Organizational Culture Management

Katalin Pádár Ph.D. Student 29/11/2013

Management • • •

Ms. Katalin Pádár - Leadership & Org. Culture [email protected] Midterm: 6th December, 2013 Ms. Henrietta Finna - regarding administrative stuff [email protected]

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Outline • Importance of Org. Cult. • The concept: Schein Deal & Kennedy Handy (Harrison) Hofstede

“We’re wondering whether you’d fit into our corporate culture!” 29/11/2013 - Organizational Culture - Katalin Pádár

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National culture The sum total of the beliefs, rituals, rules, customs, artifacts, and the institutions that characterize the population. 29/11/2013 - Organizational Culture - Katalin Pádár

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Why is it important??? “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster." Prof. Geert Hofstede, Emeritus Professor, Maastricht University.

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Why is it important??? “If you don’t understand the culture of the company, even your most brilliant strategies will fail. Your vision will be resisted, plans won’t get executed properly, and all kinds of things will start going wrong.” Isadore Sharp, Chairman & CEO, Four Seasons Hotels 29/11/2013 - Organizational Culture - Katalin Pádár

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Why is it important??? “Whatever your culture, your values, your guiding principles, you have to take steps to inculcate them in the organization early in its life so that they can guide every decision, every hire, every strategic objective you set.” Howard Schultz, CEO, Starbucks 29/11/2013 - Organizational Culture - Katalin Pádár

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Models on Org. Culture • Several methods have been used to classify organizational culture

• There is no single “type” of organizational culture

organizational culture vary widely from one company to the next

• Researchers have developed models to describe different organizational cultures

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Organizational culture is... “... the pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.” Edgar H. Schein 29/11/2013 - Organizational Culture - Katalin Pádár

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Edgar H. Schein • •

1928 -

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Professor of Management at M.I.T. and is considered one of the a 'founders' of organizational psychology.

Investigates organizational culture, process consultation, the research process, career dynamics, and organization learning and change.

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The Levels of Culture and Their Interaction Visible artifacts

Artifacts & Creations Technology Art Visible & Audible Behavior Patterns

Visible but often not decipherable

Values

Values

Greater level of awareness

Underlying assumptions

Basic Assumptions Relationship to Environment Nature of Reality, Time & Space Nature of Human Nature Nature of Human Activity Nature of Human Relationships

Taken for granted Invisible Preconscious

Taught to new members... “One Tuesday afternoon in February 2008, Starbucks closed all of its US stores. A note posted on 7,100 locked doors explained the reason: «We’re taking time to perfect our espresso. Great espresso requires practice. That’s why we’re dedicating ourselves to honing our craft.» ”

H. Schultz 29/11/2013 - Organizational Culture - Katalin Pádár

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Organizational culture... (1) is always in the process of formation and change

(2) tends to cover all aspects of human functioning (3) is learned around the major issues of external adaptation and internal integration

(4) is ultimately embodied as an interrelated, patterned set of basic assumptions that deal with the ultimate issues, such as the nature of humanity, human relationships, time, space, and the nature of reality and truth itself. 29/11/2013 - Organizational Culture - Katalin Pádár

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(Schein)

Deal & Kennedy •

Corporate Cultures: The Rites and rituals of Corporate Life (1982)

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The components of corporate culture: values, heroes, rites and rituals.

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Feedback speed

Culture Types Deal & Kenendy (1982) Feedback speed

Fast

Work hard, play hard culture

Tough-guy macho culture

Process culture

Bet-yourcompanyculture

Slow Degree of risk Low 29/11/2013 - Organizational Culture - Katalin Pádár

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Deal & Kennedy’s typology Work-hard, playhard culture

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Stress coming from quantity of work rather than uncertainty. High-speed action leading to high-speed recreation. Eg. restaurants, software companies.

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Work hard, play hard culture

Tough-guy macho culture

Process culture

Bet-yourcompanyculture

Feedback

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Fast

Slow Risk Low

High

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Deal & Kennedy’s typology Tough-guy macho culture

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Stress coming from high risk and potential loss/gain of reward. Focus on the present rather than the longer-term future. Eg. police, surgeons, sports.

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Work hard, play hard culture

Tough-guy macho culture

Process culture

Bet-yourcompanyculture

Feedback

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Fast

Slow Risk Low

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Deal & Kennedy’s typology Process culture

• • •

Fast Low stress, plodding work, comfort and security. Stress may come from internal politics and stupidity of the system. Development of bureaucracies and other ways of maintaining the status quo. Focus on security of the past Slow and of the future. E.g. banks, insurance comp.

29/11/2013 - Organizational Culture - Katalin Pádár

Work hard, play hard culture

Tough-guy macho culture

Process culture

Bet-yourcompanyculture

Feedback

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Risk Low

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Deal & Kennedy’s typology Bet-your-company culture

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Stress coming from high risk and delay before knowing if actions have paid off. The long view is taken, but then much work is put into making sure things happen as planned. E.g. aircraft manufacturers, oil companies.

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Work hard, play hard culture

Tough-guy macho culture

Process culture

Bet-yourcompanyculture

Feedback

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Fast

Slow Risk Low

High

Management

Charles Handy •

1932 - ; Irish author/philosopher specializing in organizational behavior and management

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Popularized (1985) the 1972 work of Roger Harrison of looking at culture which some scholars have used to link organizational structure to organizational culture.

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Handy - Power culture •

Concentrates power among a few

• Control radiates from the center like a web and influence spread out from • Power central figure or group •

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a

Power derives from the top person and

personal relationships with that individual matters more than any formal title of position. Has few rules and little bureaucracy; swift decisions can ensue.

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Handy - Role culture have clearly delegated authorities • People within a highly defined structure. these organizations form hierarchical • Typically, bureaucracies.

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Power derives from a person's position

and little scope exists for expert power. Controlled by procedures, role descriptions and authority definitions. Predictable and consistent systems and procedures are highly valued.

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Handy - Task culture •

Teams are formed to solve particular

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Power derives from expertise as long as

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problems. a team requires expertise. These cultures often feature the multiple reporting lines of a matrix structure. It is all a small team approach, who are highly skilled and specialist in their own markets of experience.

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Handy - Person culture • Where all individuals believe themselves superior to the organization. • Survival can become difficult for such organiza•

tions, since the concept of an organization suggests that a group of like-minded individuals pursue the organizational goals. Some professional partnerships can operate as person cultures, because each partner brings a particular expertise and clientele

to the firm. 29/11/2013 - Organizational Culture - Katalin Pádár

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Geert Hofstede • •

1928 “I am a Dutch social psychologist who did a pioneering study of cultures across modern nations.”

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Hofstede’s Cultural Dimensions • Power distance (PDI) • Individualism (IDV) • Masculinity (MAS) • Uncertainty Avoidance Index (UAI) • Long-Term Orientation (LTO) 29/11/2013 - Organizational Culture - Katalin Pádár

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Power Distance (PDI) “... is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'.”

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Individualism (IDV) “... on the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family.. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word 'collectivism' in this sense has no political meaning: it refers to the group, not to the state.” 29/11/2013 - Organizational Culture - Katalin Pádár

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Masculinity (MAS) “... versus its opposite, femininity, refers to the distribution of roles between the genders (...) The IBM studies revealed: (a) women's values differ less among societies than men's values; (b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values on the one side, to modest and caring and similar to women's values on the other. The assertive pole has been called 'masculine' and the modest, caring pole 'feminine'. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men's values and women's values.” 29/11/2013 - Organizational Culture - Katalin Pádár

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Uncertainty Avoidance Index (UAI) “... deals with a society's tolerance for uncertainty and ambiguity; (...)

It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and

on the philosophical and religious level by a belief in absolute Truth; (...) People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions.” 29/11/2013 - Organizational Culture - Katalin Pádár

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Long-Term Orientation (LTO) “... versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars. It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'.

Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage.” 29/11/2013 - Organizational Culture - Katalin Pádár

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Home: JPN, Host: USA • • • • •

PDI - Power Distance Index IDV - Individualism MAS - Masculinity UAI - Uncertainty Avoidance Index LTO - Long-Term Orientation http://www.geert-hofstede.com/

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Home: FRA, Host: HUN • • • • •

PDI - Power Distance Index IDV - Individualism MAS - Masculinity UAI - Uncertainty Avoidance Index LTO - Long-Term Orientation http://www.geert-hofstede.com/

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Questions to consider - 1 • • • • • •

Define leadership and its relation to management!

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What does the Managerial Grid imply in terms of appropriate leadership?

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What is favorableness of a situation?

Explain the difference between leadership and management! Define types of power and give at least two examples for the use of these types of power! Why is the mutual sharing view important? What is the main idea behind McGregor’s theory? Name and explain the biggest difference between the Michigan Studies and the Ohio State Studies models!

Describe those situations when task-oriented leadership behavior is favorable according to Fiedler’s theory!

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Questions to consider - 2 •

List all the situational factors described by the path-goal theory! Point out the difference between the two major categories!

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What types of decision-making styles are there according to the Vroom-Yetton-Yago model? How can a manager decide which one is the appropriate?

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Delineate the Hersey-Blanchard Situational Theory model, briefly describe its suggested leadership styles!

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Why is maturity an important concept in the Hersey-Blanchard situational theory? How suggested leadership styles reflect this?

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Explain why it is important (e.g., to a manager in an organization) to pay attention to organizational culture!

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Name the levels of culture defined by Schein and briefly describe the and their relation to each other!

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What is Schein’s definition of organizational culture?

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Questions to consider - 3 •

Why are groups important if one talks about organizational culture? Explain the difference between external adaptation and internal integration!

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Why should organizational culture be taught to new members?

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What is ‘Bet-your-company culture’ like?

Describe (draw) the matrix about culture types which was suggested ny Deal and Kennedy!

List the 4+1 cultural dimensions of Hofstede! Why are these important? What is uncertainty avoidance index? Explain it briefly! Which theorist can you relate it to?

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Thank you for your kind attention!

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