Organizational Cultures, Innovation, and Change Exploring Management Chapter 9 Organizational Cultures, Innovation, and Change

Chapter 9 What is the nature of organizational culture? How do organizations support and achieve innovation? How do manages lead the processes of organizational change?

9.1 Organizational Culture Organizational culture is the personality of the organization Organizational culture shapes behavior and influences performance The observable culture is what you see and hear as an employee or customer The core culture is found in the underlying values of the organization Value-based management supports a strong organizational culture The culture of an organization is a driving force in the behavior of the organization’s employees.

ORGANIZATIONAL CULTURE Organizational Culture Culture is the personality of the organization Shared beliefs and values that guide behavior of organization members Culture is reinforced as organizational members teach the culture to new members. It’s the “way we do things around here”. The group pictured has a culture that seems to require suits as proper business attire.

ORGANIZATIONAL CULTURE Strong Cultures Organizational culture shapes behavior and influences performance Strong cultures are clear, well defined and widely shared among members Socialization helps new members learn the culture Great cultures often value employees as highly as they value customers, or in this case, patients.

ORGANIZATIONAL CULTURE Observable Culture Observable culture is what you see and hear Stories about the founding of the company and legendary organizational members are part of the observable culture as well as traditions, colors and uniforms.

ORGANIZATIONAL CULTURE Organizational Culture Core culture is the underlying values of the organization Core values are the beliefs that shape behavior Core values need to be demonstrated in actions as well as stated in documents.

ORGANIZATIONAL CULTURE Values Values based management works hard to make sure the core values show Symbolic leaders use language and symbols to establish and reinforce organizational culture Symbolic leaders provide examples of how to act, speak, and treat others. They often preside over ceremonies, rites and rituals that reinforce the culture and reward those who exemplify the culture’s values.

ORGANIZATIONAL CULTURE Workplace Spirituality Workplace spirituality involves creating meaning and community for employees Common elements are meaningful work, respect for diversity, work life balance and ethical behavior Symbolic leaders model and teach the culture and values Workplace spirituality sometimes includes a focus on religious faith, but many organizations emphasize spirituality by valuing employees and providing a means for personal expression. It can be very motivating, as shown in the Self-Actualization level of Maslow’s hierarchy.

Organizations pursue process, product and business model innovations. Green innovations pursue and support the goals of sustainability. Social innovations seek solutions to important societal problems. Commercializing innovation turns new ideas into stable products. Innovative organizations share many common characteristics. Innovative organizations are often very connected with the external environment.

Innovation Types of Innovation Innovation – taking a new idea and putting it into practice Process innovation results in better ways to do things Product innovation results in new or improved goods or services Business model innovations are new ways to make money Information technology provides great examples. Online banking provides faster processing with convenience, Smart phones like the BlackBerry, Droid and iPhone are product innovations and online education is an example of how colleges have used technology for a business model innovation.

Innovation Types of Innovation Green innovations Earth friendly business models Social innovations Business models that help solve the world’s social problems Social Entrepreneurship Ways to solve social problems “Green” companies and Social business models are very connected with the external environment and incorporate it into the organizational mission.

Innovation Commercializing Innovation Turns ideas into products, services or processes This process is critical to avoiding the many pitfalls of new product development. Studies have shown that less than 10% of new ideas result in successful new products.

Innovation Commercializing Innovation Reverse innovation takes products created for small or emerging markets and moves them into larger distribution Reverse innovation often takes specialized products and moves them to the mainstream.

Innovation Innovative Organizations Characteristics of highly innovative organizations Strategy includes innovation Culture values innovation Structures support innovation Management supports innovation Staffing for creativity and innovation Highly innovative organizations value innovation on all levels.

Organizations pursue both transformational and incremental changes. 9.3 Leading Change Organizations pursue both transformational and incremental changes. Three phases of planned change are unfreezing, changing and refreezing. Managers use force-coercion, rational persuasion, and shared power change strategies. Change leaders identify and deal positively with resistance to change. Change comes in many degrees of size and urgency.

Organizational Change Types of Change Change leaders Leaders who take responsibility for change Change leaders must have great persuasive skills.

Organizational Change Types of Change Transformational change Results in major and comprehensive redirection of the organization Incremental change Smaller change that aligns systems and practices with strategy The recession created the need for transformational change in many organizations.

Organizational Change Change Process Kurt Lewin described change as a three part process The key here is Phase 3. There will be a tendency, for some time, on the part of managers to go back to the old way of doing things. Continued support and reinforcement is needed to avoid the problem.

Organizational Change Strategies for leading change These strategies are consistent with the concept of the sources of authority being legitimate (force-coercion), knowledge (expertise) and charisma (reference).

9.3 Organizational Change Change leaders identify and deal positively with resistance to change Positive tactics Education and communication Participation and involvement Facilitation and support Negotiation and agreement Negative resistance tactics Manipulation and cooptation Explicit and implicit coercion Long term acceptance of change is better when positive tactics are used.

9.3 Organizational Change Why people resist change Fear of the unknown Disrupted habits Loss of confidence Loss of control Poor timing Work overload Loss of face Lack of purpose We all know how we feel when forced to make changes. Our employees are no different.