Organizational Behaviour, emerging knowledge and practice for the real world, by S. McShane, M. Von Glinow (fifth edition) – Summary chapter 14

Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. Shared values are values that people within the organization or work unit have in common. Shared assumptions are nonconscious, taken-for-granted perceptions or ideal prototypes of behaviour that are considered the correct way to think and act toward problems and opportunities. Espoused values are the stated values and enacted values are values we actually act upon. The organization’s culture consists of shared values and shared assumptions.

There are seven main corporate cultures, although many of the popular organizational culture models and measures oversimplify the variety of organizational cultures because as long as employees have diverse values, an organization’s culture will have noticeable variability. The seven main corporate cultures are innovation (1), stability (2), respect for people (3), outcome orientation (4), attention to detail (5), team orientation (6) and aggressiveness (7).

Subcultures can enhance the dominant culture by espousing parallel assumptions and values. Countercultures embrace values or assumptions that directly oppose the dominant culture. Countercultures potentially create conflict and dissension among employees, but can also maintain the organization’s standards of performance and ethical behaviour and they act as spawning grounds for emerging values that keep the firm aligned with the evolving needs and expectations of the environment.

Artefacts are the observable signs and symbols of an organization’s culture. There are four broad categories of artefacts:

1. Organizational stories and legends
   This includes stories and legends that serve as powerful social prescriptions of the way things should or should not be done. The stories also produce emotions in listeners and these emotions tend to improve listeners’ memory of moral of the story.
2. Organizational language
   This includes how employees talk to each other, describe customers, express anger and greet stakeholders. It stands out when employees habitually use customized phrases and labels.
3. Rituals and ceremonies
   Rituals are the programmed routines of daily organizational life that dramatize the organization’s culture. This includes how visitors are greeted. Ceremonies are planned displays of organizational culture, conducted specifically for the benefit of an audience.
4. Physical structures and symbols
   This includes the physical structure of a building, as this is built after the organizational culture and the structure subsequently reinforces or alters that culture.

The strength of an organization’s culture refers to how widely and deeply employees hold the company’s dominant values and assumptions. Organizational culture has three important functions: control system (1), it influences employee decisions and behaviour, social glue (2), it bonds people together and makes them feel part of the organizational experience and sense-making (3), it helps employees make sense of what’s going on.

Strong organizational cultures only improve organizational effectiveness under specific conditions. There are three conditions:

1. Culture content is aligned with the external environment
   The benefits of a strong culture depend on whether the culture is aligned with the external environment.
2. Culture strength
   The benefits of culture depend on the strength of the organizational culture. It has to be moderate, but not too strong. A culture that is too strong leads to repression of subcultures and it leads to people locking in their mental models.
3. Culture is an adaptive culture
   The benefits of culture depend on whether the culture content includes an adaptive culture. An adaptive culture is a culture in which employees are receptive to change.

An organization’s culture influences the ethical conduct of its employees.

A bicultural audit is a process of diagnosing cultural relations between companies and determining the extent to which cultural clashes will likely occur. There are different strategies for merging different organizational cultures:

1. Assimilation
   This occurs when employees at the acquired company willingly embrace the cultural values of the acquiring company.
2. Deculturation
   This occurs when the acquiring firm imposes its culture on an unwilling acquired firm.
3. Integration
   This occurs when merging companies combine two or more cultures into a new composite culture.
4. Separation
   This occurs when merging companies remain distinct entities with minimal exchange of culture or organizational practices.

There are five main strategies for altering and strengthening corporate cultures.

The company’s founder usually forms an organization’s culture. The process of leading cultural change is associated with both transformational leadership and authentic leadership. This strategy s called actions of founders and leaders.

A culture can be changed or strengthened by aligning artefacts with the desired culture. A culture can also be changed or strengthened by introducing culturally consistent rewards and recognition. It is also possible to change or strengthen a culture by supporting workforce stability and communication. This strategy is mostly used for strengthening the corporate culture.

Selecting job applicants whose values are compatible with the culture is also a way of strengthening and changing the culture. The attraction-selection-attrition (ASA) theory states that organizations have a natural tendency to attract, select and retain people with values and personality characteristics that are consistent with the organization’s character, resulting in a more homogeneous organization and a stronger culture.

Organizational socialization is the process by which individuals learn the values, expected behaviours and social knowledge necessary to assume their roles in the organization. The psychological contract refers to the individual’s beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party. Job applicants form perceptions of what the company will offer them by way of career and learning opportunities, jo resources, pay and benefits, quality of management and job security. They also form perceptions about what the company expects from them. Transactional contracts are primarily short-term economic exchanges. Relational contracts are long-term attachments that encompass a broad array of subjective mutual obligations.

There are three stages of organizational socialization:

1. Pre-employment socialization
   This stage includes all the learning and adjustment that occurs before the first day of work. The main problem with this stage is that it relies on indirect information.
2. Encounter
   This is the stage in which newcomers how well their pre-employment expectations fit reality. A reality shock is stress that results when employees perceive discrepancies between their pre-employment expectations and on-the-job reality. A reality shock impedes the learning and adjustment process because energy is directed to coping with the stress.
3. Role management
   In this stage, relations with co-workers and supervisors are strengthened and people practice new role behaviours. It also includes resolving conflicts between work and non-work activities.

A realistic job preview (RJP) is a method of improving organizational socialization in which job applicants are given a balance of positive and negative information about the job and work context. RJPs tend to reduce turnover and improve performance. It minimizes the reality shock.