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Organizational Theory,Design, and Change

Sixth Edition

Gareth R. Jones

Chapter 7

Creating and

Managing

Organizational

Culture

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What is Organizational Culture? Organizational culture: the set of

shared values and norms thatcontrols organizational members

interactions with each other and withpeople outside the organization

Can be a source of competitive advantage

Can be used to increase organizational

effectiveness Can be used to control decisions making and

activities/behaviors

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What are Organizational Values?

Values: general criteria, standards, or guidingprinciples that people use to determine which typesof behaviors, events, situations, and outcomes aredesirable or undesirable Terminal value: a desired end state or outcome that

people seek to achieve

Instrumental value: a desired mode of behavior

Norms: standards or styles of behavior that are

considered acceptable or typical for a group ofpeople

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Figure 7.1: Terminal and InstrumentalValues in an Organizations Culture

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Organizational Culture

Based on enduring values embodied inorganizational norms, rules, standardoperating procedures, and goals

People draw on these cultural values toguide their actions and decisions when facedwith uncertainty and ambiguity

Important influence on members behaviorand response to situations

A countrys culture can affect the values andnorms of a company or a companys culture

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How is an Organizations CultureTransmitted to its Members?

Socialization and Socialization Tactics Socialization: the process by which members learn

and internalize the values and norms of anorganizations culture

Stories, Ceremonies, andOrganizational Language Organization rites

Rites of passage:mark an individuals entry to, promotion in,and departure from the organization

Rites of integration: shared announcements oforganizational success, office parties, and cookouts

Rites of enhancement: public recognition and reward foremployee contributions

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Figure 7.2: Where an OrganizationsCulture Comes From

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Where Does OrganizationalCulture Come From? (cont.)

Characteristics of people withinthe organization Through a process of hiring people that

match existing culture and attrition,

people become more and more similarover time

Organizational ethics The moral values, beliefs, and rules that

establish the appropriate way fororganizational stakeholders to deal withone another and with the environment Derived from the personality and beliefs of the

founder and top management

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Where Does OrganizationalCulture Come From? (cont.)

Property rights The rights that an organization gives to members

to receive and use organizational resources

The distribution of property rights to differentstakeholders determines:

How effective an organization is

The culture that emerges in the organization

Top managers are in a strong position to

establish the terms of their own employment andthe property rights received by others

Changing property rights changes the corporateculture by changing the instrumental values thatmotivate and coordinate employees

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Table 7.3: Common Property RightsGiven to Managers and the Workforce

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Where Does OrganizationalCulture Come From? (cont.)

Organizational structure Mechanistic vs. Organic

Mechanistic predictability and stability are

desired goals Organic innovation and flexibility are

desired end states

Centralized vs. Decentralized

Decentralized encourages and rewardscreativity and innovation

Centralized reinforces obedience andaccountability

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Can Organizational Culture beManaged?

Changing a culture can be verydifficult

Hard to understand how the previousfour factors interact

Major alterations are sometimes needed

Some ways culture can be changed: Redesign structure

Revise property rights used to motivatepeople

Change the people especially topmanagement