Chapter 10 Organizational Culture and Change 335IBM Canada
http://www.ibm.com/ca/en/Organization A Organization B- Managers must fully document
all decisions. - Creative decisions, change, and risks
are not encouraged. - Extensive rules and regulations exist
for all employees. - Productivity is valued over employee
morale. - Employees are encouraged to stay
within their own departments. - Individual effort is encouraged.
- Management encourages and
rewards risk-taking and change. - Employees are encouraged to
ìrun with” ideas, and failures are
treated as “learning experiences.” - Employees have few rules and
regulations to follow. - Productivity is balanced with treating
its people right. - Team members are encouraged to interact
with people at all levels and functions. - Many rewards are team-based.
- Management encourages and
EXHIBIT 10-2 Contrasting Organizational Cultures- It serves as a control mechanism that guides and shapes the attitudes and
behaviour of employees, and helps them make sense of the organization.
This last function is of particular interest to us.^10 As the following quotation makes
clear, culture defines the rules of the game:
Culture by definition is elusive, intangible, implicit, and taken for granted. But every
organization develops a core set of assumptions, understandings, and implicit rules that
govern day-to-day behaviour in the workplace. Until newcomers learn the rules, they are
not accepted as full-fledged members of the organization. Transgressions of the rules on
the part of high-level executives or front-line employees result in universal disapproval and
powerful penalties. Conformity to the rules becomes the primary basis for reward and
upward mobility.^11
The role of culture in influencing employee behaviour appears to be increasingly
important in today’s workplace.^12 As organizations widen spans of control, flatten struc-
tures, introduce teams, reduce formalization, and empower employees, the shared mean-
ingprovided by a strong culture ensures that everyone is pointed in the same direction.
Geoffrey Relph, IBM Canada’s marketing director of professional services, compared
the culture of his previous company (GE Appliances in Louisville, Kentucky) with that
of IBM: “The priorities in GE are: ‘Make the financial commitments. Make the financial
commitments. Make the financial commitments.’ At IBM, the company’s attention is
divided among customer satisfaction, employee morale, and positive financial results.”^13
These two cultures give employees and managers different messages about where they
should direct their attention. Recent research suggests, moreover, that employees are
more likely to behave appropriately when there are clear norms about behaviour, rather
than general guidelines, such as “be honest.”^14
Culture can also influence people’s ethical behaviour. When lower-level employees
see their managers padding expense reports, this sends a signal that the firm tolerates such
dishonest behaviour. Firms that emphasize individual sales records may encourage
unhealthy competition among sales staff, including “misplacing” phone messages and
not being helpful to someone else’s client. Toronto-based GMP Securities, on the other
hand, emphasizes the importance of a teamwork culture, so that individuals are not
competing against one another and engaging in questionable activities. Founding part-
ner Brad Griffiths notes that “the corporate culture is to make an environment where
everybody feels they’re involved. We want to be successful, but not at the expense of
the individual.”^15 For further discussion of the effect of culture on ethical behaviour, see
this chapter’s Ethical Dilemma Exercise on pages 362–363.
GMP Securities
http://www.gmpsecurities.com