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ORGANIZATIONAL CULTURE SOCIALIZATION AND MENTORING
How Can I Use These Concepts for Competitive Advantage?

2014 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.
MAJOR TOPICS ILL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER
14.1THE FOUNDATION OF ORGANIZATIONAL CULTURE: UNDERSTANDING ITS DRIVERS AND FUNCTIONS
MAJOR QUESTION:What is culture and why is it important to understand its layers and functions?
14.2THE IMPACT OF ORGANIZATIONAL CULTURE TYPES ON OUTCOMES
MAJOR QUESTION:To what extent are the different types of organizational culture related to important outcomes?
14.3THE PROCESS OF CULTURE CHANGE
MAJOR QUESTION:What are the mechanisms I can use to implement culture change?
14.4THE ORGANIZATIONAL SOCIALIZATION PROCESS
MAJOR QUESTION:How can the practical lessons of socialization research be integrated within the three phases of socialization?
14.5EMBEDDING ORGANIZATIONAL CULTURE THROUGH MENTORING
MAJOR QUESTION:What are the four developmental networks and how can I use them to advance my career?
INTEGRATIVE FRAMEWORK FOR UNDERSTANDING AND APPLYING OB
This chapter focuses on organizational culture and the socialization and mentoring that allow new members to become part of the culture of the organization. The Integrative Framework shows how culture functions as both an environmental input and an organizational process.
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winning at work
HOW WOULD I ASSESS PERSONENVIRONMENT FIT (PE) WHEN APPLYING FOR JOBS?
Employment site Glassdoor provides information on salaries organizational cultures and interview questions by using anonymous posts from employees and people seeking employment. In 2012 the company obtained 285000 questions used by hiring managers. Here are the four most frequently asked interview questions:Whats your favorite movie? Whats your favorite website? Whats the last book you read for fun? What makes you uncomfortable?1

WHY ARE COMPANIES ASKING THESE QUESTIONS?
Although these questions have nothing to do with performance recruiters ask them because they are trying to assess whether or not an applicant will fit in with the companys culture. A recent study of people hiring undergraduate and graduate students revealed that more than 50 percent of the evaluators considered fit to be the most important criterion during the interview process.2
WHAT DOES IT MEAN TO FIT?
Personenvironment fit (PE)reflects the compatibility between an individual and a work environment that occurs when their characteristics are well matched.3Although there are many types of fit we are interested in what is calledpersonorganization fit (PO)which reflects the extent to which your personality and values match the climate and culture in an organization.PO fit is important because it is associated with more positive work attitudes and task performance and lower intentions to quit and stress.4
HOW CAN YOU ASSESS FIT?
It will take some effort on your part. First conduct an evaluation of your strengths weaknesses and values. Next do the same for the company or department at hand by doing research about the company on the Internet or talking with current employees. This information will now enable you to prepare a set of diagnostic questions to ask during the interview process. These questions need to focus on determining your level of fit. For example if you value recognition for hard work then ask a recruiter how the company rewards performance. If the answer does not support a strong link between performance and rewards you probably will have a low PE fit and will not be happy working at this company.
We have created a Take-Away Application later in this chapter to help you practice the process of assessing personorganization fit.
FOR YOUWHATS AHEAD IN THIS CHAPTER
This chapter begins your exploration of what is called macro organizational behavior. Macro OB is concerned with studying OB from the perspective of the organization as a whole. We use the graphical image of the Integrative Framework of OB on the previous page to illustrate how organizational culture is a key input that influences a host of processes and outcomes. We begin by exploring the foundation of organizational culture so that you can understand its drivers and functions. Next we review the four key types of organizational culture and consider their relationships with various outcomes. This is followed by a discussion of how managers can change organizational culture. Finally we discuss how socialization and mentoring are used to embed organizational culture and focus on how you can use knowledge of these processes to enhance your career success and happiness.
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14.1THE FOUNDATION OF ORGANIZATIONAL CULTURE: UNDERSTANDING ITS DRIVERS AND FUNCTIONS
MAJOR QUESTION
What is culture and why is it important to understand its layers and functions?
THE BIGGER PICTURE
Although you may have a small impact on your employers organizational culture you undoubtedly are affected by it. Culture affects outcomes at the individual group and organizational level. You are going to learn what creates organizational culture and how culture in turn affects other organizational processes. You also will understand the three levels that constitute culture and the functions it serves for organizations.
The quote culture eats strategy for breakfast was attributed to management expert Peter Drucker. But it really caught everyones attention when Mark Fields CEO at Ford Motor Company used it in 2006. The slogan currently hangs in the companys war room. Fords former CEO Alan Mulally created the war room which contains charts graphs and lists of products as a meetingplace for executives to discuss the execution of Fords corporate strategies. The culture slogan serves as a reminder of the importance of organizational culture to Fords success.5
What is the point of this slogan? Its quite simple. A company can have the best vision and strategy in the world but it wont be able to execute them unless the culture is aligned with the strategy. This is a lesson that successful companies like Lincoln Electric Southwest Airlines and SAS Institute have applied for years. Lincoln Electric has the largest share of the global welding market Southwest is the largest airline in the United States and SAS is the worlds largest privately held software firm.6All of these firms exert significant effort at creating and reinforcing the type of culture that helps them achieve their strategic goals.
One of our primary goals in this chapter is to help you understand how managers can use organizational culture as a competitive advantage. Let us start by considering the foundation of organizational culture.
Defining Culture and Exploring Its Impact
Organizational cultureis defined as the set of shared taken-for-granted implicit assumptions that a group holds and that determines how it perceives thinks about and reacts to its various environments.7This definition highlights four important characteristics of organizational culture:
Shared concept.Organizational culture consists of beliefs and values that are shared among a group of people.
Learned over time.It is passed on to new employees through the process of socialization and mentoring topics discussed later in this chapter.
Influences our behavior at work.This is why culture eats strategy for breakfast.
Impacts outcomes at multiple levels.Culture affects outcomes at the individual group/team and organizational levels.
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FIGURE 14.1DRIVERS AND FLOW OF ORGANIZATIONAL CULTURE

SOURCE: Adapted from C. Ostroff A. J. Kinicki and R. S. Muhammad Organizational Culture and Climate in I. B. Weiner N. W. Schmitt and S. Highhouse eds.Handbook of Psychology vol. 12 2nd ed. (Hoboken NJ: Wiley 2012) 643676. Reprinted with permission of John Wiley & Sons Inc.
Figure 14.1provides a conceptual framework for understanding the drivers and effects of organizational culture. Five elements drive organizational culture:
The founders values
The industry and business environment
The national culture
The organizations vision and strategies
The behavior of leaders
In turnorganizational cultureinfluences the type oforganizational structureadopted by a company and a host ofinternal processes(including human resource practices policies and procedures) implemented in pursuit of organizational goals. These organizational characteristics then affect a variety ofgroup and social processes.8This sequence ultimately affects employeeswork attitudes and behaviorsand a variety of organizationaloutcomes. All toldFigure 14.1tells us that organizational culture has a wide span of influence ultimately impacting a host of individual group and organizational outcomes.9Once again this is why culture eats strategy for breakfast.
The Three Levels of Organizational Culture
Organizational culture operates on three levels:
1.Observable artifacts
2.Espoused values
3.Basic underlying assumptions
Each level varies in terms of outward visibility and resistance to change and each level influences another level.
Level 1: Observable ArtifactsAt the more visible level culture represents observable artifacts.Artifactsconsist of the physical manifestation of an organizations culture.Organizational examples include:
Acronyms
Manner of dress
Awards
Myths and stories told about the organization
Published lists of values
Observable rituals and ceremonies
Special parking spaces
Decorations
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At Facebook for example the word hack is pasted all around offices. The term hack is symbolic of the hacker way of pursuing continuous improvement and challenging the status quo.10Kayak.com an online travel company uses a two-foot-tall stuffed elephant named Annabelle as an artifact. Annabelle sits in a specially designed conference room that is used to have sensitive meetings or discussions. Paul English cofounder and chief technology officer created the room and brought in Annabelle because Kayaks open floor plan does not lend itself to discussing touchy matters. The company feels that this artifact has led to more honest and constructive communications among employees.11Its important to remember that artifacts are easier to change than the less visible aspects of organizational culture.

Annabelle the Elephant is an artifact of the corporate culture atKayak.com provided as a catalyst to make sure employees do not ignore an important but difficult topic the so-called elephant in the room. Can you think of other artifacts that might prime people to give honest feedback?
Level 2: Espoused ValuesValues were defined inChapter 2as abstract ideals that guide ones thinking and behavior across all situations. In the context of organizational culture it is important to distinguish between values that are espoused versus those that are enacted.
Espoused valuesrepresent the explicitly stated values and norms that are preferred by an organization.They are generally established by the founder of a new or small company and by the top management team in a larger organization. Most companies have a short of list of espoused values. For example Procter and Gambles list of values includes integrity leadership ownership passion for winning and trust.12In contrast Google and Zappos have 10 espoused values.
Because espoused values represent aspirations that are explicitly communicated to employees managers hope that those values will directly influence employee behavior. Unfortunately aspirations do not automatically produce the desired behaviors because people do not always walk the talk.
EXAMPLEEnergy company BP for instance has long claimed that it values safety yet the company had a refinery fire in Texas City Texas that killed 15 people in 2005. In 2006 a pipeline leak in Alaska lost over 200000 gallons of crude and the 2010 Deepwater Horizon spill in the Gulf lost more than 200 million gallons according to the US government.13
Enacted valuesrepresent the values and norms that actually are exhibited or converted into employee behavior.They represent the values that employees ascribe to an organization based on their observations of what occurs on a daily basis. It is important for managers to reduce gaps between espoused and enacted values because they can significantly influence employee attitudes and organizational performance.
Consider that a survey from the Ethics Resource Center showed that employees were more likely to behave ethically when management behavior set a good ethical example and kept its promises and commitments.14This finding was underscored by another study of 129 mergers. Employees were more productive and post-merger performance was higher when employees believed that the post-merger behavior within the newly formed firm was consistent with the espoused values.15It pays to walk the talk when it comes to integrating companies after a merger.
EXAMPLEJuniper Networks spent considerable effort to align its espoused values of trust delivering excellence pursuing bold aspirations and making a meaningful difference with employee behavior. The company started by selecting 200 employees from around the world to come up with a list of behaviors that exemplified each of the values. These behaviors were then infused into the human resource practices of hiring training evaluating and promoting people. The company completely revamped its process of performance appraisal.
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Old.Employees felt the old system violated the companys values. Previously the company evaluated all employees and then forced a distribution curve across the entire population.
New.The new system builds on a conversation day. On such days employees and managers discuss areas for improvement and areas for growth set stretch goals and align the goals with employees career aspirations. There is no rating given or a specific measure of improvement. An employee survey revealed that 66 percent of Junipers employees felt that the new system was helpful or extremely helpful.16
Level 3: Basic Underlying AssumptionsBasic underlying assumptionsconstitute organizational values that have become so taken for granted over time that they become assumptions that guide organizational behavior.They represent deep-seated beliefs that employees have about their company and thus constitute the core of organizational culture. As you might expect basic underlying assumptions are highly resistant to change. Consider how Unilever CEO Paul Polman reinforces a core belief in sustainability (see Example box).
Sustainabilityrepresents a companys ability to make a profit without sacrificing the resources of its people the community and the planet.17Sustainability also is referred to as being green and Pulitzer Prizewinning political commentator Thomas Friedman believes that outgreening other nations can renew America and even defeat al-Qaeda.18
EXAMPLEUnilever Strives to Promote a Sustainability Culture
When Paul Polman took over as CEO of Unilever in 2009 he told Wall Street analysts that the company would no longer provide earnings guidance and quarterly profit statements. This is unheard of! Analysts revolted and the stock price immediately dropped.

Paul Polman CEO at Unilever.
WHAT WAS POLMAN TRYING TO ACCOMPLISH?
Polman wanted to instill a deep-seated belief regarding sustainability within all employees at Unilever. He started this effort by creating a Sustainable Living Plan. The plan contained goals to double its sales even as it cuts its environmental footprint in half and sources all its agricultural products in ways that dont degrade the earth by 2020. The company also set a goal to improve the well-being of 1 billion people by influencing them to wash their hands and brush their teeth and by selling foods with less salt and fat.
Polman told investors that if you dont buy into this I respect you as a human being but dont put your money in our company. He believes that shareholder return should not override nobler goals. He also said Our purpose is to have a sustainable business model that is put at the service of the greater good. Its as simple as that.
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WHAT ARE THE RESULTS OF UNILEVERS PUSH FOR A SUSTAINABILITY CULTURE?Polman believes that employees are more engaged and the company is a more desirable place to work. As evidence Unilever is one of the five most-searched-for employers behind Google Apple Microsoft and Facebook. In 2012 sales grew in every region Unilever operates in around the globe and the company cut costs through its Sustainable Living plan.
Employees at Unilever say that doing good is in the companys DNA. This is what we call a basic underlying assumption!19
YOUR THOUGHTS?
1.What do you think was the driving force behind Polmans desire to create a culture of sustainability?
2.Do you agree with Polman about the tangible business benefits of Unilevers cultural values?
3.Whether you agree with Polman or not was he wise to tell investors not to put money in the Unilever if they did not also buy into the Sustainable Living plan?
The Four Functions of Organizational Culture
An organizations culture fulfills four important functions (seeFigure 14.2):
1.Organizational identity
2.Collective commitment
3.Social system stability
4.Sense-making device
FIGURE 14.2FOUR FUNCTIONS OF ORGANIZATIONAL CULTURE

SOURCE: Adapted from discussion in L. Smircich Concepts of Culture and Organizational AnalysisAdministrative Science Quarterly September 1983 339358. Copyright 1983. Reprinted with permission of Sage Publications Inc.
To help bring these four functions to life lets consider how each of them has taken shape at Southwest Airlines. Southwest is a particularly instructive example because it has grown to become the largest carrier in the United States serving more customers domestically than any other airline and has achieved 40 consecutive years of profitability.Fortunenamed Southwest the seventh Most Admired Company in the World and it was recognized in 2012 byChief Executive Magazineas one of the 40 Best Companies for Leaders based on outstanding company culture and internal professional development.20
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Function 1: Culture Provides Employees with an Organizational IdentitySouthwest Airlines is known as a fun place to work that values employee satisfaction and customer loyalty over corporate profits. Gary Kelly Southwests CEO highlighted this theme by noting that our people are our single greatest strength and our most enduring long-term competitive advantage.21
The company has a catastrophe fund based on voluntary contributions for distribution to employees who are experiencing serious personal difficulties. Southwests people-focused identity is reinforced by the fact that it is an employer of choice. Southwest contributed $228 million into its employee-based profit-sharing program in 2013. The company also was rated as providing outstanding opportunities for women and Hispanics byProfessional Womenmagazine andHispanicmagazine respectively andNational Conference on Citizenshipranked Southwest as one of The Civic 50 for use of time talent and resources in civic engagement.
Function 2: Culture Facilitates Collective CommitmentThe mission of Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth friendliness individual pride and Company Spirit.22Southwests nearly 46000 employees are committed to this mission. As evidence Southwest was rated number one in Customer Service by the 2013 Airline Quality Ratings and JD Power named them 2012 Customer Service Champion for performance in People Presentation Price Process and Product.

This photo demonstrates Southwests culture. You see employees having fun in an airport terminal which can be a frustrating experience for passengers. Do you think these employees can lighten the spirit of the travelers in the background?
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Function 3: Culture Promotes Social System StabilitySocial system stability reflects the extent to which the work environment is perceived as positive and reinforcing and the extent to which conflict and change are effectively managed. Southwest is noted for its philosophy of having fun having parties and celebrating. For example each city in which the firm operates is given a budget for parties. Southwest also uses a variety of performance-based awards and service awards to reinforce employees. The companys positive and enriching environment is supported by the lowest turnover rates in the airline industry and the employment of 1355 married couples. In 2013 Southwest was recognized with the Employee Choice Awards Best Place to Work byGlassdoor.com.
Function 4: Culture Shapes Behaviors by Helping Members Make Sense of Their SurroundingsThis function of culture helps employees understand why the organization does what it does and how it intends to accomplish its long-term goals. Keeping in mind that Southwests leadership originally viewed ground transportation as their main competitor in 1971 employees come to understand why the airlines primary vision is to be the best primarily short-haul low-fare high-frequency point-to-point carrier in the United States. Employees understand they must achieve exceptional performance such as turning a plane around in 20 minutes because they must keep costs down in order to compete against Greyhound and the use of automobiles. In turn the company reinforces the importance of outstanding customer service and high-performance expectations by using performance-based awards and profit sharing. Employees own about 13 percent of the company stock.23
TAKE-AWAY APPLICATIONTAAPAssessing the Levels of Culture at My Current Employer
Answer the following questions by considering your current or a past employer. (If you do not have experience yet as an employee substitute your current school/university or a company you are researching as an employer of choice.)
1.What artifacts can you see at work? What do these artifacts tell you about your employer?
2.What are the companys espoused values? Do you think managements enacted behaviors are consistent with the espoused values?
3.Identify three key beliefs you have about your employer: You may want to ask a colleague the same question. Are these beliefs consistent with the meaning of the artifacts you described in question 1?
4.How does your employers culture compare to that of Southwest?
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14.2THE IMPACT OF ORGANIZATIONAL CULTURE TYPES ON OUTCOMES
MAJOR QUESTION
To what extent are the different types of organizational culture related to important outcomes?
THE BIGGER PICTURE
Do you think that companies rated onFortunes List of 100 Best Places to Work have unique cultures? How do we know what type of culture exists at these companies or your current employer? You will learn about the four types of culture that are defined by the competing values framework. You also will discover the extent to which these four culture types are related to important outcomes.
To address the above Major Question we need to provide a taxonomy of culture types. You can imagine that it is hard to get agreement on a common set of organizational culture types given cultures complexity. While consultants tend to invent their own proprietary assessments academics have proposed and scientifically tested three different frameworks. This section discusses thecompeting values frameworkbecause it is the most widely used approach for classifying organizational culture. It also was named as one of the 40 most important frameworks in the study of organizations and has been shown to be a valid approach for classifying organizational culture.24We then discuss relationships among culture types and outcomes.
Identifying Culture Types with the Competing Values Framework
Thecompeting values framework(CVF)provides a practical way for managers to understand measure and change organizational culture.It identifies four fundamental types of organizational culture as shown inFigure 14.3.25
The CVF was originally developed by a team of researchers who were trying to classify different ways to assess organizational effectiveness. This research showed that measures of organizational effectiveness varied along two fundamental dimensions or axes. One axis pertained to whether an organization focuses its attention and efforts on internal dynamics and employees or outward toward its external environment and its customers and shareholders. The second was concerned with an organizations preference for flexibility and discretion or control and stability. Combining these two axes creates four types of organizational culture that are based on different core values and different sets of criteria for assessing organizational effectiveness.
Figure 14.3shows the strategic thrust associated with each cultural type along with the means used to accomplish this thrust and the resulting ends or goals pursued by each cultural type. Before beginning our exploration of the CVF it is important to note that organizations can possess characteristics associated with each culture type. That said however organizations tend to have one type of culture that is more dominant than the others. Let us begin our discussion of culture types by starting in the upper-left-hand quadrant of the CVF.
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FIGURE 14.3THE COMPETING VALUES FRAMEWORK
Culture varies along two continua of competing values: flexibility and discretion vs. stability and control and internal focus and integration vs. external focus and differentiation. This leads to four categories of organizations each with its own unique thrust.

SOURCE: Adapted from K. S. Cameron R. E. Quinn J. Degraff and A. V. ThakorCompeting Values Leadership(Northampton MA: Edward Elgar 2006) 32.
Clan CultureCompanies with aclan culturehavean internal focus and value flexibility rather than stability and control.These resemble a family-type organization in which effectiveness is achieved by encouraging collaboration trust and support among employees. This type of culture is very employee-focused and strives to instill cohesion through consensus and job satisfaction and commitment through employee involvement. Clan organizations devote considerable resources to hiring and developing their employees and they view customers as partners. Collaborating is the strategic thrust of this culture.
EXAMPLEGoogle is the number 1 company to work for in 2014.26Larry Page Googles co-founder and CEO describes the culture as a family environment. He said my job in the company is to make sure everybody in the company has great opportunities and that they feel theyre having a meaningful impact and are contributing to the good of society. . . . Its important that the company be a family that people feel that theyre part of the company and that the company is like a family to them. When you treat people that way you get better productivity.27Google also holds weekly all-hands (TGIF) meetings so that employees can ask Larry Sergey Brina Google co-founderand other executives questions about anything involving the company. This practice enhances employee communication and morale two aspects of a clan culture.
EXAMPLEEdward Jones the privately held financial services firm was ranked as the 4th best company to work for in 2014. Edward Jones has over 11000 small offices and 7 million clients worldwide. The company maintains a close-knit culture by using a variety of celebratory events. Its 8% turnover rate is one of the lowest in the industry and more than 33% of its financial advisors are more than 50 years old.28
Adhocracy CultureCompanies with anadhocracy culturehave an external focus and value flexibility.Creation of new products and services is the strategic thrust of this culture which is accomplished by being adaptable creative and fast to respond to changes in the marketplace. Adhocracy cultures do not rely on the type of centralized power and authority relationships that are part of market and hierarchical cultures. They empower and encourage employees to take risks think outside the box and experiment with new ways of getting things done.
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Edward Jones launched a program that provides tablet PCs to its financial advisors. As shown advisors take tablets on the road as they make personal visits to existing and potential clients. The goal is to reduce the amount of time advisors spend on administrative tasks leaving them more time to build strong relationships with clients.
A recent article inThe Wall Street Journalnoted that adhocracy-type cultures are decreasing in the United States as many companies are becoming risk averse. The downside of this trend is that reasonable risk taking is needed to create new businesses products and ultimately jobs. On the positive side however pockets of risk taking are taking place in different industries such as technology and energy and different regions like the coastal cities of San Francisco and Boston and college towns like Boulder Colorado and Austin Texas.29
EXAMPLEBiopharmaceutical firm AstraZeneca is experimenting with new ways to organize research to improve productivity. Scientists now are responsible for candidate drugs until they begin the final human trials ending a culture of handing off early-stage products to other researchers as if on an assembly line.30
EXAMPLEThe Tata group a multinational conglomerate headquartered in Mumbai India has 100 operating companies in more than 80 countries. Tata takes innovation so seriously that it developed an Innometer. The conglomerate measures creative goals and accomplishments vs. domestic or global benchmarks while instilling a sense of urgency among employees.31
Market CultureCompanies with amarket culturehave a strong external focus and value stability and control.Competition is the strategic thrust of these organizations. They have a strong desire to deliver results and accomplish goals. Because this type of culture is focused on the external environment customers and profits take precedence over employee development and satisfaction. The major goal of managers is to drive toward productivity profits and customer satisfaction.
EXAMPLEGrupo Bimbo is the worlds largest bakery company. Bimbo managers operate in a low-margin business and thus focus heavily on execution. Profits depend heavily on getting the right amount of highly perishable products to stores at the right moment and at a reasonable cost. . . . For instance it uses tricycle delivery bikes in urban areas of China where streets are too narrow for trucks a practice it first implemented in Latin America.32The company operates 171 plants and delivers over 10000 products across 22 countries.
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EXAMPLECanadas Bombardier is the largest train manufacturer in the world. Bombardiers culture focuses on the importance of setting and achieving goals. CEO Pierre Beaudoin said Connecting goals to each persons day-to-day work is important. . . . What I like most though is that we now have an organization that wants to get better. And thats the key. We always talk about why were not there yet; were on a journeyhow close are we to those world-class metrics. We used to make excuses for why our performance was good enough. Today we say what will it take to get to world class? Can you see the cultural focus on productivity goal achievement and competitiveness?33

Imagine having to deliver over 10000 products across 22 countries. Do you think this takes a lot of planning and detailed execution? Bimbos market-based culture contributes to this effort.
Hierarchy CultureControl is the strategic thrust within a hierarchy culture. Thehierarchy culturehas an internal focus which produces a more formalized and structured work environment and values stability and control over flexibility.This orientation leads to the development of reliable internal processes extensive measurement and the implementation of a variety of control mechanisms. Effectiveness in a company with this type of culture is likely to be assessed with measures of efficiency timeliness quality safety and reliability of producing and delivering products and services.34Hierarchical cultures have been found to have both negative and positive effects.
EXAMPLEConsider the positive example of Mumbaisdabbawalas individuals who deliver prepared meals to customers homes or offices and then return emptydabbasmetal lunch boxeslater in the day. To do their jobs effectively dabbawalas rely on a hierarchical culture (see the Problem-Solving Application).
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