Social Systems and Organizational Culture

Chapter Four

These illustrations provide some evidence that there has been a backlash in our society against too many status symbols. Some speakers argue that an overemphasis on status has created, or at least magnified, a gap between the haves and the havenots. As a result, some contemporary employees reject traditional symbols of 'status even when those are available to them. They choose to wear clothes of their own choice to work; they don't always drive higher-priced cars; and they prefer to mingle with other employees despite having access to an executive dining room after receiving a promotion.




Social (national) culture creates the wide-ranging context in which organizations operate. It provides the complex social system of laws, values, and customs in which organizational behavior occurs. Employee behavior (B), according to social psychologist Kurt Lewin, is a function of the interaction between personal characteristics (P) and the environment (E) around the person, or B == f (P, E). Part of that environment is the social culture in which the individual lives and works, which provides broad clues as to how a person with a given background will behave. The previous discussion indicated how employee actions are sharply affected by the roles assigned to them and the status level accorded to them.
1[ rganizati norms that are shared b) an org.unz., IuD· consciou ly created by its key members. or it may have imply evolved across time. It represents a key element of the work environment in which employees perform their jobs. This idea of organizational culture is somewhat intangible, for we cannot see it or touch it, but it is present and pervasive. Like the air in a room, it surrounds and affects everything that happens in an organization. Because it is a dynamic systems concept, culture is also affected by almost everything that occurs within an organization. Organizational cultures are important to a firm's success for severalreasons. They give an organizational identity to employees-a defining vision of what the organization represents. They are also an important source of stability and continuity to the organization, which provides a sense of security to its members. At the same time, knowledge of the organizational culture helps newer employees interpret what goes on inside the organization, by providing an important context for events that would otherwise seem confusing. More than anything else, perhaps, cultures help stimulate employee enthusiasm for their tasks. Cultures attract attention, convey a vision, and typically honor high-producing and creative individuals as heroes. By recognizing and rewarding these people, organizational cultures are identifying them as role models to emulate.

Characteristics of Cultures
rganizations, like fingerprints and snowflakes, are unique. Each has its own history, atterns of communication, systems and procedures, mission statements and visions, stories and myths which, in their totality, constitute its distinctive culture. Cultures are relatively stable in nature, usually changing only slowly over time. Exceptions to this condition may occur when a major crisis threatens a firm or when two organizations merge with each other (requiring a careful blending of the two so as to avoid culture clash).

Cultures are distinctive, stable, implicit, and symbolic.




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More frequently. He achieved his results by defining. employees make inferences about it from hearing stories about the way things are done. This results in a good fit of employer and employee. (See "What Managers Are Reading." provides an opportunity for the corporation to communicate its corporate values and discover barriers to their achievement. More recently. led that company to an outstanding level of successfor more than twenty years. Novell's acquisition of WordPerfect.:: t n tatement adorns many awards given to employees anu their units for exceptional work. em 0 Over time. from observing key artifacts. nature of competition.. examples abound of corporate mergers whose partners experienced a clash of cultures. Jack Welch and the GE Way.. Most organizational cultures have historically been implicit rather than explicit.Jack Welch. open exchanges of ideas. - t'1le:l' : -' _ ems . lis Example.18 92 Several other dimensions of culture are important to note. an organization'S culture becomes perpetuated by its tendency to attract and retain people who fit its values and beliefs. Unfortunately. humidity. and high levels of contributions from each employee. culture clearly depends on the organization's goals. emphasizing. even major accounting firms are demanding that potential merger partners answer a series of due diligence questions before moving ahead. organizations have begun talking about their intended cultures. there is no best culture for all firms. and rewarding a corporate culture built around several valued principles: • • • Removing boundaries that inhibit the flow of ideas Increasing speed and simplicity by "delayering" the organization Setting "stretch" goals for employees and rewarding their achievement • • • Following a "six sigma" program for improving qua and performance Emphasizing the importance of customer satisfaction Creating a learning culture that stresses high morals. and other factors in its environment. the blending of General Electric with Honeywell. the marriage of Daimler-Benz with Chrysler. . employees also will gravitate toward the organizational culture they prefer as a work environment. and many top leaders see one of their major roles as speaking out about the kind of environment they would like to create within their firms. Source: Robert Slater. 'The Championship Way. though. Also. the assumptions and values of the culture. from reading slogans that portray corporate ideals. industry. if not embrace. Cultures will be more easily recognized when their elements are generally integrated and consistent with each other. For one.") A final defining characteristic of most cultures is that they are seen as symbolic representations of underlying beliefs and values. most members must at least accept. or from watchi ng ceremonies in which certain types of employees are honored. and the merger of Wells Fargo with Norwest Bank all encountered difficulties that delayed expected payoffs. and rainfall. Just as people may choose to move to a certain region because of geographic characteristics such as temperature. Seldom do we read a description of a firm's culture. A training program. He has been referred to as the" most successful chief executive ever" by many business magazines and corporate observers. former CEO of General Electric. As a result. New York: McGraw-HilL 1998. of symbolic representation. Most important among these questions is "Will there be a good fit between the twO?. in other words. -\ popuier s' c"". they fit together like pieces of a puzzle.

19 Measuring Organizational Culture Systematic measurement and comparison of cultures is difficult at best. or it may be made up of various subcultures-the environment within a single division. plant. such as customer service and quality products. cultures have varying strengths-they can be characterized as relatively strong or weak. management's actions are even more important to watchful employees. The estimated cost (in lost profits) to a single firm of higher turnover (presumably due to the more task-oriented culture) was $6-9 million for the fourteen months. Most early attempts by researchers relied on examination of stories. Just as yeast is a critical ingredient in baking Ho 93 A study of five international accounting firms examined their cultures. and is. fourteen months longer than their counterparts in the other culture. more recently. Another approach is to survey employees directly and seek their percepFIGURE 4-8 • Distinctive • Stable • Implicit • Symbolic • No one type is best • Integrated • Accepted • A reflection of top management • Subcultures • Of. In other cases. the other emphasized the interpersonal relationship values of team orientation and respect for people. A culture may exist across an entire organization. Newly hired professionals working in the culture accenting interpersonal relations stayed. communication. who can have a powerful influence on their employees by what they say. acceptance of decision making and control. Finally. Some research indicates that there must be. employees seldom talked explicitly about the culture in which they worked. depending largely on the degree of their impact on employee behavior and how widely the underlying beliefs and values are held. and commitment to the employer. Such a result is especially likely when a firm consciously seeks to create a performance-enhancing culture that removes barrier to succes . on average. a positive relationship between certain organizational cultures and performance. employee retention (turnover) rates for new hires. varying strength Characteristics of organizational cultures J . rituals. who can quickly detect when managers give only lip service but not true support to certain ideals. The ten characteristics of cultures are summarized in Figure 4-8. symbols. However. Most cultures evolve directly from top management. One emphasized the work task values of detail and stability. or department. Others have used interviews and open-ended questionnaires in an attempt to assess employee values and beliefs. Two primary cultures were identified. culture has become an increasingly acceptable conversation topic among employees.Social Systems and Organizational Culture Chapter Four Historically. examination of corporate philosophy statements has provided insight into the espoused culture (the beliefs and values that the organization states publicly). Agreement within an organization on a culture should result in a larger degree of cooperation. branch. and ceremonies to obtain clues and construct a composite portrait. and the opportunity costs associated with employee departures. The effect of organizational culture on employee behavior is difficult to establish.

collaboration.:rru~ariona1 BeNll 94 tions of the organization' culture. Prudential Insurance Company of America used a standard pencil-and-paper instrument to identify part of its culture. Communicating and Changing Culture If organizations are to consciously create and manage their cultures. This measurement process allowed Prudential to involve employees in changing to a new culture-one where managers are measured against their culturechange goals. gain approval. organizational socialization is like placing an organization's fingerprints on people or stamping its own genetic code on them.of the organization's culture are also unintentionally communicated to employees in a variety of ways. elemen . and found major gaps. Examples of formal communication vehicles for transmitting organizational cultures include executive visions of the firm's future. and even 10\<ing rrr. many organizational cultures are in the process of changing and need to be monitored regularly and by a variety of methods to gain a truer picture. Managers are encouraged to engage in storytelling as a way to forge a culture and build organizational identity. This approach. risk avoidance. it is the essential process of learning the ropes to survive and prosper within the firm. convey personal frailty through tales of mistakes made and learned from. and therefore an intentional approach that helps make this happen is used by many firms. In reality. caution. retelling historical success stories. Collectively.z° Any attempt to measure organizational culture can be only an imperfect assessment. Stories convey a sense of tradition. Prudential measured current norms and found strong perceptions of conformity. initiative. The most memorable stories entertain as well as inform and uplift as well as teach. which is the continuous process of transmitting key elements of an organization's culture to its employees. Employees wanted a culture that stressed teamwork. discussed earlier in this chapter). and behavior of employees. People are generally more willing to adapt when they want to please others.Part One Fundamencals ofOrb. and enhance cohesion around key values. and codes of ethical conduct. training. they must be able to communicate them to employees. and learn about their new work environment. Similarly. especially the newly hired ones. Informal means involve publicly recognizing heroes and heroines. competition with other work groups. Of course. Then the company assessed desired norms. and they provide Socialization affects employees. they point out consequences of actions. From the employee's viewpoint. It consists of both formal methods (such as military indoctrination at boot camp or corporate orientation training for new employees) and informal means (like the role modeling provided by mentors. One of the more interesting methods is to become a member of the organization and engage in participant observation. and top-down decision making. organizations are anxious to have the new employees fit in. thoughts. Viewed from the organization's perspective. such as when news of a manager's error and an executive's forgiveness of it are accidentally leaked throughout the firm. customer service.become exaggerated without popping the hot-air balloon. All these approaches help shape' the attitudes. corporate philosophy statements. and cooperation. explain how past problems have been solved. Good stories tap into the emotions of an audience and have proven to be powerful ways to create shared meaning and purpose. These stories highlight purposeful plots and patterns that the organization cherishes. I \ \ . Such measurements capture only a snapshot of the culture at a single point in time. these cultural communication acts may be lumped under the umbrella of organizational socialization. The important point is that socialization can be functional for both workers and their employers. allows direct sensing from the perspective of a member who is experiencing the culture.

is a key means for achieving socialization of employees. . then the creative individualist can infuse new life and ideas for the organization'S benefit. If we assume that the culture of a certain organization invites its employees to challenge. A h!ghly creative. as this example demonstrates: Delbert Little is an engineer who works for a major American electronics firm. regularlj imploring them to exercise hi: mp . Delbert can be described as exercising creative individualism (but bordering on rebellion). and talented worker. A reciprocal process emerges when changes occur in the other direction.! n. Employees can also have an active impact on the nature of the organization's culture and operations. Isolation. Individualization occurs when employees successfully exert influence on the social system around them at work by challenging the culture or deviating from it. ionate memo to top executive detailing his reasoning and rrymg to persuade them to change their minds. The two extremesrebellion and total conformity-may prove dysfunctional for the organization and the individual's career in the long run. deviation from norms) Individualization High . He accepts some norms and values but rejects others (and therefore is moderately socialized). he also flaunts his rejection of orporate norms regarding personal behavior (mode of dress and deference to authority) . he has a relatively high impact on his portion of the 95 Individualization affects the organization. which shows the types of employees who accept or reject an organization'S norms and values while exerting various degrees of influence. too. acceptance of norms) Socialization Rebellion Low' Low (impact of employee on organizational culture. and experiment while also not being too disruptive. FiGURE 4-~ High Four combinations of socialization and individualization Conformity (impact of organizational culture on employee. energetic. he prides himself on giving 110 percent effort to his job. Consequently. question. then. The interaction between socialization and individualization is portrayed in Figure 4-9. er i mo v ing in the TOng produ t n. Although he totally accepts his employer's values regarding the need to create new and improved products through technological breakthroughs.Social Systems and Organizational Culture Chapter Four valuable lessons that carry forward the wisdom gained through previous years" Storytelling. He fights fiercely for what he thinks is right and attempts to change others' thinking. of course. is seldom a productive course of action.

Iotoro ~. mentors.0 CI) E Minimal Il. Status symbols are sought as if they were magical herbs. Corning. role conflict. they become part of that organization's social system." he laughed one day. Du Pont. Other important cultural factors include the work ethic and corporate attitudes toward social responsibility. : __ .. Ford. The variables in an organizational system operate in a working balance called social equilibrium.~arwnal Behavior I Very great 96 I/) I/) CI) Great c CI) > ~ ~ Moderate :c nI .1.Part One Fundamer. 3. Status is the social rank of a person in a group. "The company tolerates my behavior. Can SUMMARY When people join a work group. n . However.f" Clearly. 1 ! I \ . often spanning five to ten years to complete. Figure 4-10 indicates the relative effectiveness of a variety of methods for changing culrure.:al5 ojOrgan. The broad environment that people live in is their social culture. "only because I have produced over 100 patents while working here!" ul ure be changed? A rudy of corporate culrure at nine large companiesE pre . and role ambiguity. Role is the pattern of action expected of a person in activities involving others. and . as is the training of employees to enable them to change. and it leads to status systems and possibly status anxiety. AT&T. Related ideas are role perception. we call their behavior functional. because they often provide external evidence of status for their possessors. It is the medium by which they relate to the world of work. IB11. Communicate top management support Train employees Formulate value statements Reward behaviors Use stories and myths Publicly recognize heroes and heroines Use slogans Appoint a manager of culture Culture-change methods FIGURE 4-10 Effectiveness of methods for changing o-ga :o:a: ca culture o n organization (individualism).. it requires a long-term effort. Individuals make a psychological contract that defines their personal relationship with the system. When they contribute to the organization's success. People need to accept and appreciate the value that a diversity of cultural backgrounds can contribute to the success of an organization.ugge ts that it can change.Johnson. an open display of topmanagement commitment and support for the new values and beliefs is critically important.

6. saying. but the process is time-consuming. "You can discover if you personally have a work ethic if you think more about the Discussion Questions 97 . If it is not. Seek to understand. Consider the continuing debate in the United States regarding the merits of affirmative action. Look around your classroom. Paint a comprehensive verbal portrait of the organizational culture at your workplace. Role model Role perceptions Social culture Social equilibrium Social responsibility Social system Status Status anxiety Status deprivation Status symbols Status systems Storytelling Valuing diversity Work ethic Discrimination Dysfunctional effect Equal employment opportunity (EEO) Functional effect Individualization Mentor Open systems Organizational culture Organizational socialization Prejudice Protege Psychological contract Role Role ambiguity Terms and Concepts for Review 1. 1. 4. 5. is the disequilibrium functional for the organization? 2. offer yourself as a mentor to at least one person who does not report directly to you. 3. Find. In what ways does it reflect cultural diversity? Suggest ways by Which the resources represented in that diversity could be used to greater advantage for the benefit of all participants. Analyze the status symbols that are apparent in your organization. Organizational cultures reflect the assumptions and values that guide a firm. and use. Look at your organization as a social system. What psychological contract do you feel is present in this course? Describe its key features. Participants learn about their organization's culture through the process of socialization and influence it through individualization. Make sure that your workplace capitalizes on these aspects of diversity. Also. They are intangible but powerful influences on employee behavior. and ask yourself whether it is in balance or not. A management specialist recently commented about the work ethic. or student organization. the psychological contract you have with each of your employees. 3. Identify three arguments for and three against the concept. 4. Decide whether they are functional or dysfunctional for employee morale and performance. Organizational. 2. Inventory the positive ways in which each of your employeesis different. cultures can be changed. at least one active mentor for yourself.1. and actively manage. dormitory. Isthe culture strong or weak? Describe what you could do to clarify it and strengthen it.

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