350 ch10 culture

8/8/2019 350 Ch10 Culture

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ORGANIZATIONALORGANIZATIONAL

CULTURE AND ETHICALCULTURE AND ETHICALVALUESVALUES

ORGANIZATIONALORGANIZATIONAL

CULTURE AND ETHICALCULTURE AND ETHICALVALUESVALUES

Chapter 10

8/8/2019 350 Ch10 Culture


W hat is Organizational Culture?Shared Values...

W ays of thinking...

Attitudes...Guiding beliefs« ± relevant to, and supportive of, the

organization and its goals.

8/8/2019 350 Ch10 Culture


The Purpose of Culture

To help integrate organizational

members so that they know how to relateand work together effectively.

To help the organization adapt to theexternal environment.

8/8/2019 350 Ch10 Culture


J ohn Chambers: CEO of Cisco Systems( J une 2010 interview)

³When I started (At Cisco in 1995), I viewed my job asthree main areas: vision and strategy of the company ,development and recruitment of the team to implement

that vision and strategy , and the need to communicate all of the above. ´

³Within four or five years I realized there was something that many of us do not understand when we take a

leadership role: culture . Great companies have very strong and great cultures.´

³ A huge part of a leadership role is to drive the culture of the company and to reinforce it.´

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EFFECTS OF CULTURE

Determines how people communicateDetermines how people interact

Determines how people relate to oneanother Guides day-to-day working relationships

Determines what is appropriate behavior Determines how power and status areallocated

8/8/2019 350 Ch10 Culture


8/8/2019 350 Ch10 Culture


Rites and CeremoniesRites of Passage ± Facilitates transition into or out of the organization ± EG: freshman week and senior weekRites of Integration ± Encourages common feelings of group identity ± EG: homecoming / sporting eventsRites of Renewal ± Improve organizational functioning

± EG: team buildingRites of Enhancement ± Enhance social identities common feelings ± EG: Student awards and recognition / dean¶s list

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Organizational Rites and Their Social Consequences

Type of Rite Example Social Consequences

PassageInduction and basic training; US

Army

Facilitate transition of personinto new social roles andstatuses

Enhancement Annual awards night Enhance social identities andincrease status of members

RenewalOrganizational developmentactivities

Refurbish social structures andimprove organizationfunctioning

Integration Office holiday party

Encourage and revive commonfeelings that bind memberstogether and commit them tothe organization

Source: Adapted from Harrison M. Trice and Janice M. Beyer,³Studying Organizational Cultures through Rites and Ceremonials,´

Academy of Management Review 9 (1984), 653-659. Used with permission.

8/8/2019 350 Ch10 Culture


8/8/2019 350 Ch10 Culture


Organizational Chart for Nordstrom

Directors

Store Mgrs,Buyers,Merchandise

Mgrs.

Dept Managers

Sales & Sales Support

CustomersCustomers

8/8/2019 350 Ch10 Culture


Determinants of Culture

Stable but with a clear external vision andorientation.

MISSION

Highly organic andfocused on adapting tothe external

environment. ADAPTABILITY

Internal efficiency &stability. Mechanistic,conformity, high

integration,collaborationBUREAUCRACTIC

People oriented, familyatmosphere dealingwith external change.

Clan controls.CLAN CULTURE

ENVIRONMEN T

S TRATEGY

Externalfocus

Internal

focus

Stable Dynamic

Stability FlexibilityNEEDS based on the environment

8/8/2019 350 Ch10 Culture


The Learning Organization¶s Culture

Each employee considers how his or her actionswill affect others and the organization.

A culture of equalit y: All employees aretreated equally without status differences.A culture of risk-taking , adaptation , and

continual improvement . The status quo isalways being questioned.

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SUB CULTURES

Organizations can have different sub cultures just as they have different sub structures.

Organic departments/divisions may well havedifferent cultures than mechanistic ones. ± EG: The culture of accounting students versus the

culture of theater students.

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Cultural Strength

Measured by the degree of agreement aboutshared values.

A strong culture is associated with increasedfrequency of the visible elements.

A strong culture can be very hard to changeunless it is a culture of change.

± The Learning Organization must have a strong culturethat is supportive of risk taking, adaptation,improvement and change

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Environment - Strategy ±CultureThe match between strategy, environment, and culture is very important.

Environment

Culture

Strategy

³Corporate cultureshould embody what theorganizationneeds to be

effective within itsenvironment.´

Since we have little, if any, influence on the externalenvironment, we need to create an organizationalculture that fits with the strategy and environment.

8/8/2019 350 Ch10 Culture


8/8/2019 350 Ch10 Culture


Q UIZYour Friend has an open box of cookiessitting out, but he or she is not there tooffer you one.W ould you eat one?

Two?

Three?The entire box?

8/8/2019 350 Ch10 Culture


Have you ever said ³ I love you.´ when youdidn¶t mean it?

Never OnceTwice

All the time

Q UIZ

8/8/2019 350 Ch10 Culture


A very good friend asks you if you think she isattractive. You think she is ugly as a wart.W hat would you say?

You find a bag with $1000 in unmarked bills. Noone saw you pick it up. There is a receipt inside

with the owner¶s name and address.W hat would you do?

Q UIZ

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An Ethical ConundrumIs ethics a matter of degree?

Can the same behavior be

ethical in one situation andunethical in another?

Should everyone have the

same ethics?

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Forces That Shape Managerial

Ethics

Is aDecision

or Behavior Ethical and

SociallyResponsible?

Beliefs and ValuesMoral DevelopmentEthical Framework

Personal Ethics

StructurePolicies, RulesCode of EthicsReward SystemSelection, Training

Organizational Systems

Government RegulationsCustomersSpecial Interest GroupsGlobal Market Forces

External Stakeholders

Rituals, CeremoniesStories, HeroesLanguage, SlogansSymbolsFounder, History

Organizational Culture

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Formal Structure and

Systems of the OrganizationEthics committee: A cross-functional

oversight group.Chief Ethics Officer: Oversees ethics

programs.Code of ethics: A formal statement of the

organization¶s values regarding ethics andsocial responsibilityTraining programs

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How Leaders Shape CultureBy what they do. ± The examples they set

± The types of people they hireBy what they say. ± Formal policies, codes of ethics, etc.

By what the organization does. ± Ethical training, ethics committees«

VALUE-BASED LEADERSHIP

8/8/2019 350 Ch10 Culture


8/8/2019 350 Ch10 Culture


Ralph Davis CEO, Travel Insurance Services

³Many years ago, I came back to my office after a seven week absence, having entrusted the business tothose I hired. It was a mess. Cliques; infighting; no more

family team that I had developed. I called each individual into my office and asked what happened. Every person pointed to someoneelse. Essentially, everyone was at fault for participating,

yet no one took responsibility for their individual actions.So, I fired them all! Best thing I ever did.´

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Travel Insurance Services - The Aftermath A conversation with the CEO

³Next morning, I walked in and found a banner with everyone's signature and apology...and a request to be rehired.

³I accepted the apologies, rehired everyone. A few week's later I let go the office manager who was the chief culprit.

³One quit because of the manager's firing. Two years later, thequitter called me and took me to lunch. She apologized for quitting, realized she'd µbacked the wrong horse¶. Wasn't asking for her job, but µwanted me to know¶ about

her conclusion.³Never had the problem again. Some of the people are still

with my old company.´

Davis sold the company and retired in 2004

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U pdate:Travel Insurance Services

³The NASDAQ listed company that ultimately purchased my business told everyone two months later: µYour business is about revenue, THEN relationships.¶ So much for today's MBAs running corporate

America. When I was asked to produce my legacy notes, i.e. explain how I got to run a profitable company, my first sentence was,

"It's all about relationships. Revenue will come later. By relationships, I mean(1) take care of the employees; (2) help them take care of the prospect and client; (3) then the shareholders will be taken care of. That's what made mycompany successful; that's why you're happy with your profitable

purchase". Never again heard from them. They've refused to use me as a consultant,

which has led them to lose major business unnecessarily, and 25% of the seasoned employees have left.

350 ch10 culture

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