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Organizational Culture

Organizational CultureA system of shared meanings and beliefsIdentifies what goals are soughtCore values (terminal values)Prosperity, harmony, freedom, self-respectCommunicates how to achieve goalsBehavioral norms (instrumental values)Honesty, obedience, ambitious, independentReflected in vision and mission statementsVisionWhat we intend to achieveMission What we do; Who we serve; and How? Purpose-Driven CultureA companys vision and mission communicates its purpose or raison d'trePurpose-driven companies transmit a consistent message, bolstered by articulate values, that resonate with employees and customersPurpose-driven companies perform betterHigher job satisfaction (79% to 19%)Strong financial performance (91% to 65%)Clearly defined culture & beliefs (89% to 38%)Survey of 3,300 executives by Deloitte concluded that culture was the most important issue they faced to assure successPurposeWhole FoodsTo improve customers health and well-beingUSAA (United Services Automobile Association)Supporting members of the military and their familiesREI (Recreation Equipment Incorporated)Helping people to enjoy the outdoors sustainablySaint Judes Childrens Research Hospital Advance cures, and means of prevention, for pediatric catastrophic diseasesASU College of BusinessTo be recognized as a national leader in innovative, life-changing undergraduate and graduate business programs

The Google BumpGreat perks at Google1

But free gourmet-quality food is only a manifest benefitInstead, the intended purpose is to encourage employee relationshipsA common gathering spotDeliberate manipulation of service linesDeliberate crowding of diners seated at long tablesThus, employees bump into each other with frequencyRanked #1 Best place to work by Fortune in 2015Offers paid time off for volunteeringOnsite fitness centerDiscounted gym membershipsOnsite medical care facilityOffers college tuition reimbursement to employeesFree gourmet-quality dining Paid Holidays 13Paid Vacation 15Sick days Unlimited140 applicants per employee hireSpouse receives salary for 10 years in event of employee deathWhen and Why Culture Matters MostCulture as a social control mechanism and as a device to distinguish the firm from competitorsWhat Determines CultureIndustry Environment customer requirements competition/munificence societal expectationsManagementCULTUREAssumptionsValuesForms strategy structure processesCulture and forms must conform to industry imperatives the right thing to do.Prime beneficiaries or their agents may shape values consistent with assumptionsManagement develops the forms necessary to conduct businessEVENTS 2008 Deepwater Horizon electric utility financial services

food services oil exploration

Adapted from Gordon 1991Dotted lines = InfluenceSolid lines = Controlling influenceCulture ChallengesThe Challenge of Culture & personalityJapanese auto companies in the USTrade imbalance circa 1980-90Cultural differences between US and JapanRegional, personality, value & attitudinal

Devices that emphasize personal values & beliefs Interview Realistic Job Previews Personality and Attitude Tests Integrity TestingJapanese Auto Companies in US Personality and attitude testing humility, changeableness, team orientation, anti-unionWalt Disney originally hired fair/carnival folk (hucksters) specific vocabulary consistent with wholesome culture law enforcement = security hosts employees = cast members customers = guests rides = attractions REVIEW DISNEY MATERIALSCulture ChallengesThe Challenge of a New Business EnterpriseWalt Disney CompanyFamily-friendly theme park @ Disneyland

Disney Culture (cast members, security hosts, and guests)personal references: characterphysical appearance: grooming, conformityservice orientation: enthusiasm, integrity

Cultural Types (Sonnenfelds Typology)AcademyThe Learning OrganizationMastery - Careers knowledge, competence, specialization, training, silosBaseball TeamThe NaturalPerformance - Free agents outcomes, entrepreneurship, risk-taking, incentivesClubThe FamilyConformity - Seniority loyalty, fitting in, experience, generalists, career latticesFortressThe CastleFaithfulness - Knights preoccupied with survival, defensive, messiah-silver bullet

Academy steady career climbers recruit @ college campuses skill-based pay programs certification programsBaseball Team reward outcomes and provide big incentives risk takers a lot of job hopping low in loyaltyClub value team players with experience comes knowledge; show of loyalty high homogeneityFortress an org that has fallen on hard times seeking a messiah for deliveranceCompeting Values FrameworkCONTROL - Processes - HIERARCHYFocus: ProcessSituation: Organization has large and complex scope and scale, government regulations and standards determine business practices, failure is no optionPurposes: Efficiency and qualityPractices: Implementing large scale technology and systems, applying continuous improvement processes, complying with regulations, adhering to standardsPeople: Organized, methodical, technical, practical, objective, persistentEnvironment: Clear roles, logical objectives, structured work, cohesive work processesMeasures: Budget adherence, milestones achieved, number of failures, regulatory complianceCREATE Open Systems - ADHOCRACYFocus: VisionSituation: Differentiation creates significantly higher margins, a new Methodology changes the game, an industry is situated around blockbuster inventionPurposes: Innovation and Growth Practices: Encouraging radical thinking, launching new ventures, speculating emerging opportunities, launching change initiatives, destroying old practices People: Visionary, optimistic, generalist, enthusiastic, quick thinker, expressive Environment: Stimulating projects, flexible hours, free from everyday constraints, diverse workforce Measures: Diversity of experiments, new market growth, adoption rate, revenues from new products and services COMPETE Rational Goals - Market Focus: Goals Situation: Shareholder demands are the primary driver, aggressive competition, markets change from mergers and acquisitions, investors demand quick results Purposes: Profits and speed Practices: Managing performance through objectives, investing for increasing rates of return, quickly starting and killing initiatives, quickly confronting problemsPeople: Goal oriented, assertive, driven, accountable, decisive, competitiveEnvironment: High pressure, fast moving, quantifiable results, pay for performanceMeasures: Gross Profit, time to market, return on investment, operating incomeCOLLABORATE Human Relations - CLANFocus: ValuesSituation: A community united by shared beliefs, competency is closely linked to unique abilities, lifestyle identificationPurposes: Community and knowledgePractices: Building teams and developing communities, training,and coaching, creating shared vision and values, harmonious work environmentPeople: Build trust, helpful, resolves conflict, empowering, good listener, encourages participationEnvironment: Harmonious atmosphere, collaborative workplace, informal communication,shared valuesMeasures: Employee satisfaction, employee turnover, training per employee, peer review

CVF 4 Culture Types

Hartnell, Ou, & Kinicki 2011Cultural Types (Deal & Kennedys Typology)DrivingHigh Risk & Fast FeedbackIndividualistic - objectives police, construction, consulting, ad agenciesOutgoingLow Risk & Fast FeedbackTeam - activity Sales, retail stores, real estate, large computer firmsSpecialistHigh Risk & Slow FeedbackCompetence - ideas Aerospace, investment, Oil, military, high-technology ControlLow Risk & Slow FeedbackConformity - process Banks, insurance, utilities, accounting, public agenciesHigh RiskLow RiskFast FeedbackSlow FeedbackDriving - Macho-Tough Guy tolerate high risks - measure of success get things done quickly - emergency attitude short-term orientation; dont learn; do not value cooperation fashionable; in, one-on one sports. no hellos, scoring pointsOutgoing - Work hard/Play hard team-based approaches to problem solving hyperactive world of work (phone, PC, interview) short-term orientation; the quick fix like team sports, like to party together, company partiesSpecialist - Bet your company technically competent; can live with ambiguity slowly get things done, dont respond well to sudden change rather conformist in dress to status position, like golf work in high-stakes ventures (oil drilling, Athlon)Control - Process cautious, orderly, & punctual - attend to detail bureaucratic, red-tape, process-oriented, memo wars style is substance - process over production slow changing, abhor uncertainty, jogging Functions & Dysfunctions of CultureDistinguishes one company from anotherConveys a sense of identity among membersFacilitates commitment to something larger than self-interest*Enhances social system stabilityServes as a behavioral control mechanismAdopted culture may be misfit or maladaptivePerpetuates a spoils system*Encourages conformityStokes conflict with subculturesResistant to change

How is culture TransmittedExplicit statements regarding valuesVision & missionFormsPermissible business strat