Organizational Culture & Change Study Guide

Fundamental Definitions of Organizational Culture

• Organizational Culture Defined: The set of values, attitudes, beliefs, and expected behaviors shared by members of an organization.

• Internal Personality: It is often referred to as the “internal personality” of an organization, serving a function similar to national culture through common values and shared understandings.

• Shared Social Knowledge: Culture provides shared social knowledge that informs employees about the internal rules, norms, shared meanings, and values.

• Reality vs. Management Rhetoric: Culture defines what is truly important or accepted within the workplace, which can differ significantly from what management officially states. Note: "The desire to mock is strong."

Common Characteristics and Distinctions of Culture

• Culture as a Descriptive Term: Organizational culture is focused on how employees perceive the characteristics of the culture, not whether they personally like those characteristics.

• Diagnostic Questions: To understand descriptive culture, one might ask:     * Does it encourage teamwork?     * Does it reward innovation?     * Does it stifle initiative?

• Culture vs. Job Satisfaction:     * Organizational Culture: This is a descriptive term based on perception.     * Job Satisfaction: This is an evaluative term based on feelings or attitudes toward the work.

The Three Levels of Culture

1. Artifacts: The highest level, described as the “tip of the iceberg.” These are tangible aspects that can be seen, heard, and observed by others.

2. Espoused Values: The intermediate level consisting of shared principles, standards, and goals. These are often codified in documents like the ‘mission statement.’

3. Assumptions: The lowest level, representing what is “underwater.” These are taken-for-granted beliefs about human nature and reality. They are often unspoken, reside outside immediate awareness, and are discerned by how people justify and explain their actions.

Analyzing Espoused vs. Enacted Values

• Espoused Values: These are the stated values, such as those found in mission statements, representing the “desired” culture.

• Enacted Values: These are the values perceived by employees, representing the “real” culture.

• Alignment Requirement: Critical alignment is required between:     * Espoused and enacted values.     * The organization's values and the values of its individual members.

• Case Example of Misalignment: A management statement claiming “honest feedback is the only road toward improvement, when it comes to management everyone’s viewpoint counts” was contradicted by the reality where the Org Effectiveness Dept was ordered to scrub negative comments from $360$-degree reviews.

Manifestations of Organizational Culture

• Symbols: Objects, acts, or events that convey meaning to others. Symbols associated with corporate culture communicate the organization's most important values.

• Stories: Narratives based on true events that are repeated and shared among employees. These are told to newcomers to keep the organization's values alive.

• Physical Structure: These include building design, office layout, and physical space choices. Examples include whether the workplace is open and whether top management works in a separate part of the building.

• Heroes: Individuals who exemplify the deeds, character, and attributes of a strong corporate culture. They serve as role models for other employees.

• Language and Slogans: Succinct phrases or sentences used to express key organizational values.

• Ceremonies: Planned affairs that constitute a special event and are conducted specifically for the benefit of an audience.

• Rituals: Daily or weekly routines that occur consistently within the organization.

Diagnosing and Internalizing Culture

• Cultural Diagnostic Questions: Employees use several questions to navigate the culture:     * What do I have to do/say to fit in?     * How do I get my boss’s attention (both good and bad)?     * How do I get ahead?     * How do I feel like part of the group?     * What is really important around here (as opposed to what management says)?     * How do things really get done around here?

• Instructor Note: "I regret shaving my ‘stache."

Types and Typologies of Organizational Culture

• Social Architecture Categories:     * Fragmented: Employees are distant and disconnected from one another.     * Mercenary: Employees think alike but are not friendly (often characterized by politics).     * Networked: Employees think differently but are friendly to each other (highly creative environments).     * Communal: Employees think alike and are friendly to each other.

• Values-Based Typologies:     

* The Clan: Based on human affiliation. Values include attachment, collaboration, trust, and support.     

* The Adhocracy: Based on change. Values include growth, variety, attention to detail, stimulation, and autonomy.     

* The Market: Based on achievement. Values include communication, competence, and competition.    

 * The Hierarchy: Based on stability. Values include communication, formalization, and routine.

Uniformity and Subcultures

• Dominant Culture: This expresses the core values shared by a majority of members and gives the organization its distinct personality.

• Subcultures: These tend to develop in large organizations, reflecting the common problems, situations, or experiences faced by specific members.

Profiles of Specific Organizational Cultures

• Customer Service Culture:     * Focuses on service quality with the mantra “the customer is always right.”     * Vital because $65\%$ of U.S. organizations are service-based.     * Aim is to modify employee attitudes and behaviors toward customers to improve service delivery.

• Safety Culture:     * Reflects how much safe behaviors are expected and valued (e.g., avoiding 'workarounds').     * 2023 Statistics: There were $5,283$ fatal workplace accidents and $2.6 \times 10^6$ non-fatal accidents in the U.S. alone.     * Research Finding: Halbesleben ($2010$) found that exhaustion relates positively to engaging in safety workarounds, which leads to more injuries.

• Diversity Culture: The extent to which a company embraces a diverse workforce from the top down (e.g., hiring minorities/women, sensitivity training, inclusiveness).

• Creativity/Innovation Culture: Stresses the importance of new ideas and innovation. This culture influences both the quantity and the quality of creative ideas produced by employees.

Cultural Strength and Its Impact

• Strong Culture: Values, assumptions, and beliefs are widely held and agreed upon. This exerts a substantial impact on employee behavior.

• Weak Culture: Characterized by disagreement or confusion regarding values and beliefs. Behavior is managed through bureaucracy and formalized systems rather than shared understanding.

• Cultural Strength Impact (Exhibit 16.6):     * Factors observed include leader and member behaviors.     * High strength in organizational structure, mission, values, and artifacts leads to better performance and higher satisfaction.     * Organizational Culture creates the Organizational Climate.

Liabilities of a Strong Culture

• A strong culture can be detrimental if values and norms are misaligned with company strategy or the environment.

• Homogeneity Issues: Strong cultures can breed a single way of thinking, reducing overall innovation.

• Inertia: Excessive need for consensus, stagnation, entrenchment, and uniformity/rigidity.

• Clashes: Difficulty in changing the culture if the internal or external environment shifts (e.g., historical issues at IBM).

• Dysfunction: Potential for toxicity and cultural clashes during mergers or reorganizations.

Cultural Formation, Reinforcement, and ASA Theory

• Formation via Founders:     * Founders hire and retain employees who think/feel like them.     * Indoctrination and socialization through training, mentors, and rewards ("learning the ropes").     * Founders serve as role models whose behavior encourages identification and internalization of beliefs.

• Attraction-Selection-Attrition (ASA) Theory: The organization is a product of its workers' personalities.     * Attraction: Similar personalities are attracted to the same organizations.     * Selection: Similar personalities are hired by the organization.     * Attrition: Those who do not fit the personality type eventually leave.     * Motto: "Birds of a feather flock together."

The Three Stages of Socialization

1. Anticipatory Stage: Occurs before the job starts. involves information shared during recruitment and selection to set expectations.

2. Encounter Stage: Starts the first day of work. The employee compares what they encounter to what was expected. A mismatch leads to “reality shock.”

3. Understanding/Adaptation Stage: The employee learns from socialization and begins to internalize expected behaviors and norms.

Person-Organization (P-O) Fit

• Definition: The degree to which an individual's personality and values match the organization's culture.

• Benefits:     * Higher P-O fit correlates to higher job satisfaction and positive affect (Gabriel et al., $2015$).     * Higher P-O fit correlates to reduced stress levels (Kristof-Brown et al., $2005$).

• Applications to Increase Fit:     * Realistic Job Previews (RJPs): Provided during the anticipatory stage to ensure the candidate has an accurate picture of the culture. This is described as inexpensive and highly effective.     * Orientation Programs: Used by $64-93\%$ of organizations to disseminate socialization information.     * Mentoring: Matching junior employees with seniors for guidance and relationship building.

Influencing and Changing Culture

• Creating a Positive Culture:     * Leaders model behavior/words.     * Build on employee strengths and reward more than punish.     * Emphasize individual vitality and growth.     * Celebrate wins.     * Warning: Beware of "toxic positivity" that is unrealistic.

• Conditions for Cultural Change:     * Dramatic crisis exists/is created.     * Organization is young and small.     * The existing culture is weak.     * New leadership is introduced.

Resistance and Forces Against Change

• Structural Inertia: Resistance rooted in the organization's size, complexity, and the interdependence of structures, systems, and formal processes.

• Cultural Inertia: Resistance rooted in shared expectations, norms, values, and established myths.

• Individual Resistance: Stemming from fear, uncertainty avoidance, apathy, or failure to perceive benefits.

Overcoming Resistance and Managing Change

• Managerial Tactics: Communication (framing is key), participation, building commitment, positive relationships, implementing changes fairly, manipulation/cooptation, selecting pro-change staff, and coercion.

• Kotter’s 8-Step Model:    

1. Establishing a Sense of Urgency     

2. Forming a Powerful Guiding Coalition    

3. Creating a Vision     

4. Communicating a Vision     

5. Empowering Others to Act on the Vision     

6. Planning for and Creating Short-Term Wins    

7. Consolidating Improvements and Producing Still More Change     

8. Institutionalizing New Approaches

• Process Flow: Unfreeze → Change → Refreeze.

• 20/60/20 Rule:     * Top 20\%: People already on your side; use them to sway others.     * Middle 60\%: The group to be swayed.     * Bottom 20\%: The knee-jerk reaction is to start here — DON'T.

Summary of Cultural Importance

• Behavioral Guide: Provides cues for what is accepted/valued and pressures for conformity.

• Identity and Commitment: Provides a sense of identity and generates commitment to goals.

• Performance: Strong culture creates dedication not possible through formal means. Fit between culture and strategy is critical.

• Climate and Sustainability: Culture creates climate (shared perceptions) and promotes social sustainability.