UGBA105: Organizational BehaviorSlide 2Slide 3Where did the idea of “organization culture” come from? (1) The critique of 1950’s corporate culture: Overconformity and alienation(2) Then in the late 70’s came…What’s the nature of culture?What are the components of culture?Is making $ a value?Southwest Airlines: work and peopleSaturn: “Putting people first”Other examples of core values?“Respect the divine and respect people”Examples of norms and beliefsSo cultures vary in content. They also vary in strengthDimensions of culture strengthWhat about subcultures?Slide 17Strong culture companies as social institutionsSlide 19Slide 20What are the upsides to a strong culture?Apple’s product-driven cultureAll of which help the bottom lineCulture as competitive strategyWhat are the downsides to a strong culture?Uniformity as SAS InstituteStrong culture low diversity at P&GTunnel vision at AppleEnron’s “culture of corruption”Managing & changing culture: Step I: describe itSigns of culture: HeroesCeremoniesContests, sports, recreational activitiesOffice partiesLogos and symbolsLanguage and jargonPeoplesoft’s people-lingoChorus from the IBM Rally Song: “EVER ONWARD”Step II: Figure out where it comes fromStep III: Align/realign the organizationAligning peopleSelection at MicrosoftSelection at AppleSelection and socialization at P&G(Re)Align the formal organizationAligning rewards at CiscoCulture takeawaysClass business: Wednesday agendaUGBA105: UGBA105: Organizational BehaviorOrganizational BehaviorProfessor Jim LincolnProfessor Jim LincolnWeek 5: LectureWeek 5: LectureManaging Organizational CultureManaging Organizational Culture2•Last time: Leadership vision and charisma as OB levers for change•This week: Analyzing and managing organizational culture3Strategy (diversification; innovation) Input Environment(Competition, change)Resources(munificence)History (age, conditions at founding) OutputSystemsUnitIndividualInformalOrganization(Culture, leadership, networks, politics)Tasks (technologies, work flows)People(ability, skills, motivation, biases)FormalOrganization (job titles, departments, reporting hierarchy, IT & HR systems Where does culture fit in? Where does culture fit in?4Where did the idea of Where did the idea of “organization culture” come from?“organization culture” come from? (1) The critique of 1950’s corporate culture: (1) The critique of 1950’s corporate culture: Overconformity and alienationOverconformity and alienation •William H. Whyte’s The Organization Man (Doubleday, 1956)•The Man in the Gray Flannel Suit(20th Century Fox, 1956)5(2) Then in the late 70’s came…(2) Then in the late 70’s came…–William Ouchi: Theory Z (1981)–Tom Peters and Robert Waterman: In Search of Excellence (1979)–Richard Pascale and Anthony Athos: The Art of Japanese Management (1983)–Ezra Vogel: Japan as No. 1 (1985)–James Abegglen and George Stalk: Kaisha (1985)6What’s the nature of culture?What’s the nature of culture?“It's invisible but omnipresent. Most know it exists but few can actually define it. Newcomers are perplexed by it. Confronting it head on can be dangerous.”“The name of this nebulous creature? It's known on campus as "The Berkeley Way" -- an unwritten code of conduct that governs how people go about their business.” The Berkeleyan, February 16, 2000“No one can define the HP way. If it weren’t fuzzy, it would be a rule” (HP Vice President)7What are the components of What are the components of culture?culture?(1) (2) (3)8Is making Is making $$ a value? a value?9Southwest Airlines: Southwest Airlines: work and people work and people Value 1: Work should be fun…it can be play…enjoy itValue 2: Work is important…don’t spoil it with seriousnessValue 3: People are important…each one makes a difference.It used to be a business conundrum: “Who comes first? The employees, customers, or shareholders?” That’s never been an issue to me. The employees come first. If they’re happy, satisfied, dedicated, and energetic, they’ll take real good care of the customers. When the customers are happy, they come back. And that make the shareholders happy.”Herb Kelleher10Saturn: “Putting people first”Saturn: “Putting people first” “Saturn was created with one simple idea: to put people first. With the mission to create a different kind of car company — one dedicated to finding new ways for people to work together to design, build and sell cars — Saturn has earned a reputation for superior customer satisfaction.” Saturn website11 Other examples of core values?Other examples of core values?12““Respect the divine and respect people”Respect the divine and respect people” “Our goal is to strive toward both the material and spiritual fulfillment of all employees in the Company, and through this successful fulfillment, serve mankind in its progress and prosperity. We are scientists constantly directing our efforts toward perfecting our technology. But we must not forget that the complete process of living requires devotion to humanity as well as to science, to the emotional as with the rational, and to love equally with reason. Just as a family unites in a common bond of support and affection, let us all unite in a bond of love and respect.”What about foreign companies?What about foreign companies?13Examples of norms and beliefs Examples of norms and beliefs •HP: “Manage by wandering around”•3M: “Thou shalt not kill a new product idea”•P&G: “Employees are expected to have facts and data at their fingertips -- opinions and intuition are frowned upon.”•“(S)alespersons wear dark business suits and white shirts; that's no longer a strict regulation but most IBM salesmen continue to dress that way”•Apple: “Do you want to sell sugar water to children for the rest of your life or do you want to change the world?”•Xerox is a copier company14 So cultures vary in So cultures vary in contentcontent. . They also vary in They also vary in strengthstrength–Strong: Consistent, persistent, intense, shared, crystallized, consensual, consequential–Weak: Vague, fragmented, inconsistent, transitory, politicized, conflictual15Dimensions of culture strengthDimensions of culture strengthComplacent “country club” cultureStrong, organization-wide