CHAPTER 16 ORGANIZATIONAL CULTURE

organizational culture A system of shared meaning held by an organization’s members that

distinguishes the organization from others. This system of shared meaning includes values, beliefs, and
assumptions that characterize the organization.

1. Adaptability. The degree to which employees are encouraged to be innovative and flexible as well as to
take risks and experiment.
2. Detail orientation. The degree to which employees are expected to exhibit precision, analysis, and
attention to detail.
3. Results/outcome orientation. The degree to which management focuses on results or outcomes rather
than on the techniques and processes used to achieve them.
4. People/customer orientation. The degree to which management decisions consider the effect of
outcomes on people within and outside the organization.
5. Collaboration/team orientation. The degree to which work activities are organized around teams
rather than individuals.
6. Integrity. The degree to which people exhibit integrity and high ethical standards in their work.

Appraising an organization on the strength of each provides a basis for the shared understanding that members have about
the organization, how things are done in it, and the way they are supposed to behave.

Another common culture framework groups organizations into one of four types, each with its own
assumptions, beliefs, values, artifacts, and even criteria for effectiveness:

1. “The Clan.” A culture based on human affiliation. Employees value attachment, collaboration, trust, and
support.
2. “The Adhocracy.” A culture based on change. Employees value growth, variety, attention to detail,
stimulation, and autonomy.
3. “The Market.” A culture based on achievement. Employees value communication, competence, and
competition.
4. “The Hierarchy.” A culture based on stability. Employees value communication, formalization, and
routine.

The differences between these cultures are reflected in their internal versus external focus and their flexibility and stability.

For instance, clans are internally focused and flexible, adhocracies are externally focused and flexible, markets are externally
focused and stable, and hierarchies are internally focused and stable.

Organizational culture describes how employees perceive the characteristics of an organization, not
whether they like those characteristics. In other words, it’s a descriptive term.

keep in mind that organizational culture is descriptive in that it describes an organization, On the other hand, job satisfaction
is evaluative because it can be positive or negative.

dominant culture A culture that expresses the core values that are shared by a majority of the
organization’s members.
core values The primary or dominant values that are accepted throughout the organization.
subcultures Mini cultures within an organization, typically defined by department designations and
geographical separation.

The dominant culture expresses the core values that a majority of members share and that give the organization its distinct
personality. Subcultures tend to develop in large organizations in response to common problems or experiences that a group
of members face in the same department or location.
that the Zappos culture values customer care and dedication over speed and efficiency, which explains the
behavior of Zappos executives and employees.

strong culture A culture in which the core values are intensely held and widely shared.

The more members who accept the core values and the greater their commitment, the stronger the culture and the greater its
influence on member behavior.

The Functions of Culture

Culture defines “the rules of the game.”
1. it has a boundary-defining role: It creates distinctions between organizations.
2. it conveys a sense of identity for organization members.
3. culture facilitates commitment to something larger than individual self-interest.
4. it enhances the stability of the social system.
5. it is a sense-making and control mechanism that guides and shapes employees’ attitudes and
behavior.
Culture is the social glue that helps hold the organization together by providing standards for what
employees should say and do.

organizational climate The shared perceptions that organizational members have about their organization
and work environment. organizational climate The shared perceptions that organizational members have
about their organization and work environment.

espoused (i.e., adopted on-the-surface)

enacted (i.e., actually put into practice)

when there is alignment between espoused and enacted organizational values, employees have higher organizational
commitment.

ethical culture The shared concept of right and wrong behavior in the workplace that reflects the true
values of the organization and shapes the ethical decision making of its members.

Researchers have developed ethical climate theory (ECT) and the ethical climate index (ECI) to categorize and measure the
shared perceptions of the ethical work context and environment as reflected in an organization’s policies, practices, and
procedures.

Of the nine identified ECT climate categories, five are most prevalent in organizations: instrumental, caring,
independence, law and code, and rules.
1. instrumental ethical climate, managers may frame their decision making around the assumption that
employees (and companies) are motivated by self-interest (egoistic).
2. caring climate, managers may operate under the expectation that their decisions will have a positive
effect on the greatest number of stakeholders (employees, customers, suppliers) possible.
3. independence ethical climate rely on everyone’s personal moral ideas to dictate his or her workplace
behavior.
4. Law and code climates require managers and employees to use an external, standardized moral
compass such as a professional code of conduct for norms
5. rules climates tend to operate by internal standardized expectations from, perhaps, an organizational
policy manual.

sustainability Maintaining organizational practices over a long period of time because

the tools or structures that support them are not damaged by the processes.

Social sustainability practices address the ways that social systems are affected by an organization’s
actions
over time and how changing social systems may affect the organization.

For example, farmers in Australia have been working collectively to increase water use efficiency, minimize soil erosion, and
implement tilling and harvesting methods that ensure long-term viability for their farm businesses. In a very different context,
3M has an innovative pollution-prevention program rooted in cultural principles of conserving resources, creating products
that have minimal effects on the environment, and collaborating with regulatory agencies to improve environmental effects.

Culture and Innovation

The most innovative companies are often characterized by their open, unconventional, collaborative,
vision-driven, accelerating cultures. Start-up firms often have innovative cultures because they are usually
small, agile, and focused on solving problems to survive and grow.

Let’s unpack some of the major factors that signal a negative organizational culture;
1. Institutionalization A condition that occurs when an organization takes on a life of its own, apart from
any of its members. brings about organizational rigidity and resistance to change.
2. Barriers to Change Culture is a liability when shared values don’t agree with those that further the
organization’s effectiveness. This is most likely when an organization’s environment is undergoing rapid
change, and its entrenched culture may no longer be appropriate.
3. Barriers to Diversity Hiring new employees who differ from the majority in race, age, gender, disability,
or other characteristics creates a paradox; contradiction.
4. Toxicity and Dysfunctions
5. Barriers to Acquisitions and Mergers

How a Culture Begins

Culture creation occurs in three ways.
1. founders hire and keep only employees who think and feel the same way they do.
2. they indoctrinate and socialize employees to their way of thinking and feeling.
3. the founders’ own behavior encourages employees to identify with them and internalize their beliefs,
values, and assumptions.
Keeping a Culture Alive
Once a culture is in place, practices within the organization maintain it by giving employees a set of similar
experiences.

Three forces play a particularly important part in sustaining a culture:

1. Selection The explicit goal of the selection process is to identify and hire individuals with the knowledge,
skills, and abilities to perform successfully.
2. Top Management The actions of top management have a major impact on the organization’s
[Link] words and behavior, senior executives establish norms that filter through the
organization about
3. socialization A process that adapts employees to the organization’s culture. Socialization can help
alleviate the problem many employees report when their new jobs are different from what they expected

prearrival stage The period of learning in the socialization process that occurs before a new employee joins
the organization. recognizes that each individual arrives with a set of values, attitudes, and expectations
about both the work and the organization.

encounter stage The stage in the socialization process in which a new employee sees what the organization
is really like and confronts the possibility that expectations and reality may diverge.

metamorphosis stage The stage in the socialization process in which a new employee changes and adjusts
to the job, work group, and organization.
How Employees Learn Culture
Culture is transmitted to employees in several forms, the most potent being stories, rituals, material
symbols, and language.

Stories Stories such as these circulate through many organizations, anchoring the present in the past and
legitimizing current practices.88 They typically include narratives about the organization’s founders, rule
breaking, rags-to-riches successes, workforce reductions, relocations of employees, reactions to past
mistakes, and organizational coping.
Rituals Repetitive sequences of activities that express and reinforce the key values of the organization, which
goals are most important, which people are important, and which are expendable.
material symbols What conveys to employees who is important, the degree of egalitarianism top
management desires, and the kinds of behavior that are appropriate.
Language Many organizations and subunits within them use language to help members identify with the
culture, attest to their acceptance of it, and help preserve it.

Developing an Ethical Culture

Despite differences across industries and cultures, ethical organizational cultures share some common
values and [Link], managers can create a more ethical culture by adhering to the following
principles:
• Be a visible role model. Employees will look to the actions of top management as a benchmark for
appropriate behavior, but everyone can be a role model to positively influence the ethical atmosphere. Send
a positive message.
• Communicate ethical expectations. Whenever you serve in a leadership capacity, minimize ethical
ambiguities by sharing a code of ethics that states the organization’s primary values and the judgment rules
employees must follow.
• Provide ethical training. Set up seminars, workshops, and training programs to reinforce the organization’s
standards of conduct, clarify what practices are permissible, and address potential ethical dilemmas.
• Visibly reward ethical acts and punish unethical ones. Evaluate subordinates on how their decisions
compare with the organization’s code of ethics. Review the means as well as the ends. Visibly reward those
who act ethically and conspicuously punish those who don’t.
• Provide protective mechanisms. Seek formal mechanisms so everyone can discuss ethical dilemmas and
report unethical behavior without fear of reprimand. These might include identifying ethical counselors,
ombudspeople, or ethical officers for liaison roles.

Developing a Positive Culture

positive organizational culture A culture that emphasizes building on employee strengths, rewards more
than punishes, and emphasizes individual vitality and growth.

Let’s consider each of these areas.

Building on Employee Strengths
Rewarding More Than Punishing
Encouraging Vitality and Growth
Limits of Positive Culture

A Spiritual Culture
workplace spirituality The recognition that people have an inner life that nourishes and is nourished by
meaningful work that takes place in the context of community.

Characteristics of a Spiritual Organization

• Benevolence. Spiritual organizations value kindness toward others and the
happiness of employees and other organizational stakeholders.
• Strong sense of purpose. Spiritual organizations build their cultures around
a meaningful purpose. Although profits may be important, they’re not
the primary value.
• Trust and respect. Spiritual organizations are characterized by mutual trust,
honesty, and openness. Employees are treated with esteem and value,
consistent with the dignity of each individual.
• Open-mindedness. Spiritual organizations value flexible thinking and creativity among employees.
 CHAPTER 17 HUMAN RESOURCE POLICIES AND PRACTICES

Recruitment Practices
Strategic recruiting has become a cornerstone for many companies, in which recruiting practices are
developed in alignment with long-term strategic goals. As for defining “success” in recruiting, most research
suggests that the best system attracts candidates who are highly knowledgeable about the job and the
organization.
Online recruiting has yielded an exponentially increased number of applications, even as the means to
identify the best online recruitment sources are still developing.

Selection Practices
human capital resources The capacities of a work unit derived from the collective knowledge, skills, abilities,
and other resources of the organization’s workforce. Human capital resources are the capacities available
to an organization through its employees.
The resources include specialized skills, collective knowledge, abilities, and other resources available
through an organization’s workforce.

Initial Selection
Initial selection devices are used for preliminary rough cuts to decide whether the applicant meets the basic
qualifications for a job. Application forms and résumés (including letters of recommendation) are initial
selection devices. Background checks are either an initial selection device or a contingent selection device,
depending on how the organization handles them.
Application Forms
Background Checks

Substantive and Contingent Selection

Written Tests
Long popular as selection devices, written employment tests—called paper-and-pencil tests, Managers
recognize that valid tests can help predict who will be successful on the job.
Intelligence or Cognitive Ability Tests Tests of intellectual ability/cognitive ability/intelligence (the terms
are sometimes used interchangeably), spatial and mechanical ability, perceptual accuracy, and motor
ability have long proven valid predictors for the performance of many skilled, semiskilled, and unskilled
operative jobs.
Personality Tests Personality tests are inexpensive and simple to administer, and their use has grown.
Integrity Tests As ethical problems in organizations have increased, integrity tests have gained
popularity. These paper-and-pencil tests measure factors such as dependability, carefulness,
responsibility, and honesty
Performance-Simulation Tests
performance-simulation tests have higher face validity (the measurement of whether applicants
perceive the measures to be accurate), and their popularity has increased.
1. work sample tests Hands-on simulations of part or all of the work that applicants for routine jobs must
perform.
2. assessment centers Off-site locations where candidates are given a set of performance simulation
tests designed to evaluate their managerial potential.
3. situational judgment tests Substantive selection tests that ask applicants how they would perform in a
variety of job situations; the answers are then compared to the answers of high-performing employees.
4. realistic job previews Substantive selection tests that are job tryouts to assess talent versus experience.

Interviews
a one-on-one conversation between an interviewer and an interviewee
1. unstructured interviews Short, casual interviews made up of random questions.
2. structured interviews Planned interviews designed to gather job-related information.
3. behavioral structured interviews These interviews require applicants to describe how they handled
specific problems and situations in past jobs, based on the assumption that past behavior offers the
best predictor of future behavior.
4. panel interviews Structured interviews conducted with a candidate and a number of panel members
in a joint meeting.

Contingent Selection Tests

drug test
medical examinations

Training and Development Programs

Types of Training
Basic Skills reading, writing, comprehension, and math
Technical Skills new technology and new structural designs in the organization.
Problem-Solving Skills logic, reasoning, and problem-defining skills
Interpersonal Skills training to improve listening, communicating, and team-building skills.
Civility Training
Ethics Training

Training Methods
Job Training On-the-job training methods include job rotation, apprenticeships, understudy
assignments, and formal mentoring programs.
Computer-Based Training The fastest-growing training medium is computer-based training, or e-
training or e-learning.

Performance Evaluation
Researchers now recognize three major types of behavior that constitute performance at work:
1. Task performance. Performance of the duties and responsibilities that contribute to the production of a
good or service, or to administrative tasks. These include most of the tasks in a conventional job
description.
2. Citizenship. Performance of actions that contribute to the psychological environment of the
organization, such as helping others when not required, supporting organizational objectives, treating
coworkers with
respect, making constructive suggestions, and saying positive things about the workplace.
3. Counterproductivity. Behavior that actively damages the organization, including stealing, damaging
company property, acting aggressively toward coworkers, and taking avoidable absences.

Purposes of Performance Evaluation

human resources decisions
identify training and development needs
pinpoint employee skills and competencies
provide feedback to employees
the basis for reward allocations

What Do We Evaluate?
Individual Task Outcomes
Behaviors
Traits
Methods of Performance Evaluation
1. Written Essays
2. critical incidents A way of evaluating an employee’s behaviors that are key in making the difference
between executing a job effectively and executing it ineffectively.
3. graphic rating scale An evaluation method in which the evaluator rates performance factors on an
incremental scale.
4. behaviorally anchored rating scales (BARS) Scales that combine major elements from the critical
incident and graphic rating scale approaches. The appraiser rates employees based on items along a
continuum, but the points are examples of actual behavior on the given job rather than general
descriptions or traits.
5. forced comparison Method of performance evaluation where an employee’s performance is made in
explicit comparison to others (e.g., an employee may rank third out of 10 employees in her work unit).
6. group order ranking An evaluation method that places employees into a particular classification, such
as quartiles.
7. individual ranking An evaluation method that rank-orders employees from best to worst.

Improving Performance Evaluations

Use Multiple Evaluators
Evaluate Selectively
Train Evaluators
Provide Employees with Due Process

The Leadership Role of Human Resources (HR)

high-performance work system (HPWS) A group of human resources practices that

work together and reinforce one another to improve organizational outcomes.
Communicating HR Practices
Designing and Administering Benefits Programs
Drafting and Enforcing Employment Policies
Managing Work–Life Conflicts
Mediations, Terminations, and Layoffs
 CHAPTER 18 ORGANIZATIONAL CHANGE AND STRESS MANAGEMENT

ChangeMaking things different.

planned change Change activities that are intentional and goal-oriented.

change agents Persons who act as catalysts and assume the responsibility for managing change
activities.
They see a future for the organization others have not identified, and they are able to motivate, invent, and
implement this vision.

Overcoming Resistance to Change

Communication
Participation
Building Support and Commitment
Develop Positive Relationships
Implementing Changes Fairly
Manipulation and Cooptation
Manipulation refers to covert influence attempts. Twisting facts to make them more attractive, withholding information, and
creating false rumors to get employees to accept change are all examples of manipulation.
Cooptation combines manipulation and participation.36 It seeks to buy off the leaders of a resistance group by giving them a
key role, seeking their advice not to find a better solution but to get their endorsement.
Selecting People Who Accept Change
Coercion
the application of direct threats or force on the resisters.
Approaches to Managing Organizational Change

Lewin’s Three-Step Model of the Change Process

Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the status
quo, movement to a desired end state, and refreezing the new change to make it permanent

Kotter’s Eight-Step Plan

John Kotter of Harvard Business School built on Lewin’s three-step model to create a more detailed
approach for implementing change.

action research A change process based on systematic collection of data and then selection of a change
action based on what the analyzed data indicate.
organizational development (OD) A collection of planned change interventions, built on humanistic
democratic values, that seeks to improve organizational effectiveness and employee well-being.
sensitivity training Training that seeks to change behavior through unstructured group interaction.
survey feedback The use of questionnaires to identify discrepancies among member perceptions;
discussion follows, and remedies are suggested.
process consultation (PC) A meeting in which a consultant assists a client in understanding process
events with which he or she must deal and identifying processes that need improvement.
team building High interaction among team members to increase trust and openness.
intergroup development Organizational development (OD) efforts to change the attitudes, stereotypes,
and perceptions that groups have of each other.
appreciative inquiry (AI) An approach that seeks to identify the unique qualities and special strengths of
an organization, which can then be built on to improve performance.

Managing Paradox
paradox theory The theory that the key paradox in management is that there is no final optimal status for
an organization.

Stimulating a Culture of Innovation

innovation A new idea applied to initiating or improving a product, process, or service.

Sources of Innovation
Structural variables are one potential source of innovation.A comprehensive review of the structure–
innovation relationship leads to the following conclusions:
1. Organic structures positively influence innovation. Because they’re lower in vertical differentiation,
formalization, and centralization, organic organizations facilitate the flexibility, adaptation, and cross-
fertilization that make the adoption of innovations easier.
2. Innovation-contingent rewards positively influence innovation. When creativity is rewarded, firms
tend to become more innovative—especially when employees are given feedback on their performance in
addition to autonomy in doing their jobs.
3. Innovation is nurtured when there are slack resources. Having an abundance of resources, including
an equal distribution of wealth, allows an organization to afford to purchase or develop innovations, bear
the cost of instituting them, and absorb failures.
4. Interunit communication is high in innovative organizations. These organizations are heavy users of
committees, task forces, cross-functional teams, and other mechanisms that facilitate interaction across
departmental lines.
idea champions Individuals who take an innovation and actively and enthusiastically promote the idea,
build support, overcome resistance, and ensure that the idea is implemented

Creating a Learning Organization

learning organization An organization that has developed the continuous capacity to adapt and change.

Managing Learning What can managers do to make their firms learning organizations? Here are some
suggestions:

• Establish a strategy. Management needs to make explicit its commitment to change, innovation, and
continuous improvement.
• Redesign the organization’s structure. The formal structure can be a serious impediment to learning.
Flattening the structure, eliminating or combining departments, and increasing the use of cross-functional
teams reinforce interdependence and reduce boundaries.
• Reshape the organization’s culture. Managers must demonstrate by their actions that taking risks and
admitting failures are desirable. This means rewarding people who take chances and make mistakes. They
also need to encourage functional conflict.

Stress at Work

stress An unpleasant psychological process that occurs in response to environmental pressures.

challenge stressors Stressors associated with workload, pressure to complete tasks, and time urgency.
hindrance stressors Stressors that keep you from reaching your goals, for example, red tape, office politics,
and confusion over job responsibilities.
demands Responsibilities, pressures, obligations, and even uncertainties that individuals face in the
workplace.
resources Factors within an individual’s control that can be used to resolve demands.
allostasis Working to change behavior and attitudes to find stability.

Potential Sources of Stress at Work

Environmental Factors
Organizational Factors
Task demands relate to a person’s job.
Role demands relate to pressures placed on a person as a function of the particular role he or she plays in the organization.
Interpersonal demands are pressures created by other employees.
Personal Factors
Stressors Are Additive

Individual Differences
Perception
Job Experience
Social Support
Personality Traits
Consequences of Stress at Work
Physiological Symptoms
Psychological Symptoms
Behavioral Symptoms

Managing Stress
Individual Approaches
Organizational Approaches
1. Selection and Placement, and Training
2. Goal Setting
3. Redesigning Jobs
4. Employee Involvement
5. Organizational Communication
6. Employee Sabbaticals
7. Wellness Programs