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Chapter 16 Organizational Culture LEARNING OBJECTIVES After studying this chapter, students should be able to: Describe the common characteristics of organizational culture. Compare the functional and dysfunctional effects of organizational culture on people and the organization. Identify the factors that create and sustain an organization’s culture. Show how culture is transmitted to employees. Describe the similarities and differences in creating an ethical culture, a positive culture, and a spiritual culture. Show how national culture can affect the way organizational culture is transported to another country. INSTRUCTOR’S RESOURCES Instructors may wish to use the following resources when presenting this chapter. Text Exercises Myth or Science?: “An Organization’s Culture Is Forever” An Ethical Choice: A Culture of Compassion Career Objectives: How Do I Learn to Lead? Personal Inventory Assessment: Comfort With Change Scale Point/Counterpoint: Organizations Should Strive to Create a Positive Organizational Culture Questions for Review Experiential Exercise: Greeting Newcomers Ethical Dilemma: Culture of Deceit Text Cases Case Incident 1: The Place Makes the People Case Incident 2: Active Cultures Instructor’s Choice This section presents an exercise that is NOT found in the student's textbook. Instructor's Choice reinforces the text's emphasis through various activities. Some Instructor's Choice activities are centered on debates, group exercises, Internet research, and student experiences. Some can be used in class in their entirety, while others require some additional work on the student's part. The course instructor may choose to use these at anytime throughout the class—some may be more effective as icebreakers, while some may be used to pull together various concepts covered in the chapter. Web Exercises At the end of each chapter of this Instructor’s Manual, you will find suggested exercises and ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics on the Web” are set up so that you can simply photocopy the pages, distribute them to your class, and make assignments accordingly. You may want to assign the exercises as an out-of-class activity or as lab activities with your class. Summary and Implications for Managers Exhibit 16-6 depicts organizational culture as an intervening variable. Employees form an overall subjective perception of the organization based on factors such as degree of risk tolerance, team emphasis, and support of individuals. This overall perception represents, in effect, the organization’s culture or personality and affects employee performance and satisfaction, with stronger cultures having greater impact. Specific implications for managers are below: Realize that an organization’s culture is relatively fixed in the short term. To affect change, involve top management and strategize a long-term plan. Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. Not surprisingly, “misfits” have considerably higher turnover rates. Understand that employees’ performance and socialization depend, to a considerable degree, on their knowing what to do and not do. Train your employees well and keep them informed of changes to their job roles. As a manager, you can shape the culture of your work environment, sometimes as much as it shapes you. All managers can especially do their part to create an ethical culture and to consider spirituality and its role in creating a positive organizational culture. Be aware that your company’s organizational culture may not be “transportable” to other countries. Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas. This chapter begins with a discussion of decision making in organizations. Just as tribal cultures have totems and taboos that dictate how each member should act toward fellow members and outsiders, organizations have rules and norms that govern how members behave. We call these expectations the organizational culture. Every organization has a culture that, depending on its strength, can have a significant influence on the attitudes and behaviors of organization members, even if that effect is hard to measure precisely. As the opening discussion of incorporating big data illustrates, even strong improvements to decision making in organizations challenge the organizational culture. In this chapter, we’ll discuss what organizational culture is, how it affects employee attitudes and behavior, where it comes from, and whether it can be changed. BRIEF CHAPTER OUTLINE What Is Organizational Culture? Definition of Organizational Culture Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations. Research identifies seven primary characteristics that capture the essence of an organization’s culture: Innovation and risk taking. Attention to detail. Outcome orientation. People orientation. Team orientation. Aggressiveness. Stability. Each of the characteristics exists on a continuum from low to high. Exhibit 16-1 shows how companies can be very different along these dimensions. Culture Is a Descriptive Term Organizational culture is concerned with employees’ perception of the characteristics of the culture—not whether they like them. Research has sought to measure how employees see their organization: Does it encourage teamwork? Does it reward innovation? Does it stifle initiative? Organizational culture differs from job satisfaction: organizational culture is descriptive, whereas job satisfaction is evaluative. Do Organizations Have Uniform Cultures? Most organizations have a dominant culture and numerous sets of subcultures. Dominant culture expresses the core values that are shared by a majority of the organization’s members. Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences that members face. Strong Versus Weak Cultures Strong culture: core values are intensely held and widely shared. The more members who accept core values and the greater their commitment to those values, the stronger the culture is. A strong culture should reduce employee turnover because it demonstrates high agreement about what the organization represents. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. Culture Versus Formalization High formalization creates predictability, orderliness, and consistency. Formalization and culture are two different roads to a common destination. The stronger an organization’s culture, the less management needs to develop formal rules and regulations. Employees internalize guides when they accept the organization’s culture. What Do Cultures Do? Cultures can be positive or negative for organizations. The Functions of Culture: Boundary-defining role. Conveys a sense of identity for members. Facilitates the generation of commitment. Enhances the stability of the social system. Culture serves as a sense-making and control mechanism; guides and shapes attitudes and behavior of employees. Today’s trend toward decentralized organizations makes culture more important than ever, but ironically it also makes establishing a strong culture more difficult. When formal authority and control systems are reduced, culture’s shared meaning points everyone in the same direction. In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. Individual–organization “fit”—that is, whether the applicant’s or employee’s attitudes and behavior are compatible with the culture—strongly influences who gets a job offer, a favorable performance review, or a promotion. Culture Creates Climate Organizational climate refers to the shared perceptions organizational members have about their organization and work environment. A positive overall workplace climate has been linked to higher customer satisfaction and financial performance. Dozens of dimensions of climate have been studied, including safety, justice, diversity, and customer service, to name a few. A person who encounters a positive climate for performance will think about doing a good job more often and will believe others support his or her success. Someone who encounters a positive climate for diversity will feel more comfortable collaborating with coworkers regardless of their demographic background. Climates can interact with one another to produce behavior. Climate also influences the habits people adopt. The Ethical Dimension of Culture Organizational cultures are not neutral in their ethical orientation, even when they are not openly pursuing ethical goals. Over time, the ethical work climate (EWC), or the shared concept of right and wrong behavior in that workplace, develops as part of the organizational climate. The ethical climate 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 ethical dimensions of organizational cultures. Of the nine identified climate categories, five are found to be most prevalent in organizations: instrumental, caring, independence, law and code, and rules. Each explains the general mindset, expectations, and values of the managers and employees in relationship to their organization. Organizations often progress through different categories as they move through their business life cycle. An organization’s ethical climate powerfully influences the way its individual members feel they should behave, so much so that researchers have been able to predict organizational outcomes from the climate categories. Instrumental climates are negatively associated with employee job satisfaction and organizational commitment, even though those climates appeal to self-interest (of the employee and the company). They are positively associated with turnover intentions, workplace bullying, and deviant behavior. Caring and rules climates have a positive association with job satisfaction. Caring, independence, rules, and law and code climates also reduce employee turnover intentions, workplace bullying, and dysfunctional behavior. Studies of ethical climates and workplace outcomes suggest that some climate categories are likely to be found in certain organizations. Industries with exacting standards such as engineering, accounting, and law tend to have a rules or a law and code climate. Industries that thrive on competitiveness such as financial trading often have an instrumental ethical climate. Industries with missions of benevolence are likely to have a caring climate, even if they are for-profit as in an environmental protection firm. Research is exploring why organizations tend to fall into certain climate categories by industry, especially successful organizations. We cannot conclude that instrumental climates are always bad, or that caring climates are always good. Instrumental cultures may foster the individual success their companies need to thrive, for example, and they may help under-performers to recognize their self-interest is better served elsewhere. Managers in caring cultures may be thwarted from making the best decisions when only choices that serve the greatest number of employees are acceptable. The Ethical Climate Index (ECI) is one new way researchers are seeking to understand the context of ethical drivers in organizations. By measuring the collective levels of moral sensitivity, judgment, motivation, and character of our organizations, we may be able to judge the strength of the influence our ethical climates have on us. Culture and Sustainability As the name implies, sustainability refers to practices that can be maintained over very long periods of time because the tools or structures that support the practices are not damaged by the processes. One survey found that a great majority of executives saw sustainability as an important part of future success. Social sustainability practices address the ways social systems are affected by an organization’s actions over time, and in turn, 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. Sustainable management doesn’t need to be purely altruistic. To create a truly sustainable business, an organization must develop a long-term culture and put its values into practice. In other words, there needs to be a sustainable system for creating sustainability! In one workplace study, a company seeking to reduce energy consumption found that soliciting group feedback reduced energy use significantly more than simply issuing reading materials about the importance of conservation. In other words, talking about energy conservation and building the value into the organizational culture resulted in positive employee behavioral changes. Like other cultural practices we’ve discussed, sustainability needs time and nurturing to grow. Culture and Innovation The most innovative companies are often characterized by their open, unconventional, collaborative, vision-driven, accelerating cultures. Startup firms often have innovative cultures by definition since because they are usually small, agile, and focused on solving problems in order to survive and grow. Culture as an Asset Culture can also significantly contribute to an organization’s bottom line in many ways. There are many more cases of business success stories due to excellent organizational cultures than there are of success stories despite bad cultures, and almost no success stories because of bad ones. Culture as a Liability Introduction Culture enhances organizational commitment and increases the consistency of employee behavior. Institutionalization When an organization undergoes institutionalization and becomes institutionalized—that is, it is valued for itself and not for the goods or services it produces—it takes on a life of its own, apart from its founders or members. It doesn’t go out of business even if its original goals are no longer relevant. Barriers to change Culture is a liability when the shared values are not in agreement with those that will further the organization’s effectiveness. Most likely to occur when the environment is dynamic. Where there is rapid change, an entrenched culture may no longer be appropriate. Barriers to diversity Diverse behaviors and strengths are likely to diminish in strong cultures as people attempt to fit in. Strong culture can be liabilities when they effectively eliminate the unique strengths that people of different backgrounds bring to the organization. Strong cultures can also be liabilities when they support institutional bias or become insensitive to people who are different. Strengthening Dysfunctions Coherence around negativity and dysfunctional management systems in a corporation can produce downward forces that are equally powerful. One study of thousands of hospitality-industry employees in hundreds of locations found that local organizational cultures marked by low or decreasing job satisfaction had higher levels of turnover. As we know from this text, low job satisfaction and high turnover indicate dysfunction on the organization’s part. Negative attitudes in groups add to negative outcomes, suggesting a powerful influence of culture on individuals. Barriers to acquisitions and mergers Cultural compatibility has become the primary concern when considering acquisitions and/or mergers. A survey by Bain and Company revealed that 70 percent of mergers failed to increase shareholder values. Creating and Sustaining Culture Introduction Once an organization’s culture is established, it rarely fades away. How a Culture Begins Ultimate source of an organization’s culture is its founders. Founders have a vision of what the organization should be. Unconstrained by previous ideologies or customs. New organizations are typically small; facilitates the founders’ imparting of their vision on all organizational members. Culture creation occurs in three ways: Founders hire employees who think and feel the way they do. Employees are indoctrinated and socialized into the founders’ way of thinking. Founders’ behavior acts as a role model. Keeping a Culture Alive Selection The explicit goal of the selection process is to identify and hire individuals with the knowledge, skills, and abilities to perform successfully. Selection also provides information to applicants. Selection thus becomes a two-way street, allowing employer or applicant to avoid a mismatch and sustaining an organization’s culture by selecting out those who might attack or undermine its core values. Top management The actions of top management also have a major impact on the organization’s culture. Through words and behavior, senior executives establish norms that filter through the organization about, for instance, whether risk taking is desirable, how much freedom managers give employees, what is appropriate dress, and what actions earn pay raises, promotions, and other rewards. Socialization (Exhibit 16-2) The process of helping new employees adapt to the organization’s culture is socialization. Three stage process: Pre-arrival Recognizes that each individual arrives with a set of values, attitudes, and expectations. Encounter Individual confronts the possible dichotomy between expectations and reality. Metamorphosis (Exhibit 16-3) Process of working out any problems discovered during the encounter stage. The options presented in Exhibit 16-3 are alternatives designed to bring about the desired metamorphosis. Most research suggests high levels of institutional practices encourage person–organization fit and high levels of commitment, whereas individual practices produce more role innovation. The three-part entry socialization process is complete when: New members have internalized and accepted the norms of the organization and their work group, are confident in their competence, and feel trusted and valued by their peers. They understand the system—not only their own tasks but the rules, procedures, and informally accepted practices as well. They know what is expected of them and what criteria will be used to measure and evaluate their work. As Exhibit 16-2 showed, successful metamorphosis should have a positive impact on new employees’ productivity and their commitment to the organization, and reduce their propensity to leave the organization. Researchers have begun to examine how employee attitudes change during socialization by measuring them at several points over the first few months. Summary: How Cultures Form (Exhibit 16-4) Exhibit 16-4 summarizes how an organization’s culture is established and sustained. The original culture derives from the founder’s philosophy and strongly influences hiring criteria as the firm grows. Top managers’ actions set the general climate, including what is acceptable behavior and what is not. The way employees are socialized will depend both on the degree of success achieved in matching new employees’ values to those of the organization in the selection process, and on top management’s preference for socialization methods. How Employees Learn Culture Introduction Culture is transmitted to employees through stories, rituals, material symbols, and language. Stories Stories such as these circulate through many organizations, anchoring the present in the past and legitimating current practices. Rituals Repetitive sequences of activities that express and reinforce the key values of the organization are rituals. Symbols Layout of corporation headquarters, types of automobile top executives are given, aircraft, size of offices, executive perks, etc. are examples of material symbols. 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. Influencing an Ethical Organizational Culture An Ethical Culture How can management create a more ethical culture? Be a visible role model. Communicate ethical expectations. Provide ethical training. Visibly reward ethical acts and punish unethical ones. Provide protective mechanisms. The work of setting a positive ethical climate has to start at the top of the organization. One study demonstrated that when top management emphasizes strong ethical values, supervisors are more likely to practice ethical leadership. Positive ethical attitudes transfer down to line employees, who show lower levels of deviant behavior and higher levels of cooperation and assistance. A study involving auditors found perceived pressure from organizational leaders to behave unethically was associated with increased intentions to engage in unethical practices. Clearly the wrong type of organizational culture can negatively influence employee ethical behavior. Finally, employees whose ethical values are similar to those of their department are more likely to be promoted, so we can think of ethical culture as flowing from the bottom up as well. Creating a Positive Organizational Culture Introduction There is a trend today for organizations to attempt to create a positive organizational culture. A positive organizational culture emphasizes building on employee strengths, rewards more than it punishes, and emphasizes individual vitality growth. Building on Employee Strengths Although a positive organizational culture does not ignore problems, it does emphasize showing workers how they can capitalize on their strengths. Rewarding More Than Punishing Although most organizations are sufficiently focused on extrinsic rewards such as pay and promotions, they often forget about the power of smaller (and cheaper) rewards such as praise. Part of creating a positive organizational culture is “catching employees doing something right.” Emphasizing Vitality and Growth No organization will get the best from employees who see themselves as mere cogs in the machine. A positive culture recognizes the difference between a job and a career. Limits of Positive Culture Not a panacea for all companies. All cultures don’t value being positive. There may be benefits to establishing a positive culture, but an organization also needs to be careful to be objective and not pursue it past the point of effectiveness. Spirituality and Organizational Culture What Is Spirituality? Workplace spirituality is not about organized religious practices. It is not about God or theology. Workplace spirituality recognizes that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community. Why Spirituality Now? (Exhibit 16-5) As we noted in our discussion of emotions in Chapter 4, the myth of rationality assumed the well-run organization eliminated feelings. Concern about an employee’s inner life had no role in the perfectly rational model. But just as we’ve now come to realize that the study of emotions improves our understanding of organizational behavior, an awareness of spirituality can help us better understand employee behavior in the twenty-first century. Of course, employees have always had an inner life. So why has the search for meaning and purposefulness in work surfaced now? Summarized reasons in Exhibit 16-5. Characteristics of a Spiritual Organization The concept of workplace spirituality draws on our previous discussions of values, ethics, motivation, and leadership. Although research remains preliminary, several cultural characteristics tend to be evident in spiritual organizations. Benevolence. Strong sense of purpose. Trust and respect. Open-mindedness. Achieving a Spiritual Organization Many organizations have grown interested in spirituality but have had difficulty putting its principles into practice. Several types of practices can facilitate a spiritual workplace, including those that support work–life balance. Criticisms of Spirituality Critics of the spirituality movement in organizations have focused on three issues. First is the question of scientific foundation. What really is workplace spirituality? Second, are spiritual organizations legitimate? Do organizations have the right to impose spiritual values on their employees? Third is the question of economics: are spirituality and profits compatible? As you might imagine, there is comparatively little research on workplace spirituality. An emphasis on spirituality can clearly make some employees uneasy. Critics have argued that secular institutions, especially business firms, have no business imposing spiritual values on employees. If the concerns listed in Exhibit 16-5 truly characterize a large segment of the workforce, then perhaps organizations can do so. Global Implications We considered global cultural values (collectivism–individualism, power distance, and so on) in Chapter 5. Here our focus is a bit narrower. How is organizational culture affected by a global context? But that doesn’t mean organizations should, or could, be blissfully ignorant of local culture. Organizational cultures often reflect national culture. The culture at AirAsia, a Malaysian-based airline, emphasizes openness and friendships. The carrier has lots of parties, participative management, and no private offices. However, the culture of many U.S. airlines does not reflect the same degree of informality. If U.S. airlines were to merge with AirAsia, they would need to take these cultural differences into account. One of the primary things U.S. managers can do is to be culturally sensitive. The United States is a dominant force in business and in culture, and with that influence comes a reputation. Some ways in which U.S. managers can be culturally sensitive include talking in a low tone of voice, speaking slowly, listening more, and avoiding discussions of religion and politics. The management of ethical behavior is one area where national culture can rub up against corporate culture. Many strategies for improving ethical behavior are based on the values and beliefs of the host country. U.S. managers endorse the supremacy of anonymous market forces and implicitly or explicitly view profit maximization as a moral obligation for business organizations. This worldview sees bribery, nepotism, and favoring personal contacts as highly unethical. That means doing special favors for family and friends is not only appropriate but also may even be an ethical responsibility. Managers in many nations also view capitalism skeptically and believe the interests of workers should be put on a par with the interests of shareholders. U.S. employees are not the only ones who need to be culturally sensitive. Summary and Implications for Managers Exhibit 16-6 depicts organizational culture as an intervening variable. Employees form an overall subjective perception of the organization based on factors such as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organization’s culture or personality and affects employee performance and satisfaction, with stronger cultures having greater impact. Specific implications for managers are below: Realize that an organization’s culture is relatively fixed in the short term. To affect change, involve top management and strategize a long-term plan. Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. Not surprisingly, “misfits” have considerably higher turnover rates. Understand that employees’ performance and socialization depend, to a considerable degree, on their knowing what to do and not do. Train your employees well and keep them informed of changes to their job roles. As a manager, you can shape the culture of your work environment, sometimes as much as it shapes you. All managers can especially do their part to create an ethical culture and to consider spirituality and its role increating a positive organizational culture. Be aware that your company’s organizational culture may not be “transportable” to other countries. Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas. EXPANDED CHAPTER OUTLINE What Is Organizational Culture? Definition of Organizational Culture Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations. Research identifies seven primary characteristics that capture the essence of an organization’s culture: Innovation and risk taking. The degree to which employees are encouraged to do both. Attention to detail. Degree to which employees are expected to exhibit precision, analysis, and attention to detail. Outcome orientation. Degree to which management focuses on results rather than on processes used to achieve them. People orientation. Degree to which management decisions consider the effect of outcomes on people within the organization. Team orientation. Degree to which work activities are organized around teams rather than individuals. Aggressiveness. Degree to which people are aggressive and competitive. Stability. Degree to which activities emphasize maintaining the status quo. Each of the characteristics exists on a continuum from low to high. Exhibit 16-1 shows how companies can be very different along these dimensions. Culture Is a Descriptive Term Organizational culture is concerned with employees’ perception of the characteristics of the culture—not whether they like them. Research has sought to measure how employees see their organization. Does it encourage teamwork? Does it reward innovation? Does it stifle initiative? Organizational culture differs from job satisfaction. Job satisfaction is evaluative. Organizational culture is descriptive. Do Organizations Have Uniform Cultures? Most organizations have a dominant culture and numerous sets of subcultures. Dominant culture expresses the core values that are shared by a majority of the organization’s members. Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences that members face. If organizations were composed only of numerous subcultures, organizational culture as an independent variable would be significantly less powerful. It is the “shared meaning” aspect of culture that makes it such a potent device for guiding and shaping behavior. That’s what allows us to say, for example, that the Zappos culture values customer care and dedication over speed and efficiency and to use that information to better understand the behavior of Zappos executives and employees. Strong Versus Weak Cultures Strong culture: core values are intensely held and widely shared. The more members who accept core values and the greater their commitment to those values, the stronger the culture is. A strong culture should reduce employee turnover because it demonstrates high agreement about what the organization represents. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. These qualities, in turn, lessen employees’ propensity to leave. Culture Versus Formalization High formalization creates predictability, orderliness, and consistency. Formalization and culture are two different roads to a common destination. The stronger an organization’s culture, the less management needs to develop formal rules and regulations. Employees internalize guides when they accept the organization’s culture. What Do Cultures Do? Cultures can be positive or negative for organizations. The Functions of Culture: Boundary-defining role. Conveys a sense of identity for members. Facilitates the generation of commitment. Enhances the stability of the social system. Culture serves as a sense-making and control mechanism; guides and shapes attitudes and behavior of employees. Today’s trend toward decentralized organizations makes culture more important than ever, but ironically it also makes establishing a strong culture more difficult. When formal authority and control systems are reduced, culture’s shared meaning points everyone in the same direction. Employees organized in teams may show greater allegiance to their team and its values than to the values of the organization as a whole. In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. Strong leadership that communicates frequently about common goals and priorities is especially important in innovative organizations. Individual–organization “fit”—that is, whether the applicant’s or employee’s attitudes and behavior are compatible with the culture—strongly influences who gets a job offer, a favorable performance review, or a promotion. Culture Creates Climate Organizational climate refers to the shared perceptions organizational members have about their organization and work environment. This aspect of culture is like team spirit at the organizational level. When everyone has the same general feelings about what’s important or how well things are working, the effect of these attitudes will be more than the sum of the individual parts. The same appears true for organizations. One meta-analysis found that across dozens of different samples, psychological climate was strongly related to individuals’ level of job satisfaction, involvement, commitment, and motivation. A positive overall workplace climate has been linked to higher customer satisfaction and financial performance. Dozens of dimensions of climate have been studied, including safety, justice, diversity, and customer service, to name a few. A person who encounters a positive climate for performance will think about doing a good job more often and will believe others support his or her success. Someone who encounters a positive climate for diversity will feel more comfortable collaborating with coworkers regardless of their demographic background. Climates can interact with one another to produce behavior. For example, a positive climate for worker empowerment can lead to higher levels of performance in organizations that also have a climate for personal accountability. Climate also influences the habits people adopt. If the climate for safety is positive, everyone wears safety gear and follows safety procedures even if individually they wouldn’t normally think very often about being safe—indeed, many studies have shown that a positive safety climate decreases the number of documented injuries on the job. The Ethical Dimension of Culture Organizational cultures are not neutral in their ethical orientation, even when they are not openly pursuing ethical goals. Over time, the ethical work climate (EWC), or the shared concept of right and wrong behavior in that workplace, develops as part of the organizational climate. The ethical climate 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 ethical dimensions of organizational cultures. Of the nine identified climate categories, five are found to be most prevalent in organizations: instrumental, caring, independence, law and code, and rules. Each explains the general mindset, expectations, and values of the managers and employees in relationship to their organization. Organizations often progress through different categories as they move through their business life cycle. An organization’s ethical climate powerfully influences the way its individual members feel they should behave, so much so that researchers have been able to predict organizational outcomes from the climate categories. Instrumental climates are negatively associated with employee job satisfaction and organizational commitment, even though those climates appeal to self-interest (of the employee and the company). They are positively associated with turnover intentions, workplace bullying, and deviant behavior. Caring and rules climates have a positive association with job satisfaction. Caring, independence, rules, and law and code climates also reduce employee turnover intentions, workplace bullying, and dysfunctional behavior. Studies of ethical climates and workplace outcomes suggest that some climate categories are likely to be found in certain organizations. Industries with exacting standards such as engineering, accounting, and law tend to have a rules or a law and code climate. Industries that thrive on competitiveness such as financial trading often have an instrumental ethical climate. Industries with missions of benevolence are likely to have a caring climate, even if they are for-profit as in an environmental protection firm. Research is exploring why organizations tend to fall into certain climate categories by industry, especially successful organizations. We cannot conclude that instrumental climates are always bad, or that caring climates are always good. Instrumental cultures may foster the individual success their companies need to thrive, for example, and they may help under-performers to recognize their self-interest is better served elsewhere. Managers in caring cultures may be thwarted from making the best decisions when only choices that serve the greatest number of employees are acceptable. The Ethical Climate Index (ECI) is one new way researchers are seeking to understand the context of ethical drivers in organizations. By measuring the collective levels of moral sensitivity, judgment, motivation, and character of our organizations, we may be able to judge the strength of the influence our ethical climates have on us. Culture and Sustainability As the name implies, sustainability refers to practices that can be maintained over very long periods of time because the tools or structures that support the practices are not damaged by the processes. One survey found that a great majority of executives saw sustainability as an important part of future success. Social sustainability practices address the ways social systems are affected by an organization’s actions over time, and in turn, 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. Sustainable management doesn’t need to be purely altruistic. To create a truly sustainable business, an organization must develop a long-term culture and put its values into practice. In other words, there needs to be a sustainable system for creating sustainability! In one workplace study, a company seeking to reduce energy consumption found that soliciting group feedback reduced energy use significantly more than simply issuing reading materials about the importance of conservation. In other words, talking about energy conservation and building the value into the organizational culture resulted in positive employee behavioral changes. Like other cultural practices we’ve discussed, sustainability needs time and nurturing to grow. Culture and Innovation The most innovative companies are often characterized by their open, unconventional, collaborative, vision-driven, accelerating cultures. Startup firms often have innovative cultures by definition since because they are usually small, agile, and focused on solving problems in order to survive and grow. Culture as an Asset Culture can also significantly contribute to an organization’s bottom line in many ways. There are many more cases of business success stories due to excellent organizational cultures than there are of success stories despite bad cultures, and almost no success stories because of bad ones. Culture as a Liability Introduction Culture enhances organizational commitment and increases the consistency of employee behavior. Institutionalization When an organization undergoes institutionalization and becomes institutionalized—that is, it is valued for itself and not for the goods or services it produces—it takes on a life of its own, apart from its founders or members. It doesn’t go out of business even if its original goals are no longer relevant. Acceptable modes of behavior become largely self-evident to members, and although this isn’t entirely negative, it does mean behaviors and habits that should be questioned and analyzed become taken for granted, which can stifle innovation and make maintaining the organization’s culture an end in itself. Barriers to change Culture is a liability when the shared values are not in agreement with those that will further the organization’s effectiveness. Most likely to occur when the environment is dynamic. Where there is rapid change, an entrenched culture may no longer be appropriate. Barriers to diversity Diverse behaviors and strengths are likely to diminish in strong cultures as people attempt to fit in. Strong culture can be liabilities when they effectively eliminate the unique strengths that people of different backgrounds bring to the organization. Strong cultures can also be liabilities when they support institutional bias or become insensitive to people who are different. Strengthening Dysfunctions Coherence around negativity and dysfunctional management systems in a corporation can produce downward forces that are equally powerful. One study of thousands of hospitality-industry employees in hundreds of locations found that local organizational cultures marked by low or decreasing job satisfaction had higher levels of turnover. As we know from this text, low job satisfaction and high turnover indicate dysfunction on the organization’s part. Negative attitudes in groups add to negative outcomes, suggesting a powerful influence of culture on individuals. Barriers to acquisitions and mergers Cultural compatibility has become the primary concern when considering acquisitions and/or mergers. A survey by Bain and Company revealed that 70 percent of mergers failed to increase shareholder values. The $183 billion merger between America Online (AOL) and Time Warner in 2001 was the largest in U.S. corporate history. It was also a disaster. Only 2 years later, the stock had fallen an astounding 90 percent, and the new company reported what was then the largest financial loss in U.S. history. Creating and Sustaining Culture Introduction Once an organization’s culture is established it rarely fades away. How a Culture Begins Ultimate source of an organization’s culture is its founders. Founders have a vision of what the organization should be. Unconstrained by previous ideologies or customs. New organizations are typically small; facilitates the founders’ imparting of their vision on all organizational members. Culture creation occurs in three ways: Founders hire employees who think and feel the way they do. Employees are indoctrinated and socialized into the founders’ way of thinking. Founders’ behavior acts as a role model. Keeping a Culture Alive Selection The explicit goal of the selection process is to identify and hire individuals with the knowledge, skills, and abilities to perform successfully. The final decision, because it’s significantly influenced by the decision maker’s judgment of how well the candidates will fit into the organization, identifies people whose values are essentially consistent with at least a good portion of the organization’s. Selection also provides information to applicants. Those who perceive a conflict between their values and those of the organization can remove themselves from the applicant pool. Selection thus becomes a two-way street, allowing employer or applicant to avoid a mismatch and sustaining an organization’s culture by selecting out those who might attack or undermine its core values. Top management The actions of top management also have a major impact on the organization’s culture. Through words and behavior, senior executives establish norms that filter through the organization about, for instance, whether risk taking is desirable, how much freedom managers give employees, what is appropriate dress, and what actions earn pay raises, promotions, and other rewards. Socialization (Exhibit 16-2) The process of helping new employees adapt to the organization’s culture is called socialization. Three stage process: Pre-arrival Recognizes that each individual arrives with a set of values, attitudes, and expectations. Encounter Individual confronts the possible dichotomy between expectations and reality. If expectations were fairly accurate, the encounter stage merely cements earlier perceptions. However, this is often not the case. At the extreme, a new member may become disillusioned enough to resign. Proper recruiting and selection should significantly reduce that outcome, along with encouraging friendship ties in the organization—newcomers are more committed when friends and coworkers help them “learn the ropes.” Metamorphosis (Exhibit 16-3) Process of working out any problems discovered during the encounter stage. The options presented in Exhibit 16-3 are alternatives designed to bring about the desired metamorphosis. Most research suggests there are two major “bundles” of socialization practices. The more management relies on formal, collective, sequential, fixed, and serial socialization programs and emphasize divestiture, the more likely newcomers’ differences will be stripped away and replaced by standardized predictable behaviors. These institutional practices are common in police departments, fire departments, and other organizations that value rule following and order. Programs that are informal, individual, random, variable, and disjunctive and emphasize investiture are more likely to give newcomers an innovative sense of their role and methods of working. Creative fields, such as research and development, advertising, and filmmaking, rely on these individual practices. Most research suggests high levels of institutional practices encourage person–organization fit and high levels of commitment, whereas individual practices produce more role innovation. The three-part entry socialization process is complete when: New members have internalized and accepted the norms of the organization and their work group, are confident in their competence, and feel trusted and valued by their peers. They understand the system—not only their own tasks but the rules, procedures, and informally accepted practices as well. They know what is expected of them and what criteria will be used to measure and evaluate their work. As Exhibit 16-2 showed, successful metamorphosis should have a positive impact on new employees’ productivity and their commitment to the organization and reduce their propensity to leave the organization. Researchers have begun to examine how employee attitudes change during socialization by measuring them at several points over the first few months. One study has documented patterns of “honeymoons” and “hangovers” for new workers, showing that the period of initial adjustment is often marked by decreases in job satisfaction as their idealized hopes come into contact with the reality of organizational life. Other research suggests that role conflict and role overload for newcomers rise over time, and that workers with the largest increases in these role problems experience the largest decreases in commitment and satisfaction. It may be that the initial adjustment period for newcomers presents increasing demands and difficulties, at least in the short term. Summary: How Cultures Form (Exhibit 16-4) Exhibit 16-4 summarizes how an organization’s culture is established and sustained. The original culture derives from the founder’s philosophy and strongly influences hiring criteria as the firm grows. Top managers’ actions set the general climate, including what is acceptable behavior and what is not. The way employees are socialized will depend both on the degree of success achieved in matching new employees’ values to those of the organization in the selection process, and on top management’s preference for socialization methods. How Employees Learn Culture Introduction Culture is transmitted to employees through stories, rituals, material symbols, and language. Stories Stories such as these circulate through many organizations, anchoring the present in the past and legitimating current practices. They typically include narratives about the organization’s founders, rule breaking, rags-to-riches successes, reductions in the workforce, relocation of employees, reactions to past mistakes, and organizational coping. Employees also create their own narratives about how they came to either fit or not fit with the organization during the process of socialization, including first days on the job, early interactions with others, and first impressions of organizational life. Rituals Repetitive sequences of activities that express and reinforce the key values of the organization are rituals. Symbols Layout of corporation headquarters, types of automobiles top executives are given, aircraft, size of offices, executive perks, etc. are examples of material symbols. These convey to employees who is important, the degree of egalitarianism top management desires, and the kinds of behavior that are appropriate, such as risk taking, conservative, authoritarian, participative, individualistic, or social. 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. Unique terms describe equipment, officers, key individuals, suppliers, customers, or products that relate to the business. New employees may at first be overwhelmed by acronyms and jargon, that, once assimilated, act as a common denominator to unite members of a given culture or subculture. Influencing an Organizational Culture An Ethical Culture How can management create a more ethical culture? Be a visible role model. Employees look to top management behavior as a benchmark. Communicate ethical expectations. Code of ethics can minimize ethical ambiguities. Provide ethical training. Training sessions that reinforce standards of conduct and clarify permissible practices. Visibly reward ethical acts and punish unethical ones. Performance appraisal of managers should include analysis of behavior against code of ethics. Provide protective mechanisms. Creation of ethical counselors, ombudsmen, or ethical officers. The work of setting a positive ethical climate has to start at the top of the organization. One study demonstrated that when top management emphasizes strong ethical values, supervisors are more likely to practice ethical leadership. Positive ethical attitudes transfer down to line employees, who show lower levels of deviant behavior and higher levels of cooperation and assistance. A study involving auditors found perceived pressure from organizational leaders to behave unethically was associated with increased intentions to engage in unethical practices. Clearly the wrong type of organizational culture can negatively influence employee ethical behavior. Finally, employees whose ethical values are similar to those of their department are more likely to be promoted, so we can think of ethical culture as flowing from the bottom up as well. Creating a Positive Organizational Culture Introduction There is a trend today for organizations to attempt to create a positive organizational culture. A positive organizational culture emphasizes building on employee strengths, rewards more than it punishes, and emphasizes individual vitality growth. Building on Employee Strengths Although a positive organizational culture does not ignore problems, it does emphasize showing workers how they can capitalize on their strengths. Rewarding More Than Punishing Although most organizations are sufficiently focused on extrinsic rewards such as pay and promotions, they often forget about the power of smaller (and cheaper) rewards such as praise. Part of creating a positive organizational culture is “catching employees doing something right.” Many managers withhold praise because they’re afraid employees will coast or because they think praise is not valued. Employees generally don’t ask for praise, and managers usually don’t realize the costs of failing to give it. Emphasizing Vitality and Growth No organization will get the best from employees who see themselves as mere cogs in the machine. A positive culture recognizes the difference between a job and a career. It supports not only what the employee contributes to organizational effectiveness but also how the organization can make the employee more effective—personally and professionally. Although it may take more creativity to encourage employee growth in some types of industries, consider the food industry. Limits of Positive Culture Not a panacea for all companies. All cultures don’t value being positive. There may be benefits to establishing a positive culture, but an organization also needs to be careful to be objective and not pursue it past the point of effectiveness. Spirituality and Organizational Culture What Is Spirituality? Workplace spirituality is not about organized religious practices. It is not about God or theology. Workplace spirituality recognizes that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community. Why Spirituality Now? (Exhibit 16-5) As we noted in our discussion of emotions in Chapter 4, the myth of rationality assumed the well-run organization eliminated feelings. Concern about an employee’s inner life had no role in the perfectly rational model. But just as we’ve now come to realize that the study of emotions improves our understanding of organizational behavior, an awareness of spirituality can help us better understand employee behavior in the twenty-first century. Of course, employees have always had an inner life. So why has the search for meaning and purposefulness in work surfaced now? Summarized reasons in Exhibit 16-5. Characteristics of a Spiritual Organization The concept of workplace spirituality draws on our previous discussions of values, ethics, motivation, and leadership. Although research remains preliminary, several cultural characteristics tend to be evident in spiritual organizations. Benevolence. Spiritual organizations value showing kindness towards others and promoting 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 of the organization. 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. Achieving a Spiritual Organization Many organizations have grown interested in spirituality but have had difficulty putting its principles into practice. Several types of practices can facilitate a spiritual workplace, including those that support work-life balance. Leaders can demonstrate values, attitudes, and behaviors that trigger intrinsic motivation and a sense of calling through work. Encouraging employees to consider how their work provides a sense of purpose through community building also can help achieve a spiritual workplace; often this is achieved through group counseling and organizational development, a topic we take up in Chapter 18. Criticisms of Spirituality Critics of the spirituality movement in organizations have focused on three issues. First is the question of scientific foundation. What really is workplace spirituality? Second, are spiritual organizations legitimate? Do organizations have the right to impose spiritual values on their employees? Third is the question of economics: are spirituality and profits compatible? As you might imagine, there is comparatively little research on workplace spiritualty. An emphasis on spirituality can clearly make some employees uneasy. Critics have argued that secular institutions, especially business firms, have no business imposing spiritual values on employees. This criticism is undoubtedly valid when spirituality is defined as bringing religion and God into the workplace. However, it seems less stinging when the goal is limited to helping employees find meaning and purpose in their work lives. If the concerns listed in Exhibit 16-5 truly characterize a large segment of the workforce, then perhaps organizations can do so. Global Implications We considered global cultural values (collectivism–individualism, power distance, and so on) in Chapter 5. Here our focus is a bit narrower. How is organizational culture affected by a global context? But that doesn’t mean organizations should, or could, be blissfully ignorant of local culture. Organizational cultures often reflect national culture. The culture at AirAsia, a Malaysian-based airline, emphasizes openness and friendships. The carrier has lots of parties, participative management, and no private offices, reflecting Malaysia’s relatively collectivistic culture. However, the culture of many U.S. airlines does not reflect the same degree of informality. If U.S. airlines were to merge with AirAsia, they would need to take these cultural differences into account. So when an organization opens up operations in another country, it ignores the local culture at its own risk. One of the primary things U.S. managers can do is to be culturally sensitive. The United States is a dominant force in business and in culture, and with that influence comes a reputation. “We are broadly seen throughout the world as arrogant people, totally self-absorbed and loud, ” says one U.S. executive. Companies such as American Airlines, Lowe’s, Novell, ExxonMobil, and Microsoft have implemented training programs to sensitize their managers to cultural differences. Some ways in which U.S. managers can be culturally sensitive include talking in a low tone of voice, speaking slowly, listening more, and avoiding discussions of religion and politics. The management of ethical behavior is one area where national culture can rub up against corporate culture. Many strategies for improving ethical behavior are based on the values and beliefs of the host country. U.S. managers endorse the supremacy of anonymous market forces and implicitly or explicitly view profit maximization as a moral obligation for business organizations. This worldview sees bribery, nepotism, and favoring personal contacts as highly unethical. Any action that deviates from profit maximization may indicate that inappropriate or corrupt behavior may be occurring. In contrast, managers in developing economies are more likely to see ethical decisions as embedded in a social environment. That means doing special favors for family and friends is not only appropriate but also may even be an ethical responsibility. Managers in many nations also view capitalism skeptically and believe the interests of workers should be put on a par with the interests of shareholders. Summary and Implications for Managers Exhibit 16-6 depicts organizational culture as an intervening variable. Employees form an overall subjective perception of the organization based on factors such as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organization’s culture or personality and affects employee performance and satisfaction, with stronger cultures having greater impact. Specific implications for managers are below: Realize that an organization’s culture is relatively fixed in the short term. To affect change, involve top management and strategize a long-term plan. Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. Not surprisingly, “misfits” have considerably higher turnover rates. Understand that employees’ performance and socialization depend, to a considerable degree, on their knowing what to do and not do. Train your employees well and keep them informed of changes to their job roles. You can shape the culture of your work environment, sometimes as much as it shapes you. All managers can especially do their part to create an ethical culture and to consider spirituality and its role increating a positive organizational culture. Be aware that your company’s organizational culture may not be “transportable” to other countries. Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas. Myth or Science? “An Organization’s Culture Is Forever” This is actually not true. Although research indicates organizational culture is difficult to change and that change can take a long time, it can be done. Sometimes it is essential to survival. For years, Wisconsin’s Wellspring system provided a low-level nursing home environment in which inpatients had little input about their care and the organizational culture allowed lax standards to prevail. Then the network of 11 nursing homes launched a culture change initiative. Management focused on caregiver collaboration, education, accountability, and empowerment. The results were excellent. Wellspring realized fewer state standards infractions and higher retention rates at the facilities, but the results for the patients were even greater: fewer bedfast residents, less use of restraints and psychoactive medication, less incontinence, and fewer tube feedings than in other nursing homes. The Wellspring program illustrates the significant effect positive organizational culture change can achieve. CEO Bob Flexon of Dynegy Inc., a Houston-based electric utility giant emerging from bankruptcy, is trying to save his company by changing the organizational culture. First, he ditched the cushy CEO office suite, $15, 000 marble desk, and Oriental rugs for a small cubicle on a warehouse-style floor shared with all 235 headquarters employees. Next, he visited company facilities, trained “culture champions, ” and reinstated annual performance reviews as part of the plan to increase collaboration. He created a plaque as a reminder to “Be Here Now” instead of multitasking and banned smartphones from meetings. Flexon said, “The idea was to instill a winning spirit, ” and he counts on his visibility as CEO to broadcast the culture change down to the lowest levels of the widespread organization. Positive results have included a reduction in turnover from 8 percent in 2011 to 5.8 percent in 2012. Flexon said, “People are cautiously beginning to believe that we can win again.” The company continues to report massive earnings losses, but Flexon is optimistic about Dynegy’s rebound. He says, “Our ongoing focus on culture is what will make the difference.” Sources: J. Bellot, “Nursing Home Culture Change What Does It Mean to Nurses?” Research in Gerontological Nursing (October 2012), pp. 264–-273; J. S. Lublin, “This CEO Used to Have an Office, ” The Wall Street Journal (March 13, 2013), pp. B1, B8; and J. Molineux, “Enabling Organizational Cultural Change Using Systemic Strategic Human Resource Management—A Longitudinal Case Study, ” International Journal of Human Resource Management (April 1, 2013), pp. 1588–-1612. Class Exercise Divide the class into groups of three to five students each. Ask students to identify several HR issues such as hiring and retention decisions, or benefits decisions, and how these might be viewed by the companies in the text feature. Students should consider the issues under the organizations’ former and current organizational cultures. Then ask each group to read http: //www.forbes.com/sites/stevedenning/2011/07/23/how-do-you-change-an-organizational-culture/ and use the model presented in the article to explore how the companies presented in the text feature changed their cultures. Ask students to discuss their findings as a class. Teaching Notes This exercise is applicable to face-to-face classes or synchronous online classes such as BlackBoard 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See http: //www.baclass.panam.edu/imob/SecondLife for more information. An Ethical Choice A Culture of Compassion In the world of banking, success and ethical culture don’t necessarily go hand in hand. Leaders who desire ethical cultures in their organizations must choose to build ethics into the company’s definition of success in ways that translate into ethical actions for managers and employees. Contrast two financial success stories, Goldman Sachs and Wells Fargo. Both megabanks are among the Fortune 100 (the largest U.S. companies ranked by revenue). They are also two of Fortune’s World’s Most Admired Companies, a list that ranks the largest companies in revenue by nine criteria including social responsibility. Yet their organizational cultures appear to be vastly different. Goldman Sachs seems to struggle to achieve an ethical culture for its employees and clients, while Wells Fargo seems to emanate a culture of compassion. Consider some recent headlines: Mefit “Mike” Mecevic was a loyal janitor for Goldman Sachs when Superstorm Sandy hit New York in 2012. Mecevic and his coworkers rode out the storm in the company’s Manhattan skyscraper and worked nonstop for days to keep floodwaters back. Then a Goldman Sachs manager threw him out without explanation. Mecevic said to him, “I live in Staten Island, there's a state of emergency, there are no cars, no trains, no lights. The water is up to our necks. I was begging for my life. But he said 'Leave the building.’” Mecevic implored two other managers to help him, to no avail. He left but was later fired anyway. “I worked day and night, ” Mecevic said. “They destroyed my life for nothing. Nothing.” Wells Fargo is committed to respecting its clients, even when those clients are in trouble. For the past few years, it has held “Home Preservation Workshops” where indebted homeowners can meet with “home retention” team members in confidential booths set up in large halls across the United States. Clientsbring paperwork specific to their cases, and team members negotiate binding agreements. One client said, “It is a great feeling to not worry” about losing her home. Organizational culture is where leaders’ ethical choices demonstrate their expectations for others’ decisions throughout the company. Both Goldman and Wells Fargo enjoy stellar reputations. But these examples suggest that the two companies make very different ethical choices with respect to their cultures. Sources: B. Ross, A. Ng, and C. Siemaszko, “Ex-Goldman Sachs Janitor Sues for Being Forced into Post-Hurricane Sandy Destruction, ”New York Daily News, June 7, 2013, www.nydailynews.com/new-york/janitorsues-tossed-aftermath-hurricane-sandy-article-1.1366334; M. Schifrin and H. Touryalai, “The Bank That Works, ” Forbes, February 13, 2012, 66–74. Class Exercise Divide the class into groups of three to five students each. Assign half the groups the task of identifying companies with poor cultures that lack compassion. Teams with this assignment should discuss whether incorporating more compassion into the organizations would limit their success. The other groups should identify companies that have reputations for compassion and giving. Teams should discuss why this philosophy makes the organizations what they are and how they might change if their approach was different. Have each group present their discussions to the class. Ask students which type of organization they would rather work for and why. Teaching Notes This exercise is applicable to face-to-face classes or synchronous online classes such as BlackBoard 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See http: //www.baclass.panam.edu/imob/SecondLife for more information. Career Objectives How do I learn to lead? I’ll be starting a new job in a few weeks. It’s my first time working as a leader for a team, and I know I have a lot to learn. Is there any way I can be sure I’ll achieve success as a leader? — Gordon Dear Gordon: Learning about a new job is always complicated. Learning how to be a leader is certainly complicated. It’s expected that you have the capacity to provide direction and purpose for employees and that you will respect the existing culture of the group as well as the capacities of individual members. Here are a few key insights toward making your transition into leadership successful: Ask questions. New leaders are often anxious about asking questions of direct reports for fear of being seen as incompetent or weak. However, inquiring about how things have been done in the past and asking about individual goals signals that you are concerned about the team members. Familiarizing yourself with the group’s culture and practices can also help you develop techniques to harness the team's strengths and overcome challenges. Build relationships with other leaders. Remember—you were put into this role for a reason, and the company wants to see you succeed, so make the most of the resources of others. Take detailed notes regarding specific activities and strategies that were successful, and schedule a check-in to discuss how these strategies have worked over time. If you can show you are truly engaged in the learning process, you’ll find others more willing to provide you with assistance and advice. Start small. Much has been written about the importance of gaining small wins early on to build your reputation. The old saying “you never get a second chance to make a first impression” definitely holds true in the workplace. Try to develop new initiatives with clear outcomes that will allow you to demonstrate your leadership traits. The best leadership transitions include learning what the situation calls for and setting your team up for success from the start. Be proactive! Sources: T. B. Harris, N. Li, W. R. Boswell, X. Zhang, and Z. Xie, “Getting What’s New from Newcomers: Empowering Leadership, Creativity, and Adjustment in the Socialization Context,"” Personnel Psychology 67 (2014): 567–604; Y. H. Ji, N. A. Cohen, A. Daly, K. Finnigan, and K. Klein, “The Dynamics of Voice Behavior and Leaders’ Network Ties in Times of Leadership Successions,” Academy of Management Proceedings, 2014, 16324; and B. Eckfeldt, “5 Things New CEOs Should Focus On,” Business Insider, June 1, 2015, http://www.businessinsider.com/5-thingsnew-ceos-should-focus-on-2015-6 Personal Inventory Assessments Comfort with Change Scale Do you like change? Hate change? Few people are neutral about their preference for change. Take this PIA to see how comfortable you are with change. Point/Counterpoint Organizations Should Strive to Create a Positive Organizational Culture Point Organizations should do everything they can to establish a positive culture, because it works. Scores of recent studies have shown that individuals who are in positive states of mind at work and in life lead happier, more productive, and more fulfilling lives. Given the accumulating evidence, researchers are now studying ways to make that happen. In a Harvard Business Review article, Adam Grant discusses an interesting concept: outsourcing inspiration. What does he mean by that? Grant writes: “A growing body of research shows that end users—customers, clients, patients, and others who benefit from a company’s products and services—are surprisingly effective in motivating people to work harder, smarter, and more productively.” Some tangible examples of how this can work: Northwestern University’s “buddy program” introduces Alzheimer’s patients to scientists working to develop treatments for the disease. At a Merrill Lynch branch, weekly team meetings begin with stories about how the team has made a difference in customers’ lives. “All Medtronic employees have a ’defining moment’ in which they come face-to-face with a patient whose story deeply touches them, ” writes former CEO Bill George. Of course, there are other ways of creating a positive organizational culture, including building on strengths and rewarding more than punishing. Outsourcing inspiration is a great way for employees to feel appreciated, to experience empathy, and to see the impact of their work—all motivating outcomes that will lead organizations to be more effective and individuals more fulfilled in their work. Creating a positive organizational culture is not magic, but it tends to have extremely positive benefits for organizations that embrace it. Counterpoint There are many unanswered questions about the merits of using positive organizational scholarship to build positive organizational cultures. Let’s focus on three. What is a positive culture? The employment relationship can be amicable and even mutually beneficial. However, glossing over natural differences in interests with the frosting of positive culture is intellectually dishonest and potentially harmful. From time to time, any organization needs to undertake unpopular actions. Can anyone terminate an employee positively (and honestly), or explain to someone why others received a raise? There’s a danger in trying to sugarcoat. Positive relationships will develop—or not—on their own. We’d be better off preaching that people, and organizational cultures, should be honest and fair, rather than unabashedly positive. Is practice ahead of science? Before we start beseeching organizations to build positive cultures, we should make sure these interventions work as we think they do. Many have unintended consequences, and we simply don’t have enough research to support the claims put forth. As one reviewer noted, “Everyone wants to believe they could have greater control over their lives by simply changing the way they think. Research that supports this idea gets promoted loudly and widely.” But it’s not based on a mountain of evidence. Is building a positive culture manipulative? Psychologist Lisa Aspinwall writes of “saccharine terrorism, ” where employees are coerced into positive mindsets by happiness coaches. You may think this an exaggeration, but companies like UBS, American Express, KPMG, FedEx, Adobe, and IBM use happiness coaches to do exactly that. As one critic noted, “Encouraging people to maintain a happy outlook in the face of less-than-ideal conditions is a good way of keeping citizens under control in spite of severe societal problems, or keeping employees productive while keeping pay and benefits low.” Rather than insisting on positive cultures, how about promoting honest cultures as an idea? Sources: B. Azar, “Positive Psychology Advances, with Growing Pains, ” Monitor on Psychology (April 2011), pp. 32–36; A. Grant, “How Customers Can Rally Your Troops, ” Harvard Business Review (June 2011), downloaded on July 12, 2011, from http: //hbr.org/; and J. McCarthy, “5 Big Problems with Positive Thinking (And Why You Should Do It Anyway), ” Positive Psychology (October 2010), downloaded on July 10, 2011, from http: //psychologyofwellbeing.com/. Class Exercise Divide the class into teams of three to five students each. Assign half the class teams to assume the Point view and the other half the Counterpoint view. Ask the students to fact find on the Internet about their side of the issue and prepare to debate to convince the class that their side is more correct or feasible. Additional information can be found from such sources as http: //www.management-issues.com/2006/5/25/opinion/the-difference-between-manipulation-and-motivation.asp. On a specified day, call upon a Point Team and a Counterpoint Team to use 15 minutes to make their sides of the issue clear. Offer each team a chance to rebut the view of the other team. Take a vote among the class. Which side was more persuasive? Teaching Notes This exercise is applicable to face-to-face classes or synchronous online classes such as BlackBoard 9.1, Breeze, WIMBA, and Second Life Virtual Classrooms. See http: //www.baclass.panam.edu/imob/SecondLife for more information. Instructor Manual for Organizational Behavior Timothy A. Judge Stephen P. Robbins 9781292146300, 9780133507645, 9780136124016
