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Unformatted text preview: Corporate Culture Corporate Culture Organization Culture Defined: •Set of key behaviors, beliefs and shared understandings that are shared by members of the organization. members the correct way to think and act. •Defines basic organizational values and communicates to new •Everyone participates in culture, but culture generally goes unnoticed. It is only when organizations attempt to implement new strategies or programs that go against cultural norms and values that they come facetoface with culture. •Each firm has a distinct culture. Corporate Culture Corporate Culture Levels and Purpose of Culture: • Culture exists at two levels: At the surface are visible artifacts and observable behaviors – dress, actions, symbols, stories, and ceremonies that are shared. Visible elements reflect deeper values such as underlying assumptions, beliefs, and thought processes or “true culture.” • Critical Functions: Integrate members so they know how to relate to one another. Members develop a collective identity and relationships to work together effectively. Culture guides daytoday working relationships and communication. Help the firm adapt to the external environment. Corporate Culture Corporate Culture Interpreting Culture: • To interpret organizational culture requires making inferences based on observable artifacts. • Typical observable artifacts are: Rites and ceremonies Stories Symbols Language Corporate Culture Corporate Culture Interpreting Culture: Rites and ceremonies Elaborate planned events conducted for the benefit of an audience. Used to reinforce specific values or create a bond among people. Four types of rites and ceremonies: Rites of passage • Facilitate transition of persons into social roles and statuses that are new. • At Citibank becoming an officer was seen as a critical step in a career. • A special series of activities accompany this promotion (taking the officer to the officer’s dining room, buying drinks, parking spaces, new office etc.). • Induction and basic training in the U.S. Army. Corporate Culture Corporate Culture Interpreting Culture: Rites and ceremonies Rites of enhancement • Annual awards night. • Enhances social identities and increase status of employees. • Tupperware sales people hold a weekly rally at which sales people are recognized in reverse order of sales (This ceremony reinforces the goal of sales volume held by the company. • MaryKay Cosmetics use of rewards for reaching specified sales targets (pink Cadillacs). Corporate Culture Corporate Culture Interpreting Culture: Rites and ceremonies Rites of renewal • Refurbish social structures and improve organizational functioning. • McDonald’s annual nationwide contest to determine the best hamburger cooking team (encourages each store to reevaluate the details of how they cook hamburgers). • Communicates to all employees the McDonald’s value of hamburger quality. Rite of integration Rite • In many firms the CEO comes down from his/her office to walk through every department, shaking hands with employees (Herb Kelleher, Sam Walton). • Serves as a ceremony to communicate concern for the organizational “family” Corporate Culture Corporate Culture Interpreting Culture: Stories Narratives based on true events that are shared among organizational employees and told to new employees to inform them about an organization. Stories keep alive the primary values of the organization. Commonly include company heroes or historic legends. 3M and TI examples 3M involves the hero working on the project even when he/she was not supported by management and then bringing the successful product to 3M. TI involves an initial disaster that was averted by employees selflessly banding together to get TI back up and running. Corporate Culture Corporate Culture Interpreting Culture: Symbols Physical artifacts use to focus attention on a specific item. Nordstrom example: example: Uses an upside down organizational chart to symbolize their support of lowerlevel employees. Nordstrom is known for customer service and the chart symbolizes that managers support the employees who provide service. Language Includes slogans and metaphors. 3M – “at 3M the 11th commandment is never kill a new product idea.” Guaranteed eateries, Inc uses a slogan as the key value for employee action: “Your enjoyment guaranteed. Always.” the acronym YEGA is printed on menus, name tags etc, Corporate Culture Corporate Culture Culture Strength and Adaptation: • Strong cultures is typically associated with ceremonies, symbols, stories, heroes and slogans. These elements increase commitment to the values and strategy of the firm. • Strong cultures do not ensure success unless the culture is adaptable. Strong cultures that are not adaptable can be more damaging than a weak culture (IBM). • Adaptive vs. unadaptive cultures: Issue relates to core values and behaviors. Adaptive Core values managers are concerned about customers and Core values managers are concerned about customers and employees, value people and processes that create useful ch Common behavior managers pay attention to constituencies initiate change when needed. Behavior is flexible. HP example Corporate Culture Corporate Culture Culture Strength and Adaptation: Unadaptive Core values managers are more concerned about themselves, immediate work group or product (technology). Value orderly and riskreducing processes more than leadership initiatives. Common behavior managers tend to be isolated, political and bureaucratic. Do not change strategies quickly or take advantages of changes in their environment. MoDOT:
Administration Leadership Leadership Planning Project Development Are these structural changes, reporting relationships, task groups, integrating committees? Operations Construction Maintenance Materials Traffic Bridges Chief Engineer MoDOT Current Structure COO ACE Operations Construction Maintenance Materials DCE ACE Design ACE Planning Bridge Design Traffic Mgmt Systems Program Mgmt Policy Devel. District District District District District District Corporate Culture Corporate Culture Cultural Change: • Central Issue: Just one strategic change is impossible because any strategic change must be accompanied by accommodations from other strategic elements inside and outside the corporation. General consensus regarding corporate culture Organizations should have strong cultures. A firm’s culture must fit its environment. Culture must contain values supporting continuous change in order to adjust to new environmental conditions. Critical issue is to identify the appropriate culture for different types of businesslevel strategies. A strategy should be congruent with an organizations most important values, practices and beliefs (culture). Corporate Culture Corporate Culture Cultural Change: • Competing Values Model: Three value dimensions are central to the conceptualization and assessment of organizational effectiveness. Also illustrate tensions and paradoxes. Control versus flexibility Internal versus external focus Means versus ends process When depicted graphically, the three dimensions define four models of organizations: Human relations Open systems Internal process Rational goal Human Relations Model:
Cultural Values: (Consensual)
- Teamwork - Participation - Supportiveness Flexibility Open Systems Model: Goals: HRM Development, Morale Goals: Growth, Resource Acquisition Cultural Values: (Developmental) Cultural
- Creativity - Inventiveness - Growth - Competiveness Matching Strategy: Internal - Defender Defender - Prospector Prospector - Analyzer Analyzer Matching Strategy:
-Prospector -Prospector External
Goals: Efficiency, Productivity Cultural Values: (Rational)
- Task focus - Goal clarity - Efficiency - Performance Goals: Stability and Control Cultural Values: (Hierarchical)
- Centralization - Routinization, formalization - Stability, continuity, order - Predictable performance outcomes Matching Strategy:
- Defender Defender Matching Strategy:
- Analyzer Analyzer Internal Process Model: Control Rational Goal Model: Corporate Culture Corporate Culture Cultural Change: • Competing Values Model: Strategy types Prospector • First mover looking for opportunities • External focus, monitor environment • Dominant coalition blends management, marketing & R&D. • Flexibility and external focus – Open Systems Model Defender • Narrow productmarket domain • Attempt to seal off the market to create a stable set of customers, ignore developments outside this segment (internal focus). • Tight controls to ensure efficiency (control). • Dominant coalition tends to be production and finance experts. • Control and internal focus – Internal Process Model. Corporate Culture Corporate Culture Cultural Change: • Competing Values Model: Strategy types Analyzer • Compromise between defender and prospector • Simultaneously locate and exploit new markets and opportunities while maintaining product base and customers. • Centralized control system to deal with stable and dynamic aspects (control). • Dominant coalition tends to be marketing, production & R&D (moderate external orientation). • Flexibility and external focus – Open Systems Model Human Relations Model problem: • None of the strategy categories fit. • Adept at implementing strategies. Compatible with and complementary to all three strategies. ...
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- Spring '10