Chapter 16
Organizational Culture
and Development
How Individuals Work,
Live, and Achieve
Together
Chapter 16 Study Questions
• What is organizational culture?
• How do you understand an organizational
culture?
• How can the organizational culture be
managed?
• How can you use organizational
development to improve the firm?
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What is organizational culture?
• Organizational culture
– The system of shared actions, values, and
beliefs that develops within an organization and
guides the behavior of its members
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What is organizational culture?
• External adaptation
– Involves reaching goals and dealing with
outsiders regarding tasks to be accomplished
– methods used to achieve the goals
– methods of coping with success and failure.
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What is organizational culture?
• Important aspects of external adaptation
– Separating eternal forces based on importance
– Developing ways to measure accomplishments
– Creating explanations for not meeting goals
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What is organizational culture?
External adaptation involves answering important
goal-related questions regarding coping with
reality
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What is the real mission?
How do we contribute?
What are our goals?
How do we reach our goals?
What external forces are important?
How do we measure results?
What do we do if specific targets are not met?
How do we tell others how good we are?
When do we quit?
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What is organizational culture?
• Internal integration
– Deals with the creation of a collective identity
and with finding ways of matching methods of
working and living together
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What is organizational culture?
• Important aspects of working together
– Deciding who is a member and who is not
– Developing an informal understanding of
acceptable and unacceptable behavior
– Separating friends from enemies
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What is organizational culture?
Internal integration involves answering
important questions associated with living
together
– What is our unique identity?
– How do we view the world?
– Who is a member?
– How do we allocate power, status, and
authority?
– How do we communicate?
– What is the basis for friendship?
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What is organizational culture?
• Subculture
– A group of individuals with a unique pattern of
values and philosophy that are not inconsistent
with the organization’s dominant values and
philosophy
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What is organizational culture?
• Counterculture
– A groups where the pattern of values and
philosophies outwardly reject those of the
larger organization or social system
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What is organizational culture?
• Problems associated with subcultural
divisions within the larger culture
– Subordinate groups are likely to form into a
counterculture pursuing self-interests
– The firm may encounter extreme difficulty in
coping with broader cultural changes
– Embracing natural divisions from the larger
culture may lead to difficulty in international
operations
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What is organizational culture?
• Developing the multicultural organization
Step 1: The organization should develop pluralism
Step 2: The organization should fully integrate its
structure
Step 3: The organization must integrate the
informal networks
Step 4: The organization should break the linkage
between naturally occurring group identity and
organizational identity
Step 5: The organization must actively work to
eliminate identity-based interpersonal conflict
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Figure 16.1
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How do you understand an
organizational culture?
Layers of cultural analysis
• First – observable culture
• Second – recognizes that shared values
can play a critical part in linking people
together
• Third – common cultural assumptions
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How do you understand an
organizational culture?
• Sagas
– Heroic accounts of organizational
accomplishments
• Rites
– Standardized and recurring activities that are
used at special times to influence
organizational members
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How do you understand an
organizational culture?
• Rituals
– Systems of rites
• Cultural symbols
– Any object, act, or event that serves to transmit
cultural meaning
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How do you understand an
organizational culture?
• Shared values
– Help turn routine activities into valuable and
important actions
– Tie the organization to the important values of
society
– May provide a very distinctive source of
competitive advantage
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How do you understand an
organizational culture?
• Characteristics of strong corporate cultures
– A widely shared real understanding of what the
firm stands for, often embodied in slogans
– A concern for individuals over rules, policies,
procedures, and adherence to job duties
– A recognition of heroes whose actions illustrate
the company’s shared philosophy and concerns
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How do you understand an
organizational culture?
• Characteristics of strong corporate cultures
– A belief in ritual and ceremony as important to
members and to building a common identity
– A well-understood sense of the informal rules
and expectations so that employees and
managers know what is expected of them
– A belief that what employees and managers do
is important and that it is essential to share
information and ideas
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How do you understand an
organizational culture?
• Organizational myths
– Unproven and often unstated beliefs that are
accepted uncritically
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How can the organizational
culture be managed?
• Strategies for managing corporate culture
– Managers help modify observable culture,
shared values, and common assumptions
directly
– Use of organizational development techniques
to modify specific elements of the culture
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How can the organizational
culture be managed?
• Management philosophy
– links key goal-related strategic issues with key
collaboration issues and comes up with a
series of general ways by which the firm will
manage its affairs
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How can the organizational
culture be managed?
Why a well-developed management
philosophy is important
– Establishes generally understood boundaries
on all members of the firm
– Provides a consistent way for approaching new
and novel situations
– Helps hold individuals together by showing
them a known path to success
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How can the organizational
culture be managed?
• Strategies for building, reinforcing, and
changing organizational culture
– Directly modifying the visible aspects of culture
– Changing the lessons to be drawn from
common stories
– Setting the tone for a culture and for cultural
change
– Fostering a culture that addresses questions of
external adaptation and internal integration
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How can the organizational
culture be managed?
Mistakes that managers can make in
changing culture
– Trying to change people’s values from the top
down without also changing how the
organization operates
– Attempting to revitalize an organization by
dictating major changes and ignoring shared
values
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How can you use organization
development to improve the firm?
• Organization development (OD)
– The application of behavioral science
knowledge in a long-range effort to improve an
organization’s ability to cope with change in its
external environment and to increase its
internal problem-solving capabilities
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How can you use organization
development to improve the firm?
Underlying assumptions of OD
• Individual level
– guided by principles that reflect an underlying
respect for people and their capabilities
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How can you use organization
development to improve the firm?
• Group level
– Guided by principles that reflect a belief that
groups can be good for both people and
organizations
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How can you use organization
development to improve the firm?
• Organizational level
– Guided by principles that show a respect for the
complexity of an organization as a system of
interdependent parts.
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How can you use organization
development to improve the firm?
• Outcome goals
– Mainly deal with issues of external adaptation
• Process goals
– Mainly deal with issues of internal integration
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How can you use organization
development to improve the firm?
• OD helps organizations by:
– Creating an open problem solving climate
– Supplementing formal authority with knowledge and
competence
– Moving decision making where relevant information
is available
– Building trust and maximizing collaboration
– Increasing the sense of organizational ownership
– Allowing people to exercise self-direction and selfcontrol
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How can you use organization
development to improve the firm?
• Action research
– The process of systematically collecting data
on an organization, feeding it back to the
members for action planning, and evaluating
results by collecting and reflecting on more
data after the planned actions have been taken.
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Figure 16.2
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How can you use organization
development to improve the firm?
• Survey feedback
– Collection of data via questionnaire response
from organization members or sample of such
responses
• Confrontation meetings
– Designed to help determine how an
organization may be improved and to take
initial actions to better the situation
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How can you use organization
development to improve the firm?
• Structural redesign
– Realigning the structure of the organization or
major subsystems to improve performance
• Collateral organization
– Pulling a representative set of members out of
the formal organization structure to engage in
periodic small-group problem-solving sessions
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How can you use organization
development to improve the firm?
• Team building
– Activities designed to help examine how the
group functions and how it can function better
• Process consultation
– Activities that are facilitated by an OD
practitioner and designed to improve group
functioning
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How can you use organization
development to improve the firm?
• Intergroup team building
– Designed to help groups improve working
relationships and experience improved group
effectiveness
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How can you use organization
development to improve the firm?
• Role negotiation
– Clarifying expectations in working relationships
• Job redesign
– Creating long-term congruence between
individual goals and organizational career
opportunities
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