Chapter 7 Unlocking the Business Environment Chapter 7 Organisational Culture and Change By the end of this chapter you should have a better understanding of: what society understands by culture; cultural differences that make organisations unique; differences between views of cultural change; reasons why organisations experience change and difficulties associated with change; how to apply Lewin’s and Kotter’s techniques to the change process.

Chapter 7 Unlocking the Business Environment Culture and change You have probably studied under a number of different tutors who have set different standards of expectation both in class and for assignments. In so doing you have probably experienced a different culture in one tutor’s class compared to another. The same situation arises in organisations, with employees who join an organisation adapting to its organisational culture. Culture is the set of key values, beliefs and understandings shared by a group of people.

Chapter 7 Unlocking the Business Environment What is culture? Culture, like leadership in Chapter 6, is easier to talk about than to define. It is very easy to talk about the culture of a particular country being different but not so easy to say why, and what the differences are. There are a number of influences on our own particular cultural environment: family and community expectations, religion, nationality, etc. Because people bring these cultural influences with them into an organisation, organisations are affected by, and in turn influence, employees.

Chapter 7 Unlocking the Business Environment What is culture? Towards the end of the 1970s a Dutch professor, Geert Hofstede, undertook a major survey of national culture and its influence on the American company IBM, which at the time was operating in over 40 different countries. His study identified four different dimensions of culture: power distance, uncertainty avoidance, individualism and masculinity. His work has been criticised by a number of authors but it is one of the largest studies to date with over 60,000 of IBM’s employees.

Chapter 7 Unlocking the Business Environment Organisational culture One way of thinking about culture in organisations is simply as ‘that’s the way we do things around here’. Trying to pin down exactly what it is, however, is much more difficult. This is because the artefacts of any organisation’s culture reside at various levels. As with communities, these artefacts include symbols, language, stories and beliefs that form part of a particular organisation’s makeup. Organisational culture is a recent research topic, with most of the literature and analysis dating from 1980.

Chapter 7 Unlocking the Business Environment Cultural change When a change in the culture of an organisation is suggested, people naturally feel uneasy; the usual environment that they have become accustomed to is about to change. Their underlying cultural assumptions about the organisation are about to alter. This unease about change means that changing culture is difficult and sometimes not possible. Edgar Schein talks about change taking place gradually (if at all) over a good number of years.

Chapter 7 Unlocking the Business Environment Cultural change Cultural change can be viewed from a managerial perspective and from a social science perspective. A managerial perspective of culture is one where culture is viewed as something that can be attained as part of an overall management strategy. In other words, culture can be managed. The social science perspective takes the view that culture ‘just is’ and is something that cannot be easily described; it is continually evolving.

Chapter 7 Unlocking the Business Environment Why we need change There are a number of reasons that force companies to change, whether they like it or not: changing market conditions; increasing competition internationally; new technology. Companies also change in size as they grow, and this instigates change related to company growth. For example, a company could outgrow its existing factory and need new premises, or it could increase its production in response to demand, which requires new structures.

Chapter 7 Unlocking the Business Environment Managing change Accepting the fact that organisations need to change has led to a well-established method for implementing change based on work by Kurt Lewin (1951), which is based on the following three-step process: unfreezing; changing; refreezing. Lewin’s guide is no longer deemed appropriate as the refreezing step is detrimental to future change. However, it has proved to be a useful tool.

Chapter 7 Unlocking the Business Environment Summary The chapter began with an introduction to culture and then considered how organisations viewed culture as something unique to them. In other words, the glue that holds an organisation together through a shared pattern of meaning and understanding. Reasons for cultural change were then considered and the difficulties inherent in organisations attempting change were discussed. Finally some well-established and useful tools to assist with the change process were considered.