Week 4: Topic 3A - Organizational Culture

Achieving Vision and Strategy

In order to achieve this, managers must:

1. Build and support the right culture

2. Get the right organizational structure

3. Establish effective Human Resources practices

Organizational Culture

The 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

The shared assumption of how work gets done

Organizational Structure

A formal system of task and reporting relationships that coordinates and motivates organizational members, so they work together to achieve organizational goals

Who reports to whom and who does what

Human Resources Practices

All of the activities an organization uses to manage its human capital, including staffing, appraising, training and development, and compensation

Types of Organizational Culture

Clan, Adhocracy, Hierarchy, Market

Two Dimensions of Organizational Culture

Horizontal: inward focus (operations/employees) or outward focus (customers/shareholders)

Vertical: flexibility (and discretion) or stability (control)

Clan Culture

- Emphasis on employee collaboration.

- Internal focus.

- Values flexibility over stability.

Think Chick-Fil-A, "we're like a family here!"

Adhocracy Culture

- Emphasis on innovation and creation.

- External focus.

- Values flexibility over stability

- Adaptable, creative, and quick to respond to changes in the environment

Think of Google

Market Culture

- Emphasis on competition and "winning", i.e. delivering results.

- External focus.

- Values stability and control

Think of Uber, fast responses (mostly), lots of productivity, "I WANT MY MONEY NOW!"

Hierarchy Culture

- Emphasis on control: process management, efficiency, reliability, timeliness, etc.

- Internal focus.

- Formalized, structured work environment.

Think of Amazon, highly efficient because of its many intricacies.

How Employees Learn Culture

Symbols, stories, heroes, rites and rituals, and organizational socialization

Symbols

An object, an act, a quality, or event that conveys meaning to others

Stories

Narrative based on true events repeated—and sometimes embellished upon—to emphasize a particular value

Heroes

Person whose accomplishments embody the values of the organization

Rites and Rituals

Activities and ceremonies that celebrate important occasions and accomplishments

Organizational Socialization

The process by which people learn the values, norms, and required behaviors of an organization

Span of Control

The number of people reporting directly to a given manager; there's narrow (tall) and wide (flat)

Narrow Span of Control

Manager has a limited number of people reporting: like three VPs reporting to one president, instead of nine VPs reporting to one.

Wide Span of Control

Manager has several people reporting: like one supervisor having 40 employees that give reports.

Authority

The right to perform or command; also, the rights inherent in a managerial position to make decisions, give orders, and utilize resources

Accountability

Expectation that managers must report and justify work results to the managers above them

Responsibility

The obligation one has to perform the assigned tasks

Delegation

The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy

Centralized Authority

Organizational structure in which important decisions are made by upper managers—power is concentrated at the top

Decentralized Authority

Organizational structure in which important decisions are made by middle-level and supervisory-level managers—power is delegated throughout the organization

Organizational Design

Concerned with designing the optimal structures of accountability and responsibility that an organization uses to execute its strategies

Three categories and 8 types:

1. Traditional designs

2. Horizontal designs

3. Open boundaries between organizations

The Eight Types of Organizational Structures

Traditional:

1. Simple

2. Functional

3. Divisional

4. Matrix

Horizontal:

5. Horizontal Structure

Open Boundaries:

6. Hollow

7. Modular

8. Virtual

Simple Structure

Has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization

Functional Structure

People with similar occupational specialties are put together in formal groups

Divisional Structure

People with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions

Matrix Structure

Combines functional and divisional approaches to emphasize project or program teams

Horizontal Structure

Teams or workgroups, either temporary or permanent, are created to improve collaboration and work on common projects

Hollow Structure

The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster

Modular Structure

Firms that use a modular structure will assemble product "chunks" or modules, provided by outside contractors

Virtual Structure

A company outside a company that is created "specifically to respond to an exceptional market opportunity that is often temporary"

*Different from Virtual Organization

Boundaryless Organization

A fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks; the collaborators may include competitors, suppliers, and customers

Enacted Values

Values and norms actually exhibited in the organization

Espoused Values

Explicitly stated values and norms preferred by an organization

Integration

Allows separate systems to communicate directly with each other, eliminating the need for manual entry into multiple systems