What Is an Organization?

A consciously coordinated social unit, composed

of a group of people, which functions on a
relatively continuous basis to achieve a common
goal or set of goals.
 Organizational Culture
Organizational culture
– set of shared, taken-for-granted implicit
assumptions that a group holds and that
determines how it perceives, thinks about and
reacts to its various environments
– A common perception held by the organization’s
members; a system of shared meaning.
 Henry Mintzberg on Culture
• “Culture is the soul of the organization — the
beliefs and values, and how they are
manifested. I think of the structure as the
skeleton, and as the flesh and blood. And
culture is the soul that holds the thing together
and gives it life force.”
 Organizational Culture
• The pattern of shared values, beliefs and
assumptions considered to be the appropriate
way to think and act within an organization.
– Culture is shared
– Culture helps members solve problems
– Culture is taught to newcomers
– Culture strongly influences behaviour
Organizational Culture Characteristics

• Passed on to new employees through the

process of socialization
• Influences our behavior at work
• Operates at different levels
 Organizational Culture
• Shaped by four components:
– Founder’s values
– Industry and business environment
– National culture
– Senior leaders’ visions
How Organizational Culture Forms

Top
Philosophy management
of Selection Organization's
organization's criteria culture
founders
Socialization
 Elements of Strong Culture
• Widely shared philosophy
• Concern for individuals
• Recognition of heroes
• Belief in ritual and ceremony
• Well-understood sense of the informal rules
and expectations
• Belief that what employees do is important to
others
 Cultures can be “strong” and “weak”

• Strong cultures can be both good and

bad—help people make sense of what’s
going on

• Weak cultures do not provide workers

with a sense of belonging
 Embedding Organizational Culture

1. Formal statements
2. The design of physical space
3. Slogans, language, acronyms, and sayings
4. Deliberate role modeling, training programs, teaching and
coaching
5. Explicit rewards, status symbols (e.g., titles),
and promotion criteria
 Embedding Organizational Culture
6. Stories, legends, and myths about key people and events
7. The organizational activities, processes, or outcomes that
leaders pay attention to, measure, and control
8. Leader reactions to critical incidents and organizational
crises
9. The workflow and organizational structure
10. Organizational systems and procedures
11. Organizational goals and the associated criteria used for
recruitment, selection, development, promotion, layoffs,
and retirement of people
Exhibit 9-1 Layers of Culture

Artifacts of Material Symbols

Organizational Language
Culture Rituals
Stories

Organizational Beliefs
Culture Values
Assumptions
 Levels of Culture
• Artifacts
– Aspects of an organization’s culture that you see, hear, and feel
• Beliefs
– The understandings of how objects and ideas relate to each other
• Values
– The stable, long-lasting beliefs about what is important
• Assumptions
– The taken-for-granted notions of how something should be in an
organization
 Characteristics of Organizational
Culture
• Innovation and risk-taking
– The degree to which employees are encouraged to be innovative and take
risks.
• Attention to detail
– The degree to which employees are expected to exhibit precision, analysis,
and attention to detail.
• Outcome orientation
– The degree to which management focuses on results or outcomes rather than
on technique and process.
• People orientation
– The degree to which management decisions take into consideration the effect
of outcomes on people within the organization.
 Characteristics of Organizational
Culture
• Team orientation
– The degree to which work activities are organized around teams rather
than individuals.
• Aggressiveness
– The degree to which people are aggressive and competitive rather
than easygoing.
• Stability
– The degree to which organizational activities emphasize maintaining
the status quo in contrast to growth.
 Wal-Mart’s 10-foot Rule
• “One of our secrets to customer service is the
10-foot rule, handed down to us by our
founder, Sam Walton. During his many store
visits, he encouraged associates to take a
pledge with him: "I want you to promise that
whenever you come within 10 feet of a
customer, you will look him in the eye, greet
him, and ask him if you can help him."
• “This pledge is what we call our "10-foot
attitude," and it was something Sam had
•
practiced since childhood.”
From Walmart.com
 Types of Organizational Culture

• Constructive
• Passive-defensive
• Aggressive-defensive
 Types of Organizational Culture
Constructive
• Employees are encouraged to interact with
others
• Associated with achievement, self-actualizing,
humanistic-encouraging, and affiliative
 Types of Organizational Culture
Passive-defensive
• Employees must interact with others in ways
that do not threaten their own job security
• Associated with approval, convention,
dependent, and avoidance
 Types of Organizational Culture

Aggressive-defensive
• Employees approach tasks in forceful ways to
protect their status and job security
• Associated with oppositional power, is
competitive and perfectionistic
 Outcomes Associated with
Organizational Culture

1. Significantly correlated with employee

behavior and attitudes
2. Organizational commitment, job satisfaction,
intention to quit, and turnover impacted
3. Did not predict financial performance
4. Mergers frequently failed due to
incompatible cultures
 Do Organizations Have Uniform
Cultures?
• Organizational culture represents a common
perception held by the organization members.
• Core values or dominant (primary) values are
accepted throughout the organization.
– Dominant culture
• Expresses the core values that are shared by a majority of the
organization’s members.
– Subcultures
• Tend to develop in large organizations to reflect common
problems, situations, or experiences.
 Culture’s Functions
• Culture is the social glue that helps hold an organization
together by providing appropriate standards for what
employees should say or do.
• It has a boundary-defining role.
• It conveys a sense of identity for organization members.
• It facilitates the generation of commitment to something
larger than one’s individual self-interest.
• It enhances social system stability.
• It serves as a “sense-making” and control mechanism that
guides and shapes the attitudes and behaviour of employees.
 Culture as a Liability
• Culture can have dysfunctional aspects in some
instances
– Culture as a Barrier to Change
• When organization is undergoing change, culture may impede
change
– Culture as a Barrier to Diversity
• Strong cultures put considerable pressure on employees to
conform
– Culture as a Barrier to Mergers and Acquisitions
• Merging the cultures of two organizations can be difficult, if not
impossible
 Keeping a Culture Alive
• Selection
– Identify and hire individuals who will fit in with the culture
• Top Management
– Senior executives establish and communicate the norms of
the organization
• Socialization
– Organizations need to teach the culture to new employees
 How to Change Culture
• Have top-management people become positive role
models, setting the tone through their behaviour.
• Create new stories, symbols, and rituals to replace
those currently in vogue.
• Select, promote, and support employees who
espouse the new values that are sought.
• Redesign socialization processes to align with the
new values.
 How to Change Culture
• Change the reward system to encourage acceptance
of a new set of values.
• Replace unwritten norms with formal rules and
regulations that are tightly enforced.
• Shake up current subcultures through transfers, job
rotation, and/or terminations.
• Work to get peer group consensus through utilization
of employee participation and creation of a climate
with a high level of trust.
Contrasting Organizational Cultures

Organization A Organization B

• Managers must fully document • Management encourages and

all decisions. rewards risk-taking and change.
• Creative decisions, change, and risks • Employees are encouraged to
are not encouraged. “ run with ” ideas, and failures are
treated as “ learning experiences. ”
• Extensive rules and regulations exist • Employees have few rules and
for all employees. regulations to follow.
• Productivity is valued over employee • Productivity is balanced with treating
morale. its people right.
• Employees are encouraged to stay • Team members are encouraged to interact
within their own department. with people at all levels and functions.
• Individual effort is encouraged. • Many rewards are team based.
 Point-CounterPoint

• Why Culture Doesn’t • When Culture Can

Change Change
 Culture develops over many  There is a dramatic crisis
years, and becomes part of
how the organization thinks  There is a turnover in
and feels leadership
 Selection and promotion  The organization is young
policies guarantee survival and small
of culture  There is a weak culture
 Top management chooses
managers likely to maintain
culture
 Summary and Implications
• Employees form an overall subjective perception of the
organization based on such factors as degree of risk tolerance,
team emphasis, and support of people.
– This overall perception becomes, in effect, the organization’s culture
or personality.
– These favourable or unfavourable perceptions then affect employee
performance and satisfaction, with the impact being greater for
stronger cultures.
• Just as people’s personalities tend to be stable over time, so
too do strong cultures.
– This makes strong cultures difficult for managers to change.
 Summary and Implications
• One of the more important managerial implications of
organizational culture relates to selection decisions.
– Hiring individuals whose values don't align with those of the
organization is not good.
• An employee's performance depends to a considerable
degree on knowing what he should or should not do.
HR Implications: Creating an Ethical
Culture
• Visibly reward ethical acts and punish
unethical ones.
– Performance appraisals should consider how
decisions and behaviour measure against the
organization’s code of ethics.
• Provide protective mechanisms.
– Employees need to be able to discuss ethical
dilemmas and report unethical behaviour without
fear of punishment.
ORGANISATION BEHAVIOUR
 ORGANISATION BEHAVIOUR

“Organisation Behaviour is concerned with the study of

what people do in an organisation and how that behaviour
affects the performance of the organisation.”
(Robbins: 1998,9)
 Organizational Behaviour
• . . . a field of study that investigates the
impact that individuals, groups and structure
have on behaviour within organizations, for
the purpose of applying such knowledge
toward improving an organization’s
effectiveness.
 ORGANISATION BEHAVIOUR

The study of Organisational Behaviour involves:

• consideration of the interaction among the formal structure
(organisational context in which the process of management takes place)
• the tasks to be undertaken
• the technology employed and the methods of carrying out work
• the behaviour of people
• the process of management
• the external environment
 ORGANISATION BEHAVIOUR

Interrelated dimensions influencing behaviour:

• The Individual - working environment should satisfy individual needs as
well as attainment of organisational goals.
• The Group - formal and informal. Understanding of groups complements
a knowledge of individual behaviour.
• The Organisation - impact of organisation structure and design, and
patterns of management, on behaviour.
• The Environment - technological and scientific development, economic
activity, governmental actions.
 Why Do We Study OB?
• To learn about yourself and how to deal with others
• You are part of an organization now, and will
continue to be a part of various organizations
• Organizations are increasingly expecting individuals
to be able to work in teams, at least some of the
time
• Some of you may want to be managers or
entrepreneurs
Challenges Facing the Workplace
Organizational Level

• Productivity
• Developing Effective Employees
• Global Competition
• Managing in the Global Village

Group Level

• Working With Others

• Workforce Diversity Workplace

Individual Level

• Job Satisfaction
• Empowerment
• Behaving Ethically
 Today’s Challenges in the
Workplace
• Challenges at the Individual Level
– Job Satisfaction
– Empowerment
– Behaving Ethically
• Challenges at the Group Level
– Working With Others
– Workforce Diversity
 Today’s Challenges in the
Workplace
• Challenges at the Organizational Level
– Productivity
– Developing Effective Employees
• Absenteeism
• Turnover
• Organizational Citizenship
– Competition From the Global Environment
– Managing and Working in a Global Village
 Productivity
• Productivity
– A performance measure including effectiveness
and efficiency
• Effectiveness
– Achievement of goals
• Efficiency
– The ratio of effective work output to the input
required to produce the work
 Effective Employees
• Absenteeism
– Failure to report to work
• Turnover
– Voluntary and involuntary permanent withdrawal from the
organization
• Organizational citizenship behaviour
– Discretionary behaviour that is not part of an employee’s
formal job requirements, but is helpful to the organization
 The Rigour of OB
• OB looks at consistencies
– What is common about behaviour, and helps
predictability?
• OB is more than common sense
– Systematic study, based on scientific evidence
• OB has few absolutes
• OB takes a contingency approach
– Considers behaviour in context
 Beyond Common Sense
• Systematic Study
– Looking at relationships, attempting to attribute
causes and effects and drawing conclusions based
on scientific evidence
• Behaviour is generally predictable
• There are differences between individuals
• There are fundamental consistencies
• There are rules (written & unwritten) in almost every
setting
 Summary and Implications
• OB is a field of study that investigates the impact that
individuals, groups, and structure have on behaviour
within an organization.
• OB focuses on improving productivity, reducing
absenteeism and turnover, and increasing employee
job satisfaction and organizational commitment.
• OB uses systematic study to improve predictions of
behaviour.