Chapter 15 3

Presentation Slides
to Accompany
Organizational Behavior
10th Edition
Don Hellriegel and John W. Slocum, Jr.
Chapter 15—Cultivating Organizational Culture

Prepared by
Michael K. McCuddy
Valparaiso University

1
Learning Objectives for
Cultivating Organizational Culture
 Explain how organizational cultures are formed,
sustained, and changed
 Describe four types of organizational culture
 Discuss how organizational culture can influence
ethical behaviors of managers and employees
 Explain why fostering cultural diversity is important
 Describe the process of organizational socialization
and its affect on culture

Chapter 15: Cultivating Organizational Culture
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Components of Organizational
Culture
 Routine ways of communicating
 Norms shared by individuals and teams
 Dominant values held by an organization
 Guiding philosophy for management’s
policies and decision making
 Rules of the game for getting along in the
organization
 Climate of the organization

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Layers of Organizational Culture

Cultural
Symbols

Shared
Behaviors

Cultural
Values

Shared
Assumptions

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Issues Associated with
External Adaptation and Survival
 Identifying the organization's primary mission and selecting

strategies to pursue it

 Setting specific targets

 Determining how to pursue the goals, including selecting

an organizational structure and reward system

 Establishing criteria to measure how well individuals,

teams, and departments are accomplishing their goals

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Issues Associated with
Internal Integration
 Identifying methods of communication and developing a

shared meaning for important concepts

 Establishing criteria for membership in groups and teams

 Determining rules for acquiring, maintaining, and losing

power and status

 Developing systems for encouraging desirable behaviors

and discouraging undesirable behaviors

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How Cultures Emerge

Top
Management Behaviors Results Culture
• Agrees on • Employees • Financial • Strong culture
shared behave in ways performance emerges
assumptions of that are • Traditions are
• Market share
human behavior consistent with maintained
shared values • Employee
• Develops a • Socialization
and commitment
shared vision of practices for
assumptions
cultural values new employees

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Methods of Maintaining
Organizational Culture
Methods of Maintaining Organizational Culture
•What managers and teams pay attention to
•Reactions to organizational crises
•Managerial role modeling
•Criteria for rewards
•Criteria for selection and promotion
•Organizational rites, ceremonies, stories

Recruitment of Removal of
employees who Organizational employees who
fit the culture Culture deviate from
the culture

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Organizational Rites and
Ceremonies POSSIBLE
TYPE EXAMPLE CONSEQUENCES

Rites of passage Basic training, U.S. Army Facilitate transition into new
roles; minimize differences in
way roles are carried out
Rites of degradation Firing a manager Reduce power and identity;
reaffirm proper behavior

Rites of Mary Kay Cosmetics Enhance power and identity;
enhancement Company ceremonies emphasize value of proper
behavior

Rites of integration Office party Encourage common feelings
that bind members together
Source: Adapted from Trice, H. M., and Beyer, J. M. The Cultures of Work Organizations.
Englewood Cliffs, N.J.: Prentice-Hall, 1993, 111.

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Requirements for Successfully
Changing Organizational Culture
 Understand the old culture first

 Support employees and teams who have ideas for a better

culture and are willing to act on those ideas
 Find the most effective subculture in the organization and

use it as a model
 Help employees and teams do their jobs more effectively

 Use the vision of a new culture as a guide for change

 Recognize that significant cultural change takes time

 Live the new culture

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Framework of Types of Cultures

Flexible Clan Entrepreneurial
Culture Culture
Formal
Control
Orientation Bureaucratic Market
Culture Culture
Stable
Internal External
Forms of
Attention
Source: Adapted from Hooijberg, R., and Petrock, F. On cultural change: Using the competing values framework to help
leaders execute a transformational strategy. Human Resource Management, 1993, 32, 29-50; Quinn, R. E. Beyond Rational
Management: Mastering the Paradoxes and Competing Demands of High Performance. San Francisco: Jossey-Bass, 1988.

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Attributes of a Bureaucratic
Culture
 Long-term concerns are predictability,
efficiency, and stability
 Members value standardized goods and
services
 Managers view their roles as being good
coordinators, organizers, and enforcers of
written rules and standards
 Tasks, responsibilities, authority, rules, and
processes are clearly defined

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Attributes of a Clan Culture

 Members understand that contributions to the
organization exceed any contractual
agreements
 A clan culture achieves unity with a long and
thorough socialization process
 Members share feelings of pride in
membership, as well as feelings of personal
ownership of a business, a product, or an
idea
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12 (continued)
Attributes of a Clan Culture

 Peer pressure to adhere to important
norms is strong
 Success is assumed to depend
substantially on sensitivity to customers
and concern for people
 Teamwork, participation, and
consensus decision making are
believed to lead to success

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Attributes of an
Entrepreneurial Culture
 There is a commitment to experimentation,
innovation, and being on the leading edge
 This culture does not just quickly react to
changes in the environment—it creates
change
 Effectiveness depends on providing new and
unique products and rapid growth
 Individual initiative, flexibility, and freedom
foster growth and are encouraged and well
rewarded
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Attributes of a Market Culture

 Contractual relationship between individual
and organization
 Independence and individuality are valued
and members are encouraged to pursue their
own financial goals
 Does not exert much social pressure on an
organization’s members, but when it does,
members are expected to conform

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14 (continued)
Attributes of a Market Culture
 Superiors’ interactions with subordinates
largely consist of negotiating performance–
reward agreements and/or evaluating
requests for resource allocations
 Has a weak socialization process
 Few economic incentives are tied directly to
cooperating with peers
 Often tied to monthly, quarterly, and annual
performance goals based on profits

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Organizational Uses of Culture

 Organizational culture has the potential to
enhance organizational performance,
individual satisfaction, and a variety of
expectations, attitudes, and behaviors in
organizations
 If an organization’s culture is not aligned with
the changing expectations of internal and/or
external stakeholders, the organization’s
effectiveness can decline

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15 (continued)
Organizational Uses of Culture

 Organizational culture and performance are
related, although the evidence regarding the
exact nature of this relationship is mixed
 Organizational culture affects employee
behavior and performance
 Assessing which attributes of an
organization’s culture need to be preserved
and which ones need to be modified is a
constant organization need
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Relationship Between Culture
and Performance
 Organizational culture can have a significant

impact on a firm’s long-term economic
performance
 Organizational culture will probably be an

even more important factor in determining
success or failure of firms during the next
decade

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16 (continued)
Relationship Between Culture
and Performance
 Organizational cultures that inhibit strong
long-term financial performance are not rare;
they develop easily, even in firms that are
filled with reasonable and intelligent people
 Although tough to change, organizational
cultures can be made more performance
enhancing if managers understand what
sustains a culture

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Effects of Organizational Culture
on
Employee Behavior and
Performance
 Allows employees to understand the firm’s history

and current methods of operation
 Fosters commitment to corporate philosophy and

values
 Serves as a control mechanism for employee

behaviors
 Certain cultural types may produce greater

effectiveness and productivity
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Effects of Organizational Culture
on Ethical Behavior
 A culture emphasizing ethical norms provides

support for ethical behavior
 Top managers play a key role in fostering

ethical behavior by exhibiting correct behavior
 The presence or absence of ethical behavior

in managerial actions both influences and
reflects the culture
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How Employees Can Change
Unethical Behavior
 Secretly or publicly reporting unethical actions to
a higher level within the organization
 Secretly or publicly reporting unethical actions to
someone outside the organization
 Secretly or publicly threatening an offender or
responsible manager with reporting unethical
actions
 Quietly or publicly refusing to implement an
unethical order or policy

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Actions for Creating a Culture
that Encourages Ethical behavior
 Be realistic in setting values and goals regarding
employee relationships
 Encourage input from organization members
regarding appropriate values and practices for
implementing the culture
 Opt for a “strong” culture that encourages and
rewards diversity and principled dissent
 Provide training on adopting and implementing
the organization’s values

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Guidelines for Managing
Cultural Diversity
 Organization members must:
 Understand the nature of diversity and value a variety of opinions
and insights
 Recognize the learning opportunities and challenges presented by
the expression of different perspectives
 The organizational culture must:
 Foster expectations for high standards of performance and ethics for
everyone
 Stimulate personal development
 Encourage openness
 Make workers feel valued
 The organization must have a well-articulated and widely
understood mission
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Steps in Socialization

7. Role model to
sustain culture

6. Rituals, taboos,
rites, and stories to
reinforce culture
5. Adoption of Removal of employees
cultural value policies who deviate from culture

4. Rewards that
sustain the culture

3. Training to develop
capabilities consistent
with culture
2. Challenging early
work assignments

Removal of candidates
1. Careful selection who do not “fit” culture

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Possible Outcomes of the
Socialization Process
Successful socialization is Unsuccessful socialization is
reflected in: reflected in:
 Job satisfaction  Job dissatisfaction
 Role clarity  Role ambiguity and conflict
 High work motivation  Low work motivation
 Understanding of culture,  Misunderstanding, tension,
perceived control perceived lack of control
 High job involvement  Low job involvement
 Commitment to  Lack of commitment to
organization organization
 Tenure  Absenteeism, turnover
 High performance  Low performance
 Internalized values  Rejection of values

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