16

Organizational
Culture
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Corporate Culture Hits Schwab

Executives at Charles
Schwab & Co.
underestimated the
influence of organizational
culture on behavior when
they acquired U.S. Trust

AP/Wide World Photos.

McShane/Von Glinow OB4e Slide 16-2 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Organizational Culture Defined

The basic pattern of

shared values and
assumptions governing
the way employees within
an organization think
about and act on
problems and
opportunities.
AP/Wide World Photos.

McShane/Von Glinow OB4e Slide 16-3 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Elements of Organizational Culture
Artifacts
• Stories/legends
• Rituals/ceremonies Visible
• Organizational language
• Physical structures/décor

Shared values
• Conscious beliefs
• Evaluate what is good or bad, right or
wrong
Invisible
(below the surface)
Shared assumptions
• Unconscious, taken-for-granted
perceptions or beliefs
• Mental models of ideals

McShane/Von Glinow OB4e Slide 16-4 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Meaning of Cultural Content

• Cultural content refers to the relative ordering of

beliefs, values, and assumptions.

• Example: Software company SAS Institute has

an employee-focused culture that emphasizes
work-life balance.

• An organization emphasizes only a handful of

values out of dozens or hundreds of values that
exist.

McShane/Von Glinow OB4e Slide 16-5 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Organizational Subcultures

• Located throughout the organization

• Can enhance or oppose (countercultures) firm’s

dominant culture

• Two functions of countercultures:

– provide surveillance and critique, ethics
– source of emerging values

McShane/Von Glinow OB4e Slide 16-6 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Mayo Clinic Deciphers its Culture

Courtesy of the Mayo Clinic

To decipher its culture and identify ways to reinforce it at the

two newer sites, the Mayo Clinic retained an anthropologist
who shadowed employees, joined physicians on patient
visits, and posed as a patient to observe what happens in
waiting rooms.

McShane/Von Glinow OB4e Slide 16-7 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Artifacts: Stories and Legends

• Social prescriptions of desired (undesired)

behavior
• Provides a realistic human side to
expectations
• Most effective stories and legends:
– Describe real people
– Assumed to be true
– Known throughout the organization
– Are prescriptive

McShane/Von Glinow OB4e Slide 16-8 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Artifacts: Rituals and Ceremonies

• Rituals
– programmed routines
– (eg., how visitors are greeted)

• Ceremonies
– planned activities for an audience
– (eg., award ceremonies)

McShane/Von Glinow OB4e Slide 16-9 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Artifacts: Organizational Language

• Words used to address people, describe

customers, etc.
• Leaders use phrases and special vocabulary as
cultural symbols
– eg. Referring to “clients” rather than “customers”
• Language also found in subcultures
– eg. Whirlpool’s “PowerPoint culture”

McShane/Von Glinow OB4e Slide 16-10 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Artifacts: Physical Structures/Symbols

• Building structure -- may shape and reflect

culture
– Example: Oakley’s “interplanetary headquarters”
looks like a vault, representing the eyewear and
clothing company’s protective culture
• Office design conveys cultural meaning
– Furniture, office size, wall hangings

McShane/Von Glinow OB4e Slide 16-11 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Benefits of Strong Corporate Cultures

Social
Control

Strong
Organizational Social
Culture Glue

Improves
Sense-Making

McShane/Von Glinow OB4e Slide 16-12 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Problems with Strong Cultures

1. Culture content might be misaligned with the

organization’s environment.

2. Strong cultures may focus on mental models

that could be limiting

3. Strong cultures suppress dissenting values from

subcultures.

McShane/Von Glinow OB4e Slide 16-13 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Adaptive Organizational Cultures

• External focus -- firm’s success depends on

continuous change
• Focus on processes more than goals

• Strong sense of ownership

• Proactive --seek out opportunities

McShane/Von Glinow OB4e Slide 16-14 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Org Culture and Ethics

• Executives view org culture as one of three main

influences on business ethics
• Organizational culture also an ethical problem
when it is very strong --corporate cults

McShane/Von Glinow OB4e Slide 16-15 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Bicultural Audit

• Part of due diligence in merger

• Minimizes risk of cultural collision by diagnosing
companies before merger
• Three steps in bicultural audit:
1. Examine artifacts
2. Analyze data for cultural conflict/compatibility
3. Identify strategies and action plans to bridge
cultures

McShane/Von Glinow OB4e Slide 16-16 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Merging Organizational Cultures

Acquired company embraces

Assimilation acquiring firm’s cultural values

Acquiring firm imposes its culture on

Deculturation unwilling acquired firm

Cultures combined into a new

Integration composite culture

Merging companies remain

Separation separate with their own culture

McShane/Von Glinow OB4e Slide 16-17 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Strengthening Organizational Culture

McShane/Von Glinow OB4e Slide 16-18 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Whole Foods Spreads its Culture

When expanding operations, Whole Foods Market maintains its

culture through a ‘yoghurt culture’ strategy. This is a socialization
process in which current employees who carry the grocer’s unique
culture are transferred to new stores so recently-hired employees
learn and embrace that culture more quickly.

McShane/Von Glinow OB4e Slide 16-19 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Organizational Socialization Defined

The process by which individuals learn the values,

expected behaviors, and social knowledge
necessary to assume their roles in the organization.

McShane/Von Glinow OB4e Slide 16-20 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Socialization: Learning & Adjustment

• Learning Process
– Newcomers make sense of the organization’s
physical, social, and strategic/cultural dynamics

• Adjustment Process
– Newcomers need to adapt to their new work
environment
• New work roles
• New team norms
• New corporate cultural values

McShane/Von Glinow OB4e Slide 16-21 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Stages of Socialization

Pre-Employment
Pre-Employment Encounter
Encounter Role
Role
Stage
Stage Stage
Stage Management
Management

•• Outsider
Outsider •• Newcomer
Newcomer •• Insider
Insider

•• Gathering
Gathering •• Testing
Testing •• Changing
Changing roles
roles
information
information expectations
expectations and
and behavior
behavior

•• Forming
Forming •• Resolving
Resolving
psychological
psychological conflicts
conflicts
contract
contract

McShane/Von Glinow OB4e Slide 16-22 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Pre-employment Socialization Conflicts

A: Firm “sells” the job and

company, hides negative info Individual Organization
Attracts Attracts
B: Applicant polishes up the Organization Individual
résumé to look good
B

C: Applicant avoids asking C D

important questions that may
be awkward (e.g. pay) A

D: Company avoids using valid Individual Organization

selection tests that might Selects Selects
scare away applicants Organization Individual

McShane/Von Glinow OB4e Slide 16-23 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Realistic Job Previews

• A balance of positive and negative information

about the job and work context
• Benefits of RJPs
– Less turnover, higher job performance
– Less reality shock
– Vaccination effect
– Builds loyalty

McShane/Von Glinow OB4e Slide 16-24 © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 16

Organizational
Culture
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc. All rights reserved.