Organizational Culture and Change

Introduction  Organisations, to cope with global competition and the changing business environment, envision a ‘futuristic state’ with a new purpose and goals to be achieved and try to move to that ‘state’ in terms of a planned strategy.  Organisational culture is like the blood flow in the human system that connects and energizes the various internal organs.  Changes made in the systems/subsystems may not be effective until they are compatible with the organisational culture. Otherwise, cultural incongruence/resistance will defeat the purpose of any planned change.

Cont…. What is Corporate Culture? Corporate culture is the pattern of basic assumptions that is invented, discovered, or developed by an organisation as it learns to cope with its problems of external adaptation and internal integration, and validated enough to be taught to new members as the correct ways of perceiving, thinking, and feeling in relation to these problems (Schein, Martin and Meyerson, 1986). The elements of culture, thus, include:  Basic assumptions  Artifacts  Values

Cont…. Organisation Culture and Dealing with Change Organisational culture could be a help or a hindrance to organisational change. On the one hand, it provides power for action while on the other, it filters information, exercises control over decision-making, and restrains action options. Identifying and Diagnosing Organisation Culture  Interviewing employees at different levels of an organisation (for example, workers, supervisors, managers, etc.)  Administering relevant questionnaires and conducting attitudinal and morale surveys (socio-metric techniques assist in identifying cliques and subcultures within the organisation)

1Part Organisational Change  Analyzing the process aspects (organizational policies, decisions, procedures, rules and regulations, and how the resources are procured and managed, etc.)  Examining the organization’s external relations with its customers, clients, etc. in terms of how they perceive and evaluate the organization

Cont…. Developing New Culture  The needed changes or adjustments in value orientation  Employee attitudes, skills, and behaviors that would be congruent with the new values  The changes required in current employee skills and behaviors. In any organisation, individuals develop particular ways of handling work that gradually become the accepted way of doing things, thereby evolving into procedures.  The needed changes in the current organisational practices (i.e., the administrative and work processes).

1Part Organisational Change Employee-culture Compatibility  Cultural compatibility is difficult to judge and, at best, can be fostered through mentoring or coaching a new hire.  It is important to examine how the corporate culture is evidenced in the decisions and actions of the top management

Cont…. Assessing Cultural Risk  This is to assess the degree to which the planned change (in structure, systems, processes, and people) fits in with the organizational culture.  The extent of cultural risk depends upon two issues: 1) how important the changes are to the strategy and 2) how compatible the changes are with the culture. Change, Strategy, and Culture Alignment Change Strategy Culture

Cont…. Is it Possible to Change the Corporate Culture?  Culture is deep-seated in an organization as much as the personality in an individual.  Any attempt to change the corporate culture requires an understanding of the cultural dimensions (artifacts, norms, values, and basic assumptions).  Changes that occur in the outer layers of organisational culture are deceptive, as the change may not trickle down to the deeper layers (values and basic assumptions). In fact, resistance to change attempts may arise from the value base.

1Part Organisational Change  Changes in the corporate culture, rather than being an initial solution to organisational problems, should be considered only after the other less difficult and less costly solutions have been found to be either inadequate or inappropriate.  Cultural change may involve certain issues of ethical and legal sensitivity.

Cont…. Checklist for Cultural Change Formulate a clear picture of the firm’s new strategy and of the shared values, norms, and behaviors needed to make it work Take a close look at the inner functioning of the organisation and determine if cultural change is necessary. Identify aspects of the current culture that could still be valid and other aspects that need to be modified or changed. Identify the depth of cultural change needed.

1Part Organisational Change Communicate the change translated into goals, sub goals, activities, and behaviors. Involve employees in the change process. Monitor the progress from time to time; build momentum in terms of initial success. Defuse resistance. Despite this, expect certain casualties to occur (for example, some employees may leave the organisation and a few setbacks may occur to the change effort).

Cont…. Issues in Culture Change There are at least three unresolved issues related to the culture change. These are: a) Whether and how basic underlying beliefs and assumptions can be changed, b) Whether emphasis is more fruitfully placed on intrinsic or extrinsic motivators, c) The timing and sequence in which motivators are best employed.

The Role of Communication  Customize the message  Set the appropriate tone  Build in feedback  Set the example  Ensure penetration

Ten Key Factors in Effective Change Management 1. Have a holistic view on change 2. Active Senior Management Support is required for Effective Change 3. Change is a Multi-disciplinary activity 4. Change focus on people and their personal growth 5. Change is About Success 6. Change is a Perceptual Process 7. Effective Changes require competent change agents 8. In Terms of Methodology, There is no one Best Way 9. Change is About Ownership 10. Change is About Fun, Challenge, and opportunity

Cont…. Classic Skills for Leaders 1. Tuning in to the environment 2. Challenging the prevailing organisational wisdom 3. Communicating a compelling aspiration 4. Building coalitions 5. Transferring ownership to a working team 6. Learning to persevere 7. Making everyone a hero

Contemporary Change Issues For Today’s Managers How are changes in technology affecting the work lives of employees? What can managers do to help their organizations become more innovative? How do managers create organizations that continually learn and adapt? Is managing change culture-bound?

 Continuous Improvement Processes  Good isn’t good enough.  Focus is on constantly reducing the variability in the organizational processes to produce more uniform products and services.  Lowers costs and raises quality.  Increases customer satisfaction.  Organizational impact  Additional stress on employees to constantly excel.  Requires constant change in organization.

Process Reengineering – “Starting all over” – Rethinking and redesigning organizational processes to produce more uniform products and services. Identifying the organization’s distinctive competencies— what it does best. Assessing core processes that add value to the organization’s distinctive competencies. Reorganizing horizontally by process using cross-functional and self-managed teams.

Sources of Innovation: Structural variablesStructural variables Organic structuresOrganic structures Long-tenured managementLong-tenured management Slack resourcesSlack resources Interunit communicationInterunit communication Organization’s cultureOrganization’s culture Human resourcesHuman resources Sources of Innovation: Structural variablesStructural variables Organic structuresOrganic structures Long-tenured managementLong-tenured management Slack resourcesSlack resources Interunit communicationInterunit communication Organization’s cultureOrganization’s culture Human resourcesHuman resources Innovation A new idea applied to initiating or improving a product, process, or service.

Idea Champions Individuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the idea is implemented.

Creating a Learning Organization Characteristics: 1.Holds a shared vision. 2.Discards old ways of thinking. 3.Views organization as system of relationships. 4.Communicates openly. 5.Works together to achieve shared vision. Characteristics: 1.Holds a shared vision. 2.Discards old ways of thinking. 3.Views organization as system of relationships. 4.Communicates openly. 5.Works together to achieve shared vision. Learning Organization An organization that has developed the continuous capacity to adapt and change.

Managing a Learning Organization Establish a strategy Redesign the organization’s structure Reshape the organization’s culture Managing Learning

Mastering Change: It’s Culture-Bound Questions for culture-bound organizations: 1.Do people believe change is even possible? 2.How long will it take to bring about change in the organization? 3.Is resistance to change greater in this organization due to the culture of the society in which it operates? 4.How will the societal culture affect efforts to implement change? 5.How will idea champions in this organization go about gathering support for innovation efforts? Questions for culture-bound organizations: 1.Do people believe change is even possible? 2.How long will it take to bring about change in the organization? 3.Is resistance to change greater in this organization due to the culture of the society in which it operates? 4.How will the societal culture affect efforts to implement change? 5.How will idea champions in this organization go about gathering support for innovation efforts?