Module-V

Organisational Design
PROGRAM: MBA SEMESTER: II
COURSE CODE: 1T4 COURSE TYPE: CORE
COURSE: NAME OF THE FACULTY: PROF. DEEPIKA
ORGANISATIONAL SONI/DR. DHANASHREE KATEKHAYE
BEHAVIOUR
CO5 The students will be able to justify how organizational
change and conflict affect working relationships within
organizations and demonstrate how to apply relevant
theories to solve problems of change and conflict within
organizations

1. Organizational Culture

Figure 1Sources: A. Bryant, “We’re Family, So We Can Disagree,” The New York Times (February 21, 2010), pp. BU1, BU9;
K. Damore, “Burns: Blazing A New Trail,” CRN (May 23, 2011), downloaded on July 15 2011, from www.crn.com/ ; and D.
Mattioli, “Xerox Makes Push

Like every major CEO, Ursula Burns wass a millionaire. Yet she still shopped for groceries.
She drove herself to work. She cleaned her own house. “Where you are is not who you are,”
her mother often told her. Burns appears to have lived that credo. With quiet determination,
she’s trying to make Xerox’s culture, in some ways, reflect who she is.
‘An executive once was asked what he thought organizational culture meant. He gave said:
“I can’t define it, but I know it when I see it.”’

1.1 Definition

By culture, we mean that complex whole which includes knowledge, belief, art, morals, law,
custom and other capabilities acquired by man in a society. Cultural values are passed from
generation to generation.
Organizational culture refers to ‘a system of shared meaning’ held by members that
distinguishes the organization from other organizations. Seven primary characteristics seem
to capture the essence of an organization’s culture:

 Innovation and risk taking. The degree to which employees are encouraged to be
innovative and take risks.
 Attention to detail. The degree to which employees are expected to exhibit precision,
analysis, and attention to detail.
 Outcome orientation. The degree to which management focuses on results or outcomes
rather than on the techniques and processes used to achieve them.
 People orientation. The degree to which management decisions take into consideration
the effect of outcomes on people within the organization.
 Team orientation. The degree to which work activities are organized around teams rather
than individuals.
 Aggressiveness.
The degree to
which people are
aggressive and
competitive rather
than easygoing.
 Stability. The
degree to which
organizational
activities emphasize
maintaining the
status quo in
contrast to growth.
Another common culture framework groups organisations into four different types based
on competing values:
 “The Clan”: A culture based on human affiliation. Employees value attachment,
collaboration, trust & support.
 “The Adhocracy”: A culture based on change. Employees value growth, variety,
attention to detail, stimulation and autonomy.
 ‘The market”: A culture based on achievement. Employees value communication,
competence & competition.
 “The Hierarchy”: A culture based on stability. Employees value communication,
formalization and routine.

The differences between these cultures are reflected in their internal versus external focus and
their flexibility and stability. For instance, clans are internally focused, flexible, adhocracies
are externally focused & flexible, markets are externally focused and stable & hierarchies are
internally focused and stable. As per research, employees tend to be more satisfied and
committed to clan cultures.
There are different types of cultures:
 Dominant culture A culture that expresses the core values that are shared by a majority
of the organization’s members.
 Subcultures Minicultures within an organization, typically defined by department
designations and geographical separation.
 Strong culture A culture in which the core values are intensely held and widely shared.
 Core values The primary or dominant values that are accepted throughout the
organization.

1.2 Do Organizations have uniform cultures?

Organizational culture represents a common perception the organization’s members hold. We

should therefore expect individuals with different backgrounds or at different levels in the
organization to describe its culture in similar terms.
That doesn’t mean, however, that there are no subcultures. Most large organizations have a
dominant culture and numerous subcultures. A dominant culture expresses the core values a
majority of members share and that give the organization its distinct personality. Subcultures
tend to develop in large organizations to reflect common problems or experiences members
face in the same department or location. The purchasing department can have a subculture
that includes the core values of the dominant culture plus additional values unique to
members of that department.
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. But
subcultures can influence members’ behavior too.

1.3 Strong versus Weak Cultures

If most employees have the same opinions about the organization’s mission and values, the
culture is strong; if opinions vary widely, the culture is weak.
In a strong culture, the organization’s core values are both intensely held and widely shared.
The more members who accept the core values and the greater their commitment, the
stronger the culture and the greater its influence on member behavior, because the high
degree of sharedness and intensity creates a climate of high behavioral control.
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. One study found that the more employees agreed on customer
orientation in a service organization, the higher the profitability of the business unit. Another
study found that when team managers and team members disagree about perceptions of
organizational support, there were more negative moods among team members, and the
performance of teams was lower. These negative effects are especially strong when managers
believe the organization provides more support than employees think it does.

1.4 Importance of a stable culture to organization:

 Reduced recruitment efforts.

 Improved employee stability.
 Reduced conflicts.
 Enhanced employee engagement and job-satisfaction.
 Improved employer brand identity.

Organizational culture affects all aspects of your business, from punctuality and tone to
contract terms and employee benefits. When workplace culture aligns with your employees,
they’re more likely to feel more comfortable, supported, and valued. Companies that
prioritize culture can also weather difficult times and changes in the business environment
and come out stronger.
Culture is a key advantage when it comes to attracting talent and outperforming the
competition. 77 percent of workers consider a company’s culture before applying, and almost
half of employees would leave their current job for a lower-paying opportunity at an
organization with a better culture. The culture of an organization is also one of the top
indicators of employee satisfaction and one of the main reasons that almost two-thirds (65%)
of employees stay in their job.

Example
Consider Microsoft and Salesforce. Both technology-based companies are world-class
performers and admired brands, and both owe this in part to prioritizing culture. Microsoft,
known for its cut-throat competitiveness under Steve Balmer, has been positively
transformed by Satya Nadella, who took over as CEO of the company in 2014. He embarked
on a program to refine the company culture, a process that upended competitiveness in favor
of continuous learning. Instead of proving themselves, employees were encouraged
to improve themselves. Today Microsoft’s market cap flirts with $1 trillion and it is again
competing with Apple and Amazon as one of the most valuable companies in the world.
Salesforce puts corporate culture front and center and has experienced incredible
growth throughout its history. Marc Benioff, Salesforce’s founder and CEO, established
philanthropic cultural norms that have guided the company over the past two decades. All
new Salesforce employees spend part of their first day volunteering and receive 56 hours of
paid time to volunteer a year. This focus on meaning and mission has made Salesforce one of
the best places to work in America according to Fortune, and it hasn’t compromised profits
either: Salesforce’s stock price has surged year after year at an average of over 26% annually
to date.

Qualities of a great organizational culture:

Alignment comes when the company’s objectives and its employees’ motivations are all
pulling in the same direction. Exceptional organizations work to build continuous alignment
to their vision, purpose, and goals.
• Appreciation can take many forms: a public kudos, a note of thanks, or a promotion.
A culture of appreciation is one in which all team members frequently provide recognition
and thanks for the contributions of others.
• Trust is vital to an organization. With a culture of trust, team members can express
themselves and rely on others to have their back when they try something new.
• Performance is key, as great companies create a culture that means business. In these
companies, talented employees motivate each other to excel, and, as shown above, greater
profitability and productivity are the results.
• Resilience is a key quality in highly dynamic environments where change is continuous. A
resilient culture will teach leaders to watch for and respond to change with ease.
• Teamwork encompasses collaboration, communication, and respect between team
members. When everyone on the team supports each other, employees will get more done
and feel happier while doing it.
• Integrity, like trust, is vital to all teams when they rely on each other to make decisions,
interpret results, and form partnerships. Honesty and transparency are critical components of
this aspect of culture.
• Innovation leads organizations to get the most out of available technologies, resources,
and markets. A culture of innovation means that you apply creative thinking to all aspects of
your business, even your own cultural initiatives.
• Psychological safety provides the support employees need to take risks and provide honest
feedback. Remember that psychological safety starts at the team level, not the individual
level, so managers need to take the lead in creating a safe environment where everyone feels
comfortable contributing. Now that you know what a great culture looks like, let’s tackle how
to build one in your organization.

Culture’s Functions

1. First, culture has a boundary-defining role: it creates distinctions between one

organization and others.
2. Second, it conveys a sense of identity for organization’s members.
3. Third, culture facilitates commitment to something larger than individual self-interest.
4. Fourth, it enhances the stability of the social system. Culture is the social glue that
helps hold the organization together by providing standards for what employees
should say and do. Finally, it is a sense-making and control mechanism that guides
and shapes employees’ attitudes and behavior. This last function is of particular
interest to us. 15 Culture defines the rules of the game.
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 can point everyone in the
same direction. However, employees organized in teams may show greater allegiance to their
team and its values than to 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.
It’s no coincidence that Disney theme park employees appear almost universally attractive,
clean, and wholesome with bright smiles. The company selects employees who will maintain
that image. On the job, a strong culture supported by formal rules and regulations ensures
they will act in a relatively uniform and predictable way.

Culture Creates Climate

If you’ve worked with someone whose positive attitude inspired you to do your best, or with
a lackluster team that drained your motivation, you’ve experienced the effects of 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. 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 as well. Dozens of
dimensions of climate have been studied, including safety, justice, diversity, and customer
service. 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 co-workers 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.

Culture as a Liability
Culture can enhance organizational commitment and increase the consistency of employee
behavior, clearly benefits to an organization. Culture is valuable to employees too, because it
spells out how things are done and what’s important. But we shouldn’t ignore the potentially
dysfunctional aspects of culture, especially a strong one, on an organization’s effectiveness.

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.

Barriers to Change Culture is a liability when the shared values don’t agree with those that
further the organization’s effectiveness. This is most likely when an organization’s
environment is undergoing rapid change, and its entrenched culture may no longer be
appropriate. Consistency of behavior, an asset in a
stable environment, may then burden the organization and make it difficult to respond to
changes.

Barriers to Diversity Hiring new employees who differ from the majority in race, age,
gender, disability, or other characteristics creates a paradox: management wants to
demonstrate support for the differences these employees bring to the workplace, but
newcomers who wish to fit in must accept the organization’s core cultural values. Because
diverse behaviors and unique strengths are likely to diminish as people attempt to assimilate,
strong cultures can become liabilities when they effectively eliminate these advantages. A
strong culture that condones prejudice, supports bias, or becomes insensitive to people who
are different can even undermine formal corporate diversity policies.

Barriers to Acquisitions and Mergers Historically, when management looked at acquisition

or merger decisions, the key factors were financial advantage and product synergy. In recent
years, cultural compatibility has become the primary concern. All things being equal, whether
the acquisition actually works seems to have more to do with how well the two organizations’
cultures match up. A survey by consulting firm A. T. Kearney revealed that 58 percent of
mergers failed to reach their financial goals. As one expert commented, “Mergers have an
unusually high failure rate, and it’s always because of people issues”— in other words,
conflicting organizational cultures. 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. To this day, Time Warner
stock— trading around $32 per share in late 2011—remains at a fraction of its former price
(around $200 per share before the merger). Culture clash is commonly argued to be one of
the causes of AOL Time Warner’s problems. As one expert noted, “In some ways the merger
of AOL and Time Warner was like the marriage of a teenager to a middle-aged banker. The
cultures were vastly different. There were open collars and jeans at AOL. Time Warner was
more buttoned-down

Managing Organisational Culture:

Culture is a ubiquitous phenomenon that surrounds us at all times. Therefore, culture

adequate leadership and behavior is not an option. An organization’s culture doesn’t pop out
of thin air, and once established it rarely fades away. It develops all the time and cannot
change. So, the question is simply, whether it is all left up to coincidence or actively
managed. What influences the creation of a culture? What reinforces and sustains it once it’s
in place?

How a Culture Begins

An organization’s current customs, traditions, and general way of doing things are largely
due to what it has done before and how successful it was in doing it. This leads us to the
ultimate source of an organization’s culture: its founders. Free of previous customs or
ideologies, founders have a vision of what the organization should be, and the firm’s small
size makes it easy to impose that vision on all members.
Culture creation occurs in three ways.
First, founders hire and keep only employees who think and feel the same way they do.
Second, they indoctrinate and socialize these employees to their way of thinking and feeling.
And finally, the founders’ own behavior encourages employees to identify with them and
internalize their beliefs, values, and assumptions. An ongoing management of organizational
culture can—in the extreme—be anchored in one single person, and that could be the owner
of a small company or a general manager of a mid cap. And it is absolutely desirable to have
a general manager or an executive, who is competent in organizational culture. When the
organization succeeds, the founders’ personality becomes embedded in the culture. The
fierce, competitive style and disciplined, authoritarian nature of Hyundai, the giant Korean
conglomerate, exhibits the same characteristics often used to describe founder Chung Ju-
Yung. Other founders with immeasurable impact on their organization’s culture include Bill
Gates at Microsoft, Ingvar Kamprad at IKEA, Herb Kelleher at Southwest Airlines, Fred
Smith at FedEx, and Richard Branson at the Virgin Group.

Culture is simply always relevant and cultural competence increases the overall quality of
considerations and evaluations, which in turn provides a better basis for decisions and
activities. That applies for common tasks in daily business as well as for strategic initiatives,
projects or for targeted efforts to change the organizational culture. Hence, cultural
competence increases the overall quality of managing organizational behavior.

Keeping the Culture alive

1. Whenever a deliberate or targeted change of organizational culture is aimed for, it should

be started from a position of strength.
2. A crisis such as a turnaround is utterly improper to develop and change culture for the
better! During a crisis, particularly our most advanced and fi nely differentiated cultural
achievements, are being destroyed. And that causes a cultural deconstruction.
3. Primary goal of the management of organizational culture is not to let a crisis arise. By
sensitizing the organization’s and its member’s sense in dealing with themselves and their
environment, a higher level of consciousness can be reached. When a crisis was
inevitable, then this level of consciousness allows to better cope with the crisis.
4. Managing organizational culture throughout a crisis should concentrate on devastating the
malfunctions of the past and to “rescue” (keep up) as many as possible of the most
advanced cultural achievements (dispositions) through the crisis. However, in order to do
so, these dispositions must be known in the first place and therefore they must have been
identified and described. Only then, the measures to cope with the crisis can be screened
for their side effects with regard to these dispositions.
5. The initiation of a culture project is a proper means to an ongoing operationalization of
organizational culture. It is difficult to convey that the work on the organization’s culture
will start and that this work may be anchored organizationally “just for fun”. The
necessity and the benefits must be declared right from the outset. That includes the
declaration of specific goals that are aimed for by means of operationalizing (managing)
organization culture. Such goals must be prioritized over other initiatives.

Process of development and managing a culture

1. A culture project is initiated by the organizational leadership. However, the trigger
therefore can also come from shareholders, unions, works councils, etc. Organization’s
leadership has ultimately to provide the necessary resources to perform the project, which
may consist of purely internal forces, but also of mixed teams and even of predominantly
external forces.
2. A culture project is defined here as an undertaking with a specific goal, aiming at
identifying and describing the relevant cultural dispositions in this respect, and possibly
initiating measures to achieve the goals. Such measures may be of cultural nature, but not
necessarily. A culture project can be structured as follows:
• Culture Analysis: Identifying and describing of relevant cultural dispositions
• Culture Change : Identifying, describing and implementing measures
• Communication : Rational, goals, status or progress, results of the project; Stories.

The aim of a culture analysis is to find a striking scheme for cultural (refl exive, notional,
emotional) dispositions, which enlightens the task at hand and at the same time prepares
an easy continued employment. Probably the most common form of continued
employment is the aim to obtain an improvement. This can be either through adjustments
(e.g. processes, strategy) to conform with the prevailing culture or by changing the culture
itself.
3. Monitor if the current developments are and activities are in conflict with the prevailing
cultural profile and if any destructive dispositions exist.
4. If necessary, decide on the measures to comply with the prevailing cultural profile or to
change the cultural profile itself (dispositions)-initiate, plan, implement and control them.
5. Continuously communicate to foster the development of the new culture that facilitates its
nurturing and development. Design a target communication to prevent the undesirable
developments.
6. Manage the organizational culture properly by substantial training (theory and on the
job).
7. At an advanced stage of cultural project, a far more competent and experienced decision
on how to institutionalize the ongoing management of culture is possible. It is about the
continuous maintenance of the new culture being developed and continuous management
of cultural aspects
Model describing how cultures are created and maintained

Founder Values

A company’s culture, particularly during its early years, is inevitably tied to the personality,
background, and values of its founder or founders, as well as their vision for the future of the
organization. When entrepreneurs establish their own businesses, the way they want to do
business determines the organization’s rules, the structure set up in the company, and the
people they hire to work with them. For example, some of the existing corporate values of the
ice cream company Ben & Jerry’s Homemade Holdings Inc. can easily be traced to the
personalities of its founders Ben Cohen and Jerry Greenfield. In 1978, the two high school
friends opened up their first ice-cream shop in a renovated gas station in Burlington,
Vermont. Their strong social convictions led them to buy only from the local farmers and
devote a certain percentage of their profits to charities. The core values they instilled in their
business can still be observed in the current company’s devotion to social activism and
sustainability, its continuous contributions to charities, use of environmentally friendly
materials, and dedication to creating jobs in low-income areas. Even though Unilever
acquired the company in 2000, the social activism component remains unchanged and
Unilever has expressed its commitment to maintaining it (Kiger, 2005; Rubis, et. al., 2005;
Smalley, 2007).

Founder values become part of the corporate culture to the degree to which they help the
company be successful. For example, the social activism of Ben and Jerry’s was instilled in
the company because the founders strongly believed in these issues. However, these values
probably would not be surviving 3 decades later if they had not helped the company in its
initial stages. In the case of Ben and Jerry’s, these values helped distinguish their brand from
larger corporate brands and attracted a loyal customer base. Thus, by providing a competitive
advantage, these values were retained as part of the corporate culture and were taught to new
members as the right way to do business.

Industry Demands

While founders undoubtedly exert a powerful influence over corporate cultures, the industry
characteristics also play a role. Companies within the same industry can sometimes have
widely differing cultures. At the same time, the industry characteristics and demands act as a
force to create similarities among organizational cultures. For example, despite some
differences, many companies in the insurance and banking industries are stable and rule-
oriented, many companies in the high-tech industry have innovative cultures, and those in
nonprofit industry may be people-oriented. If the industry is one with a large number of
regulatory requirements—for example, banking, health care, and high-reliability (such as
nuclear power plant) industries—then we might expect the presence of a large number of
rules and regulations, a bureaucratic company structure, and a stable culture. The industry
influence over culture is also important to know because this shows that it may not be
possible to imitate the culture of a company in a different industry, even though it may seem
admirable to outsiders.

How Are Cultures Maintained?

As a company matures, its cultural values are refined and strengthened. The early values of a
company’s culture exert influence over its future values. It is possible to think of
organizational culture as an organism that protects itself from external forces. Organizational
culture determines what types of people are hired by an organization and what types of
people are left out. Moreover, once new employees are hired, the company assimilates new
employees and teaches them the way things are done in the organization. We call these
processes attraction-selection-attrition and onboarding processes.

Attraction-Selection-Attrition

Organizational culture is maintained through a process known as attraction-selection-attrition

(ASA). First, employees are attracted to organizations where they will fit in. Someone who
has a competitive nature may feel comfortable in and may prefer to work in a company where
interpersonal competition is the norm. Others may prefer to work in a team-oriented
workplace. Research shows that employees with different personality traits find different
cultures attractive. For example, out of the Big Five personality traits, employees who
demonstrate neurotic personalities were less likely to be attracted to innovative cultures,
whereas those who had openness to experience were more likely to be attracted to innovative
cultures (Judge & Cable, 1997).

Of course, this process is imperfect, and value similarity is only one reason a candidate might
be attracted to a company. There may be other, more powerful attractions such as good
benefits. At this point in the process, the second component of the ASA framework prevents
them from getting in: selection. Just as candidates are looking for places where they will fit
in, companies are also looking for people who will fit into their current corporate culture.
Many companies are hiring people for fit with their culture, as opposed to fit with a certain
job. For example, Southwest Airlines prides itself for hiring employees based on personality
and attitude rather than specific job-related skills, which they learn after they are hired.
Companies use different techniques to weed out candidates who do not fit with corporate
values. For example, Google relies on multiple interviews with future peers. By introducing
the candidate to several future coworkers and learning what these coworkers think of the
candidate, it becomes easier to assess the level of fit.

Even after a company selects people for person-organization fit, there may be new employees
who do not fit in. Some candidates may be skillful in impressing recruiters and signal high
levels of culture fit even though they do not necessarily share the company’s values. In any
event, the organization is eventually going to eliminate candidates eventually who do not fit
in through attrition. Attrition refers to the natural process where the candidates who do not fit
in will leave the company. Research indicates that person-organization misfit is one of the
important reasons for employee turnover (Kristof-Brown, et. al., 2005; O’Reilly, et. al.,
1991).

Because of the ASA process, the company attracts, selects, and retains people who share its
core values, whereas those people who are different in core values will be excluded from the
organization either during the hiring process or later on through naturally occurring turnover.
Thus, organizational culture will act as a self-defending organism where intrusive elements
are kept out. Supporting the existence of such self-protective mechanisms, research shows
that organizations demonstrate a certain level of homogeneity regarding personalities and
values of organizational members (Giberson, et. al., 2005).

New Employee Onboarding

Another way in which an organization’s values, norms, and behavioral patterns are
transmitted to employees is through onboarding (also referred to as the organizational
socialization process). Onboarding refers to the process through which new employees learn
the attitudes, knowledge, skills, and behaviors required to function effectively within an
organization. If an organization can successfully socialize new employees into becoming
organizational insiders, new employees will feel accepted by their peers and confident
regarding their ability to perform; they will also understand and share the assumptions,
norms, and values that are part of the organization’s culture. This understanding and
confidence in turn translate into more effective new employees who perform better and have
higher job satisfaction, stronger organizational commitment, and longer tenure within the
company (Bauer, et. al., 2007). Organizations engage in different activities to facilitate
onboarding, such as implementing orientation programs or matching new employees with
mentors.

What Can Employees Do During Onboarding?

New employees who are proactive, seek feedback, and build strong relationships tend to be
more successful than those who do not (Bauer & Green, 1998; Kammeyer-Mueller &
Wanberg, 2003; Wanberg & Kammeyer-Mueller, 2000). For example, feedback seeking helps
new employees. Especially on a first job, a new employee can make mistakes or gaffes and
may find it hard to understand and interpret the ambiguous reactions of coworkers. By
actively seeking feedback, new employees may find out sooner rather than later any
behaviors that need to be changed and gain a better understanding of whether their behavior
fits with the company culture and expectations.

Relationship building or networking (a facet of the organizing function) is another important

behavior new employees may demonstrate. Particularly when a company does not have a
systematic approach to onboarding, it becomes more important for new employees to
facilitate their own onboarding by actively building relationships. According to one estimate,
35% of managers who start a new job fail in the new job and either voluntarily leave or are
fired within one and a half years. Of these, over 60% report not being able to form effective
relationships with colleagues as the primary reason for this failure (Fisher, 2005).

What Can Organizations Do During Onboarding?

Many organizations, including Microsoft, Kellogg Company, and Bank of America take a
more structured and systematic approach to new employee onboarding, while others follow a
“sink or swim” approach where new employees struggle to figure out what is expected of
them and what the norms are.

A formal orientation program indoctrinates new employees to the company culture, as well as
introducing them to their new jobs and colleagues. An orientation program has a role in
making new employees feel welcome in addition to imparting information that may help
them be successful in their new jobs. Many large organizations have formal orientation
programs consisting of lectures, videotapes, and written material, while some may follow
more informal approaches. According to one estimate, most orientations last anywhere from
one to five days, and some companies are currently switching to a computer-based
orientation. Ritz Carlton, the company ranked number 1 in Training magazine’s 2007 top 125
list, uses a very systematic approach to employee orientation and views orientation as the key
to retention. In the 2-day classroom orientation, employees spend time with management,
dine in the hotel’s finest restaurant, and witness the attention to customer service detail
firsthand. During these two days, they are introduced to the company’s intensive service
standards, team orientation, and its own language. Later, on their 21st day they are tested on
the company’s service standards and are certified (Durett, 2006; Elswick, 2000). Research
shows that formal orientation programs are helpful in teaching employees about the goals and
history of the company, as well as communicating the power structure. Moreover, these
programs may also help with a new employee’s integration to the team. However, these
benefits may not be realized to the same extent in computer-based orientations. In fact,
compared to those taking part in a regular, face-to-face orientation, those undergoing a
computer-based orientation were shown to have lower understanding of their job and the
company, indicating that different formats of orientations may not substitute for each other
(Klein & Weaver, 2000; Moscato, 2005; Wesson & Gogus, 2005).

What Can Organizational Insiders Do During Onboarding?

One of the most important ways in which organizations can help new employees adjust to a
company and a new job is through organizational insiders—namely, supervisors, coworkers,
and mentors. Leaders have a key influence over onboarding and the information and support
they provide determine how quickly employees learn about the company politics and culture,
while coworker influence determines the degree to which employees adjust to their
teams. Mentors can be crucial to helping new employees adjust by teaching them the ropes of
their jobs and how the company really operates. A mentor is a trusted person who provides an
employee with advice and support regarding career-related matters. Although a mentor can
be any employee or manager who has insights that are valuable to the new employee, mentors
tend to be relatively more experienced than their protégés. Mentoring can occur naturally
between two interested individuals or organizations can facilitate this process by having
formal mentoring programs. These programs may successfully bring together mentors and
protégés who would not come together otherwise.

Research indicates that the existence of these programs does not guarantee their success, and
there are certain program characteristics that may make these programs more effective. For
example, when mentors and protégés feel that they had input in the mentor-protégé matching
process, they tend to be more satisfied with the arrangement. Moreover, when mentors
receive training beforehand, the outcomes of the program tend to be more positive (Allen, et.
al., 2006). Because mentors may help new employees interpret and understand the company’s
culture, organizations may benefit from selecting mentors who personify the company’s
values. Thus, organizations may need to design these programs carefully to increase their
chance of success.

Leadership

Leaders are instrumental in creating and changing an organization’s culture. There is a direct
correspondence between the leader’s style and an organization’s culture. For example, when
leaders motivate employees through inspiration, corporate culture tends to be more
supportive and people-oriented. When leaders motivate by making rewards contingent on
performance, the corporate culture tended to be more performance-oriented and competitive
(Sarros, et. al., 2002). In these and many other ways, what leaders do directly influences the
cultures of their organizations. This is a key point for managers to consider as they carry out
their leading P-O-L-C function.

Part of the leader’s influence over culture is through role modeling. Many studies have
suggested that leader behavior, the consistency between organizational policy and leader
actions, and leader role modeling determine the degree to which the organization’s culture
emphasizes ethics (Driscoll & McKee, 2007). The leader’s own behaviors will signal to
individuals what is acceptable behavior and what is unacceptable. In an organization in which
high-level managers make the effort to involve others in decision making and seek opinions
of others, a team-oriented culture is more likely to evolve. By acting as role models, leaders
send signals to the organization about the norms and values that are expected to guide the
actions of its members.

Leaders also shape culture by their reactions to the actions of others around them. For
example, do they praise a job well done or do they praise a favored employee regardless of
what was accomplished? How do they react when someone admits to making an honest
mistake? What are their priorities? In meetings, what types of questions do they ask? Do they
want to know what caused accidents so that they can be prevented, or do they seem more
concerned about how much money was lost because of an accident? Do they seem outraged
when an employee is disrespectful to a coworker, or does their reaction depend on whether
they like the harasser? Through their day-to-day actions, leaders shape and maintain an
organization’s culture.
Reward Systems

Finally, the company culture is shaped by the type of reward systems used in the organization
and the kinds of behaviors and outcomes it chooses to reward and punish. One relevant
element of the reward system is whether the organization rewards behaviors or results. Some
companies have reward systems that emphasize intangible elements of performance as well
as more easily observable metrics. In these companies, supervisors and peers may evaluate an
employee’s performance by assessing the person’s behaviors as well as the results. In such
companies, we may expect a culture that is relatively people- or team-oriented, and
employees act as part of a family (Kerr & Slocum, 2005). However, in companies in which
goal achievement is the sole criterion for reward, there is a focus on measuring only the
results without much regard to the process. In these companies, we might observe outcome-
oriented and competitive cultures. Whether the organization rewards performance or
seniority would also make a difference in culture. When promotions are based on seniority, it
would be difficult to establish a culture of outcome orientation. Finally, the types of
behaviors that are rewarded or ignored set the tone for the culture. Which behaviors are
rewarded, which ones are punished, and which are ignored will determine how a company’s
culture evolves. A reward system is one tool managers can wield when undertaking the
controlling function.

Conflict
The very meaning of conflict envisions fights, riots, or war. But these extreme situations
represent only the most overt & violent expressions of conflict. During a typical workday,
managers encounter more subtle and non-violent kinds of opposition such as arguments,
criticism and disagreement as happened to George in the opening case. Conflict, like power
and politics, is an inevitable & often positive force in today’s organizations.

Definition
Conflict is a process that begins when one party perceives that another party has negatively
affected, or is about to negatively affect, something that the first party cares about.
Conflict is a dysfunctional outcome resulting from poor communication, a lack of openness
and trust between people, and the failure of managers to be responsive to the needs and
aspirations of their employees.

Types of Conflicts
The Traditional View of Conflict
The early approach to conflict assumed all conflict was bad and to be avoided. Conflict was
viewed negatively and discussed with such terms as violence, destruction, and irrationality to
reinforce its negative connotation. This traditional view of conflict was consistent with
attitudes about group behavior that prevailed in the 1930s and 1940s.
The view that all conflict is bad certainly offers a simple approach to looking at the behavior
of people who create conflict. We need merely direct our attention to the causes of conflict
and correct those malfunctions to improve group and organizational performance. This view
of conflict fell out of favor for a long time as researchers came to realize that some level of
conflict was inevitable.

The Interactionist View of Conflict

The interactionist view of conflict encourages conflict on the grounds that a harmonious,
peaceful, tranquil, and cooperative group is prone to becoming static, apathetic, and
unresponsive to needs for change and innovation. The major contribution of this view is
recognizing that a minimal level of conflict can help keep a group viable, self-critical, and
creative.
The interactionist view does not propose that all conflicts are good. Rather, functional
conflict supports the goals of the group and improves its performance and is, thus, a
constructive form of conflict. A conflict that hinders group performance is a destructive or
dysfunctional conflict.
Task conflict relates to the content and goals of the work.
Relationship conflict focuses on interpersonal relationships. Process conflict relates to how
the work gets done. Studies demonstrate that relationship conflicts are almost always
dysfunctional. Why? It appears that the friction and interpersonal hostilities inherent in
relationship conflicts increase personality clashes and decrease mutual understanding, which
hinders the completion of organizational tasks. Unfortunately, managers spend a lot of effort
resolving personality conflicts among staff members; one survey indicated this task consumes
18 percent of their time.

Nature of Conflict

Conflict may be understood as collision or disagreement. The conflict may be within an

individual wen there is incompatibility between his own goals and events, may be between
two individuals, when one doesn’t see eye to eye with another, and in the process tries to
block or frustrate the attempts of another, or between two groups in an organization.

Organizational conflict refers to the condition of misunderstanding or disagreement that is

caused by the perceived or actual opposition in the needs, interests, and values among people
who work together. Organizational conflict may also be termed as workplace conflict.
Conflict is a struggle between incompatible or opposing needs, wishes, ideas, interests or
people. Conflict arises when individuals or groups encounter goals that both parties cannot
obtain satisfactorily.
Conflict may be cognitive or affective. Cognitive conflict refers to differences in perspectives
or judgements about issues. Affective conflict is emotional and directed at other people.
Affective conflict is likely to be destructive because it can lead to anger, bitterness, goal
displacement and develop better ideas and poor decisions. Cognitive conflict on the other
hand, can air legitimate differences of opinion and develop better ideas and solutions to
problems. Conflict needs to be cognitive and not affective.
 Sr. No. Traditional View of Conflict Interactionist View of Conflict
1 Conflict is avoidable. Conflict is inevitable.
2 Conflict is caused by Conflict arises from many causes, including
management error in organisational structure, unavoidable differences
designing organizations or by in goals, differences in perceptions & values.
trouble makers.
3 Conflict disrupts the Conflict contributes & detracts from
organisation & prevents organisational performance in varying degrees.
optimal performance.
4 The task of management is to The task of management is to manage the level
eliminate conflict. of conflict & its resolution for optimal
organisational performance.
5 Optimal organisational Optimal organisational performance requires a
performance requires the moderate level of conflict
removal of conflict.

The Conflict Process

The conflict process has five stages: potential opposition or incompatibility, cognition and
Stage I Stage II Stage III Stage IV Stage V
Potential Cognition & Intentions Behaviour Outcomes
opposition or personalization
incompatibility
personalization, intentions, behavior, and outcomes.

Conflict handling Increased

Perceived intentions group
conflict Overt Conflict performance
Antecedent 1 Competing
2 Collaborating 1 Party’s behavior
conditions
3 Compromising
Felt conflict 2 Other’s reaction Decreased
1 Communication 4 Avoiding
group
2 Structure 5 Accommodating
performance
3 Limited resources
4 Overlapping job
boundaries
5 Personal variables