1. Pamela S. Lewis Stephen H. Goodman Patricia M. Fandt Slides Prepared by Zulema Seguel © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. CHAPTER 11 Organizational Culture, Change & Development

2. 233 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Learning Objectives slide 1 of 2 1.Discuss the foundations of organizational culture. 2.List and explain the two components of organizational culture. 3.Clarify the differences between the types of organizational artifacts. 4.Explain impact of culture on the organization. 5.Explain how organizational culture can be changed.

3. 333 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Learning Objectives slide 2 of 2 6.Identify and discuss the targets of planned change. 7.Describe the steps for planned change. 8.Identify ways managers can gain support of employee concerns in the change process. 9.Explain how empowering others to act on a vision affects the change process.

4. 433 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Foundations of Organizational Culture Organizational culture is the shared, emotionally charged beliefs, values, and norms that bind people together and help them make sense of the systems within an organization. The beliefs, values and norms tell people: –“ What is to be done.” –“How it is to be done.”

5. 533 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Organizational Culture and Change In order to survive, organizations and their cultures must continuously evolve and change. Conditions prompting change include: –Economic crises –Changes in laws or regulations –Social developments –Global competition –Demographic trends –Explosive technological changes Cultures also change when an organization discovers, invents or develops solutions to problems it faces.

6. 633 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Components of Organizational Culture Substance –Consists of shared systems of beliefs, values, expectations, and norms. Form –Consists of the observable ways that members of a culture express ideas.

7. 733 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Examining Culture Through Organizational Artifacts Artifacts are the cultural routines, rituals, ceremonies, etc. that we see in public functions and events staged by the organization. Artifacts support and reinforce the organization’s shared beliefs, value systems, expectations, and norms.

8. 833 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Rites, Rituals, and Ceremonies A relatively dramatic, usually planned set of recurring activities used at special times to influence the behavior and understanding of organizational members. Through rituals and ceremonies, participants gain an understanding of and cement beliefs that are important to the organization’s culture.

9. 933 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Language, Metaphors and Symbols Language includes certain words, phrases, speeches, etc. Metaphors use familiar elements or objects to make behavior or other unfamiliar processes or actions comprehensible. –Special terminology –Abbreviations –Jargon or slang –Gestures Symbols can be a picture, a shape, or a particular object.

10. 1033 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Stories and Sagas slide 1 of 2 Stories and sagas graphically and quickly communicate emotionally charged beliefs to organization members. Stories have important meaning for all employees, but especially for new employees. Organizational stories tell new members: –The real mission of the organization –How it operates. –What behavior is acceptable. –How individuals can fit into the organization.

11. 1133 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Stories and Sagas slide 2 of 2 Stories also serve as symbols of the organization’s entrepreneurial orientation and promote values that unify employees from diverse organizational units. Sagas are historical accounts describing the unique accomplishments of a group and its leaders or heroes.

12. 1233 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. The Impact of Culture on Organizations Strong Cultures –Shared values and beliefs create a setting in which people are committed to one another and share an overriding sense of mission. –A strong culture can cause a resistance to change, however, by reinforcing a singular view of the organization and the environment.

13. 1333 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Culture Issues slide 1 of 2 Three important issues are embedded in an organization’s culture. –Ethics –Diversity of employees –Leadership behavior How does all this fit together?

14. 1433 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Culture Issues slide 2 of 2 Managers and leaders must use good leadership practices to be sure to introduce, develop, reward, and “cement” ethical practices and positive ways of working with diversity into the organization culture.

15. 1533 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Changing Organizational Culture Top leaders can set the tone for a culture and for culture change. Leaders who strive for high-quality products and services understand that they must: –Involve the keepers and holders of the culture. –Build on what all organizational members share. –Teach new members how to behave.

16. 1633 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Organizational Change Organizational change refers to any alteration of activities in an organization. Alterations can involve: –The structure of the organization –The transfer of work tasks –The introduction of new products, systems, or technologies or behavior among members.

17. 1733 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Targets for Change Individual targets Group targets Organizational targets Environmental targets

18. 1833 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Individual Targets Involves human resource changes. Changes in this area are triggered by new staffing strategies or by an effort to enhance workforce diversity. –The number and skills of the human resource component. –Improving levels of employee motivation and performance.

19. 1933 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Group Targets Involves changes in the nature of the relationship between managers and subordinates or the relationships within work groups.

20. 2033 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Organizational Targets Changes in any of the following areas: –Basic goals and strategies of the organization –Products, quality, or services offered –Organizational structure –The composition of work units –Organizational processes such as reward, communication, or information processing system –The culture

21. 2133 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Environmental Targets Involves changing sectors of an organization’s environment For example, changes in products or services offered may require new technology or a new distribution system

22. 2233 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Force Field Analysis Describe the problems or issues Identify the desired end state List the potential benefits Identify the driving forces, strategies, and strengths Identify the resisting forces or weaknesses Identify the opportunities & threats Identify tactics to weaken the restraining forces Identify tactics to strengthen the positive forces Develop an Action Plan

23. 2333 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Force Field Analysis Example Organizationa l Initiative: “Implement a new software database program.” FORCES FOR CHANGE FORCES RESISTING CHANGE Added capabilityFear of Change Perform work quicker Resist new Training Maintain technological edge Old habits Network everyone on same system See no benefits to change Organizational Initiative: “Implement a new software database program.”

24. 2433 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Steps for Planned Change Create a vision: Unfreeze behavior Clarifies and directs change effort Communicate: Share information Gains support and helps members learn Empower employees to act Provides training and development to implement Institutionalize: Refreeze Reinforces and rewards the new behaviors Evaluate: Examine feedback Establishes criteria for success and monitors changes

25. 2533 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Step 1: Creating A Vision The vision often triggers the beginning of the unfreezing process. –Unfreezing is a process that involves developing an initial awareness of the need for change and the forces supporting and resisting change. Other relevant topics. –Driving force - The push for change in the status quo. –Restraining force - The force to keep the status quo. –External forces - Forces that are fundamentally beyond the control of management.

26. 2633 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Step 2: Communication and Information Sharing Valuable way to help organization members learn to embrace change. To gain the support of employees for the change efforts, management should consider their most commonly expressed concerns. –Information - “What’s going to happen?” –Personal involvement - “How will I fit in?” –Implementation - “How do I get started on the change?” –Impact - “What will be different?”

27. 2733 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Step 3: Empowering Others To Act On The Vision slide 1 of 2 The change process focuses on providing training and educational opportunities to help employees learn the new behavior they need to implement the vision. Many changes that occur in an organization are relatively easy to implement in isolation. However, major difficulties can arise when dealing with human reactions to such organizational changes or attempting to change human actions and relationships directory.

28. 2833 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Step 3: Empowering Others To Act On The Vision slide 2 of 2 All of these things are components of individual and organizational development. –Individual development includes anything that helps an individual learn how to adapt to change. –Organization development refers to teaching people to interact successfully with others in the organization.

29. 2933 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Step 4: Institutionalization or Refreezing the New Approaches Reinforcing new behavior, usually by positive results, feelings of accomplishment, or rewards from others. The new way of doing things must be embedded in the “new culture” including: –Rewards –Changing goals –Policies –Rules –Performance appraisal –Behavior of managers/leaders

30. 3033 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Step 5: Evaluation An important and often overlooked step. Management needs to know whether the change had the intended effects. Too many managers undertake change with the mistaken belief that simple because the change was made, it will be successful. Evaluation forces the manager to establish criteria for judging change success before the change is instituted. Mangers must also give careful thought as to how the results of the change will be measured.

31. 3133 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Implications for Leaders: Organizational Culture & Change slide 1 of 2 Solicit input from those who will be affected by organizational change. Involvement is essential to accepting the need for change. Carefully formulate your message regarding the need for and nature of organizational change. The success of the change process will depend on effective communication. Assess your organizational environment and be sure that the tone and the tempo of the change fits the organization. Timing is everything.

32. 3233 © Copyright ©2004 by South-Western, a division of Thomson Learning. All rights reserved. Implications for Leaders: Organizational Culture & Change slide 2 of 2 Serve as a role model, a leader, for the behaviors sought by the organizational change. Actions speak louder than words.