Chapter 12 Organizational Culture and Change John R. Schermerhorn, Jr. Daniel G. Bachrach Management 13th edition Chapter 12 Organizational Culture and Change

Planning Ahead — Key Takeaways Explain the concept of organizational culture and discuss how it affects organizational behavior and performance. Describe how a multicultural organization handles subcultures and diversity issues. Identify alternative approaches to organizational change and the types of change strategies and resistance to change found in organizations. Copyright ©2015 John Wiley & Sons, Inc.

Chapter 12 Outline Organizational Cultures Multicultural Organizations Understanding organizational culture Observable culture Values and the core culture Multicultural Organizations Multicultural organizations Organizational subcultures Power, diversity, and organizational subcultures Copyright ©2015 John Wiley & Sons, Inc.

Chapter 12 Outline Organizational Change Models of change leadership Transformational and incremental and change Phases of planned change Change strategies Resistance to change Copyright ©2015 John Wiley & Sons, Inc.

Organizational Cultures The system of shared beliefs and values that guides behavior in organizations Socialization How new members learn the culture of the organization Copyright ©2015 John Wiley & Sons, Inc.

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. Copyright ©2015 John Wiley & Sons, Inc.

Organizational Cultures The best organizations have positive cultures that: Respect members Are customer driven Are performance-oriented Encourage positive work behaviors Discourage dysfunctional behaviors Copyright ©2015 John Wiley & Sons, Inc.

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? How widespread is empowerment, worker involvement? What is the competitive style, internal and external? What value is placed on people, as customers and employees? Is teamwork a way of life in this organization? Questions for reading an organization’s culture Copyright ©2015 John Wiley & Sons, Inc.

Figure 12.1 Levels of organizational culture—observable culture and core culture in the organizational “iceberg ” Stories Tales about events conveying core values Heroes People (past and present) who display core values Symbols Language and other symbols conveying core values Rites and Rituals Celebration of heroes and events displaying core values CORE CULTURE Core Values Beliefs about the right ways to behave Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

Organizational Cultures Important cultural values include: Performance excellence Innovation Social responsibility Integrity Worker involvement Customer service Teamwork Copyright ©2015 John Wiley & Sons, Inc.

Organizational Cultures Value-based management: Describes managers who actively help to develop, communicate, and enact shared values Copyright ©2015 John Wiley & Sons, Inc.

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: Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and Diversity Multiculturalism involves inclusiveness, pluralism, and respect for diversity Multicultural organizations has a culture with core values that respect diversity and support multiculturalism. Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and Diversity Characteristics of multicultural organizations: Pluralism Structural integration Informal network integration Absence of prejudice and discrimination Minimum intergroup conflict Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and Diversity 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 Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and Diversity Common subcultures include: Generational Gender Occupations and functions Ethnicity or national cultures Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and 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 Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and Diversity 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 Copyright ©2015 John Wiley & Sons, Inc.

Figure 12.2 Glass ceilings as barriers to women and minority cultures in traditional organizations Copyright ©2015 John Wiley & Sons, Inc.

Multicultural Organizations and Diversity Diversity Leadership Copyright ©2015 John Wiley & Sons, Inc.

Organizational Change Change leader A change agent who takes leadership initiative for changing the existing pattern of behavior of another person or social system Copyright ©2015 John Wiley & Sons, Inc.

Figure 12.3 Change leaders versus status quo managers Copyright ©2015 John Wiley & Sons, Inc.

Organizational Change Top-down change Change initiatives come from senior management Success depends on support of middle-level and lower-level workers Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

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: Copyright ©2015 John Wiley & Sons, Inc.

Organizational Change Transformational and incremental change Transformational change Results in a major and comprehensive redirection of the organization Incremental change Bends and adjusts existing ways to improve performance Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

Figure 12.3 Lewin’s three phases of planned organizational change Copyright ©2015 John Wiley & Sons, Inc.

Organizational Change Improvisational Change Making continual adjustments as changes are being implemented Copyright ©2015 John Wiley & Sons, Inc.

Figure 12.5 Alternative change strategies and their leadership implications Copyright ©2015 John Wiley & Sons, Inc.

Organizational Change Force-coercion strategy of change Uses formal authority as well as 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 Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.

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 Copyright ©2015 John Wiley & Sons, Inc.