CULTURE AND ORGANIZATIONAL CHANGE Prof. Károly Balaton Institute of Management

DEFINITION OF ORGANIZATIONAL CULTURE Pettigrew: „Culture is a system of publicly and collectively accpted meaning operating for a given group at a given time. This system of terms, forms, categories, and images interprets a people’s own situation to themselves.” Schein: „The pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and, therefore, to be taught to new mwmbers as the correct way to perceive, think, and feel in relation to these problems.”

LEVELS OF ORGANIZATIONAL CULTURE Surface level, observable characteristics: Ceremonies, Stories, myths, Language, Symbols, dressing codes. Deep level characteristics: Values, Assumptions, Beliefs, Feelings, Attitudes.

LEVELS OF CULTURE National culture Organizational culture Subcultures

CULTURES SUPPORTING ORGANIZATIONAL CHANGE Means for dealing with organizational level interventions: Globalization of HRM systems, Systematic integration of expatriats, Developing HR competencies helping change, Dealing intercultural conflics, Using modern communication technologies, Developing outstanding work cultures.

AGENTS OF ORGANIZATIONAL CHANGES Line managers, Internal change agents, External consultants helping the change process.

MEANS FOR CREATING FAVOURABLE CONDITIONS FOR CHANGES Initiating management development programmes, Changing administrative processes, Dividing global vision into managable smaller items, Patiante, repeating, Vaiting for favourable conditions, To replace leaving people with supporters, Changing organizational structures, Promoting key persons, increasing their responsibilities, Using connections within the organization and externally, To prepare documents supporting the desired changes.

RESISTING ORGANIZATIONAL CULTURE Reasons behing resistance: Culture has important role in past successes, It needs longer time to be formulated, Outside interventions do not help, Difficult to question the basic elements, Culture is deeply rooted in the feelings of organizational members, Those who recognize the weaknesses of culture (e.g. newcomers) have weak positions to change the culture.

COMMUNICATION OF CHANGES To communicate the coming process of changes, Show figures describing the expected results, Give answeres to the questions of „why?”, Communicate how changes will influence individuals, Two-directional communication channels to be used, To get support from middle managers, To emphasize and document partial results, To use different channels of communication, Show positive examples

STATEMENTS ON ORGANIZATIONAL FACTORS INFLUENCING INNOVATION Members of organizations that strongly agree and care about norms that encourage the expression of creative ideas will generate more creative ideas than thos who agree less and/or care less about such norms. Members of organizations that both agree and care more about the value of task-oriented norms (e.g., being decisive, meeting deadlines) will be more likely to implement creative ideas successfull ythat will members of organizations that agree and/or care less about task-oriented norms.

STATEMENTS ON ORGANIZATIONAL FACTORS INFLUENCING INNOVATION – continued 3. Organizations emphasizing collectivistic norms and divergent thinking will perform better during the creativity stage of innovation than will organizations emphasizing only one or the other, or neither, or both at a low level. 4. Organizations emphasizing collectivistic norms and non-divergent thinking will perform better during the implementation stage of innovation than will organizations emphasizing only one or the other, or neither, or both at a low level. 5. Collectivistic organizations that emphasize the horizontal form of collectivism during the creativity stage and the vertical form during the implementation stage will produce more and higher quality innovation.

STATEMENTS ON ORGANIZATIONAL FACTORS INFLUENCING INNOVATION – continued Organizations with a collectivistic orientation will be more likely to develop successful radical and routine innovations than will organizations with an individualistic orientation. Organizations employing members who are more heterogeneous will produce significantly more and higher quality innovations when they emphasize collectivistic versus individualistic norms, while organizations employing members who are more homogeneous will produce similarly moderate innovation regardless of whether their culture emphasizes individualistic or collectivistic norms.

STATEMENTS ON ORGANIZATIONAL FACTORS INFLUENCING INNOVATION – continued 8. Organizations emphasizing cullectivistic norms that also emphasize divergent thinking during the creativity stage and non-divergent thinking during the implementaion stage will experience more beneficial conflict during the creativity stage, and less detrimental conflict (process and relational) throughout the project’s duration.

STEPS IN INITIATING ORGANIZATIONAL CULTURE CHANGE Reach consensus regarding the current organizational culture. Reach consensus on the preferred future organizational culture. Determine what the changes will and will not mean. Identify stories illustrating the desired future culture. Identify a strategic action agenda. Identify immediate small wins. Identify leadership implications. Identify metrics, measures, and milestones to maintain accountability. Identify a communication strategy.