Thismodule willfocusesonunderstandingtheoriginsofOrganizationalCulture.Ourgoalistounderstandthetradeoffsmadewhenorganizationschooseastructure,andanalyzetherelationshipbetweenstructureandculture.

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Organizationalcultureisthesetofshared,takenforgrantedimplicitassumptionsthatagroupholdsandthatdetermineshowitperceives,thinksabout,andreactstoitsvariousenvironments.Observableartifacts

Consistofthephysicalmanifestationofanorganizationsculture.AttheDuPontexperimentstationplaqueshangonthecafeteriawalldescribingtheachievementsoffamousDuPontinventors.

Valuesconceptsorbeliefsthatpertaintodesirableendstates whichguidetheselectionofbehaviorandareorderedbyrelativeimportance

Espousedvaluesrepresenttheexplicitlystatedvaluesandnormsthatarepreferredbyanorganization

Enactedvaluesrepresentthevaluesandnormsthatareactuallyexhibitedorconvertedintoemployeebehavior

BasicassumptionsConstituteorganizationalvaluesthathavebecomesotakenforgrantedovertimethattheybecomeassumptionsthatguideorganizationalbehavior

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3TheCompetingValuesFrameworkisaframeworkforcategorizingorganizationalculture.Asyoucansee,thisframeworkisbasedontwocontinuumsoforganizationaleffectiveness.Oneaxispertainsto

whetheranorganizationfocusesitsattentionandeffortsoninternaldynamicsandemployeeoroutwardtowarditsexternalenvironmentanditscustomersandshareholders.

Thesecondaxesshowsanorganizationspreferenceforflexibilityorcontrolandstability.Theseaxescreatefourtypesoforganizationalculturesthatarebasedondifferentcorevaluesandcriteriaforassessingorganizationaleffectiveness.

Thefirstistheclanculture.Thiscultureischaracterizedhashavinganinternalfocusandvaluingflexibility.Thistypeoforganizationencouragescollaborationbetweenemployeesandiscommittedtohavingacohesiveworkgroupandhighjobsatisfaction.

Theadhocracyculturehasanexternalfocusandvaluesflexibility.Thistypeofculturefosterscreationofinnovativeproductsandservicesbybeingadaptable,creative,andfasttorespondtochangesinthemarketplace.Centralizedpowerandauthoritywouldnotbeeffectivestructuresinanadhocracy.Theseorganizationspromotecreativity,innovation,andknowledgesharing.

Themarketculture hasastrongexternalfocusandvaluesstabilityandcontrol.Thistypeofculturefocusesonthecustomeroveremployeedevelopmentandsatisfactionbecausethegoalofmanagersistodrivetowardsproductivity,profits,andcustomersatisfaction.Thisculturerewardsemployeeswhodeliverresults.

Thehierarchyculturehasaninternalfocusandaformalized,structuredworkenvironment.Itwilltendtohavereliableinternalprocessesandcontrolmechanisms(e.g.,Dellwhosefocusisoncostcuttingandefficiency.)

Thiscategorizationshowshowanorganizationscorevaluesaffectitsculture.Manycompaniesstrugglewithattemptingtoembodyconflictingvalues(e.g.,RitzCarltonvaluesbothemployeesandcustomersbyempoweringemployeesandprovidinghighqualitycustomerservice)

Cultures are stable over time because of a number of factors that perpetuate the culture.

1. Organizational members teach each other about the organizations preferred values, beliefs, expectations, and behaviors

2. Formalstatementsoforganizationalphilosophy,mission,vision,values,andmaterialsusedforrecruiting,selectionandsocialization

3. Thedesignofphysicalspace,workenvironments,andbuildings4. Slogans,language,acronyms,andsayings5. Deliberaterolemodeling,trainingprograms,teachingandcoachingbymanagersand

supervisors6. Explicitrewards,statussymbols(e.g.,titles),andpromotioncriteriaIntentionally alteringtheseelementsofculturemayenableculturalchange.

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Toseehowculturesfitwithin organizationalstructureswemustfirstdefineorganizationsandtypicalstructures.AnOrganizationisasystemofconsciouslycoordinatedactivitiesamongtwoormorepeople.

Therearefourcommon elementsthatmakeupthestructureofanorganizationCoordinationCommongoalsDivisionoflaborHierarchyofauthority.mostorganizationsabidebytheprincipleofunityofcommandwhichstatesthateachemployeeshouldreporttoasinglemanager.

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Organizationaldesignis definedbythestructuresofaccountabilityandresponsibilityusedtodevelopandimplementstrategies,andbythehumanresourcepractices,informationandbusinessprocessesthatactivatethosestructuresThispartialorganizationchartrevealsfourbasicdimensionsoforganizationalstructure:(1) hierarchyofauthority(whoreportstowhom),onthevertical(2)divisionoflabor,Whoisresponsibleforwhat,onthehorizontal(3)spansofcontrolthenumberofpeoplereportingdirectlytoagivenmanager.Generally,thenarrowerthespanofcontrol(fewerpeople),thecloserthesupervisionandthehighertheadministrativecostsasaresultofahighermanagertoworkerratio.(4)lineandstaffpositions. Staffpersonneldobackgroundresearchandprovidetechnicaladvice,andrecommendationstolinemanagers.LineManagershaveauthoritytomakeorganizationaldecisions.

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Traditionalorganizational designsinclude..Functionalstructure

groupspeopleaccordingtothebusinessfunctionstheyperform,forexample,manufacturing,marketing,andfinance

Divisionalstructuregroupstogetheractivitiesrelatedtooutputs,suchastypeofproductorcustomer

Matrixstructurecombinesfunctionalanddivisionalchainsofcommandtoformagridwithtwocommandstructures thisviolatestheunityofcommandprinciple anrequiresadvancedmanagementcoordination.

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IntheexampleshowninFigure173,Fordmightsetupvicepresidentsforeachfunctionalgroupandprojectmanagersforeachmakeofcar.Employeeswouldreporttotwomanagers:oneinchargeofthefunctiontheyperformandtheotherinchargeoftheprojecttheyareworkingon.

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Horizontalorganizations.OrganizearoundcompleteworkflowprocessesThey FlattenhierarchyanduseteamstomanageeverythingTheAppointprocessteamleaderstomanageinternalteamprocessesHorizontal organizationsLetsupplierandcustomercontactdriveperformanceAndProviderequiredexpertisefromoutsidetheteamasrequired

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While traditionalstructuresaredesignedtobuffertheorganizationfromitsenvironment,moderndesignsarespecificallyintendedtoopentheboundariesbetweenorganizationsthuscreatingmoreinterorganizational collaborations..HollowstructureorganizationidentifiescorecompetenciesandoutsourcesnoncoreprocessestovendorswhocandothemcheaperorfasterModularstructures outsourcepartsofaproductinsteadofprocessesVirtualorganizations identifypartnerswiththeneededtalentsandnegotiatesanagreementinwhichtheparticipantstypicallyworkinseparatefacilities,linkedbytechnology

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Contingencyapproachtoorganizationdesignassumesthatorganizationstendtobemoreeffectivewhentheyarestructuredtofitthedemandsofthesituation

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Structures anddecisionmakinggohandinhand.Mechanisticorganizations

Rigidbureaucracieswithstrictrules,narrowlydefinedtasks,andtopdowncommunication.

OrganicorganizationsFlexiblenetworksofmultitalentedindividualswhoperformavarietyoftasks

Centralizeddecisionmakingkeydecisionsaremadebytopmanagement

Decentralizeddecisionmakingimportantdecisionsaremadebymiddle andlowerlevelmanagers

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AsillustratedinTable172,eachofthemechanisticorganiccharacteristicsisamatterofdegree.Organizationstendtoberelativelymechanisticorrelativelyorganic.

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Afunctional structurecansavemoneybygroupingtogetherpeoplewhoneedsimilarmaterialsandequipmentDivisional structuresincreaseemployeesfocusoncustomersandproductsAsuccessfulmatrix structurerequiressuperiormanagerswhocommunicateextensively,fostercommitmentandcollaboration,manageconflictandnegotiateeffectivelytoestablishgoalsandprioritiesconsistentwiththeorganizationsstrategyHorizontal designsimprovecoordinationandcommunicationOrganizationsthatbecomehollow,modular,or virtual cangeneratesuperiorreturnsbyfocusingonwhattheydobest,butmaylosesomedegreeofcontrolover internalprocessesthatcaninfluenceculture.Asyouconsidertheinterplaybetweenstructureandculture,considerwhatconstituteseffectivestructuresforagivenbusinesssituation.Forexample,inacommoditybusinesswherepricesarecontrolledbystiffcompetitionamongfirms,thereareverysmallprofitmargins.Inthesesituationsitisimperativetocontrolcosts.Functionalstructuresaremoreeconomicalandthusmaybeneeded.Incontrast,inindustriesthataredifferentiatedbythereresponsivenesstocustomers,greatercustomerfocusisneededandthusadivisionalstructuredividedbymarketsegmentationmaybemoreeffective.Itisimportanttounderstandhowanappropriatecultureisdevelopedandmaintainedthroughtheactionsofmanagersandleaders.

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