Culture and Structure

Synchronous

Culture as a Liability

1. Barrier to change

2. Barrier to diversity

3. Barrier to acquisitions and mergers

What Do Cultures Do?

Culture as a Liability1. Barrier to change

• We are treating culture in a non-judgemental manner.

• Only looking at its good side but there are also its potential dysfunctional aspects

• Culture is a liability when the shared values are not in agreement with those that will further the organization’s effectiveness. This is most likely to occur when an organization’s environment is dynamic.

• Northrop example

• A strong culture can be a hindrance

2. Barrier to diversity

– Strong cultures can be liabilities when:• They effectively eliminate the unique

strengths that diverse people bring to the organization.

• They support institutional bias or become insensitive to people who are different.

3. Barrier to acquisitions and mergers

• Conflicting cultures

• More people issues with mergers

• The reality is that success of a merger depends on how well the two organizations cultures match up

How Culture Begins• Cultures don’t just appear

• Founders hire and keep only employees who think and feel the same way they do.

• Founders 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.

• When the organization succeeds, the founders’ entire personality becomes embedded in the culture of the organization.

• Disney, MARVEL, George Washington

Keeping Culture Alive- once a culture is in place then

all efforts are made to retain and maintain it • Selection

– Concern with how well the candidates will fit into the organization

– Provides information to candidates about the organization– organization fit

• Top Management– Senior executives help establish behavioral norms that are

adopted by the organization– Risk taking.– How much freedom managers should give their

employees.– What is appropriate dress.– E.g. Keirlin the CEO of Fastenal Co. his business trips are

low cost and his life style modest

Socialization

• New employees are not fully indoctrinated in the organization’s culture. They are unfamiliar with the organization’s culture and are potentially likely to disturb the beliefs and customs that are in place.

• The process that helps new employees adapt to the organization’s culture

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

• This is when the organization seeks to mold the outsider into an employee.

• The organization socializes every employee throughout his/her entire career.

Stages in the socialization Process

• Prearrival Stage– The period of learning in the socialization process that occurs

before a new employee joins the organization– E.g. hiring someone that has been though or moulded in the way

the that the company culture operates • Encounter Stage

– The stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge

– Where expectations and reality differ, the new employee must undergo socialization that will detach him/her from his/her previous assumptions and replace them with another set that the organization deems desirable.

– E.g. friendship ties • Metamorphosis Stage

– The stage in the socialization process in which a new employee changes and adjusts to the work, work group, and organization

Metamorphosis• Metamorphosis and the entry socialization

process is complete when the new member has become comfortable with the organization and his job.

• He/she has internalised the norms of the organization and his work group and understands and accepts these norms.

How organization Cultures Form

Figure 17.2

Founder sets the precedence than selection and actions follow to strengthen the culture

How Employees Learn Culture

• Stories – Legends and Gossip• Rituals - Walmart• Material Symbols – 1%• Language - Military

Stories

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

• Stories such as these typically contain a narrative of events about the organization’s founders, rule breaking, rags-to-riches successes, reductions in the workforce, relocation of employees, reactions to past mistakes, and organizational coping.

• These stories anchor the present in the past and provide explanations and legitimacy for current practices.

Rituals

• Rituals are repetitive sequences of activities that express and reinforce the key values of the organization, what goals are most important, which people are important, and which are expendable.

• One of the best-known corporate rituals is Wal-Mart’s company chant. W-A-L squiggle M-A-R-T! Was Sam Walton’s way to motivate his workforce.

Material Symbols

• The headquarters of Alcoa does not look like your typical head office operation: – There are few individual offices and is essentially made up of

cubicles, common areas and meeting rooms.– The informal corporate headquarters conveys to employees

that Alcoa values openness, equality, creativity, and flexibility.• Some corporations provide their top executives with a variety of

expensive perks. Others provide fewer and less elaborate perks.• The layout of corporate headquarters, the types of automobiles

top executives that are given, and the presence or absence of corporate aircraft are a few examples of material symbols.

• These material symbols convey to employees who is important, the degree of egalitarianism desired by top management, and the kinds of behavior that are appropriate.

Language

• Many organizations and units use language as a way to identify members of a culture or subculture. By learning this language, members attest to their acceptance of the culture and help to preserve it.

• organizations, over time, often develop unique terms to describe equipment, offices, key personnel, suppliers, customers, or products that relate to its business.

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

• Once assimilated, this terminology acts as a common denominator that unites members of a given culture or subculture.

Creating An Ethical Organizational Culture

• Characteristics of organizations that develop high ethical standards– High tolerance for risk– Low to moderate in aggressiveness– Focus on means as well as outcomes– Take the example of Johnson and Johnson and poisoned

Tylenol • Managerial practices promoting an ethical culture

– Being a visible role model – employees will look up to you and use you as a benchmark

– Communicating ethical expectations- be clear , no ambiguities and stress core values

– Providing ethical training- workshop and training to stress what is allowed and what is not

– Rewarding ethical acts and punishing unethical ones– Providing protective mechanisms-formal measures in

place so employees can freely discuss and report unethical behavior

Creating a Customer-Responsive Culture

• This is very important today. • Research reveals that the

following 6 variables are evident in customer responsive cultures

• Key Variables Shaping Customer-Responsive Cultures

• The types of employees hired by the organization• Low formalization: the freedom to meet customer

service requirements

Contd Empowering employees with decision-making discretion to

please the customer

Good listening skills to understand customer messages

Role clarity that allows service employees to act as 'boundary spanners‘

Employees who engage in organizational citizenship behaviors

In sum

• Customer responsive cultures hire service oriented people who go beyond expectations

• Deliver to the customer • Satisfied customer • Have autonomy • Get the task done in the way seen fit

to them

• Find Stanford video case about culture…

Reminders for Next Time