Chapter 4 Managing Organizational Culture and Change
Learning Objectives After reading this chapter, you should be able to: Identify the three major aspects of organizational culture. Apply a simple assessment tool to quickly gain a sense of the culture of an organization. Describe the importance of organizational culture. Identify the processes through which organizational culture can be developed and sustained. Use classification systems to identify various types of organizational culture. Identify the sources of resistance to change. Apply models to effectively manage change efforts.
Working Out at REI Critical Thinking Questions focus on: What if an employee does not fit organizational culture? How does outdoor-oriented organizational culture contribute to REI Is REI’s organizational culture sustainable (over time)?
Organizational Culture A system of shared values, assumptions, beliefs, and norms that unite the members of an organization. Reflects employees’ views about “the way things are done around here.” The culture specific to each firm affects how employees feel and act and the type of employee hired and retained by the company.
Key Effects of Organizational Culture Employee Self-Management Sense of shared identity Facilitates commitment Stability Sense of continuity Satisfies need for predictability, security, and comfort
Socialization Internalizing or taking organizational values as one’s own Implementation Support of the Organization’s Strategy If strategy and culture reinforce each other, employees find it natural to be committed to the strategy Key Effects of Organizational Culture
Stages of the Socialization Process Pre-arrival Encounter Metamorphosis
Managing Cultural Processes Cultural Symbols Company Rituals and Ceremonies Company Heroes Stories Language Leadership Organizational Policies and Decision Making
Characteristics and Types of Organizational Culture Cultural Uniformity versus Heterogeneity Strong versus Weak Cultures Culture versus Formalization National versus Organizational Culture
Characteristics and Types of Organizational Culture (continued) Types: Traditional Control or Employee Involvement Traditional control emphasizes the chain of command relies on top-down control and orders Employee involvement emphasizes participation and involvement
Four Types of Culture Classification Baseball team culture--rapidly changing environment Club culture--seeks loyal, committed people Academy culture--hires experts who are willing to make a slow steady climb up a ladder Fortress culture--focused on surviving and reversing sagging fortunes
Competing Values Framework Based on two dimensions: focus and control Focus--whether the primary attention of the organization is directed toward internal dynamics or directed outward toward the external environment Control--the extent to which the organization is flexible or fixed in how it coordinates and controls activities
Competing Values Framework Focus Control Flexible Internal External Fixed
Example of how “culture” works Hoosiers Writing: describe the “ideal team” that is being imposed on the new coach. Exchange sheets Return and complete the “ideal team”
Types of Change Planned Change--change that is anticipated and allows for advanced preparation Dynamic Change--change that is ongoing or happens so quickly that the impact on the organization cannot be anticipated and specific preparations cannot be made
Forces for Change: Environmental Forces Pressure on a firm from relationships with customers, suppliers, and employees. Environmental forces include: Technology Market forces Political and regulatory agencies and laws Social trends
Forces for Change: Internal Forces Arise from events within the company. May originate with top executives and managers and travel in a top-down direction. May originate with front-line employees or labor unions and travel in a bottom-up direction.
Resistance to Change Self-Interest Lack of Trust and Understanding Uncertainty Different Perspectives and Goals Cultures that Value Tradition
Models of Organizational Change: The Star Model The Star Model: Five Points Types of change-evolutionary or transformational Structure Reward system Processes People
Lewin’s Three-Step Model of Organizational Change Unfreezing--melting away resistance Change--departure from the status quo Refreezing--change becomes routine
Lewin’s Force Field Analysis Model Increase driving forces that drive change Reduce restraining forces that resist change or do both
Restraining forces Driving forces Status quo Desired state Time Force-field Model of Change
Four Types of Employees Alignment with culture NoYes PerformanceLowWorstGive Another Chance HighMake the tough choice Best
Tactics for Introducing Change Communication and Education Employee Involvement Negotiation Coercion Top-Management Support
Working Out at REI Responses to Critical Thinking Questions: REI’s distinctive culture will attract right people Opportunity for educating or socializing new employees Achieving a desirable culture is important in its own right, notwithstanding possible impact on sales and profits Sustaining organizational culture is a critical challenge