management

Chapter 9:

1. In what ways might artificial intelligence incorporate bias into its decision-making? Explain. Please provide details.

Chapter 10:

1. Describe the three bases of authority identified by Weber. Is it possible for each of these types of authority to function simultaneously within an organization? Discuss.

Chapter 11:

1. In which of the four cultures described in Exhibit 11.4 would you prefer to work? Why?

OrgTheory_13e_Ch11_PowerPoint.pptx

Chapter 11 Organizational Culture and Control

Organization Theory and Design

Thirteenth Edition

Richard L. Daft

Chapter

Learning Objectives

Define organizational culture and identify symbols, rituals, stories, or other observable elements that signal cultural values in a company you are familiar with.

Describe the four types of organizational culture.

Explain the relationship between culture, corporate values, and performance.

Explain how managers create a high-performance culture.

Contrast a decentralized culture of control with a hierarchical culture of control.

Explain the feedback control model.

Describe the balanced scorecard’s value for organizational control.

What is Culture?

Culture is the set of values, norms, guiding beliefs, and understandings that are shared by members of an organization

It is taught to new members as the correct way to think, feel, and behave

Organizational culture exists at two levels:

Visual artifacts and observable symbols

Underlying values, assumptions, beliefs, and thought processes

Levels of Corporate Culture

Emergence and Purpose of Culture

Culture provides sense of organizational identity

It serves two critical functions in organizations:

To integrate members so they know how to relate to one another

To help organization adapt to external environment

Internal integration: Members develop a collective identity and understand how to work together effectively

External adaptation: How the organization meets goals and deals with outsiders

Interpreting/Shaping Culture

Aspects of the organization that can help decode the organizational culture AND be used or changed by managers to shape and influence culture include:

Rites and ceremonies

Stories and sayings

Symbols

Organization structures

Power relationships

Control systems

Observable Aspects of Organizational Culture

Organization Chart for Nordstrom Inc.

Culture and Organization Design

Cultures can be assessed along many dimensions, such as:

(1) the extent to which the competitive environment requires flexibility or stability

(2) the extent to which the organization’s strategic focus and strength are internal or external

Four categories of culture are associated with these differences: adaptability, achievement, clan, and bureaucratic

Culture Strength and Organizational Subcultures

Culture strength is the degree of agreement among members of an organization about specific values

Subcultures reflect the common problems, goals, and experiences of a team or department

Subcultural differences can lead to conflicts between departments or divisions

Cultural conflicts can be particularly challenging in the case of mergers and acquisitions

Culture and Performance

Culture has a significant impact on organizational performance

Successful companies are those in which managers are evaluated and rewarded for paying careful attention to cultural values and business performance

Such companies have high-performance cultures

Combining Culture and Performance

The Cultural Focus of Control Systems

Managers consider both control of the overall organization and control of departments, teams, and individuals

Many companies are adopting a decentralized control process rather than a hierarchical control process

Hierarchical and Decentralized Methods of Control (slide 1 of 2)

	Hierarchical Control	Decentralized Control
Basic assumptions	People are incapable of self-discipline and cannot be trusted. They need to be monitored and controlled closely.	People work best when they are fully committed to the organization.
Actions	Uses detailed rules and procedures and formal control systems. Uses top-down authority, formal hierarchy, position power, supervision, quality control inspectors. Relies on task-related job descriptions.	Features limited use of rules; relies on shared values, group and self-control, selection, and socialization. Relies on flexible authority, flat structure, and expert power; everyone monitors quality. Relies on results-based job descriptions; emphasizes goals to be achieved.

Hierarchical and Decentralized Methods of Control (slide 2 of 2)

	Hierarchical Control	Decentralized Control
Actions (continued)	Emphasizes extrinsic rewards (pay, benefits, status). Features rigid organizational culture and distrust of cultural norms as means of control.	Emphasizes extrinsic and intrinsic rewards (meaningful work, opportunities for growth). Features adaptive culture; culture recognized as means for uniting individual, team, and organizational goals for overall control.
Consequences	Employees follow instructions and do just what they are told. Employees feel a sense of indifference toward work. Employee absenteeism and turnover is high.	Employees take initiative and seek responsibility. Employees are actively engaged and committed to their work. Employee turnover is low.

Feedback Control Model

Feedback is used to determine whether organizational performance meets established standards to help the organization attain

Systems for organizational control consist of the four key steps in a feedback control model

Organization Level: The Balanced Scorecard (slide 1 of 2)

The balanced scorecard (BSC) is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company’s critical success factors

A BSC considers four major perspectives:

Financial performance

Customer service

Internal business processes

Organizational capacity for learning and growth

Managers use these perspectives to identify key performance indicators (KPIs) that the organization will track

Major Perspectives of the Balanced Scorecard

Organization Level: The Balanced Scorecard (slide 2 of 2)

BSCs helps top executives and upper-level managers see how organizational performance results from cause–effect relationships

A strategy map provides a visual representation of the key drivers of an organization’s success and shows the links between specific outcomes in one area and performance in another area

Strategy maps are typically complex, with concrete, specific goals, desired outcomes, and metrics relevant to the particular business

A Strategy Map for Performance Management

Department Level: Behavior Versus Outcome Control

Lower-level managers use two different approaches to evaluating and controlling performance and allocating rewards at the department level:

Behavior control focuses on how people do their job and is based on managers’ direct observation and supervision of employee actions

Outcome control focuses on what people accomplish in their job and is based on monitoring and rewarding employee results

Organizational Design Essentials (slide 1 of 2)

Cultural values can contribute to organizational success.

Organizational cultures integrate members so that they know how to relate to one another and help the organization adapt to the external environment.

Organizational culture should reinforce the strategy and structure that the organization needs to be successful in its environment.

Even in organizations with strong cultures, several sets of subcultures may emerge.

Organizational Design Essentials (slide 2 of 2)

The right culture can enable solid business performance through the alignment of motivated employees with the mission and goals of the company.

All effective control systems involve the use of feedback.

The feedback control model includes setting strategic goals, establishing metrics and standards of performance, comparing actual performance to standards, and taking corrective action as needed.

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