Managing Change Key Influences on the Change Process: Culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Managing Change Key Influences on the Change Process: Culture Bureaucratic and risk averse environments are career killers because of their impact on learning. John Kotter We need a can-do, vibrant, innovation-driven culture. Not wearing a tie is just a snippet of that. Paul Walsh BUSS4.10 Culture Mrs Gordon's Notes

In this topic you will learn about: Organisational Culture - HANDY's FOUR CLASSES OF CULTURE In this topic you will learn about: Types of organisational culture Reasons for and problems of changing organisational culture Assessing the importance of organisational culture BUSS4.10 Culture Mrs Gordon's Notes

“The way we do things around here! What is corporate culture? “The way we do things around here!

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Culture consists of… The shared values of a business The beliefs and norms that affect every aspect of work life The behaviours that are typical of day-to- day behaviour The strength of a culture determines how difficult or easy it is to know how to behave in the business Mrs Gordon's Notes

Different types of ‘business’ culture – some real examples Both of these communities are based in my home area of Blaenavon and Ebbw Vale. My grandparents and parents worked in these communities.

Different types of ‘business’ culture – Google culture!

Organisational Culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Organisational Culture “The specific collection of values and norms that are shared by people and groups in an organisation and that control the way they interact with each other and with stakeholders outside the organisation.” Source : Wikipedia The culture of a business affects the way in which the business operates. This includes: Decision Making Organisational Structure Communication Leadership styles (cause or effect?) Attitude towards work What are the key features of the organisational culture at Google? How might this influence the business performance? BUSS4.10 Culture Mrs Gordon's Notes

How culture might be demonstrated How employees are recruited The way that visitors and guests are looked after How the working space is organised The degree of delegation & individual responsibility How contracts are negotiated and agreed The personality and style of the sales force The responsiveness of communication The methods used for communication How staff call each other

Types of Organisational culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Types of Organisational culture The AQA specification states that types of organisational culture include: power, entrepreneurial and task Power culture A few people central to the organisation have control Associated with Centralised decision making Autocratic leadership Entrepreneurial culture Risk taking and innovation are actively encouraged and rewarded, whilst failure is not criticised Decentralised decision making Democratic leadership Task culture Emphasis on achieving set outcomes through cooperation and team work Matrix structures Delegation Can you define all the terms used within this slide? BUSS4.10 Culture Mrs Gordon's Notes

Strong Weak Strong or weak culture? Staff understand and respond to culture Little need for policies and procedures Consistent behaviour Culture is embedded Little alignment with business values Inconsistent behaviour A need for extensive bureaucracy & procedures

Handy’s Four Classes of Culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Handy’s Four Classes of Culture Power Role Task Person Mrs Gordon's Notes 11

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Power culture Control radiates from the centre Concentrates power among a few Few rules and little bureaucracy Swift decisions are possible Mrs Gordon's Notes 12

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Role culture People have clearly delegated authorities within a highly defined structure Hierarchical bureaucracy Power derives from a person's position Little scope exists for expert power Power Mrs Gordon's Notes 13

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Task culture Teams are formed to solve particular problems Power derives from expertise as long as a team requires expertise No single power source Matrix organisation Team may develop own objectives (a risk) Functional Depts Project Teams Mrs Gordon's Notes 14

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Person culture People believe themselves to be superior to the business Business full of people with similar training, background & expertise Common in firms of professionals – e.g. accountants & lawyers Power lies in each group of individuals Mrs Gordon's Notes 15

Your task Take each of these ‘cultures’ – decide which leadership style would work best for each. Justify your choice.

Culture types and leadership style Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Culture types and leadership style Cultural Type Suitable Leadership Style Power Autocratic Role Autocratic or paternalistic Task Paternalistic / democratic Person Democratic Mrs Gordon's Notes 17

Reasons for changing organisational culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Reasons for changing organisational culture Change in owners / leaders Recap BUSS4.7 - how might a change in ownership mean a change in culture? Change in corporate objectives Change in size Mergers and takeovers can often mean businesses with different cultures joining together Responding to market conditions New competition Economic climate How might the organisational culture of a business have to change to respond to different functional strategies? BUSS4.10 Culture Mrs Gordon's Notes

Problems of changing organisational culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Problems of changing organisational culture Resistance to change Lack of trust Period of adjustment Alienation of: Suppliers Customers Other stakeholders Read the Business Week article on how to change corporate culture BUSS4.10 Culture Mrs Gordon's Notes

The importance of organisational culture Organisational Culture - HANDY's FOUR CLASSES OF CULTURE The importance of organisational culture Impact on staff motivation Communication Retention Personnel performance indicators Effects decision making Speed Level of involvement Scientific v Intuition Competitiveness of the business Innovation Adaptability Brand image Consumer perception Stakeholder opinion BUSS4.10 Culture Mrs Gordon's Notes

Barriers to cultural change Tradition and set ways: Loyalty to existing relationships Failure to accept the need for change Insecurity Preference for the existing arrangements Different person ambitions Fear of: Loss of power Loss of skills Loss of income The unknown Inability to perform as well in the new situation Break up of work groups

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Activity What type of organisation would you like to work for in the future - what sort of culture would it have? Watch this video about the top 100 organisations to work for in 2009 BUSS4.10 Culture Mrs Gordon's Notes

Culture activity Using The Sunday Times 100 Best companies to work for… List 3 common factors you would expect to find in the culture of these organisations Explain how the culture of an organisation can impact upon its overall performance. Select THREE companies within the 100 Best… What are the key features that these companies have? Why do the staff value about the company that they work for? What ‘organisation culture’ systems do they operate? Do some more research from the The Times 100 http://business.timesonline.co.uk/tol/business/career_and_jobs/best_100_companies/best_100_tables/

Essay title Research among schools and businesses points to ‘cultural differences’ as being the key problem in mergers. Discuss why cultural differences are so hard to overcome when bringing two organisations together. (40)

Organisational Culture - HANDY's FOUR CLASSES OF CULTURE Essay Employees at Google enjoy a creative, relaxed and innovative culture. The open plan offices, informal structure and entrepreneurial culture help to create a fun working environment. With reference to Google and/or other businesses you have studied to what extent does the culture of a business determine its ability to maintain competitiveness? BUSS4.10 Culture Mrs Gordon's Notes