Delfian Nur Fauzan

201510160311211
Theory Organization V-B

RESUME CHAPTER 7 : CREATING AND MANAGING

ORGANIZATIONAL CULTURE

Learning Objective
 Differntiate between values and norms and understand the way culture is shared by an
organizatio’s members
 Describe how individuals learn culture both formally and informally
 Identify the four building blocks or foudations of an organization’s culture
What is Organizational Culture
Organizational culture: the set of shared values and norms that controls organizational
members’ interactions with each other and with people outside the organization. Can be a source
of competitive advantage. Can be used to increase organizationa effectiveness.
Values: general criteria, standards, or guiding principles that people use to determine
which types of behaviors, events, situations, and outcomes are desirable or undesirable.
 Terminal value: a desired end state or outcome that people seek to achieve
 Instrumental value: a desired mode of behavior
Organization’s Values Embedded in Formal and Informal Structure
 Norms: standards or styles of behavior that are considered acceptable or typical for a
group of people
 Formal Structure: values are embedded in a company’s SOPs, rules, and goals.

Figure 7.1: Terminal and Instrumental Values in an Organization’s Culture

Organizational Culture
Based on enduring values embodied in organizational norms, rules, standard operating
procedures, and goals. People draw on these cultural values to guide their actions and decisions
when faced with uncertainty and ambiguity. Important influence on member’s behavior and
response to situations.
A country’s culture can affect the values and norms of a company’s culture. Differences
in communication styles, attitude toward competing tasks, and different approaches to decision
making can impact a company’s culture and executives working abroad need to be sensitive to
boyh the country’s culture and the company’s culture.
Many mergers between companies have failed because of differences in their
organizational cultures. Merger teams now exist to help smooth the transition between the two
cultures.
How is an Organization’s Culture Transmitted to its Members
Socialization: the process by which members learn and internalize the values and norms
of an organization’s culture
Role orientation: the characteristic way in which newcomers respond to a situation
 Institutionalized role orientation: results when individuals are taught to respond to
a new context in the same way that existing organizational members respond to it.
 Individualized role orientations: results when individuals are allowed and
encouraged to be creative and to experiment with changing norms and values

Table 7.1: How Socialization Tactics Shape Employees’ Role Orientation

Collective vs Individual
 Collective tactics: provide newcomers with common learning experiences
designed to produce a standardized response to a situation
 Individual tactics: each newcomer’s learning experiences are unique, and
newcomers can learn new, appropriate responses for each situation
 Formal vs Informal
 Formal tactics: segregate newcomers from existing organizational members
during the learning process.
 Informal tactics: newcomers learn on the job, as members of a team
Sequential vs Random
 Sequential tactics: provide newcomers with explicit information about the
sequence in which they will perform new activities or occupy new roles as they
advance in an organization
 Random tactics: training is based on the interests and needs of individual
newcomers because there is no set sequence to the newcomers’ progress in the
organization
Fixed vs Variable
 Fixed tactics: give newcomers precise knowledge of the timetable associated with
completing each stage in the learning process
 Variable tactics: provide no information about when newcomers will reach a
certain stage in the learning process
Serial vs Disjunctive
 Serial tactics: employed, existing organizational members act as role models and
mentors for newcomers.
 Disjunctive processes: require newcomers to figure out and develop their own
way of behaving.
Divestiture vs Investiture
 Divestiture: newcomers receive negative social support and existing
organizational members with hold support until newcomers learn the ropes and
conform to established norms
 Investiture: newcomers immediately receive positive social support from other
organizational members and are encouraged to be themselves.
Stories, Ceremonies, and Organizational Language
Organization Rites
 Rites of passage: mark an individual’s entry to, promotion in, and departure from
the organization
 Rites of integration: shared announcements of organizational success, office
parties, and cookouts
 Rites of enhancement: public recognition and reward for employee contributions
 Table 7.2: Organizational Rites

Where Does Organizational Culture Come From

Figure 7.2: Where an Organization’s Culture Comes From

Characteristics of people within the organization
Through a process of hiring people that match existing culture and attrition, people
become more and more similar over time
Organizational ethics
The moral values, beliefs, and rules that establish the appropriate way for organizational
stakeholders to deal with one another and with the environment. Derived from the personality
and beliefs of the founder and top management.
 Organizational structure
Mechanistic vs. Organic
 Mechanistic – predictability and stability are desired goals
 Organic – innovation and flexibility are desired end states
Centralized vs. Decentralized
 Decentralized – encourages and rewards creativity and innovation
 Centralized – reinforces obedience and accountability
Property rights
Rights that an organization gives to members to receive and use organizational resources.
The Distribution of property rights to different stake holders determines :
 How effective an organization is
 The culture that emerges in the organization
Top managers are in a strong position to establish the terms of their own employment and
the property rights received by others. Changing property rights changes the corporate culture by
changing the instrumental values that motivate and coordinate employees. Strong property rights
may harm the organization.

Table 7.3: Common Property Rights Given to Managers and the Workforce
RESUME CHAPTER 9 : ORGANIZATIONAL DESIGN, COMPETENCES
AND TECHNOLOGY

Learning Objective
 Identify what technology is and how it relates to organizational effectiveness.
 Differentiate between three different kinds of technology that create different
competences.
 Understand how each type of technology needs to be matched to a certain kind of
organizational structure if an organization is to be effective.
What is Technology
Technology: the combination of skills, knowledge, abilities, techniques, materials,
machines, computers, tools, and other equipment that people use to convert or change raw
materials into valuable goods and services.
Technology exists at three levels
 Individual level: the personal skills, knowledge, and competences that individuals
possess
 Functional or department level: the procedures and techniques that groups work
out to perform their work and create value
 Organizational level: the way an organization converts inputs into outputs
o Mass production: the organizational technology based on competences in
using standardized, progressive assembly process to manufacture goods
o Craftswork: the technology that involves groups of skilled workers who
interact closely to produce custom-designed products
Technology and Organizational Effectiveness
Technology is present in all organizational activities:
 Input: allows each organizational function to handle relationships with outside
stakeholders so that the organization can effectively manage its specific
environment.
 Conversion: transforms inputs into outputs
 Output: allows an organization to effectively dispose of finished goods and
services to external stakeholders
The technology of an organization’s input, conversion, and output processes is an
important source of competitive advantage.
 Figure 9.1: Input, Conversion, and Output Processes

Technical Complexity: The Theory of Joan Woodward

Programmed technology: a technology in which the procedures for converting inputs into
outputs can be specified in advance. Tasks can be standardized and the work process can be
made predictable.
Technical complexity: the extent to which a production process can be programmed so
that it can be controlled and made predictable
 High technical complexity: exists when conversion processes can be programmed
in advance and fully automated.
 Low technical complexity: exists when conversion processes depend primarily on
people and their skills and knowledge and not on machines
Woodward identified 10 levels of technical complexity that are associated with three
types of production technology:
 Small-batch and unit technology
o Involves making one-of-a-kind, customized products or small quantities of
products.
o The conversion process is flexible, thereby providing the capacity to
produce a wide range of goods that can be adapted to individual orders
o Is relatively expensive
o Scores lowest on the dimension of technical complexity
 Large-batch and mass production technology
o Involves producing large volumes of standardized products
o The conversion process is standardized and highly controllable
o Allows an organization to save money on production and charge a lower
price for its products.
 o Scores higher on the technical complexity dimension
 Continuous-process technology
o Involves producing a steady stream of output
o Individuals are only used to manage exceptions in the work process
o Tends to be more technically efficient than mass production
o Scores highest on the technical complexity dimension

Figure 9.3: Technical Complexity and Three Types of Technology

Technical Complexity and Organization Structure
An organization that uses small-batch technology
 Impossibility of programming conversion activities because production depends
on the skills and experience of people working together
 An organic structure (chap. 4) is the most appropriate structure for this
technology.
An organization that uses mass production technology
 Ability to program tasks in advance allows the organization to standardize the
manufacturing process and make it predictable
 A mechanistic structure (chap. 4) becomes the appropriate structure for this
technology
 Tasks can be programmed in advance, and the work process is predictable and
controllable in a technical sense.
  Still the potential for a major systems breakdown
 An organic structure is the appropriate structure for this technology

Figure 9.3: Technical Complexity and Organizational Structure

Technological imperative
 The argument that technology determines structure
 Aston studies found that:
o Technology is one determinant of structure
o Organizational size is a more important determinant of structure
Routine Tasks and Complex Tasks: The Theory of Charles Perrow
Perrow’s two dimensions underlie the difference between routine and nonroutine or
complex tasks and technologies:
 Task variability: the number of exceptions – new or unexpected situations – that a
person encounters while performing a task
o Is low when a task is standardized or repetitious
 Task analyzability: the degree to which search activity is needed to solve a
problem
o Is high when the task is routine
 Four types of technology
 Routine manufacturing: characterized by low task variability and high task
analyzability
 Craftswork: both task variability and task analyzability are low
 Engineering production: both task variability and task analyzability are high
 Nonroutine research: characterized by high task variability and low task
analyzability

Figure 9.4: Task Variability, Task Analyzability, and Four Type of Technology

When technology is routine, employees perform clearly defined tasks – work process is
programmed and standardized
 Mechanistic structure
Nonroutine technology requires the organization to develop structure that allows
employees to respond quickly to manage exceptions and create new solutions.
 Organic structure
Table 9.1: Routine and Nonroutine Tasks and Organizational Design