marketing people. Hes overseen a reorganization that has

engineering and design divisions now reporting to just one person. Hes encouraging people to question pastpractices, to speak out on issues, and challenge company doctrine. And GM brass is now spending more timedriving competitors cars than their ownwhile Lutz points out how most of them best GM.

Class Exercise:

Divide students into groups to answer the following questions found at the end of the case:

1. Describe the old GM culture.Answer Slow, deliberate decision making; layer-upon-layer of hierarchy; focus on cost-cutting rather thanon new product design; and management-by-committee.

2. What specific forces created this culture?Answer Executives believed that the GM system was superior to all others. Top executives were insulated,which resulted in a senior management team that saw the world through similar lenses.

3. Describe the new culture that Lutz is trying to create.Answer Hes encouraging people to question past practices, to speak out on issues, and challengecompany doctrine.

4. Do you think Lutz will succeed or fail in his effort to change GMs culture? Why?Answer Students answers will vary.

Source: Parts of this case are based on R. Meredith, Car Guy, Forbes, January 21, 2002, pp. 5051.

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Exploring OB Topics on the World Wide Web

Search Engines are our navigational tool to explore the WWW. Somecommonly used search engines are:

www.goto.com

www.google.comwww.excite.comwww.lycos.com

www.hotbot.comwww.looksmart.com

1. What do you think it would be like working for the Happiest Place on Earth? Of course, it isDisney Land! Disney is hugeso much more than theme parks. Go to:http://disney.go.com/disneycareers/index.htmlto get a flavor of what their corporate culturemight be like. Click on the links found at the bottom of the page. One even references culturebut it is not necessarily referring to corporate culture. Be prepared to talk about what youlearned about the Disney corporation in class.

2. Take a web walk and learn about organizational culture. It can be found at:http://www.oise.utoronto.ca/~vsvede/culture.htm . There are a variety of linkspick topics thatare of interest to you and explore. Write a short two page reaction paper about what youlearned on your journey and bring it to class for more discussion.

3. How does a change agent go about changing the corporate culture? The task, no doubt, isnever easy, but the following web site offers a process to follow at:http://www.hcgnet.com/html/articles/changingCulture.html . Read through the article and try tothink of a time when an organization you were involved with underwent change. Take the stepsoutlined in the article and apply them to your experience. Write a brief commentary on eachstep would apply to your situation. Bring it to class and be prepared to discuss your case.

4. How does one differentiate between a strong and a weak culture? The Denison OrganizationalCulture Survey can be found at: http://www.denisonculture.com/culture/culture_main.html . It isan internal tool used by organizations. The page provides information about the survey and amodel of strong vs. weak organizational cultures. Write a paragraph or two on how you thinkthis information might be helpful to organizations.

5. Career Bliss. Really? Go to: http://www.spiritualityofwork.com/organization.htmlto learn moreabout Spirituality at Work. While there take the 10 Steps to Career Bliss survey and see whatresults you obtain. Also on the page is a list of benefits to employers who incorporate spiritualityprinciples into the corporate culture. Write a short paper of the concept of Spirituality at Work.What do you think managers have to gain? Employees? Is there a downside? Use ideas fromthe website as a start for organizing your paper. Bring it to class for further discussion.

6. Becoming a more customer-responsive organization can be a difficult culture change. Learnhow CRHC did it at: http://www.cio.com/archive/051501/change_content.html . Thisorganization featured in this article demonstrates how difficult the process can be, but also howrewarding the changes eventually can be. Look at the model of key variables to creating a morecustomer responsive corporate culture found in the text. In the article, find examples of thosevariables as CRHC underwent the change process and list. Bring it to class for furtherdiscussion.
http://www.goto.com/http://www.google.com/http://www.excite.com/http://www.lycos.com/http://www.hotbot.com/http://www.hotbot.com/http://www.looksmart.com/http://disney.go.com/disneycareers/index.htmlhttp://disney.go.com/disneycareers/index.htmlhttp://www.oise.utoronto.ca/~vsvede/culture.htmhttp://www.hcgnet.com/html/articles/changingCulture.htmlhttp://www.denisonculture.com/culture/culture_main.htmlhttp://www.spiritualityofwork.com/organization.htmlhttp://www.spiritualityofwork.com/organization.htmlhttp://www.cio.com/archive/051501/change_content.htmlhttp://www.goto.com/http://www.google.com/http://www.excite.com/http://www.lycos.com/http://www.hotbot.com/http://www.looksmart.com/http://disney.go.com/disneycareers/index.htmlhttp://www.oise.utoronto.ca/~vsvede/culture.htmhttp://www.hcgnet.com/html/articles/changingCulture.htmlhttp://www.denisonculture.com/culture/culture_main.htmlhttp://www.spiritualityofwork.com/organization.htmlhttp://www.cio.com/archive/051501/change_content.html

Org Culture 5

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