Introduction to Industrial-Organizational Psychology PDF

W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s In addition, the chapter on group processes (Chapter 11) explored the elements that con- tribute to an organization’s total “culture.” Te f...

W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s In addition, the chapter on group processes (Chapter 11) explored the elements that con- tribute to an organization’s total “culture.” Te feld of organizational development (OD), which is introduced in this chapter, emphasizes that organizations must take steps to keep up with the changing world around them. Organizational development is an eclectic area of I/O psychology, for it draws on many theories and applications from a variety of topics within the broader feld and uses them to help organizations adapt and change. In our discussion of OD, you will see many of the concepts and topics from earlier chapters, but here they will be applied in an efort to help organizations change and innovate. You have begun working for a new organization. You have had experience with several other organizations and noticed that each was hierarchical and somewhat bureaucratic. Your last company had many layers of management. Even your uni- versity was structured, with many levels of administration between the students and the president. But this organization is quite diferent. Te employees act more like a team. Everyone is on a frst-name basis, and the head of the company is indistin- guishable from some of the other, older employees. Most importantly, the climate of the organization is completely diferent. People seem more “loose,” but they are highly motivated, work long hours, and seem to take real pride in their work and the company. You begin to wonder how organizations can vary so greatly. So far, we have studied work behavior at a number of levels. We looked at work behavior at the individual level, examining the processes by which individual workers are selected and assigned to jobs, trained, and evaluated, and the internal processes that afect the behavior of individual workers, including the factors that infuence worker motivation, job satisfaction, and stress. We have also explored work behavior at the group level. It is now time to look at work behavior from a larger perspective: the organizational level. Tis larger perspective will allow an exploration of how the structure, dynamics, and culture of the organization itself can afect the behavior of its work groups and individuals (Williams & Rains, 2007). We will begin by studying the structure of organizations, or how they are designed and operate. We will consider how factors both inside and outside the organization afect its structure, focusing on how diferent structures afect behavior within the organization. We will then look at how organizations develop their own individual cultures, which can infuence nearly all aspects of behavior at work. Finally, we will look at how organizations can change and develop to meet the demands placed on them from both within and without. In particular, we will study some of the vari- ous techniques used to help organizations change to become more efective and to become better places to work. Organizational Structure refers to the arrangement of Organizational Structure positions in an organization and the authority and responsibility relationships Organizational structure refers to the arrangement of positions in an organization among them and the authority and responsibility relationships among them. Tis means that every 444  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t organization is made up of persons holding particular positions or playing certain roles in an organization. Te organization’s structure is then determined by the inter- relationships among the responsibilities of these various positions or roles. Consider, for example, a simple internet retail business that has three positions. Te frst is the director of operations, who has authority over the other two posi- tions. Te director’s responsibilities include selecting and acquiring the products that will be ofered through the business and handling the organization’s fnances. Te second position is the marketing specialist, whose responsibilities consist of designing the web-based advertisements for the organization’s products and placing the ads in various social media outlets. In terms of authority, the marketing specialist is subordi- nate to the director but superior to the third position: the shipping clerk. Te clerk’s responsibilities are solely to package and mail orders. In this very small organization, positions and responsibilities are clearly defned, and the responsibilities are linked in such a way that all functions of the company are handled smoothly and efciently. Of course, most work organizations are extremely complex, made up of doz- ens, hundreds, or thousands of workers. Each has an arrangement of positions and responsibilities that is in some way unique. Tere are a number of diferent dimen- sions of organizational structure. For example, organizations can be classifed under a general continuum of structure that ranges from the very formal and traditional to the completely informal and nontraditional. Organizations can also be classifed by their size, or by the “shape” of their organizational hierarchy (Josefy et al., 2015). We will begin our discussion by examining some of the dimensions on which organiza- tions can be structured. Dimensions of Organizational Structure Traditional versus Nontraditional Organizational Structures Traditional organizations have formally defned roles for their members, are very rule- driven, and are stable and resistant to change. Jobs and lines of status and authority tend to be clearly defned in traditional structures, which means that much of the work behavior tends to be regulated and kept within organizational guidelines and standards. Sometimes, traditional organizational structures are called “mechanistic” or “bureaucratic” structures (we will discuss bureaucracies shortly). Nontraditional organizational structures are characterized by less formalized work roles and procedures. As a result, they tend to be rather fexible and adaptable, without the rigid status hierarchy characteristic of more traditional structures. Non- traditional organizational structures are sometimes referred to as “organic.” Generally, nontraditional organizations have fewer employees than the traditional structures, and nontraditional structures may also occur as a small organization that is a subunit of a larger, more traditionally structured organization. For example, an organization that manufactures jet airliners may be made up of a nontraditional organizational 445  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s unit that is responsible for designing new aircraft and a traditional organizational unit that is charged with producing dozens of the new jets. Traditional organizational structures arose around the turn of the 20th century when advancements in technology had led to the growth of manufacturing organi- zations and increases in their output. As these manufacturing organizations became larger and larger, there was greater need to establish rules to coordinate the various activities of the growing numbers of workers in each organization. Tese traditional structures began to replace the small, family-type manufacturing organizations, and today many work organizations, such as major manufacturers and service organizations—including banks, the Internal Revenue Service, the department of motor vehicles, and your college or university administration—are traditional organizational structures. Nontraditional structures are often organized around a particular project or prod- uct line and are responsible for all aspects of the job (Soderlund, 2015). Motion picture production crews are an example of a nontraditional structure. Film crews contain a number of types of experts and professionals—camerapersons, actors/actresses, light- ing specialists, editors—who work together, pooling their knowledge and talents to produce a creative, quality product. Nontraditional structures have also been set up in hospitals and health-care agencies, fnancial institutions, and government (O’Reilly & Tushman, 2004). Nontraditional organizations typically have four important charac- teristics: high fexibility and adaptability, collaboration among workers, less emphasis on organizational status, and group decision making. We will look at examples of both traditional and nontraditional organizational structures a bit later. Chain of Command and Span of Control Traditional organizational structures are characterized by an authority hierarchy that is represented in the organizational chart, or organigram. Te organigram graphi- cally depicts the various levels of status or authority in a traditional organization Chain of Command and the number of workers that report to each position of authority. Te chain of the number of authority levels command is the number of authority levels in a particular organization. Te chain in an organization of command follows the lines of authority and status vertically through the organi- Span of Control zation. Te span of control is the number of workers who must report to a single the number of workers supervisor. An organization with a wide span of control has many workers reporting who must report to a single to each supervisor; an organization with a narrow span has few subordinates report- supervisor ing to each superior. Based on these dimensions of chain of command and span of control, traditional organizations are often described as being either “tall” or “fat” in structure (see Figure 15.1). A tall organizational structure has a long chain of command—many authority levels—and a narrow span of control. A fat organi- zational structure has a short chain of command but a wide span of control. It is important to note that both dimensions are more descriptive of traditional rather than nontraditional structures. Highly nontraditional organizations may have a very small chain of command or none at all, because they de-emphasize authority levels. 446  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t Figure 15.1 Tall and fat organizational structures. An organization’s shape, either tall or fat, can have important implications for work life in the organization. For example, in tall organizational structures, workers at the bottom levels may feel cut of from those above, because they are separated by many levels of middle-ranking superiors. On the positive side, tall organizations may ofer lower-level employees many diferent promotional opportunities throughout their careers. Another advantage of such structures is that there is usually adequate supervision because the span of control is narrow: each supervisor is only responsible for a few employees. However, tall organizational structures can become “top heavy” with administrators and managers, because the ratio of line workers to supervisors is very low. Conversely, in a fat structure, few levels separate top-level managers from bottom-level workers, possibly leading to greater interaction between the top and 447  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s bottom of the organization. However, fat structures ofer few promotional opportu- nities to workers, and supervision may not always be adequate, because many workers report to the same supervisor. Te type of structure, tall or fat, follows from its functions and goals. For exam- ple, fat organizational structures may be more common when the task is routine or repetitive, thus requiring a large number of workers who need minimal supervi- sion. Organizations with complex and multifaceted goals or products may have taller structures, with diferent levels handling the various aspects of the company’s goals. Functional versus Divisional Structure Functional Structure Organizations can also be structured by either functions or divisions. A functional an organizational structure structure divides the organization into departments based on the functions or tasks that divides the organization performed. For example, a manufacturing frm may be made up of a production into departments based on the functions or tasks they department, sales department, and fnance department. An amusement park might perform be divided into operations, publicity, and maintenance. A divisional structure is based on types of products or customers. Each division Divisional Structure an organizational structure may perform the same range of functions, but those functions only serve the goals that divides the organization of the particular division. In other words, each division operates almost as if it were according to types of products a separate organization. For example, a major motion picture company might have or customers multiple products—flms for theatres, movies for television, and online, streaming products—each of which is represented by a separate division. Within each divi- sion are people who handle manufacturing, marketing, and fnancing, but only for their particular product. Figure 15.2 provides examples of organizations structured by function and division. A primary advantage of functional structure is that it creates job specialists, such as experts in marketing or fnance, and eliminates duplication of functions. One dis- advantage of functional structure is that workers may become overly focused on their own department and area of specialization, and this may breed interdepartmental rivalry and confict. Another disadvantage is that work must move from one large department to another to be completed, which may decrease productivity, particu- larly when work is lost in the shufe or when one department is particularly slow in accomplishing its functions, thereby creating a bottleneck. Divisional structure has positive and negative aspects as well. One advantage is that the company can easily expand products or services merely by adding a new division. Also, because each division operates as a separate entity, with its own pro- duction goals and proft picture, there is greater accountability. It is easy to determine which units are performing at either exceptional or substandard levels. One of the major drawbacks to divisional structure concerns the duplication of areas of expertise, because each division contains its own departments for production, sales, research, and other functions. Another potential weakness is that workers with similar skills and expertise may not be able to beneft from professional interaction with each other because they are housed in diferent divisions. 448  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t Figure 15.2 Functional and divisional organizational designs. 449  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s Centralized versus Decentralized Structure Another dimension of organizational structure deals with how important work- related decisions are made, which can be either centralized or decentralized. Centralization Centralization is the degree to which decision-making authority is concentrated at the degree to which the top of the organizational hierarchy (Fry & Slocum, 1984). In highly centralized decision-making power rests organizations, the decision-making power is frmly held by the top levels of the orga- at the upper levels of the nization. Decentralization is the process of taking the decision-making power out of organizational hierarchy the hands of the top level and distributing some of it to lower levels. Decentralization For example, a chain of ice cream stores could have either a very centralized or a very the process of taking the decentralized structure. In the centralized structure, top-level executives in the corpo- decision-making authority rate ofce would control all the decision making. Tey would decide what favors of away from the top levels of the organization and distributing ice cream should appear in the stores each month, the number of personnel each store it to lower levels can hire, and how the advertising budget for each store will be spent. In contrast, if the same chain had a decentralized structure, each of the store managers would be allowed to make decisions concerning the selection of ice cream favors, advertising, and person- nel. Te centralized organization has the advantage of uniformity, which means that each store should operate with some average level of quality and efciency. However, this structure may limit the ability of individual stores to adjust to special circum- stances. For example, one store manager in the centralized chain may complain that his store has special personnel and advertising needs that the corporate decision makers do not consider. In the decentralized company, each store can make its own decisions, but this could backfre if the store managers make poor or uninformed decisions. One study found that employees felt that they were treated more fairly by organizations with decentralized, as opposed to centralized, structures (Schminke et al., 2000). examples of traditional and Nontraditional Organizational Structures Traditional Organizational Structures The Bureaucracy Bureaucracy Te prototypical traditional organizational structure is the bureaucracy, which is a traditional organizational characterized by a well-defned authority hierarchy with strict rules governing work structure typifed by a well- defned authority hierarchy behavior. Te bureaucratic organization is often represented as a pyramid, with the and strict rules governing work few members with highest status on the top, leading directly down to the many behavior bottom-level workers who carry out the organization’s goal of producing goods or services. Te bureaucratic model was developed in the early 20th century by the Ger- man sociologist Max Weber, who formulated a theory of organizational structure that was based on formality and authority (Weber, 1947). Weber believed the bureaucracy 450  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t Table 15.1 Six Characteristics of a Bureaucratic Organization Specialization of labor—Te complex goals or outputs of the organization are broken down into separate jobs with simple, routine, well-defned tasks. In this way, each person becomes a specialized expert at performing a certain task. A well-defned authority hierarchy—Bureaucracies are characterized by a pyramid-type arrangement in which each lower position is controlled and supervised by the next higher level. Every position is under the direct supervision of someone higher up so that there is no confusion about who reports to whom (see Figure 15.3). Formal rules and procedures—In a bureaucracy, there are strict rules and regulations to ensure uniformity and to regulate work behavior. Because of these extensive rules and procedures, there should never be any doubt about what a particular worker is supposed to be doing. Everyone’s job is well defned, and procedures for coordinating activities with other workers should be clearly established. Impersonality—In bureaucracies, behavior is based on logical rather than emotional thinking. Tis means that personal preferences and emotional factors do not have a place in any work-related decisions. For example, a true bureaucratic service organization would never give preferential treatment to one customer over another. Employment decisions based on merit—Hiring and promotion decisions are based on who is best qualifed for the job, rather than on the personal preferences of those making the personnel decisions. In a true bureaucracy, people who are efective workers should be the only ones advancing to higher-level positions. Emphasis on written records—To ensure uniformity of action and fair and equitable treatment of employees, bureaucracies keep meticulous records of past decisions and actions. All behaviors occurring in the organization are recorded, which contributes to the image of bureaucrats as compulsive “paper-shufers.” established order in the work setting and increased productivity by reducing inefcien- cies in organizational operations. According to him, a true bureaucratic organization should possess six characteristics, outlined in Table 15.1: the division or specialization of labor, a well-defned authority hierarchy, formal rules and procedures, impersonal- ity, merit-based employment decisions, and an emphasis on written records. Manufacturing organizations, governmental organizations, and those providing simple customer service are the most likely candidates for bureaucratic structure, which, with its emphasis on job specialization, tends to lead to greater productivity when the manufacturing of goods or the delivery of services is routine. Many of the organizations you deal with on a daily basis, such as the post ofce, supermarkets, department stores, and fast-food restaurants, are built on the bureaucratic model. And, contrary to popular notions, these bureaucracies are usually efcient organiza- tions. However, the formal nature of the bureaucratic organization, with infexible rules that stife individual creativity and initiative, may lead to dissatisfed employees (Adler & Borys, 1996). Te bureaucratic model may restrict an organization’s ability to grow and innovate. Line–Staf Organizational Structure The Line–Staf Organizational Structure a traditional organizational structure composed of one group of employees who achieve the goals of the As organizations grew in complexity, a variation of the traditional bureaucratic model organization (the line) and began to emerge. Tis structure was designated the line–staf organizational struc- another group of employees ture (see Figure 15.4). who support the line (staf) 451  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s Figure 15.3 A bureaucratic organization is arranged like a pyramid, with decreasing authority levels leading down to the production line. Figure 15.4 Line–staf organizational structure. In a manufacturing organization, the line is rep- resented by production line workers. The staf consists of specialized positions or departments designed to support the line. Tis traditional structure is made up of two groups of employees, each with dif- Line ferent goals. Te frst group is the line, or those workers who are directly engaged employees in an organization in the tasks that accomplish the primary goals of the organization. For example, in who are engaged directly in manufacturing organizations, line employees are the ones making products on the tasks that accomplish its goals assembly lines or shop foors. In service organizations, line workers are involved in Staf the distribution of services to customers. Te second group of employees is desig- specialized employee positions designed to support the line nated as the staf and consists of specialized positions designed to support the line. In today’s complex organizations, many organizational members hold staf positions that have very little to do directly with the primary goals of the organization. For 452  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t example, in a computer assembly plant, many employees’ jobs involve functions that have nothing to do with assembling computers, such as bookkeeping, plant main- tenance, public relations, marketing research, and maintaining employee records Stop & Review (Nossiter, 1979). Recent research suggests that staf managers are, as a group, better at managing relationships and are more open to change and innovation than are line Defne three dimensions managers. Line managers are more service-oriented than staf managers, but they are used to classify organi- less open to change (Church & Waclawski, 2001). zational structure. Nontraditional Organizational Structures The Matrix Organization: A Hybrid of Traditional and Nontraditional Organizational Designs Te matrix organization is an organizational design that is structured both by Matrix Organization product and function simultaneously. Tis ofers the best of both traditional and an organizational design that nontraditional designs. In matrix organizations, workers have two reporting lines: blends functional and product one to a functional manager, a person responsible for the worker’s area of expertise structures (e.g., engineering, marketing), and one to a product manager, who is responsible for the particular product being produced (see Figure 15.5). In manufacturing, matrix organizations are designed to adapt rapidly to changing conditions. Tey are charac- terized by high fexibility and adaptability (Larson & Gobeli, 1987). Matrix organizations will not work well with all types of tasks or workers. Tey tend to be best suited for projects and products that require creativity and innovation, but are less well suited for routine tasks that can be easily broken down into special- ized components. Routine tasks are better handled in more traditional organizational structures. Matrix organizations tend to have high levels of performance when dealing with complex, creative work products (Ford & Randolph, 1992). Also, because of the amount of interaction among members in matrix structures and the high levels of responsibility they possess, matrix organizations usually have greater worker com- munication and job satisfaction. Te drawbacks to matrix organizations are obvious: reporting to two bosses simultaneously can cause confusion and potentially disrup- tive confict. Contingency Models of Organizational Structure It is clear that no one type of structure is appropriate for all work organizations. Orga- nizations difer in many ways, including the number and type of goods or services they produce, their size, their customers, their employees, and the environment in which they are situated. All these factors can help determine which structure is “best” 453  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s Figure 15.5 A matrix organization is a hybrid of functional and product designs. for an organization. Many theorists argue that organizational structure should be Stop & Review addressed with contingency models. Recall that these models look at the interaction Compare and contrast of characteristics of the individual—in this case, the organization—and character- traditional and nontra- istics of the situation—in this case, the setting in which the organization operates. ditional organizational One of the earliest contingency models of organizational structure was pro- structures and give posed by sociologist Joan Woodward (1965). Focusing solely on manufacturing examples of each. organizations, Woodward stated that, for maximal performance, the organizational structure needed to match the type of production technology. Woodward classi- fed manufacturers into three types: small-batch production, mass production, and 454  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t continuous-process production. According to Woodward’s model, producers of small batches of specialty products, such as specialized electronic components or construc- tion equipment, required a span of control that was moderate in size, with about 20–30 workers reporting to a supervisor, and a short chain of command. Mass- production organizations, referred to as “large-batch” companies, such as automo- bile assemblers and manufacturers of household appliances, required a large span of control (40–50 workers per supervisor) and a fairly long chain of command, with several levels in the organizational hierarchy. Finally, continuous-process manufactur- ing, such as producing chemicals or refning oil, required a small span of control and a very long chain of command. When organizational structures ft the level of technological complexity, the organizations were productive. When there was a mismatch between technological complexity and the appropriate structures designated by Woodward’s model, produc- tivity sufered (Woodward, 1965). Figure 15.6 Perrow’s contingency model of organizational structure. 455  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s Te one obvious limitation to Woodward’s structural contingency model is that it deals only with manufacturing organizations. A theory proposed by Perrow (1970) looked at the relationship between technology and structure in all types of organiza- tions. Rather than focusing solely on production technology, Perrow examined what he called “information technology,” which refers to all aspects of jobs, including the equipment and tools used, the decision-making procedures followed, and the infor- mation and expertise needed. Perrow classifed work-related technology along two dimensions: whether the technology was analyzable or unanalyzable and whether the work contained few or many exceptional work situations requiring creative prob- lem solving. Analyzable work refers to whether the technology can be broken down into simple, objective steps or procedures. Work with few exceptions is predictable and straightforward—presenting few novel problems. Work with many exceptions is “unanalyzable” and has unfamiliar problems turning up often in the work process. Te interaction of these two technology dimensions leads to Perrow’s model of four categories of organizational technology: routine, engineering, craft, and non- routine (see Figure 15.6). Routine technology consists of analyzable work tasks with few exceptions; examples are assembly-line production or the work of grocery store employees. Engineering technology consists of analyzable tasks with many excep- tions; examples include the work of lawyers or civil engineers, which involves tasks Figure 15.7 Because performing artists face many unique problems with no clearly defned steps to follow, they require a nonroutine technology. Source: Photograph by Michael Afonso, found on Unsplash (https://unsplash.com/photos/ nZU76qWy-T8). 456  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t that are analyzable but ones that also present workers with novel problems that need to be solved. Te lawyer dealing with unique legal cases or an engineer encounter- ing problems in constructing a specifc bridge are examples. Craft technology uses technology that is unanalyzable, with no discrete steps, and has few exceptions; examples include the jobs of a skilled woodcarver and a social worker. Both of these jobs involve specialized experience and knowledge, but both present workers with similar types of problems. Finally, nonroutine technology is represented by the work of scientifc researchers or professional artists and musicians in which there are no clearly defned steps to follow, yet there are many unique problems to be solved (see Figure 15.7). According to Perrow’s model, the structure of the organization adjusts to the technology. For example, organizations with routine technology tend to be formal, highly rule-driven, and centralized in structure. Nonroutine technology leads to a Stop & Review less formal, more fexible structure, such as a team or matrix organization. Te craft and engineering technologies tend to result in structures that are neither completely List and defne the six traditional nor completely nontraditional but rather a combination of both (Gibson characteristics of a et al., 2015). bureaucracy. A P P Ly I N g I / O P S y C h O L O g y the role of Organizational Structure in Computer-aided Manufacturing Since the 1980s, there have been profound advances workers took on greater responsibility for making impor- made in manufacturing technology. The greatest impact tant work-related decisions. A great deal of the increased has been in the area of computer-aided manufacturing decision making being done by lower-level workers (CAM). More and more, product manufacturing is being was related to the increased fexibility ofered by CAM controlled and monitored by sophisticated computer technology. Specifcally, it was found that the comput- systems (Cecil, 2001). The changeover to CAM has led to ers could be more quickly and easily reprogrammed by signifcant organizational restructuring for the purposes lower-level personnel rather than going through the of adapting and better integrating state-of-the-art pro- time-consuming process of going up the chain of com- duction techniques (Shaiken, 1984). mand to make reprogramming decisions. yet, with this In a study of nearly 200 U.S. metal-working factories, increase in decentralization came an increase in the the impact of CAM technology on organizational struc- development of rules governing production-related deci- ture was explored (Dean Jr et al., 1992). Of particular sions in the factories. The greater decision making of concern was how CAM afected the decentralization of production workers seemed to increase the adoption of decision making and the formalization of rules in the specifc rules to govern the computer-related decisions organizations. It was found that the use of CAM tech- they were now shouldered with. nology led to increased decentralization, as production 457  W o r k G r o u p a n d O r g a n i z at i o n a l I s s u e s Organizational Culture Although organizations have a formal structure, “informal” forces also operate to shape the organization and behavior within the organization. A popular approach to viewing these informal aspects of the organization is to refer to them collec- Organizational Culture tively as the “organizational culture.” Organizational culture can be defned as the the shared values, beliefs, shared values, beliefs, assumptions, and patterns of behavior within an organization assumptions, and patterns (Schneider et al., 2013). In many ways, organizational culture is somewhat akin to of behavior within an the organization’s “personality” (Kilman et al., 1985). It is diferences in organiza- organization tional culture that cause two companies—similar in most important ways, such as company size, goods produced, and regional location—to “feel” completely difer- ent to workers and visitors (Schein, 1992). Organizational culture is diferent from “organizational climate,” with culture being more deeply embedded in the organiza- tion (Denison, 1996). Organizational culture develops from many sources. For example, organiza- tions develop certain assumptions and norms governing behavior through a history of experience concerning what seems to “work” and what “doesn’t work” for the organization. Shared norms, values, and goals contribute greatly to an organization’s culture (O’Reilly & Chatman, 1996). An organization’s culture is also refected in the stories and “myths” that are told within the organization, and the culture can be communicated and further shaped by those stories (Schneider et al., 2011). Te technology used in the organization, the markets it sells its products and/or services to, and the organization’s competition all infuence organizational culture. Organi- zational culture can also be afected by the societal culture in which the organization is located and the makeup of its workers. Finally, the organizational culture can be shaped by the personalities of the companies’ founders and their most dominant early leaders, as with companies such as Hewlett-Packard (HP), Kellogg’s, Walmart, and J. C. Penney (Schneider et al., 1996). It has been suggested that organizations vary in terms of the strength and infuence of their organizational cultures, with some organizations having strong, dominant cultures, and other companies having weaker cultures (O’Reilly, 1989). It has also been suggested that having a strong organizational culture can be benefcial to companies that provide services because it is crucial that representatives of service organizations provide a strong sense of company identity to customers (Chatman & Jehn, 1994). A good example is cofee giant Starbucks, which has a culture focused on customer service and social and environmental responsibility (Gavin, 2013). For these types of customer service-focused organizations, it is important that customers understand what the company “stands for.” In one study, it was found that companies that have a strong commitment to good human resources practices foster a climate that involves mutual trust, cooperation, and a greater sharing of information among organizational members. Tis very posi- tive organizational culture led to greater company performance (Collins & Smith, 2006). Organizations that gain a reputation for having an exceptional organizational culture are better able to recruit job applicants (Catanzaro et al., 2010). 458  O r g a n i z at i o n a l S t r u c t u r e , C u lt u r e , a n d D e v e l o p m e n t In many of the earlier chapters, we have touched on elements of organizational culture. For example, in employee selection, particularly in hiring interviews, there are often eforts made to see if a potential employee “fts” with the company’s organi- zational culture (i.e., “Does he or she hold values consistent with our organization?”). For example, Southwest Airlines prefers hiring employees who have a good sense of humor and know how to have fun, consistent with its fun-loving company cul- ture. Initial training and socialization of new employees often include eforts to convey elements of the organization’s culture to newcomers. For example, Starbucks makes eforts to impress on new employees the importance of its emphasis on cor- porate social responsibility. In addition, companies may develop specifc norms that help convey corporate culture. For example, at Google, employees are encouraged to eat in the Google café, and there are on-site exercise rooms, washers and dryers, game rooms, and locker rooms to make it easier for employees to work together (and work late). Organizational culture can, by its very nature, serve as a force that guides behavior within the organization. However, organizational culture can often- times make an organization resistant to change and innovation (Bareil, 2013). By understanding and assessing an organization’s culture, it becomes easier to pre- dict organizational behavior under diferent circumstances (Hofstede et al., 1990). For example, studies have found that organizations with strong cultural values that involved fexibility, openness, and responsiveness were more likely to grow, Figure 15.8 Shared values, beliefs, and behavioral norms make up each company’s unique orga- nizational culture. Source: Photo by Social.Cut, on Unsplash. https://unsplash.com/photos/r0saAQNjEjQ. 459