Organisational Culture and Change

Chapter 10
Organizational Culture and Change
Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright 2007 Pearson Education Canada
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Chapter Outline
What Is Organizational Culture? Creating and Sustaining Culture Matching People With Organizational Cultures The Liabilities of Organizational Culture Approaches to Managing Change Resistance to Change
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Organizational Culture
1. What is the purpose of organizational culture? 2. How do you create and maintain organizational culture? 3. What kind of organizational culture might suit you? 4. Can organizational culture have a downside? 5. How do organizations manage change? 6. Why do people and organizations resist change?
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Henry Mintzberg on Culture

Culture is the soul of the organization the beliefs and values, and how they are manifested. I think of the structure as the skeleton, and as the flesh and blood. And culture is the soul that holds the thing together and gives it life force.
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Organizational Culture
The pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization.
Culture is shared. Culture helps members solve problems. Culture is taught to newcomers. Culture strongly influences behaviour.
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Exhibit 10-1 Layers of Culture
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Levels of Culture
Artifacts Aspects of an organizations culture that you see, hear, and feel Beliefs The understandings of how objects and ideas relate to each other Values The stable, long-lasting beliefs about what is important Assumptions The taken-for-granted notions of how something should be in an organization
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Characteristics of Organizational Culture

Innovation and risk-taking
The degree to which employees are encouraged to be innovative and take risks.
Attention to detail
The degree to which employees are expected to exhibit precision, analysis, and attention to detail.
Outcome orientation
The degree to which management focuses on results or outcomes rather than on technique and process.
People orientation
The degree to which management decisions take into consideration the effect of outcomes on people within the organization.
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Characteristics of Organizational Culture

Team orientation The degree to which work activities are organized around teams rather than individuals. Aggressiveness The degree to which people are aggressive and competitive rather than easygoing. Stability The degree to which organizational activities emphasize maintaining the status quo in contrast to growth.
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Exhibit 10-2 Contrasting Organizational Cultures

Organization A
Managers must fully document all decisions. Creative decisions, change, and risks are not encouraged. Extensive rules and regulations exist for all employees. Productivity is valued over employee morale. Employees are encouraged to stay within their own department. Individual effort is encouraged.
Organization B
Management encourages and rewards risk-taking and change. Employees are encouraged to run with ideas, and failures are treated as learning experiences. Employees have few rules and regulations to follow. Productivity is balanced with treating its people right. Team members are encouraged to interact with people at all levels and functions. Many rewards are team based.
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Cultures Functions
Boundary-defining Conveys a sense of identity for organization members Facilitates commitment to something larger than ones individual self-interest Social glue that helps hold an organization together
Provides appropriate standards for what employees should say or do
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Cultures Functions
Serves as a sense-making and control mechanism
Guides and shapes the attitudes and behaviour of employees
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Do Organizations Have Uniform Cultures?

Organizational culture represents a common perception held by the organization members. Core values or dominant (primary) values are accepted throughout the organization. Dominant culture
Expresses the core values that are shared by a majority of the organizations members.
Subcultures
Tend to develop in large organizations to reflect common problems, situations, or experiences.
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Exhibit 10-3 How Organizational Culture Forms

Philosophy of organization's founders Top management Selection criteria Socialization Organization's culture
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Creating and Sustaining Culture: Keeping a Culture Alive

Selection
Identify and hire individuals who will fit in with the culture.
Top Management
Senior executives establish and communicate the norms of the organization.
Socialization
Organizations need to teach the culture to new employees.
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A Socialization Model
Socialization Process
Outcomes
Productivity
Prearrival
Encounter
Metamorphosis
Commitment
Turnover
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Exhibit 10-5 Four-Culture Typology

Sociability
High Networked Communal
Low
Fragmented
Mercenary High
Low
Solidarity
Source: Adapted from R. Goffee and G. Jones, The Character of a Corporation: How Your Companys Culture Can Make or Break Your Business (New York: HarperBusiness, 1998), p. 21.
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Finding Your Culture

Networked culture: you possess good social skills and empathy; you like to forge close, work-related friendships; you thrive in a relaxed and convivial atmosphere. Mercenary culture: you are goal-oriented, thrive on competition, like clearly structured work tasks. Fragmented culture: you are independent, have a low need to be part of a group atmosphere, are analytical rather than intuitive. Communal culture: you have a strong need to identify with something bigger than yourself and enjoy working in teams.
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The Liabilities of Culture

Culture can have dysfunctional aspects in some instances.
Culture as a Barrier to Change
When organization is undergoing change, culture may impede change.
Culture as a Barrier to Diversity

Strong cultures put considerable pressure on employees to conform.
Culture as a Barrier to Mergers and Acquisitions

Merging the cultures of two organizations can be difficult, if not impossible.
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Strategies For Merging Cultures

Assimilation Separation Integration
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Change Agents
People who act as catalysts and assume the responsibility for managing change activities.
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Outside agents
Can offer an objective perspective. Usually have an inadequate understanding of the organizations history, culture, operating procedures, and personnel. Dont have to live with the repercussions after the change is implemented.
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Internal agents
Have to live with the consequences of their actions. May be more thoughtful. May be more cautious.
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Approaches To Managing Change

Lewins Three-Step Model Kotters Eight-Step Plan for Implementing Change Action Research Appreciative Inquiry
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Exhibit 10-6 Lewins Three-Step Change Model
Unfreezing
Moving
Refreezing
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Lewins Three-Step Model For Implementing Change

Unfreezing
Change efforts to overcome the pressures of both individual resistance and group conformity.
Moving
Efforts to get employees involved in the change process.
Refreezing
Stabilizing a change intervention by balancing driving and restraining forces.
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Exhibit 10-7 Unfreezing the Status Quo

Desired state
Restraining forces Status quo
Driving forces Time

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Unfreezing
Arouse dissatisfaction with the current state. Activate and strengthen top management support. Use participation in decision making. Build in rewards.
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Moving
Establish goals. Institute smaller, acceptable changes that reinforce and support change. Develop management structures for change. Maintain open, two-way communication.
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Refreezing
Build success experiences. Reward desired behaviour. Develop structures to institutionalize the change. Make change work.
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Exhibit 10-8 Kotters Eight-Step Plan for Implementing Change

1. 2. 3. 4. 5. 6. 7. 8. Establish a sense of urgency. Form a coalition. Create a new vision. Communicate the vision. Empower others to act. Develop short-term wins. Consolidate improvements. Reinforce changes.
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Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996). Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright 2007 Pearson Education Canada
Action Research
A change process based on the systematic collection of data and then selection of a change action based on what the analyzed data indicate.
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The Process of Action Research

Diagnosis Analysis Feedback Action Evaluation
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Appreciative Inquiry
An approach to change that seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.
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Steps of Appreciative Inquiry

Four Ds
Discovery Dreaming Design Destiny
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Exhibit 10-9 Sources of Individual Resistance to Change

Selective information processing Habit
Individual Resistance Security Fear of the unknown
Economic factors
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Cynicism About Change

Feeling uninformed about what was happening. Lack of communication and respect from ones supervisor. Lack of communication and respect from ones union representative. Lack of opportunity for meaningful participation in decision making.
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Exhibit 10-11 Sources of Organizational Resistance to Change

Threat to established resource allocations Structural inertia
Threat to established power relationships
Organizational Resistance
Limited focus of change
Threat to expertise
Group inertia
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Overcoming Resistance to Change

Education and communication
This tactic assumes that the source of resistance lies in misinformation or poor communication. Best used: Lack of information, or inaccurate information
Participation and involvement Prior to making a change, those opposed can be brought into the decision
process. Best used: Where initiators lack information, and others have power to resist
Facilitation and support

The provision of various efforts to facilitate adjustment. Best used: Where people resist because of adjustment problems
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Overcoming Resistance to Change

Negotiation and agreement
Exchange something of value for a lessening of resistance. Best used: Where one group will lose, and has considerable power to resist
Manipulation and cooperation Twisting and distorting facts to make them appear more attractive.
Best used: Where other tactics wont work or are too expensive
Explicit and implicit coercion

The application of direct threats or force upon resisters. Best used: Speed is essential, and initiators have power
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Summary and Implications

1. What is the purpose of organizational culture?
Organizational culture provides stability and gives employees a clear understanding of the way things are done around here.
2. How do you create and maintain culture?

An organizations culture is derived from the philosophy of its founders. It is communicated by managers and employees are socialized into it.
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3. What kind of organizational culture might suit you? Organizational cultures can be analyzed in terms of members friendliness (sociability) and task orientation (solidarity). 4. Can organizational culture have a downside? A strong culture can have a negative effect, including pressure-cooker cultures, barriers to change, difficulty in creating an inclusive environment, and hindering mergers and acquisitions. 5. How do organizations manage change? Kurt Lewin argued that successful change should follow three steps: unfreezing, moving, and refreezing. John Kotter built on Lewins work to offer an eight-step model. Two other theories include action research and appreciative inquiry.
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6. Why do people and organizations resist change? Individuals resist change because of basic human characteristics such as perceptions, personalities, and needs. Organizations resist change because they are conservative and because change is difficult.
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OB at Work
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For Review
1. How can an outsider assess an organizations culture? 2. What defines an organizations subcultures? 3. Can an employee survive in an organization if he or she rejects its core values? Explain. 4. What benefits can socialization provide for the organization? For the new employee? 5. Describe four cultural types and the characteristics of employees who fit best with each.
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For Review
6. How can culture be a liability to an organization? 7. How does Lewins three-step model of change deal with resistance to change? 8. How does Kotters eight-step plan for implementing change deal with resistance to change? 9. What are the factors that lead individuals to resist change? 10.What are the factors that lead organizations to resist change?
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For Critical Thinking

1. How are an individuals personality and an organizations culture similar? How are they different? 2. Is socialization brainwashing? Explain. 3. Can you identify a set of characteristics that describes your colleges or universitys culture? Compare them with several of your peers lists. How closely do they agree? 4. Resistance to change is an irrational response. Do you agree or disagree? Explain.
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Point-CounterPoint
Why Culture Doesnt Change
Culture develops over many years, and becomes part of how the organization thinks and feels. Selection and promotion policies guarantee survival of culture. Top management chooses managers who are likely to maintain culture.
When Culture Can Change

There is a dramatic crisis. There is a turnover in leadership. The organization is young and small. There is a weak culture.
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Breakout Group Exercises

Form small groups to discuss the following: 1. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you conclude that the organization has a strong or weak culture? 2. Have you or someone you know worked somewhere where the culture was strong? What was your reaction to that strong culture? Did you like that environment, or would you prefer to work where there is a weaker culture? Why? 3. Reflect on either the culture of one of your classes or the culture of the organization where you work, and identify characteristics of that culture that could be changed. How might these changes be made?
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What is organizational culture and why is it important?

What is organizational culture and why is it important?

How can organizational culture be created and maintained?

How can organizational culture be created and maintained?

Chapter 10

Organizational Culture and Change

Henry Mintzberg on Culture

Exhibit 10-1 Layers of Culture

Characteristics of Organizational Culture

Characteristics of Organizational Culture

Exhibit 10-2 Contrasting Organizational Cultures

Do Organizations Have Uniform Cultures?

Exhibit 10-3 How Organizational Culture Forms

Creating and Sustaining Culture: Keeping a Culture Alive

Exhibit 10-5 Four-Culture Typology

Finding Your Culture

The Liabilities of Culture

Culture as a Barrier to Diversity

Culture as a Barrier to Mergers and Acquisitions

Strategies For Merging Cultures

Approaches To Managing Change

Exhibit 10-6 Lewins Three-Step Change Model

Lewins Three-Step Model For Implementing Change

Exhibit 10-7 Unfreezing the Status Quo

Restraining forces Status quo

Driving forces Time

Exhibit 10-8 Kotters Eight-Step Plan for Implementing Change

The Process of Action Research

Steps of Appreciative Inquiry

Exhibit 10-9 Sources of Individual Resistance to Change

Individual Resistance Security Fear of the unknown

Cynicism About Change

Exhibit 10-11 Sources of Organizational Resistance to Change

Threat to established power relationships

Limited focus of change

Overcoming Resistance to Change

Facilitation and support

Overcoming Resistance to Change

Explicit and implicit coercion

Summary and Implications

2. How do you create and maintain culture?

Summary and Implications

Summary and Implications

For Critical Thinking

When Culture Can Change

Breakout Group Exercises

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