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Don Hellriegel Susan E. Jackson John W. Slocum, Jr. MANAGING: A COMPETENCY BASED APPROACH Don Hellriegel Susan E. Jackson John W. Slocum, Jr. MANAGING: A COMPETENCY BASED APPROACH 11 th Edition Chapter 18—Understanding Organizational Culture and Cultural Diversity Prepared by Argie Butler Texas A&M University

Learning Goals 1. Describe the core elements of a culture 2. Compare and contrast Learning Goals 1. Describe the core elements of a culture 2. Compare and contrast four types of organizational culture 3. Discuss why subcultures exist in organizations 4. Describe several activities for successfully managing diversity Chapter 18: Power. Point 18. 1

q Culture: the unique pattern of shared assumptions, values, and norms that shape the q Culture: the unique pattern of shared assumptions, values, and norms that shape the socialization, symbols, language, narratives, and practices of a group of people q Shared assumptions: the underlying thoughts and feelings that members of a culture take for granted and believe to be true q Value: a basic belief about something that has considerable importance and meaning to individuals and is stable over time Chapter 18: Power. Point 18. 2

Chapter 18: Power. Point 18. 3 (Adapted from Figure 18. 1) Chapter 18: Power. Point 18. 3 (Adapted from Figure 18. 1)

q Norms: rules that govern the behaviors of group members q Socialization: a process q Norms: rules that govern the behaviors of group members q Socialization: a process by which new members are brought into a culture q Symbol: anything visible that can be used to represent an abstract shared value or something having special meaning Chapter 18: Power. Point 18. 4

q Language: a shared system of vocal sounds, written signs, and/or gestures used to q Language: a shared system of vocal sounds, written signs, and/or gestures used to convey special meanings among members of a culture q Narratives: the unique stories, sagas, legends, and myths in a culture q Practices Ø Taboos: culturally forbidden behaviors Ø Ceremonies: elaborate and formal activities designed to generate strong feelings Chapter 18: Power. Point 18. 5

Formal Control Orientation Flexible Clan Culture Entrepreneurial Culture Bureaucratic Culture Market Culture Stable Internal Formal Control Orientation Flexible Clan Culture Entrepreneurial Culture Bureaucratic Culture Market Culture Stable Internal Focus of Attention Chapter 18: Power. Point 18. 6 (Adapted from Figure 18. 2) External

q Behavior of employees is governed by formal rules and standard operating procedures, and q Behavior of employees is governed by formal rules and standard operating procedures, and coordination is achieved through hierarchical reporting relationships q Focuses on predictability, efficiency, and stability q Tasks, responsibilities, and authority clearly spelled out q Internal Focus Chapter 18: Power. Point 18. 7

v Behaviors of employees are shaped by tradition, loyalty, personal commitment, extensive socialization, and v Behaviors of employees are shaped by tradition, loyalty, personal commitment, extensive socialization, and self-management v Formal rules and procedures minimized v High sense of member obligation and identity to the organization v Long and thorough socialization process v Mentors and role models v Strong peer pressure v Internal focus Chapter 18: Power. Point 18. 8

“There’s a family mentality here as opposed to just being another number. That trickles “There’s a family mentality here as opposed to just being another number. That trickles down from the top. He [the CEO] knows everyone’s name and says ‘hi’ everyday when I see him during morning workouts at the gym. ” Andres Smith, Accountant, Analytic Graphics, Inc. , Easton, Pennsylvania Chapter 18: Power. Point 18. 9

v External focus and flexibility create an environment that encourages risk taking, dynamism, and v External focus and flexibility create an environment that encourages risk taking, dynamism, and creativity v Commitment to experimentation, innovation, and being on the leading edge v Creates change and quickly reacts to change v Individual initiative, flexibility, and freedom seen as fostering growth § Encouraged and rewarded Chapter 18: Power. Point 18. 10

Market Culture Ø Values and norms reflect the importance of achieving measurable and demanding Market Culture Ø Values and norms reflect the importance of achieving measurable and demanding goals, especially those that are financial and market based (e. g. , sales growth, profitability and market share) Ø Hard driving competitiveness dominates Ø Profits orientation and quantifiable performance goals prevail Ø Minimal informal social pressure on members Ø Superior interactions with subordinates focus on performance-reward (economic) agreement and resource allocations Chapter 18: Power. Point 18. 11

q Exists when assumptions, values, and norms are shared by some—but not all—organizational members q Exists when assumptions, values, and norms are shared by some—but not all—organizational members Chapter 18: Power. Point 18. 12

Reason for merger failure Ø Reasons Executives Give for Failed Mergers Inability to manage Reason for merger failure Ø Reasons Executives Give for Failed Mergers Inability to manage target business Clash of management styles/egos Inability to implement change in new organization Synergies were overstated Incompatible cultures 0 10 Percent of executives who state reason as primary explanation for merger failures Chapter 18: Power. Point 18. 13 20 30 Percent 40 50 60

q Departments and divisions within the organization have their own subcultures Ø Occupational subcultures q Departments and divisions within the organization have their own subcultures Ø Occupational subcultures Ø Geographically based subcultures Ø Subcultures created by managers Positive cultures are created by managers who: § recognize personal milestones, such as birthdays and employment anniversaries; § hold public celebrations for professional achievements; § sponsor picnics and parties; and § listen to their employees and recognize the efforts they put into work Chapter 18: Power. Point 18. 14

q Diverse workforce demographics create subcultures ØEthnicity ØAge ØGender and other demographics Chapter 18: q Diverse workforce demographics create subcultures ØEthnicity ØAge ØGender and other demographics Chapter 18: Power. Point 18. 15

“My first conscious exposure to racism occurred when I came back to the States “My first conscious exposure to racism occurred when I came back to the States and went to public school. One of the children said something—I don’t remember now what—but I remember what my grandmother said to me: ‘They tried to put you in a box. Don’t ever let anybody put you in a box. ’” Clifton R. Wharton, Jr. , Former Chairman and CEO, TIAA-CREF Chapter 18: Power. Point 18. 16

q Cultural diversity: encompasses the full mix of the cultures and subcultures to which q Cultural diversity: encompasses the full mix of the cultures and subcultures to which members of the workforce belong Chapter 18: Power. Point 18. 17

q Organization goals for managing cultural diversity include: Ø Legal compliance Ø Creating a q Organization goals for managing cultural diversity include: Ø Legal compliance Ø Creating a positive culture for employees Ø Create greater economic value for the organization Chapter 18: Power. Point 18. 18

“HP is committed to building a work environment where everyone has an opportunity to “HP is committed to building a work environment where everyone has an opportunity to fully participate in creating business success…We address our commitment [to diversity] through development programs targeted to the next generation of HP leaders, work-life initiatives for our employees, recruiting of diverse talent, and other efforts that help employees and managers foster an inclusive work environment. Additionally, we establish diversity goals to create accountability and drive our success. By weaving diversity into the fabric of our company, we create a mind-set in every employee and manager that will allow them to think consciously about diversity and inclusion in everything they do. ” Emily Duncan, VP Culture and Diversity, Hewlett-Packard Chapter 18: Power. Point 18. 19

v Diagnosis: Before managers begin to design new approaches to managing diversity, they must v Diagnosis: Before managers begin to design new approaches to managing diversity, they must understand how current practices affect the amount and nature of diversity v Vision: Leaders must formulate and articulate a clear vision to persuade others to join them Chapter 18: Power. Point 18. 20 (continued)

v Involvement: For the plan to be effective, those who are affected must buy v Involvement: For the plan to be effective, those who are affected must buy into it v Timing: Planned organization change usually follows an evolutionary—not revolutionary— path Chapter 18: Power. Point 18. 21

Managing Cultural Diversity and Inclusion: Diversity Training v Awareness training: designed to provide accurate Managing Cultural Diversity and Inclusion: Diversity Training v Awareness training: designed to provide accurate information about the many subcultures present in the organization v Harassment training: aimed at ensuring that employees understand the meaning of harassment and the actions the company will take when someone complains Harassme nt of being harassed Training Seminar Chapter 18: Power. Point 18. 22

q Create Family-Friendly Work Places Ø Survey employees Ø Offer options to meet employees’ q Create Family-Friendly Work Places Ø Survey employees Ø Offer options to meet employees’ needs Ø Consider child-care initiatives Ø Consider elder-care initiatives q Hold Managers Accountable Chapter 18: Power. Point 18. 23

q Managing the reactions of the members of the dominate culture, who may feel q Managing the reactions of the members of the dominate culture, who may feel that they have lost some of the power they previously had q Synthesizing the diversity of opinions from individuals and using them as the basis for reaching meaningful agreement on issues q Avoiding real and perceived tokenism and quota systems Chapter 18: Power. Point 18. 24