How does culture impact an organization? - Chapter 14

Organizational culture refers to a set of shared meaning that people in organizations have with respect to how to adapt to the environment and cope with change. Organizational culture is about innovation and risk taking, people orientation, team orientation, stability and so on. Culture is not just one aspect of the game, it is the game. An organization is more than the collective capacity of its people to create value. Three key managerial tools for leaders for leveraging culture for performance change are the following. First, recruiting and selecting people for culture fit. Second, managing culture through socialization and training. Third, managing culture through the reward system.

What are the characteristics of organizational culture?

Organizational culture refers to the pattern of basic assumptions that a group has invented, discovered or developed in order to cope with problems of external adaption and internal integration. The assumptions have worked well enough to be considered valid, and therefore to be taught to new members as the correct way to perceive, think and feel in relation to those problems. It refers to a set of shared meanings that people in organizations have with respect to adapting to the environment and cope with change. Norms are based on the organizational culture.

Culture can be described in artifacts and creations, values and assumptions.

The seven characteristics of organizational culture are:

1. Innovation and risk taking
2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness (easygoingness reversed)
7. Stability

What are the differences and similarities of market bureaucracy and clan cultures?

Organizational cultures can be examined by the mechanisms that are used for control when they are faced with goal incongruence and performance ambiguity. Goal incongruence occurs when organizational members do not agree on what the goals of the organization are or should be. Performance ambiguity occurs when revenue streams are unpredictable or uneven. Generally, there are three ways that organization address these issues.

Market control occurs when prices determine how social interactions between people are formed. For instance, you and your friends go for beverages and you choose the bar that has the best happy-hour prices. Social interaction requirements focus on reciprocity and exchange. Information needs focus on competitive pricing; supply and demand. Employee commitment is low, self-interest is based on price and compliance. The method of controlling people is self-selected, based on price mechanisms. The costs of maintaining the control systems are low, but market costs may vary.

Bureaucratic control occurs when legitimate authority governs social interactions. For instance, when you organize an end of the semester happy hour on campus, purchase food and drinks for a large group, and then charge them for attending; provide a wristband and only those with a wristband are served. Social interaction requirements are legitimate authority. Information needs are rules and regulations, which are created or designed for the specific purpose. Employee commitment is moderate, motivated by training, close supervision, and evaluation. Employees are selected based on little screening, then trained, monitored and evaluated. The costs of maintaining the control system are moderate. There are high costs for training and supervision. 

Clan control occurs when shared values and beliefs govern how people interact socially. For example, when a group of friends just get together at the house of one person and everyone chips in money for drinks and pizza. The group has this tradition at the end of every school year, and they know they can depend upon one another to share the costs and have a good time. Social interaction requirements are shared values and beliefs. They have implicit norms; traditions that emerge over time. Employee commitment is high, there is interest for the common good of the organization, based on shared values, internalization. Employees are carefully screened for fit to the clan culture. They are screened both on skills and values. The costs of maintaining the control system are high; there are high costs for job searches and training, but low costs for supervision. 

What is the relationship between national culture and organizational culture?

Organizational culture is a term that is used both for national and international cultures. This may be a bit confession. Yet, research showed quite some overlap between these. Four organizational culture values that appear to be important in most cultures are adaptability, involvement, mission and consistency. Adaptability refers to the ability to transfer the demands of the market into organizational actions. Involvement refers to building human capability, ownership, and responsibility. Consistency refers to defining values and subsystems that are the basis of a strong culture.

When is a culture a strong culture?

Strong cultures are based upon two characteristics, namely high levels of agreement among employees about what they value and high intensity toward these values. If both are high, a strong culture exists.

Zappos, an online seller of shoes and clothing, defined the following 10 core values of culture:

1. Deliver wow through service.
2. Embrace and drive change.
3. Create fun and a little weirdness.
4. Be adventurous, creative and open-minded.
5. Pursue growth and learning.
6. Build open and honest relationships with communication.
7. Build a positive team and family spirit.
8. Do more with less.
9. Be passionate and determined.
10. Be humble.

In most organization, three general subcultures exist:

• Operators: the line managers and employees who are involved in making products, delivering services, and interacting with customers directly. The operators value teamwork and desire engagement with the work they do.
• Engineers: this group focuses on designing systems to support the work of operations, such as employees who design a manufacturing facility. 
• Executives: they have worked their way up organizational career ladders and they are financially responsible to their board of directors and shareholders. This group often has to make the tough financial decisions based on imperfect information. Executives manage many people and divisions and rely on policies and reward systems to maintain control. They may lose touch with their customers and employees at lower levels in the organizational hierarchy.

What are the steps of the socialization process?

Organizational socialization refers to the process an organization utilizes to ensure that new members acquire necessary attitudes, behaviors, knowledge and skills to become productive organizational members. 

The socialization process is defined as follows:

1. Anticipatory socialization: organizational anticipatory socialization is the process an individual goes through as he or she attempts to find an organization to join. It involves the following two basic processes: recruiting and selection. 
2. Entry and assimilation: the preentry step occurs from the time someone is offered the job to when they actually start working. Next, the entry phase occurs, which happens when the new member starts work. Onboarding is the process of welcoming and orienting new organizational members to facilitate their adjustment to the organization, its culture, and its practices and help them adjust tot heir new work environment.
3. Metamorphosis: during this phase, a person transforms from a new employee to an established contributor who is valued and trusted by other members of the organization. Metamorphosis completes the socialization process. The new employee is comfortable with the organization, their boss and their work group. He or she has internalized the organizational culture and understands the job and the rules, procedures and norms. Culture is learned through stories, rituals, symbols and language. Successful metamorphosis positively affects job performance, job satisfaction and commitment to the organization.
4. Outcomes of the socialization process are job performance, job satisfaction, organizational commitment and lower turnover

How do employees learn organizational culture?

There are four ways in which employees learn culture:

• Stories: storytelling is recognized as an important way to understand how employees make sense of what happens at work.
• Rituals: a form of social action in which a group's values and identity are publicly demonstrated or enacted in a stylized manner, within the context of a specific occasion or event.
• Symbols: the sharing of knowledge through access and exposure to images, diagrams, or objects that represent or illustrate a culture value or idea.
• Language: employees may communicate using culture-specific language, jargon or acronyms that can be confusing to a new employee. These terms and usage may be unique to the organization. For instance, some organizations have replaced the term 'employees' with 'team members'.

What are the two differences between organizational culture and climate?

Organizational climate refers to the shared perceptions of the way things are around here. While the analysis of culture relies on understanding an organization's fundamental assumptions, climate research is concerned with representing employees' shared perceptions of values in a static way that they experience at a point in time. A second key difference between culture and climate is that culture is viewed as evolving over time. Climate can be altered through management interventions. Culture is an evolved context, climate is a situation that employees are in. 

How can leaders change organization culture?

Leaders can change organizational culture through the following processes:

• Make strategy and culture important leadership priorities.
• Develop a clear understanding of the present culture.
• Identify, communicate, educate, and engage employees in the cultural ideas.
• Role model desired behaviors.
• Recruit and develop for culture.
• Align for consistency between strategy and culture.
• Recognize and reward desired behaviors and practices.

Use symbols, ceremonies, socialization, and stories to reinforce culture.

• Appoint a culture team.
• Monitor and manage the culture.