VI.

MANAGING CORPORATE CULTURE POWERPOINT 6-16

► LEARNING OBJECTIVE 6
Identify strategies for effectively managing
Managing Corporate
Culture
corporate culture. (Text pages 160-167) (Refers to text pages 160-
161)
A. The word “culture” has many meanings.
1. CULTURE is the set of important
understandings (often unstated) that
members of a community share.
2. In an organization, culture is similar to
a human’s personality.
3. An organization’s culture is transmitted
through: LECTURE LINK 6-3
The Culture of the Real
a. long-standing, unwritten rules Rocket Scientists
For 40 years the Jet
b. shared standards Propulsion Laboratory has
planned interplanetary
c. standards for social etiquette and missions for NASA guided
demeanor by a few key rules. See
complete lecture link on page
d. established customers for relating 6.Error: Reference source not
to peers, subordinates, and found of this manual.
superiors
e. other traditions
4. CORPORATE CULTURE
communicates how people in an
organization should behave by
establishing a value system conveyed
through rites, rituals, myths, legends,
and actions.
5. Or, more simply, corporate culture
means “the way we do things around
here.”
B. Cultural Forms of Expression
1. Culture has two basic components;
a. substance, the meanings
contained in its values, norms,
and beliefs
b. forms, the practices whereby
these meanings are expressed,
 affirmed, and communicated to
members
C. How Does Culture Originate?
1. The cultures of some organizations POWERPOINT 6-17
How Does Culture
originate with one person who Originate?
provides a living example of the major (Refers to text pages 161-
values of the organization. 163)

a. However, more than half of an

organization’s culture develops in
response to the environment and
the needs of employees.
b. The four distinct factors discussed
below contribute to an
organization’s culture.
2. History
a. Culture is built on awareness of
the organization’s history.
b. Humans tend to embrace beliefs
and values and to resist changes.
3. Environment
a. Environment shapes culture
because all organizations interact
with their environments.
b. Example: deregulation of the
telecommunications industry in the
1980s.
4. Staffing
a. Organizations tend to hire, retain,
and promote people who are
similar to current employees.
b. This organization “fit” ensures that
current values are accepted and
challengers are screened out.
c. Example: Medtronic’s leader Bill
George
 5.
Entry socialization
a. The organization’s values, norms,
and beliefs are rarely written
down.
b. New employees must be taught
the culture.
c. ENTRY SOCIALIZATION is the
adaptation process by which new
employees are introduced and
indoctrinated into the organization.
D. Strong and Weak Corporate Cultures
1. A strong corporate culture: TEXT FIGURE 6.11
Characteristics of a Strong
a. is clearly defined Corporate Culture
b. reinforces a common (Text page 163)

understanding about what is

important
c. has the support of management
TEXT FIGURE 6.12
and employees Characteristics of a Weak
2. In weak cultures, individuals often act Corporate Culture
(Text page 163)
in ways that are inconsistent with the
company’s way of doing things.
PROGRESS CHECK QUESTIONS (Text page 163)
9. Define the term “culture.”
10. Where does organizational culture originate?
11. Explain the four distinct factors that contribute to an
organization’s culture.
12. Summarize the characteristics of a weak
organizational culture.
E. Identifying Culture POWERPOINT 6-18
1. Researchers have identified seven Identifying Culture
(Refers to text pages 164-
characteristics that define an 165)
organization’s culture:
a. individual autonomy
b. structure
c. support
 d. identification
e. performance-reward
f. conflict tolerance
g. risk tolerance
2. Culture can be grouped into one of
four basic types, determined by:
a. the degree of risk associated with
the organization’s activities
b. the speed with which the
organization and its employees
get feedback on their decisions
3. The TOUGH-PERSON, MACHO
CULTURE is characterized by
individualists who regularly take high
risks and get quick feedback on
whether their decisions are right or
wrong. TEXT FIGURE 6.13
Generic Types of
a. Teamwork is not important, and Organization Culture
the value of cooperation is (Text page 164)
ignored.
b. People who need to gamble do
well in this culture.
4. The WORK-HARD/PLAY-HARD
CULTURE encourages employees to
take few risks and to expect rapid
feedback.
a. Activity and persistence are the
keys to success.
b. Team players who are friendly and
outgoing thrive.
5. The BET-YOUR-COMPANY
CULTURE requires big-stake
decisions with considerable time
passing before the results are known.
6. The PROCESS CULTURE involves
 low risk with little feedback.
a. Employees must focus on how
things are done rather than on the
outcomes.
b. In this atmosphere employees
become cautious and protective.
7. Organizational subcultures
a. Organizations often have multiple
subcultures.
b. The values, beliefs, and practices
can vary from one part of the
organization to the other.
c. Even with different subcultures,
some values are consistent.
8. Incompatible cultures are one reason
promising mergers fail.
PROGRESS CHECK QUESTIONS (Text page 166)
13. Which seven characteristics capture the essence of an
organization’s culture?
14. Explain the four basic types of organizational culture.
15. Think of the organization you currently work for (or
one you have worked for in the past.) Which of the
four basic types of culture most accurately describes
that organization? Provide an example to support
your selection.
16. Define the term “organizational subculture.”

CASE INCIDENT 6.2

The Way We Do Things (Text page 166)

The Fitzgerald Company has been the industry leader in producing consumer products for
years. However, sales and market shares have been in decline now for the past several. The company is
now considering changing the company culture to redefine itself and regain the success it has enjoyed
in the past.

1. Describe, in general terms, the corporate culture at Fitzgerald Company.

The corporate culture for the Fitzgerald Company has been one of work-hard-play-hard, where
activity is the key to success. Rewards accrue for persistence and the ability to find a need and fill it.
Because of the need for volume, team players who are friendly and outgoing (sales types) thrive.
2. What’s wrong with a business philosophy based on the belief “that customer relations and a
strong selling orientation are the keys to business success”?
Meeting the needs of the customer is essential to success in areas such as product design,
implementation, and delivery. Creating and selling products that please the customer impacts the
company’s total revenue. However, revenue is not the same thing as profit. Profit is what is left after
costs have been subtracted from revenue. Unless a product can be produced in a cost-effective way,
more sales won’t do a thing for profit.

3. What does Valerie mean when she says Fitzgerald Company may have to change its culture?
What are some of the necessary changes?
For the Fitzgerald Company, its corporate culture has been successful in the past. However,
losses in sales and market shares have now prompted its president to look at how the company culture
affects sales and expenses. Changing a company culture will be a difficult process for many reasons.
Based on research, the Fitzgerald Company may have to change several characteristics of the
company to foster a new culture. These characteristics include individual autonomy (degree of
responsibility/ independence for individuals in the organization), structure (rules and regulations),
support (managers to subordinates), identification (employee identification to the organization as a
whole), performance-reward (rewards for performance), conflict tolerance (willingness to hones and
open about differences), and risk tolerance (degree at which employees are encouraged to be
aggressive/innovative and risk seeking).

4. Discuss the problems the company may encounter in attempting to implement changes.
The biggest challenge the Fitzgerald Company will face is the length of time it will take to
implement and change its corporate culture. This process usually takes 6 to 15 years. It is also
expensive. Because of the cost, time, and difficulty in changing culture, some might argue that it is
easier to change the people within the organization. This assumes businesses promote people who fit
their organization, and the easiest way to change the organization’s culture is to change the people.
However, it makes more sense to strengthen or fine-tune the current cultural structure.

F. Changing Culture
POWERPOINT 6-19
1. It usually takes from 6 to 15 years to Changing Culture
successfully change organizational (Refers to text pages 166-
168)
culture.
2. According to Allan Kennedy, there are BONUS CASE 6-2
only five reasons to radically change Turning Tyco Around
organization culture. After Tyco’s former CEO
Dennis Kozlowski’s
3. It is possible to strengthen or fine-tune conviction for looting $600
the current culture without wholesale million from the company,
Ed Breen was brought in to
cultural changes. rescue the troubled company.
See complete case,
4. The easiest if not the only way to discussion questions, and
change an organization’s culture is to suggested answers on page
change its people. 6.Error: Reference source not
found of this manual.