1 Managing Change Lecture 2 Organizational Culture, Structure and Change

2 LECTURE OUTLINE 2.0 Introduction 2.1 The culture 2.2 National culture 2.3 From breadth to convergence 2.4 Culture and change

3 2.0 INTRODUCTION The invisible hand of culture – both in terms of national and global can affect the ways in which organizations and people react to change The invisible hand of culture – both in terms of national and global can affect the ways in which organizations and people react to change This in turn influences the ways in which change initiatives are implemented This in turn influences the ways in which change initiatives are implemented No matter whether the change is small or big, the Manager must anticipate resistance to changes No matter whether the change is small or big, the Manager must anticipate resistance to changes

4 2.1 THE CULTURE Is the glue that hold people together in national or work groups. Is the glue that hold people together in national or work groups. It is composed of values, beliefs and underlying assumptions that are deeply held. It is composed of values, beliefs and underlying assumptions that are deeply held. Based on an intangible factor that is usually firmly rooted and hard to change. Based on an intangible factor that is usually firmly rooted and hard to change.

5 Organizational Culture The pattern of basic assumptions; invented, discovered or developed, to cope with problems of adaptation and integration so as for the new members to perceive, think and feel in relation to these problems (Schein). The pattern of basic assumptions; invented, discovered or developed, to cope with problems of adaptation and integration so as for the new members to perceive, think and feel in relation to these problems (Schein). The set of key values, beliefs, understandings, and norms that members of an organization share (Daft, 2008). The set of key values, beliefs, understandings, and norms that members of an organization share (Daft, 2008). A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other (Robbins, A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other (Robbins, 2007.

6 Visible Artifacts – that is the constructed environment which is exemplified by technology, architecture, dress code Visible Artifacts – that is the constructed environment which is exemplified by technology, architecture, dress code Values that govern behaviour – identified by what people say – the real reasons may be concealed or unconscious Values that govern behaviour – identified by what people say – the real reasons may be concealed or unconscious Underlying assumptions – determine how group members perceive, think and feel - really helps to understand culture Underlying assumptions – determine how group members perceive, think and feel - really helps to understand culture Three Levels of Culture

Unconscious, taken-for-granted perceptions or beliefs Mental models of ideals Shared assumptions Conscious beliefs Evaluate what is good or bad, right or wrong Shared values ArtifactsArtifacts Stories/legends Rituals/ceremonies Organizational language Physical structures/décor Stories/legends Rituals/ceremonies Organizational language Physical structures/décor Visible Invisible (below the surface) Source: Daft, 2008

8 Factors that can influence culture The beliefs and values of the organization's founder – vision and mission The beliefs and values of the organization's founder – vision and mission The societal norms of the country in which the organization operates The societal norms of the country in which the organization operates Past practices of the organization - The way things have been done Past practices of the organization - The way things have been done The behavior of top management The behavior of top management

9 Mintzberg’s (1989) Organizational Structure More readings:

10 Charles Handy’s (1993) 4 Main Types of Organizational POWER CULTURE – Influenced by one person – effectiveness depends on the charisma and leadership qualities of the individual POWER CULTURE – Influenced by one person – effectiveness depends on the charisma and leadership qualities of the individual ROLE CULTURE – Depended on functions, authority and bureaucracy ROLE CULTURE – Depended on functions, authority and bureaucracy TASK CULTURE – Dependent on teams of experts working together – Success depends on getting the best to complete a task TASK CULTURE – Dependent on teams of experts working together – Success depends on getting the best to complete a task PERSON CULTURE - Groups or individuals who come together to design a culture – opportunity to develop personal aims and objectives PERSON CULTURE - Groups or individuals who come together to design a culture – opportunity to develop personal aims and objectives

11 Fons Trompenaar’s (1994) description The family culture which is personal, paternal & hierarchical The family culture which is personal, paternal & hierarchical The Eiffel Tower culture – bureaucratic The Eiffel Tower culture – bureaucratic The guided missile culture – which is task oriented The guided missile culture – which is task oriented The incubator culture – which nurtures individual creativity The incubator culture – which nurtures individual creativity

NATIONAL CULTURE National culture can result from one nation attributing characteristics to another, which can result in stereotyping and prejudice. National culture can result from one nation attributing characteristics to another, which can result in stereotyping and prejudice. The members of the organization bring their own individual experiences, beliefs and values. The members of the organization bring their own individual experiences, beliefs and values.

13 Hofstede’s Five Dimensions of National Culture Individualism-collectivism. Individualism-collectivism. Power distance. Power distance. Uncertainty avoidance. Uncertainty avoidance. Masculinity-femininity. Masculinity-femininity. Long-term/short-term orientation Long-term/short-term orientation (Source: Schemerhorn et al., 2005)

14 1. Individualism-collectivism The cultural tendency to emphasize individual or group interests. The cultural tendency to emphasize individual or group interests. Preferences for working individually or in groups. Preferences for working individually or in groups. Example of an individualistic culture — United States. Example of an individualistic culture — United States. Example of a collectivist culture — Mexico Example of a collectivist culture — Mexico

15 2. Power distance The willingness of a culture to accept status and power differences among members. The willingness of a culture to accept status and power differences among members. Respect for hierarchy and rank in organizations. Respect for hierarchy and rank in organizations. Example of a high power distance culture — Indonesia. Example of a high power distance culture — Indonesia. Example of a low power distance culture — Sweden. Example of a low power distance culture — Sweden.

16 3. Uncertainty avoidance The cultural tendency toward discomfort with risk and ambiguity. The cultural tendency toward discomfort with risk and ambiguity. Preference for structured versus unstructured organizational situations. Preference for structured versus unstructured organizational situations. Example of a high uncertainty avoidance culture — France. Example of a high uncertainty avoidance culture — France. Example of a low uncertainty avoidance culture — Hong Kong. Example of a low uncertainty avoidance culture — Hong Kong.

17 4. Masculinity-femininity The tendency of a culture to value stereotypical masculine or feminine traits. The tendency of a culture to value stereotypical masculine or feminine traits. Emphasizes competition/assertiveness versus interpersonal sensitivity/relationships. Emphasizes competition/assertiveness versus interpersonal sensitivity/relationships. Example of a masculine culture — Japan. Example of a masculine culture — Japan. Example of a feminine culture — Thailand Example of a feminine culture — Thailand

18 5. Long-term/short-term orientation The tendency of a culture to emphasize future- oriented values versus present-oriented values. The tendency of a culture to emphasize future- oriented values versus present-oriented values. Adoption of long-term or short-term performance horizons. Adoption of long-term or short-term performance horizons. Example of a long-term orientation culture — South Korea. Example of a long-term orientation culture — South Korea. Example of a short-term orientation culture — United States. Example of a short-term orientation culture — United States.

FROM BREADTH TO CONVERGENCE Central to the Convergence theory is the logic of industrialization – Changes in technology, revolutionalised large scale production and product complex divisions of labour Central to the Convergence theory is the logic of industrialization – Changes in technology, revolutionalised large scale production and product complex divisions of labour Divergence theorists take the opposite view - people will respond differently to the forces, such as technology that drives changes - Individuals influenced by national culture Divergence theorists take the opposite view - people will respond differently to the forces, such as technology that drives changes - Individuals influenced by national culture Refer to the case study on page 69 and 70 Refer to the case study on page 69 and 70

CULTURE AND CHANGE Schein’s (1984) 3 Distinct Stages of an Organization's Life The early stages of formation – provides a source of identity and strength The early stages of formation – provides a source of identity and strength The middle stages – responses to challenges from the external and internal environment – at this stage very complex & challenging blends would take place The middle stages – responses to challenges from the external and internal environment – at this stage very complex & challenging blends would take place The matured stage – suffer from complacency and outdated strategies The matured stage – suffer from complacency and outdated strategies

21 Performance – sticking to rules or seeking results Performance – sticking to rules or seeking results Objectives – changes would be smoother where there is consultation on objectives Objectives – changes would be smoother where there is consultation on objectives Planning – successful planning involves questioning of objectives and not just identifying steps needed to achieve Planning – successful planning involves questioning of objectives and not just identifying steps needed to achieve Consultation – good ideas could emerge from this approach Consultation – good ideas could emerge from this approach Procedures – operational procedures are good guidelines for Procedures – operational procedures are good guidelines for Aspects of Organizational Operation that Influences Changes

22 Communication – good internal communication facilitates those involved in being informed of goals identified Communication – good internal communication facilitates those involved in being informed of goals identified Decision-making – Centralized or decentralized depending on the organizational structure and set-up Decision-making – Centralized or decentralized depending on the organizational structure and set-up Loyalty expectations – expecting loyalty to objectives usually means better adaptability to change Loyalty expectations – expecting loyalty to objectives usually means better adaptability to change Risk-taking – calculated risks minimizes undue loses Risk-taking – calculated risks minimizes undue loses Aspects of Organizational Operation that Influences Changes

23 References Daft, R.L. (2008). The New Era of Management, 2nd Edition. Thomson South-Western, Ohio.Daft, R.L. (2008). The New Era of Management, 2nd Edition. Thomson South-Western, Ohio. McShane and Glinow. (2008). Organizational Behavior, 4th Edition. McGraw-Hill.McShane and Glinow. (2008). Organizational Behavior, 4th Edition. McGraw-Hill. Robbins, S.P. and Coulter, M. (2007). Management, 9th Edition. Prentice-Hall, USA.Robbins, S.P. and Coulter, M. (2007). Management, 9th Edition. Prentice-Hall, USA. Schermerhorn, J.R., Hunt, J.G. and Osborn, R.N. (2005) Organizational Behavior 9th Edition, WileySchermerhorn, J.R., Hunt, J.G. and Osborn, R.N. (2005) Organizational Behavior 9th Edition, Wiley