Managing Organizational Culture and Change Chapter 4 Managing Organizational Culture and Change

Learning Objectives After reading this chapter, you should be able to: Identify the three major aspects of organizational culture. Apply a simple assessment tool to quickly gain a sense of the culture of an organization. Describe the importance of organizational culture. Identify the processes through which organizational culture can be developed and sustained. Use classification systems to identify various types of organizational culture. Identify the sources of resistance to change. Apply models to effectively manage change efforts.

Organizational Culture A system of shared values, assumptions, beliefs, and norms that unite the members of an organization. Reflects employees’ views about “the way things are done around here.” The culture specific to each firm affects how employees feel and act and the type of employee hired and retained by the company.

Levels of Corporate Culture Visible Culture Expressed Values Core Values

Key Effects of Organizational Culture Employee Self-management Organizational Culture Stability Socialization Strategy Implementation

Key Effects of Organizational Culture Employee Self-Management Sense of shared identity Facilitates commitment Stability Sense of continuity Satisfies need for predictability, security, and comfort

Key Effects of Organizational Culture Socialization Internalizing or taking organizational values as one’s own Implementation Support of the Organization’s Strategy If strategy and culture reinforce each other, employees find it natural to be committed to the strategy

Stages of the Socialization Process Pre-arrival Encounter Metamorphosis

Managing Cultural Processes Company Rituals and Ceremonies Cultural Symbols Company Heroes Stories Language Organizational Policies and Decision Making Leadership

Characteristics and Types of Organizational Culture Cultural Uniformity versus Heterogeneity Strong versus Weak Cultures Culture versus Formalization National versus Organizational Culture

Characteristics and Types of Organizational Culture (continued) Types: Traditional Control or Employee Involvement Traditional control emphasizes the chain of command relies on top-down control and orders Employee involvement emphasizes participation and involvement

Four Types of Culture Classification Baseball team culture--rapidly changing environment Club culture--seeks loyal, committed people Academy culture--hires experts who are willing to make a slow steady climb up a ladder Fortress culture--focused on surviving and reversing sagging fortunes

Competing Values Framework Based on two dimensions: focus and control Focus--whether the primary attention of the organization is directed toward internal dynamics or directed outward toward the external environment Control--the extent to which the organization is flexible or fixed in how it coordinates and controls activities

Competing Values Framework Focus Internal External Flexible Control Fixed

Types of Change Planned Change--change that is anticipated and allows for advanced preparation Dynamic Change--change that is ongoing or happens so quickly that the impact on the organization cannot be anticipated and specific preparations cannot be made

Forces for Change: Environmental Forces Put pressure on a firm’s relationships with customers, suppliers, and employees. Environmental forces include: Technology Market forces Political and regulatory agencies and laws Social trends

Forces for Change: Internal Forces Arise from events within the company. May originate with top executives and managers and travel in a top-down direction. May originate with front-line employees or labor unions and travel in a bottom-up direction.

Resistance to Change Self-Interest Cultures that Value Tradition Lack of Trust and Understanding Different Perspectives and Goals Uncertainty 3

Models of Organizational Change: The Star Model The Star Model: Five Points Types of change-evolutionary or transformational Structure Reward system Processes People

Lewin’s Three-Step Model of Organizational Change Unfreezing--melting away resistance Change--departure from the status quo Refreezing--change becomes routine

Lewin’s Force Field Analysis Model Increase driving forces that drive change Reduce restraining forces that resist change or do both

Force-field Model of Change Desired state Restraining forces Status quo Driving forces Time

Implementing Organizational Change Top-down Change Change Agents Bottom-up Change

Four Types of Employees Alignment with culture No Yes Performance Low Worst Give Another Chance High Make the tough choice Best

Tactics for Introducing Change Communication and Education Employee Involvement Negotiation Coercion Top-Management Support