Chapter Three Organizational Context: Design and Culture McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives • Explain the organization theories of open systems, information processing, contingency, ecology, and learning • Present the modern horizontal, network, and virtual designs of organizations • Define organizational culture and its characteristics • Relate how an organizational culture is created • Describe how an organizational culture is maintained • Explain some ways of changing organizational culture Introduction • Organization structure represents the skeletal framework for organizational behavior – Consists of very flexible networks – Recognizes the interaction of information technology and people • Cultural context that the organization provides for organizational behavior Organization Theory • Historical roots - Chester Barnard – Cooperative system is contingent on the human participants’ • Ability to communicate • Willingness to serve • Strive toward a common purpose • Organization as an open system – input → transformation process → output Organization Theory Continued • Information processing view of organizations – External and internal uncertainties – Become a networked, information processing systems • Contingent and ecological organization theories – Learning organization represents the latest thinking in organization theory and compatible with the new paradigm environment Organization Theory Continued • A learning organization – Single loop learning – Double loop learning • Organizational behavior in the learning organization – Associated with employees’ reacting to environmental changes and characterized by human-oriented cultural values • Learning organizations in action Characteristics of Learning Organizations Traditional versus Learning Organizations Modern Organization Designs • Horizontal organizations – Relevant to today’s environmental needs for flexibility, speed, and cooperation • Network designs – Involves a unique combination of strategy, structure, and management processes • Virtual organization – Temporary network of companies that come together quickly to exploit fast-changing opportunities Traditional Hierarchical versus the Network Organization The Contrast Between the Hierarchical and Network Organization Example of a Virtual Organization Organizational Culture Context • Definition and characteristics – Recognize the importance of shared norms and values that guide organizational participants’ behavior • Uniformity of culture – Organizational culture, a common perception held by the organization’s members • Dominant culture • Subculture Creating and Maintaining a Culture • How organizational cultures start – Common steps include the formation of an idea, a core group, action plan, and implementation • Maintaining cultures through steps of socialization – Selection of entry-level personnel – Placement on the job – Job mastery Steps of Organizational Culture Socialization Creating and Maintaining a Culture Continued • Maintaining cultures through steps of socialization (continued) – Measuring and rewarding performance – Adherence to important values – Reinforcing the stories and folklore – Recognition and promotion Creating and Maintaining a Culture Continued • Changing organizational culture – Case of mergers and acquisitions • Focus areas: structure, politics, and emotions – Case of emerging relationship enterprises • Success dependent on trust, communication, and negotiation skills – Guidelines for change • Caution: pragmatically changing an organizational culture affects almost every aspect of the business Questions ... Define organizational culture and its characteristics • Relate how an organizational culture is created • Describe how an organizational culture is maintained • Explain some ways of changing organizational. .. framework for organizational behavior – Consists of very flexible networks – Recognizes the interaction of information technology and people • Cultural context that the organization provides for organizational. .. learning – Double loop learning • Organizational behavior in the learning organization – Associated with employees’ reacting to environmental changes and characterized by human-oriented cultural values