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Organizational Culture and

Structure
Notes for EM416 and EA302
What do we mean by Organizational Culture?
• It is the system of shared beliefs and Values. According to
Edgar Schein, organizational culture or corporate culture, is
a system of shared beliefs and values that develops within
an organization and guides the behavior of its members.
This is the “social glue” that binds the organization together.
It can vary considerably with different organizations having
different emphases on risk taking, treatment of employees,
team spirit and rewards.
What do we mean by organizational
structure?

• Who reports to who and who does what. That is


basically what it is. It is a formal system of task
reporting relationships that coordinates and
motivate an organization’s members so that they
can work together to achieve the organization’s
goals.
What are the 4 types of Organizational
Culture?
• Clan- collaborate, cohesion, participation, communication,
empowerment, people development and commitment
• Adhocracy- create, adaptability, creativity, agility, innovation,
growth and cutting-edge output
• Hierarchy- control, capable processes, consistency, process
control, efficiency, timeliness, smooth and functioning
• Market- compete, customer focus, productivity, enhancing
competitiveness, market share, profitability and goal
achievement
Three Levels of Organizational Culture
• Observable artifacts- physical manifestations such as manner of
dress, awards, myths and stories about the company, rituals,
ceremonies and decorations

• Espoused values- explicitly stated values and norms preferred by the


organization, or enacted values representing the values and norms
actually exhibited by the company

• Core values- core beliefs, those that are taken for granted and
difficult to change
How do employees learn the culture?
• Symbols- which convey its most important values
• Stories- are told and retold about incidences of the past
in the organization
• Heroes- persons whose accomplishments embody the
values of the organization
• Rites and Rituals- activities and ceremonies, planned and
unplanned that celebrate important occasions and
accomplishments of the organization
The importance of culture
• It gives members an organizational identity
• It facilitates collective commitment
• It promotes social-system stability
• It shapes behaviour by helping employees make
sense of their surroundings
Three Types of Organizational Structure

• For profit organizations- make money or profits by


offering products or services

• Nonprofit organizations- offer services without making


profit e.g. hospitals, colleges

• Mutual-benefit organizations- voluntary collectives to


advance members interests e.g. unions
Organization Chart

• The vertical hierarchy of authority, who reports to


whom.

• The horizontal specialization, who specializes in


what work
What are the common elements of
organizations?
• Common purpose, the means for unifying members

• Coordinated effort- working together for a common purpose

• Division of labor- work specialization for greater efficiency

• Hierarchy of authority- chain of command


What are the four factors in designing an
organization’s structure?
• Environment- mechanistic versus organic; in mechanistic authority is centralized,
tasks and rules are clearly specified, and employees are closely supervised. In
organic, authority is decentralized, there are fewer rules and procedures and
networks of employees are encouraged to cooperate and respond to unexpected
tasks

• Environment- differentiation versus integration; differentiation is the tendency for


the parts of organizations to disperse and fragment. While integration is the
tendency to draw together to achieve a common purpose

• Life Cycle; 4 stages, the birth, youth, midlife and maturity

• Link between strategy and structure- reflect cost minimization, innovation or


imitation

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