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Organizational Culture

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Sometimes called corporate culture, is a system of shared beliefs and values that develops within an organization and guides the behavior of its member.

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To implement a particular strategy, managers mush determine the right kind of ??

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1) organizational culture and 2) organizational structure

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Organizational Structure

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"who reports to whom & who does what", is a formal system of task and reporting relationships that coordinate and motivates an organization's members so that they can work together to achieve the organization's goals.

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Once a strategy has been created that reflects an organization's vision, managers must design the kind of culture and structure that will motivate and coordinate employees in achieving the organization's goals. What is the six process to meet this goal??

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1) vision 2) Strategy 3) Culture 4) Structure & Internal practices 5) Collective attitudes 6) Achievement of Goals

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4 Types of Organizational Culture

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1) Clan 2) Adhocracy 3) Market 4) Hierarchy

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Clan Culture

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has an internal focus and values flexibility rather than stability and control. "family-type organization"

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Adhocracy Culture

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has an external focus and values flexibility. "risk-taking culture" This type of culture attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace.

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Market Culture

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has a strong external focus and values stability and control. "a competitive culture valuing profits over employee satisfaction"

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Hierarchy Culture

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has an internal focus and values stability and control over flexibility. "a structured culture valuing stability and effectiveness"

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3 Levels of Organizational Culture

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observable artifacts, espoused values, and basic assumptions

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Observable Artifacts

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Level 1 of Organizational Culture: is the physical manifestations of culture. Meaning the manner of dress, awards, myths, and stories about the company, rituals and ceremonies, and decorations, as well as visible behavior exhibited by managers and employees.

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Espoused Values

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are the explicitly stated values and norms preferred by an organization. Theses are put forth by the firm's founder or top managers.

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enacted values

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represent the values and norms actually exhibited in the organization.

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Basic Assumptions

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They are not observable but represent the core values of an organization's culture.

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How do Employee's learn culture?

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by symbols, stories, heroes, and rites and rituals

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symbol

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is an object, act, quality, or event that conveys meaning to others.

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stories

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is a narrative based on true events, which is repeated and sometimes embellished upon to emphasize a particular value.

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Heroes

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is a person whose accomplishments embody the values of the organization.

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Rites and Rituals

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are the activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization's life.

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4 Functions of Organizational Culture

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1) It gives members an organizational identity. 2) It facilitates collective commitment 3) It promotes social-system stability 4) It shapes Behavior by Helping Employees make sense of their surroundings

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What types of organizational culture can increase an organization's economic performance in terms of increasing competitiveness and profitability? Name the three perspectives that answer this question.

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strength, fit, and adaptive

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Strength perspective

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assume that the strength of a corporate culture is related to a firm's long-term financial performance. This means the employees adhere to the organization's values because they believe in its purpose.

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Fit Perspective

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assumes that an organization's culture must align, or "fit", with its business or strategic context.

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Adaptive Perspective

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assumes that the most effective cultures help organizations anticipate and adapt to environmental changes.

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Which Perspective is Accurate?? Most Popular?

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Adaptive because long-term financial performances was highest for organizations that had this perspective.

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11 Ways Culture Become Embedded in Organizations

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Formal statements;slogans & sayings; stories, legends & Myth; Leader Reactions to Crises; Role Modeling, Training, & Coaching; Physical Design; Rewards, Titles, Promotions, & Bonuses; Organizational Goals & Performance Criteria; Measurable & Controllable Activities; Organizational Structure; Organizational Systems & Procedures

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Organization

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a system of consciously coordinated activities or forces of two or more people. (According to Chester I. Barnard)

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3 Types of Organizations

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for-profit, nonprofit, mutual-benefit

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for-profit organizations

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These are formed to make money, or profits, by offering products or services.

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nonprofit organizations

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These are formed to offer services to some clients, not to make a profit. (hospitals, colleges)

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mutual-benefit organizations

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These are voluntary collectives whose purpose is to advance members' interests ( unions, trade associations)

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Organization Chart

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is a box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations. (family-tree-like pattern)

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What are the two kinds of information that organization charts reveal about organizational structure?

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vertical hierarchy of authority and horizontal specialization

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Vertical Hierarchy of Authority

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"who reports to whom" the official communication network, "chain of command"

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Horizontal Specialization

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"who specializes in what work"

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Who proposed the 4 common elements of organization?

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Edgar Schein

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What are the 4 common elements of organization?

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common purpose, coordinated effort, division of labor, and hierarchy of authority.

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Common Purpose

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unifies employees or members and gives everyone an understanding of the organization's reason for being.

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Coordinated Effort

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the coordination of individual efforts into a group or organization-wide effort.

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Division of Labor

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also known as work specialization, is the arrangement of having discrete parts of a task done by different people.

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Hierarchy of Authority

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or chain of command, is a control mechanism for making sure the right people do the right things at the right time.

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Unity of Command

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in which an employee should report to no more than one manager in order to avoid conflicting priorities and demands.

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What are the 3 added common elements of organization?

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span of control; authority, responsibility, and delegation; and centralization versus decentralization of authority

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Span of Control

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or span of management, refers to the number of people reporting directly to a given manger.

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Authority

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refers to the rights inherent in a managerial position to make decisions, give orders, and utilize resources.

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accountability

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managers must report and justify work results to the managers above them.

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Responsibility

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is the obligation you have to perform the tasks assigned to you.

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Delegation

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

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Line Position or Line Managers

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have authority to make decisions and usually have people reporting to them.

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Staff Position or Staff Personnel

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have authority functions; they provide advice, recommendations, and research to line managers.

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Centralized Authority

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important decisions are made by higher-level managers

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Decentralized Authority

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important decisions are made by middle-level and supervisory-level managers.

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What are the 7 types of organizational structures?

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simple, functional, divisional, matrix, team-based, network, modular

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Simple Structure

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"for the small firm" , this has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization.

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Functional Structure

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"Grouping by Similar Work Specialties" people with similar occupational specialties are put together in formal groups.

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Divisional Structure

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"Grouping by Similarity of Purpose" People with diverse occupational specialties are put together in formal groups by similar or services, customers or clients, or geographic regions.

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Product Divisions

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grouping by similar products or services

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Customer Divisions

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Grouping by common customers or clients

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Geographic Divisions

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Grouping by regional locations

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Matrix Structure

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an organization combines and divisional chains of command in a grid so that there are two command structures- vertical and horizontal.

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Team-Based Structure

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team or workgroups, either temporary or permanent, are used to improve horizontal relations and solve problems throughout the organization.

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Network Structure

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the organization has a central core that is linked to outside independent firms by computer connections, which are used to operate as if all were a single organization. This is sometimes called "virtual corporations or virtual organizations, or hollow corp. or hollow org. "

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Modular Structure

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a firm assembles product chunks, or modules, provided by outside contractors.

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Contingency Design

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the process of fitting the organization to its environment

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Managers who take the contingency approach must consider 3 factors in designing the best kind of structure for their particular organization at that particular time.

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1) environment - mechanistic vs organic 2) Environment - differentiation vs integration 3) Life Cycle

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1) environment - mechanistic vs organic

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Tom Burns & G.M. Stalker created this. Developed into two organization called mechanistic and organic

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Mechanistic Organization

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authority is centralized, tasks and rules are clearly specified, and employees are closely supervised.

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Organic Organization

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authority is decentralized, there are fewer rules and procedures, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks.

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2) Environment - differentiation vs integration

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was proposed by Paul R. Lawrence and Jay W. Lorsch.

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Differentiation

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is the tendency of the parts of an organization to disperse and fragment.

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Integration

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is the tendency of the parts of an organization to draw together to achieve a common purpose.

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3) Life Cycle

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The four-styles of organization life cycle has a natural sequence of stages: birth, youth, midlife, and maturity.

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Birth Stage

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is the nonbureaucratic stage, the stage in which the organization is created.

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Youth Stage

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is in a prebureaucratic stage, a stage of growth and expansion.

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Midlife Stage

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the organization becomes bureaucratic, a period of growth evolving into stability.

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Maturity Stage

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the organization becomes very bureaucratic, large, and mechanistic. The danger is lack of flexibility and innovation.

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