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Organizational Behavior
SEVENTH EDITION

Gregory Moorhead and Ricky W. Griffin

Chapter 18

Organization Culture

Learning Objectives
Define organization culture and explain how it affects employee behavior. Summarize the historical development of organization culture. Describe two different approaches to culture in organizations. Identify two emerging issues in organization culture. Describe the relationships among organization culture, creativity, and innovation. Discuss the key elements of managing the organization culture.
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The Nature of Organization Culture

What Is Organization Culture?

There is no single widely accepted definition. The set of values that helps the organizations employees understand which actions are considered acceptable and which actions are considered unacceptable.

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The Nature of Organization Culture

[continued]

Definitions of culture have three things in common:

They define culture in terms of the values that individuals in organizations use to prescribe appropriate behavior. They assume that values are usually taken for granted. They emphasize the stories and other symbolic means through which the values typically are communicated.

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Historical Foundations
Social science disciplines have contributed to the understanding of organization culture. These disciplines include:
Anthropology (the study of human cultures). Sociology (the study of people in social systems). Social Psychology (the study of groups and the influence of social factors on individuals). Economics (attempts to link the cultural attributes of firms with their performance).
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Culture Versus Climate

Culture
The study of organizational culture was based in anthropology and sociology. Typically refers to:
The historical context of a situation and The impact of the context on the behavior of employees

Is the means through which employees learn and communicate what is acceptable and unacceptable in the organization.
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Culture Versus Climate

Climate

[continued]

The study of climate was based in psychology. Usually refers to:

Current atmosphere in the organization and The linkage among work groups, employees, and work performance

Is more easily manipulated than culture. Does not deal with values and norms.

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Creating the Organization Culture

Creating an organizations culture
Is the process of linking its strategic values with its cultural values, much as the structure of the organization is linked to its strategy.

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Table 18.2 Creating Organization Culture

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Creating the Organization Culture

Step 1: Formulate Strategic Values
Strategic values are the basic beliefs about an organizations environment that shape its strategy.

Step 2: Develop Cultural Values

Cultural values are morals that employees need to have and act on for the organization to carry out its strategic values.

Step 3: Create Vision

After developing its strategic and cultural values, the organization must establish a vision of the organizations direction.
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Creating the Organization Culture

[continued]

Step 4: Initiate Implementation Strategies

Implementation strategies cover many factors, from developing the organization design to recruiting and training employees who share the values and will carry them out.

Step 5: Reinforce Cultural Behavior

The final step is to reinforce the behaviors of employees as they act out the cultural values and implement the organizations strategies.

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12

Approaches to Describing Organizational Culture

The Ouchi Framework
William G. Ouchi developed a list of seven points to compare the cultures of U.S. firms, Japanese firms, and Type Z firms
Table 18.3 The Ouchi Framework

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The Ouchi Framework: Attributes of a Type Z Firm

Commitment
Is committed to retaining employees.

Evaluation
Assesses workers long term performance based on both qualitative and quantitative information.

Careers
Emphasizes broad rather than narrow career paths.

Control
Exercises control through informal, implicit mechanisms.
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The Ouchi Framework: Attributes of a Type Z Firm [continued]

Decision making
Requires that decision making occur in groups and be based on full information sharing and consensus.

Responsibility
Expects individual to take responsibility for decisions.

Concern for people

Emphasizes a holistic concern for people.

Type Z and performance

Cultural differences can account for performance differences in companies.
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The Peters and Waterman Approach

Tom Peters and Robert Waterman
Sampled highly successful U.S. firms and sought to describe management practices that led to their success. Published In Search of Excellence which led to the development of their list of excellent organization values

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The Peters and Waterman Framework Table 18.4

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17

Emerging Issues in Organization Culture

Innovation
The process of creating and doing new things that are introduced into the marketplace as products, processes, or services. Innovation involves every aspect of the organization: research and development, manufacturing, and marketing.

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Emerging Issues in Organization Culture [continued]

Types of Innovation
Radical innovation is a major breakthrough that changes or creates whole industries. Systems innovation creates a new functionality by assembling parts in new ways. Incremental innovation continues the technical improvement and extends the applications of radical and systems innovation.

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Emerging Issues in Organization Culture [continued]

Innovation (continued)
New Ventures
Intrapreneurship is entrepreneurial activity that takes place within the context of a large organization.

Corporate Research
Internal innovations that support current businesses by providing incremental innovations and keeping products technologically advanced.

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Empowerment

Emerging Issues in Organization Culture [continued]

The process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of responsibility and authority.

Procedural Justice
The extent to which the dynamics of an organizations decision-making processes are judged to be fair by those who are most affected by them.
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Managing Organizational Culture

Taking Advantage of the Existing Culture
Developing an understanding of how organizational values operate in the firm. Using the values in managing others behaviors in the firm. Communicating the values to lower-level managers for use as guides to their decision making.

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Managing Organizational Culture

[continued]

Teaching the Organizational Culture

Socialization
Is the process through which individuals become social beings.

Organizational Socialization
Is the process through which employees learn about their firms culture and pass their knowledge and understanding onto others.

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Managing Organizational Culture: Changing the Organizational Culture

[continued]

Managing Symbols
Organizational culture is understood and communicated through the use of stories and other symbolic media. Managers should substitute stories and myths that support new cultural values for those that support old ones.

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Managing Organizational Culture: Changing the Organizational Culture

[continued]

The Difficulty of Change

Increases with managers tendencies to revert to old ways, causing lower-level employees to lose faith in the change.

The Stability of Change

The self-reinforcing nature of value systems makes change difficult to implement. New ideas and beliefs can be as stable and influential as old ones.
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