Management 11e John Schermerhorn Chapter 11 Organizational Culture and Change

Planning Ahead — Chapter 11 Study Questions 1.What is organizational culture? 2.What is a multicultural organization? 3.What is the nature of organizational change? Management 11e - Chapter 112

Study Question 1: What organizational culture?  Organizational culture  The system of shared beliefs and values that develops within an organization and guides the behavior of its members  Socialization  How new members learn the culture of the organization Management 11e - Chapter 113

Figure 11.1 Levels of organizational culture—observable culture and core culture in the organizational “iceberg ” Management 11e - Chapter 114

Study Question 1: What organizational culture?  Strong cultures:  Commit members to do things that are in the best interests of the organization  Discourage dysfunctional work behavior  Encourage functional work behavior  The best organizations have strong cultures that:  Are performance-oriented  Emphasize teamwork  Allow for risk taking  Encourage innovation  Value the well being of people Management 11e - Chapter 115

Study Question 1: What organizational culture?  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  What is the core culture?  Underlying assumptions and beliefs that influence behavior and contribute to the observable culture Management 11e - Chapter 116

Study Question 1: What organizational culture?  Core culture and values:  Core values are beliefs and values shared by organization members  Strong cultures have a small but enduring set of core values  Commitment to core values is a key to long-term success  Important cultural values include:  Performance excellence  Innovation  Social responsibility  Integrity. Worker involvement. Customer service. Teamwork Management 11e - Chapter 117

Study Question 1: What organizational culture? 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? Questions for assessing an organization’s culture Management 11e - Chapter 118

Study Question 1: What organizational culture?  Value-based management:  Describes managers who actively help to develop, communicate, and enact shared values  Criteria for evaluating core values:  Workplace spirituality:  Creates meaning and shared community among organizational members Management 11e - Chapter 119 RelevanceIntegrityPervasivenessStrength

Study Question 1: What organizational culture? Meaningful purpose Trust and respect Honesty and openness Personal growth and development Worker friendly practices Ethics and social responsibility Sample values include: Management 11e - Chapter 1110

Study Question 1: What organizational culture?  Symbolic leadership  Symbolic leaders use symbols well to establish and maintain a desired organizational culture  Symbolic leaders behave in ways that espouse the organization’s values  Symbolic leaders:  Use language metaphors  Highlight and dramatize core values and observable culture  Use rites and rituals to glorify performance Management 11e - Chapter 1111

Study Question 2: What is a multicultural organization?  Multicultural organizations  Based on pluralism, operating with inclusion and respect for diversity  Multiculturalism  involves pluralism and respect for diversity  Characteristics of multicultural organizations:  Pluralism  Structural integration  Informal network integration  Absence of prejudice and discrimination  Minimum intergroup conflict Management 11e - Chapter 1112

Study Question 2: What is a multicultural organization?  Diversity:  Describes differences among people at work, such as; age, gender, race  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  Organizational subcultures  Cultures based on shared work responsibilities and/or personal characteristics  Ethnocentrism is the belief that one’s subculture is superior to all others Management 11e - Chapter 1113

Study Question 2: What is a multicultural organization?  Common subcultures include:  Occupations and functions  Ethnicity or national cultures  Gender and generations  Challenges faced by minorities and women:  Glass ceiling  Harassment and discrimination  Minorities may adapt by exhibiting biculturalism - adopting characteristics of the majority culture Management 11e - Chapter 1114

Figure 11.2 Glass ceilings as barriers to women and minority cultures in traditional organizations Management 11e - Chapter 1115

Study Question 2: What is a multicultural organization?  Diversity leadership approaches:  Managing diversity commits to building an organizational culture that allows all members to reach their full potential  Affirmative action commits the organization to hiring and advancing minorities and women  Valuing diversity commits the organization to education and training programs Management 11e - Chapter 1116

Figure 11.3 Leadership approaches to diversity—from affirmative action to managing diversity Management 11e - Chapter 1117 Source: Developed from R. Roosevelt Thomas, Jr., Beyond Race and Gender (New York: AMACOM, 1991), p. 28.

Study Question 3: What is the nature of organizational change?  Change leader  A change agent who takes leadership responsibility for changing the existing pattern of behavior of another person or social system  Change leadership  Forward-looking  Proactive  Embraces new ideas Management 11e - Chapter 1118

Figure 11.4 Change leaders versus status quo managers Management 11e - Chapter 1119

Study Question 3: What is the nature of organizational change?  Top-down change  Change initiatives come from senior management  Success depends on support of middle-level and lower-level workers  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 Management 11e - Chapter 1120

Study Question 3: What is the nature of organizational change?  Integrated change leadership  Successful and enduring change combines advantages of top-down and bottom-up approaches  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 Management 11e - Chapter 1121 Breaks up traditional patterns Implements difficult economic adjustments Top- down Builds capability for sustainable change Builds capability for organizational learning Bottom- up

Study Question 3: What is the nature of 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: Management 11e - Chapter 1122

Study Question 3: What is the nature of organizational change?  Organizational targets for change:  Tasks. People. Culture. Technology. Structure  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 Management 11e - Chapter 1123

Figure 10.3 Lewin’s three phases of planned organizational change Management 11e - Chapter 1124

Study Question 3: What is the nature of organizational change?  Improvisational Change  Making continual adjustments as changes are being planned  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 Management 11e - Chapter 1125

Study Question 3: What is the nature of 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  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 Management 11e - Chapter 1126

Figure 11.6 Alternative change strategies and their leadership implications Management 11e - Chapter 1127

Study Question 3: What is the nature of 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  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 Management 11e - Chapter 1128

Study Question 3: What is the nature of organizational change?  Methods for dealing with resistance to change:  Education and communication  Participation and involvement  Facilitation and support  Facilitation and agreement  Manipulation and co-optation  Explicit and implicit coercion Management 11e - Chapter 1129

Chapter 11 Case  Apple Inc.: People and design create the future