CHAPTER 8

What is Culture?

Culture - set of values, norms, guiding beliefs, and understandings that is shared by members of
an organization and taught to new members as the correct way to think, feel, and behave.
- exists at two levels: observable symbols and underlying values

Internal Integration - means that members develop a collective identity and know how to work
together effectively.

External Adaptation - refers to how the organization meets goals and deals with outsiders.

OBSERVABLE ASPECTS OF ORGANIZATIONAL CULTURE

Rites and Ceremonies
o The elaborate, planned activities that make up a special event and are often
conducted for the benefit of an audience.
o Rite of passage - which facilitates the transition of employees into new social roles
o Rite of integration - which creates common bonds and good feelings among
employees and increases commitment to the organization.
Stories and Myths
o Stories - narratives based on true events that are frequently shared among
employees and told to new employees to inform them about an organization.
o Heroes - who serve as models or ideals for serving cultural norms and values.
o Legends - because the events are historic and may have been embellished with
fictional details.
o Myths - which are consistent with the values and beliefs of the organization but are
not supported by facts.
Power Relationships
o Looking at power relationships means deciphering who influences or manipulates
or has the ability to do so. Which people and departments are the key power holders
in the organization
Control Systems
o the inner workings of how the organization controls people and operations. This
includes looking at such things as how information is managed, whether managers
apply behavior or outcome control related to employee activities, quality control
systems, methods of financial control, reward systems, and how decisions are made.
Organization Structures
o A strong reflection of the culture is how the organization is designed
o The way in which people and departments are arranged into a whole, and the degree
of flexibility and autonomy people have, tells a lot about which cultural values are
emphasized in the organization.
Symbols
o is something that represents another thing. In one sense, ceremonies, stories, and
rites are all symbols because they symbolize deeper values.
o Another symbol is a physical artifact of the organization. Physical symbols are
powerful because they focus attention on a specific item.
ORGANIZATION DESIGN AND CULTURE
Adaptability Culture
o characterized by strategic focus on the external environment through flexibility and
change to meet customer needs. The culture encourages entrepreneurial values,
norms, and beliefs that support the capacity of the organization to detect, interpret,
and translate signals from the environment into new behavior responses.
Mission Culture
o An organization concerned with serving specific customers in the external
environment, but without the need for rapid change, is suited to the mission culture.
o characterized by emphasis on a clear vision of the organizations purpose and on
the achievement of goals, such as sales growth, profitability, or market share, to
help achieve the purpose.
Clan Culture
o has a primary focus on the involvement and participation of the organizations
members and on rapidly changing expectations from the external environment.
o focuses on meeting the needs of employees as the route to high performance.
Bureaucratic Culture
o an internal focus and a consistency orientation for a stable environment. This type
of culture supports a methodical approach to doing business. Symbols, heroes, and
ceremonies reinforce the values of cooperation, tradition, and following established
policies and practices as ways to achieve goals.

CULTURE STRENGTH AND ORGANIZATIONAL SUBCULTURES

Culture strength is the degree of agreement among members of an organization about
specific values
Subcultures reflect the common problems, goals, and experiences of a team or department
Different departments may have their own norms

ORGANIZATIONAL CULTURE, LEARNING, AND PERFORMANCE

Culture is important to learning and innovation during challenging times
Strong adaptive cultures often incorporate the following values:
1. The whole is more important than the parts
2. Equality and trust are primary values
3. The culture encourages risk taking, change, and improvement

ETHICAL VALUES AND SOCIAL RESPONSIBILITY

Ethics refer to the code of moral principles and values that govern the behaviors of a person
or group with respect to what is right or wrong
Managerial Ethics
o Ethical decisions go far beyond behaviors governed by law
o Managerial ethics guide the decisions and behaviors of managers
o Rule of law arises from a set of codified principles and regulations that describe
how people are required to act, that are generally accepted in society, and that are
enforceable in the courts.
 An ethical dilemma arises in a situation concerning right and wrong in which values are
in conflict.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Does it pay to be good?
Extension of the idea of managerial ethics
Managements obligation to make choices and take action that positively impact
stakeholders
Increase in social responsibility
Customers and public are paying closer attention to what organizations do
Social responsibility can enhance a firms reputation

HOW MANAGERS SHAPE CULTURE AND ETHICS

Value-Based Leadership - a relationship between a leader and followers that is based on
shared, strongly internalized values that are advocated and acted upon by the leader.
Formal Structure and Systems
o Structure
Top executives can assign responsibility for ethical values to a specific
position. This not only allocates organization time and energy to the
problem but symbolizes to everyone the importance of ethics
Ethics committee - which is a cross-functional group of executives who
oversee company ethics.
Today, many organizations are setting up ethics departments that manage
and coordinate all corporate ethics activities. These departments are headed
by a chief ethics officer, a high-level company executive who oversees all
aspects of ethics
Most ethics offices have confidential ethics hotlines that employees can use
to seek guidance as well as report questionable behavior.
o Disclosure Mechanisms
A confidential hotline is also an important mechanism for employees to
voice concerns about ethical practices.
Holding organizations account- able depends to some degree on individuals
who are willing to speak up if they suspect illegal, dangerous, or unethical
activities.
Whistle-blowing is employee disclosure of illegal, immoral, or illegitimate
practices on the part of the organization.
o Code of Ethics
A formal statement of the companys values concerning ethics and social
responsibility; it clarifies to employees what the company stands for and its
expectations for employee conduct.
o Training Programs
To ensure that ethical issues are considered in daily decision making, many
companies supplement a written code of ethics with employee training
programs.
Managers play key role in providing leadership and examples of ethical behavior
CORPORATE CULTURE AND ETHICS IN A GLOBAL ENVIRONMENT
The global environment presents tough ethical challenges
Countries have varied attitudes and beliefs
Components that characterize a global culture:
o Multicultural rather than national values
o Basing status on merit rather than nationality
Managers must think broadly about ethics
Social audits measure and report ethical, social, and environmental impact of a companys
operation.
CHAPTER 9

TYPES OF DECISIONS
Organizational decision making process of identifying and solving problems
o Problem Identification
o Problem Solution
Programmed Decisions
o repetitive and well defined, and procedures exist for resolving the problem.
o They are well structured because criteria of performance are normally clear, good
information is available about current performance, alternatives are easily
specified, and there is relative certainty that the chosen alternative will be
successful.
Non-programmed Decisions
o novel and poorly defined, and no procedure exists for solving the problem.
o used when an organization has not seen a problem before and may not know how
to respond. Clear-cut decision criteria do not exist. Alternatives are fuzzy. There is
uncertainty about whether a proposed solution will solve the problem. Typically,
few alternatives can be developed for a non-programmed decision, so a single
solution is custom-tailored to the problem.

INDIVIDUAL DECISION MAKING

Rational approach ideal method for how managers should make decisions
Bounded rationality perspective how decisions are made under severe time and
resource constraints

STEPS IN THE RATIONAL APPROACH

1. Monitor the decision environment
2. Define the decision problem
3. Specify decision objective
4. Diagnose the problem
5. Develop alternative solution
6. Evaluate alternatives
7. Choose the best alternative
8. Implement the chosen alternative

BOUNDED RATIONALITY PERSPECTIVE

There is a limit to how rational managers can betime and resource constraints
Non-Programmed decisions
Constraints and Tradeoffs
Constraints impinge the decision maker
The Role of Intuition
Experience and judgment rather than logic

CONSTRAINTS AND TRADEOFFS DURING NON-PROGRAMMED DECISION

MAKING
ORGANIZATIONAL DECISION MAKING
Management Science Approach
Carnegie Model
Incremental Decision Model

MANAGEMENT SCIENCE APPROACH

Use of statistics to identify relevant variables
Remove human element
Very successful for military problems
Good tool for decisions where variables can be identified and measured
A drawback of management science is that quantitative data are not rich and lack tacit
knowledge
CARNEGIE MODEL
An organizational decision making is based on the work of Richard Cyert, James March,
and Herbert Simon, who were all associated with Carnegie-Mellon University.
A coalition is an alliance among several managers who agree about organizational goals
and problem priorities.
First, decisions are made to satisfice rather than to optimize problem solutions.
o Satisficing means organizations accept a satisfactory rather than a maximum level
of performance, enabling them to achieve several goals simultaneously.
o In decision making, the coalition will accept a solution that is perceived as
satisfactory to all coalition members.
Second, managers are concerned with immediate problems and short-run solutions. They
engage in what Cyert and March called problemistic search.
o Problemistic search means managers look around in the immediate environment
for a solution to quickly resolve a problem.

INCREMENTAL DECISION MODEL

Focus on structured sequence of activities from discovery to solution
Large decisions are a collection of small choices
Decision interrupts are barriers
Identification Phase
Development Phase
Selection Phase
Dynamic Factors
1. Identification Phase
begins with recognition. Recognition means one or more managers become aware of a
problem and the need to make a decision. Recognition is usually stimulated by a problem
or an opportunity
A problem exists when elements in the external environment change or when internal
performance is perceived to be below standard
2. Development Phase
a solution is shaped to solve the problem defined in the identification phase.
 First, search procedures may be used to seek out alternatives within the organizations
repertoire of solutions.
The second direction of development is to design a custom solution. This hap- pens when
the problem is novel so that previous experience has no value.
3. Selection Phase
The selection phase is when the solution is chosen.
The judgment form of selection is used when a final choice falls upon a single decision
maker, and the choice involves judgment based upon experience. In analysis, alternatives
are evaluated on a more systematic basis, such as with management science techniques.

PROBLEM IDENTIFICATION AND PROBLEM SOLUTION

When problem and problem solution are uncertain

GARBAGE CAN MODEL

Pattern or flow of multiple decisions
Think of the whole organization
Explain decision making in high uncertainty - organized anarchy:
Problematic preferences
Unclear, poorly understood technology
Turnover
Streams of events instead of defined problems and solutions
Implications of the Garbage Can Model
a. Solutions may be proposed even when problems do not exist
b. Choices are made without solving problems
c. Problems may persist without being solved
d. A few problems are solved

SPECIAL DECISION CIRCUMSTANCES

Todays environment presents high-stakes, quick decisions
Managers must deal with:
 High-velocity environments
Learning from decision mistakes
Understanding cognitive and personal biases
Escalating commitment
Prospect theory
Groupthink
Evidence-based management
Encourages dissent and diversity