1. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-1 ©2013 John Wiley & Sons, Inc. All rights reserved. JOHN R. SCHERMERHORN, JR. MANAGEMENT 12 th Edition Chapter 12 Organizational Culture and Change

2. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-2 Planning Ahead — Chapter 12 Study Questions 1.What is organizational culture? 2.What is a multicultural organization? 3.What is the nature of organizational change?

3. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-3 Chapter 12 Learning Dashboard 1.Organizational Cultures 1.Understanding organizational culture 2.The observable culture 3.Values and the core culture 2.Multicultural Organizations 1.Multicultural organizations and performance 2.Organizational subcultures 3.Diversity issues and organizational cultures

4. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-4 Chapter 12 Learning Dashboard 3.Organizational Change 1.Models of change leadership 2.Incremental and transformational change 3.Phases of planned change 4.Change strategies 5.Resistance to change

5. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-5 Takeaway 1: Organizational Cultures Organizational culture – The system of shared beliefs and values that guides behavior in organizations Socialization – How new members learn the culture of the organization

6. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-6 Takeaway 1: Organizational Cultures Four common organizational cultures, according to LeadershipIQ: Hierarchical cultures emphasize tradition and clear roles; Dependable cultures emphasize process and slow change; Enterprising cultures emphasize creativity and competition; and, Social cultures emphasize collaboration and trust.

7. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-7 Takeaway 1: Organizational Cultures The best organizations have positive cultures that: – Respect members – Are customer driven – Are performance-oriented – Encourage positive work behaviors – Discourage dysfunctional behaviors

8. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-8 Takeaway 1: Organizational Cultures How tight or loose is the structure? Do most decisions reflect change or the status quo? What outcomes or results are most highly valued? What is the climate for risk taking, innovation? How widespread is empowerment, worker involvement? What is the competitive style, internal and external? What value is placed on people? Is teamwork a way of life? Questions for reading an organization’s culture

9. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-9 Figure 12.1 Levels of organizational culture—observable culture and core culture in the organizational “iceberg ”

10. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-10 Takeaway 1: Organizational Cultures What is observable culture? – What one sees and hears when walking around an organization Elements of observable culture: – Heroes – Ceremonies, rites and rituals – Legends and stories – Metaphors and symbols

11. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-11 Takeaway 1: Organizational Cultures Core culture: consists of the core values, or underlying assumptions and beliefs that shape and guide people’s behaviors in an organization. Core values are beliefs and values shared by organization members

12. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-12 Takeaway 1: Organizational Cultures Important cultural values include: – Performance excellence – Innovation – Social responsibility – Integrity – Worker involvement – Customer service – Teamwork

13. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-13 Takeaway 1: Organizational Cultures Value-based management: – Describes managers who actively help to develop, communicate, and enact shared values

14. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-14 Takeaway 1: Organizational Cultures Workplace spirituality: – Creates meaning and shared community among organizational members Meaningful purpose Trust and respect Honesty and openness Personal growth and development Worker friendly practices Ethics and social responsibility Sample values in spiritual organizational cultures:

15. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-15 Takeaway 2: Multicultural Organizations Multiculturalism – involves inclusiveness, pluralism, and respect for diversity Multicultural organizations – has a culture with core values that respect diversity and support multiculturalism.

16. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-16 Takeaway 2: Multicultural Organizations Characteristics of multicultural organizations: – Pluralism – Structural integration – Informal network integration – Absence of prejudice and discrimination – Minimum intergroup conflict

17. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-17 Takeaway 2: Multicultural Organizations Organizational subcultures – groups of people who share similar beliefs and values based on their work or personal characteristics. – Ethnocentrism is the belief that one’s subculture is superior to all others

18. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-18 Takeaway 2: Multicultural Organizations Common subcultures include: – Gender and generations – Ethnicity or national cultures – Occupations and functions

19. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-19 Takeaway 2: Multicultural Organizations Diversity: – Diversity basically means the presence of differences. – Diversity alone does not guarantee positive performance impact Diversity must be included in training and human resource practices Positive impact results when diversity is embedded in the organizational culture

20. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-20 Takeaway 2: Multicultural Organizations Challenges faced by minorities and women: – Glass ceiling – Leaking pipeline problem – Harassment and discrimination Minorities may adapt by exhibiting biculturalism - adopting characteristics of the majority culture

21. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-21 Figure 12.2 Glass ceilings as barriers to women and minority cultures in traditional organizations

22. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-22 Takeaway 2: Multicultural Organizations Diversity Leadership

23. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-23 Takeaway 3: Organizational Change Change leader – A change agent who takes leadership initiative for changing the existing pattern of behavior of another person or social system

24. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-24 Figure 12.3 Change leaders versus status quo managers

25. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-25 Takeaway 3: Organizational Change Top-down change – Change initiatives come from senior management – Success depends on support of middle-level and lower-level workers

26. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-26 Takeaway 3: Organizational Change Establish a sense of urgency for change Form a powerful coalition to lead the change Create and communicate a change vision Empower others to move change forward Celebrate short-term “wins” and recognize those who help Build on success; align people and systems with new ways Stay with it; keep the message consistent; champion the vision How to lead transformational change:

27. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-27 Takeaway 3: Organizational Change Bottom-up change – The initiatives for change come from any and all parts of the organization, not just top management – Crucial for organizational innovation – Made possible by: Employee empowerment Employee involvement Employee participation

28. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-28 Takeaway 3: Organizational Change Incremental and transformational change – Incremental change Bends and adjusts existing ways to improve performance – Transformational change Results in a major and comprehensive redirection of the organization

29. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-29 Takeaway 3: Organizational Change Phases of planned change – Unfreezing The phase in which a situation is prepared for change and felt needs for change are developed – Changing The phase in which something new takes place in the system, and change is actually implemented – Refreezing The phase of stabilizing the change and creating the conditions for its long-term continuity

30. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-30 Figure 12.3 Lewin’s three phases of planned organizational change

31. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-31 Takeaway 3: Organizational Change Improvisational Change – Making continual adjustments as changes are being implemented

32. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-32 Figure 12.5 Alternative change strategies and their leadership implications

33. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-33 Takeaway 3: Organizational Change Force-coercion strategy of change – Uses power bases of legitimacy, rewards and punishments to induce change – Relies on belief that people are motivated by self- interest – Direct forcing and political maneuvering – Produces limited and temporary results – Most useful in the unfreezing phase

34. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-34 Takeaway 3: Organizational Change Rational persuasion strategy of change – Bringing about change through persuasion backed by special knowledge, empirical data, and rational argument – Relies on expert power – Relies on belief that reason guides people’s decisions and actions – Useful in the unfreezing and refreezing phases – Produces longer-lasting and internalized change

35. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-35 Takeaway 3: Organizational Change Shared power strategy of change – Engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge – Time consuming but likely to yield high commitment – Involves others in examining sociocultural factors related to the issue at hand – Relies on referent power and strong interpersonal skills in team situations – Relies on belief that people respond to sociocultural norms and expectations of others

36. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-36 Takeaway 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

37. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-37 Takeaway 3: Organizational Change Checklist for dealing with resistance to change: Check the benefits – those involved see a clear advantage Check the compatibility – keep change similar to existing values/processes Check the simplicity – make it as easy as possible to understand Check the triability – allow people to slowly try the change adjusting as progression is made

38. Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 12-38 Takeaway 3: Organizational Change Methods for dealing with resistance to change: – Education and communication – Participation and involvement – Facilitation and support – Negotiation and agreement – Manipulation and co-optation – Explicit and implicit coercion