Organizational Culture


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Organizational Culture

  1. 1. Organizational CultureWali Memon 1 Wali Memon
  2. 2. Integrated Portfolio at FedEx With all the acquisitions by FedEx, there was a need to change their structure. It adopted a multi-divisional structure. Corporate provides strategic direction and consolidated financial reporting. Significant authority has been delegated to the divisions. Each division manages its own specialized network of services. Do you know of other companies that operate in a similar fashion? Is this a good model for organizations to follow as they grow and develop? Wali Memon Exploring Behavior in Action 2
  3. 3. FedEx Organization FedEx Supply FedEx Chain Freight FedEx Custom Critical FedEx FedEx Express Corp. FedEx Trade Network FedEx Kinko’s Services FedEx Ground Wali Memon 3
  4. 4. Organizational Structure and Culture The formal system of work roles and Organizational authority relationships that govern Structure how associates and managers interact with one another. Involves the values and norms Organizational shared by managers and associates Culture that influence behavior. It is a powerful force in organizations. Wali Memon 4
  5. 5. Knowledge Objectives1. Define key elements of organizational structure, including both structural and structuring dimensions.2. Explain how corporate and business strategies relate to structure.3. Explain how environment, technology, and size relate to structure.4. Define organizational culture, and discuss the competing- values cultural framework.5. Discuss socialization.6. Describe cultural audits and subcultures.7. Explain the importance of a fit between individual values and organizational culture. Wali Memon 5
  6. 6. Fundamental Elements of Organizational Structure Structural Hierarchy StructuringCharacteristics Characteristics Wali Memon 6
  7. 7. Structural CharacteristicsDepartmentation Height Span of Control Wali Memon 7
  8. 8. Span of ControlHighest Average span of Four Average span of Ten 1 1 Organizational Level 4 10 17 100 63 1000 250 Associates 1000 AssociatesLowest Wali Memon 8
  9. 9. Functional Organization CEO VP VP VP Research and Operations Human Development Resources VP VP Finance Marketing Wali Memon 9
  10. 10. Divisional Organization CEO V.P. V.P. V.P. Product/Service Product/Service Product/Service Area 1 Area 1 Area 1 Head of Head of Head ofHead of Head of Human Head of Head of Human Head of Head of Human R&D Operations Resources R&D Operations Resources R&D Operations Resources Head of Head of Head of Head of Head of Head of Finance Marketing Finance Marketing Finance Marketing Wali Memon 10
  11. 11. Centralization StandardizationStructuring Characteristics Formalization Specialization Wali Memon 11
  12. 12. The Modern OrganizationFlexible empowering type of structure Organic Mechanistic Learning Non-Learning Boundaryless TraditionalFewer management levels, broader spans of control, lesscentralization, standardization, formalization andspecialization. Wali Memon 12
  13. 13. Freedom Substantial freedom may exist, but 1. Freedom is not unlimited 2. Alternative mechanisms are used to ensure that individuals are working for the good of the organization 3. Values are shared 4. Reward systems are used to promote appropriate behavior Wali Memon 13
  14. 14. Factors Affecting Structure Corporate Growth Strategy Diversification Wali Memon 14
  15. 15. Diversification Strategy and Structure Diversification StructureSingle product FunctionalDominant product (few products) FunctionalDominant product (several products) DivisionalRelated product DivisionalUnrelated product DivisionalUnrelated product Holding Company Wali Memon 15
  16. 16. Business StrategyHow a firm competes for success against otherorganizations in a particular market. Low cost/low price Product/service differentiation Supporting structure including strategic business units – SBUs Wali Memon 16
  17. 17. IDEO and Differentiation Strategy IDEO demonstrates a differentiation strategy, highlights that occasionally organizations supplement their human capital, and they value teams with diverse members. Is this an effective approach to business? How can this approach help other businesses and organizations? What are your thoughts about IDEO’s approaches: • Form a diverse team • Team members brainstorm • Team members engage in rapid prototyping • Team members implement the fruits of their labors Wali Memon Experiencing 17 Strategic OB
  18. 18. Environment and Basic StructureEnvironmental uncertainty – the degree to whichan environment is complex and changing;uncertain environments are difficult to monitorand understand. Paul R. Lawrence Effective organizations experiencing high environmental uncertainty tend to be more organic. Effective organizations experiencing low environmental uncertainty tend to be less organic. Wali Memon 18 Jay W. Lorsch
  19. 19. Environment and Integration Lateral Relations Information Processing Increasing Richness of Information Technology Self-Contained Tasks Slack Resources Wali Memon Increasing Implementation Complexity 19
  20. 20. Alternative Lateral Processes Direct Contact Liaison Roles Matrix Designs Taskforces Lateral Processes Managerial Teams Linking Roles Integrating Roles Wali Memon 20
  21. 21. Technology and Structure Mass Production Technology Process Small-Batch Technology Manufacturing Production Technology Mass Customization Wali Memon 21 Joan Woodward
  22. 22. Technology and Structure Task Variability Task Analyzability Routine Craft Four categories of technology Engineering Nonroutine Wali Memon 22Charles Perrow
  23. 23. Organizations and Technology Engineering Non-Routine Specialized Research and High Engineering Development Task Variability Consulting Firm Firm Routine Craft Low Mass-Production Public School Firm High Task Analyzability Low Wali Memon 23
  24. 24. Google Culture AttractsHigh-Quality Associates Do you think Google would have enjoyed its success had a different type of structure and culture been introduced? What types of organizations could benefit with a similar structure and culture? What types of organizations might have difficulty? As Google continues to grow, will the culture survive or will it possibly be replaced by a more traditional culture? Wali Memon Experiencing 24 Strategic OB Larry Page and Sergy Brin
  25. 25. Developing Organizational Culture Shared Values Reinforcing Organizational Norms Outcomes Culture Individual and Group Behavior Wali Memon 25
  26. 26. Organizational Culture Clan Adhocracy Discretion Flexibility/ Leadership Leadership Mentors and Coaches Entrepreneurs and Innovators Effectiveness Effectiveness Cohesion and Morale Creativity and Innovation Hierarchy Market Stability/Control Leadership Leadership Monitors and Organizers Hard Drivers and Competitors Effectiveness Effectiveness Efficiency and Order Goal Achievement and Winning Internal Focus/Integration External Focus/ Wali Memon Differentiation 26
  27. 27. Cultural Socialization A process through which an organization imparts its values to newcomers Context Content Social Dynamics Wali Memon 27
  28. 28. Cultural Audit A tool for assessing and understanding the culture of an organization. Use these five steps for conducting the cultural audit:Analyze Analyze Analyze Explore Examineprocess responses values anomalies linkage – and to critical and or culturecontent incidents beliefs of puzzling with culture features goals creators Subcultures – groups that share values that differ from the main values of the Wali Memon organization. 28
  29. 29. Finding a Fit at Home DepotManagerialAdvice Do you agree that an individual’s management style and values should agree with the organization’s culture? Why or why not? Do you think Nardelli is what Home Depot needed at the time? Have you worked with a leader whose style was very different than the culture of the organization? What was that like?Robert Nardelli Can some organizations benefit from a major change in leadership philosophy? Wali Memon 29
  30. 30. Person-Organization Fit Types of personal goals that one ought to have Values Abstract ideals that End-Means Dimension relate to proper life goals and methods for reaching those goals. Types of behaviors that one ought to use in reaching those goals Wali Memon 30
  31. 31. Types of Personal Values End Means (Goal) (Behavior) Values Values Wali Memon 31
  32. 32. The Strategic Lens1. Consider an organization of which you are a member or an associate. What is the structure in this organization? Is it centralized or decentralized? Is it organic and flexible? How would you change the structure in this organization to make it more effective?2. How would you describe the culture in the organization discussed in question #1? How does the culture affect members’ behavior in the organization?3. When you become a manager, what type of culture will you establish in your unit? What values do you want to emphasize? Why? Wali Memon 32
  33. 33. QuestionsWali Memon 33