1. Organizational Change and Culture
Chapter 17
Organizational Change and Culture

2. Organizational success depends on the organization’s adaptations to environmental changes.

3. Types of Changes Task Structure Technology People
(behavior to complete the job to meet
organizational objectives)
Structure
(the way the firm is organized to meet
its mission and objectives)
Technology
(the machines and process used to
get the task done)
People
(employees who complete the tasks) 4

4. Forces for Organizational Change
Internal Environmental Forces
Financial position
New and revised mission and strategy
Reorganization of formal structure
Acquisition and merger
External Environmental Forces
Increased global competition
Consumer demands
Government laws
Economic conditions
Technological advances

5. Stages in the Change Process
1. Denial
4. Commitment
2. Resistance
3. Exploration

6. Resistance to Change
Resistance to change involves the variables of intensity, source, and focus, and explains why people are reluctant to change.
Reasons for resisting change:
Status Quo
Uncertainty
Learning Anxiety
Fear
Managers should anticipate how employees will react to or resist change

7. Overcoming Resistance to Change
Create a win-win situation
Provide support
Stay calm
Avoid direct confrontation
Use power and ethical politics
Develop a positive climate for change
Encourage interest in improvement
Plan
Give facts
Clearly state why the change is needed and how it will affect employees

8. Lussier’s Change Model
Change Models
Lussier’s Change Model
Step 1. Define the change
Step 2. Identify possible resistance to change
Step 3. Plan the change
Step 4. Implement the change
Give the facts
Involve employees
Provide support
Step 5. Control the change
Lewin’s Change Model
Step 1. Unfreezing
Step 2. Moving
Step 3. Refreezing
Exhibit 14.5

9. Organizational Culture
Organizational culture – consists of the shared values and assumptions of how its members will behave
Global firms need to incorporate national cultural values in their organizational culture
Organizational culture is linked with positive organizational results
Although culture can change, it is difficult to change beliefs and values

10. Ways to Learn the Organization’s Culture
Slogans
Symbols
Ceremonies
Heroes
Stories
Contracting
protects the organization from changes in quantity or price on either the input or output side. We see this strategy used when management agrees to a long-term fixed contract to purchase materials and supplies or to sell a certain part of the organization’s output.
Lobbying
using influence to achieve favorable outcomes is a widespread practice used by organizations to manage their environment. 9

11. Strong and Weak Cultures
Strong cultures –
Organizations that have clear values that are shared to the extent of similar behavior
e.g., IBM, PepsiCo, J.C. Penney
Weak cultures –
Organizations that have no stated values and do not enforce behavior

12. Positive and Negative Cultures
Positive culture –
Has norms that contribute to effective performance and productivity
Negative culture –
A source of resistance and turmoil that hinders effective performance

13. The most effective organizational culture that leads to effective performance is strong and positive.

14. Organizational Climate (1 of 2)
Organizational climate – the relatively enduring quality of the internal environment of the organization perceived by its members
Climate is employees’ perception of the atmosphere of the internal environment
Climate is based on shared perceptions of the way things are done
Successful companies tend to have strong cultures and positive climates

15. Organizational Climate (2 of 2)
Organizational climate is important because:
The employees’ perception of the organization serves as the basis for the development of their attitudes toward it
Their attitudes in turn affect their behavior
Morale – a state of mind based on attitudes and satisfaction with the organization
Morale is an important part of organizational climate

16. Organizational identity and loyalty
Dimensions of Climate
Responsibility
Structure
Rewards
Organizational identity and loyalty
Warmth
Dimensions of Climate
Risk
Support
Exhibit 14.6

17. Dimensions of Climate: Summary (1 of 2)
Structure:
The degree of constraint on members
The number of rules, regulations, and procedures
Responsibility:
The degree of control over one’s own job
Rewards:
The degree of being rewarded for one’s efforts and being punished appropriately
Warmth:
The degree of satisfaction with human relations

18. Dimensions of Climate: Summary (2 of 2)
Support
The degree of being helped by others and of experiencing cooperation
Organizational Identity and Loyalty:
The degree to which employees identify with the organization and their loyalty to it
Risk
The degree to which risk is encouraged

19. Training and Development
The process of developing the ability to perform both present and future jobs
Usually less technical
Generally designed for professional and managerial employees
Training
The process of developing the necessary skills to perform the present job
Typically used to develop technical skills of non-managers

20. Job Instructional Training
Step 1. Preparation of the trainee
Step 2. Trainer presentation of the job
Step 3. Trainee performance of the job
Step 4. Follow-up
Exhibit 14.7

21. Performance Appraisal
Ongoing process of evaluating employee job performance
Also called:
Performance job evaluation
Performance review
Merit rating
Performance audit
One of the manager’s most important and most difficult functions

22. Conducted properly, performance appraisal can decrease absenteeism and turnover, and increase morale and productivity.

23. Performance Appraisal Steps
Organization’s
strategy, goals, and
objectives
Step 1
State job
responsibilities
Step 5
Step 2
Conduct the formal
appraisal
interviews
Develop standards
and measurement
methods
Prepare the formal
appraisal
interviews
Step 4
Step 3
Conduct informal
appraisals –
“Coaching”
Exhibit 14.9

24. Objectives used to appraise employees’ performance:
Evaluative Objectives
Used as the basis of administrative decisions that reward or punish for past performance
e.g., bonus pay
e.g., salary decisions
Used to make demotion, termination, transfer, and promotion decisions
Developmental Objectives
Used as the basis of decisions that improve future performance

25. Performance Appraisal Methods
Ranking
Management by
Objectives
(MBO)
Narrative
Rating Scale
Behaviorally
Anchored
Rating Scales
(BARS)
Critical
Incidents
Break-even Analysis
identifies profit or loss at various sales volumes
Return on Investment
measures productivity of assets
Marginal Analysis
compares the additional cost in a particular decision rather than average cost
Game Theory
mathematical models that analyze multi-party decision contexts
Linear Programming
for optimally solving resource allocation problems
Queuing Theory
for calculating waiting lines 5

26. Coaching Model Step 1. Refer to past feedback
Step 2. Describe the current performance
Step 3. Describe the desired performance
Step 4. Get a commitment to change
Step 5. Follow-up

27. Grid OD
A six-phase program designed to improve management and organizational effectiveness
Phases include:
Phase 1. Training
Phase 2. Team Development
Phase 3. Inter-group Development
Phase 4. Organizational Goal Setting
Phase 5. Goal Attainment
Phase 6. Stabilization

28. Survey Feedback Program Steps (1 of 2)
An OD technique that uses a questionnaire to gather data that are used as the basis for change
Management and the change agent do preliminary planning to develop an appropriate survey questionnaire
The questionnaire is administered to all members of the organization / unit
The survey data are analyzed to uncover problem areas for improvement

29. Survey Feedback Program Steps (2 of 2)
The change agent feeds back the results to management
Managers evaluate the feedback and discuss the results with their subordinates
Corrective action plans are developed and implemented
Measuring Climate. Commonly used to measure the organizational climate.

30. Team Building
The OD technique designed to help work groups operate more effectively
The most widely used OD technique
The goals of team building programs vary, depending on:
the group’s needs
the change agent’s skills

31. Team Building: Typical Goals (1 of 2)
To clarify the objectives of the team and responsibilities of each team member
To identify problems preventing the team from accomplishing its objectives
To develop team skills in:
problem-solving
decision-making
objective-setting
planning

32. Team Building: Typical Goals (2 of 2)
To determine a preferred style of teamwork and to change that style
To fully utilize the resources of each individual member
To develop open, honest working relationships based on trust and an understanding of group members

33. Team-Building Program Agenda Topics
Problem
Solving
Training
Closure
Process and
Structure
Evaluation
Identification
Climate
Building
Break-even Analysis
identifies profit or loss at various sales volumes
Return on Investment
measures productivity of assets
Marginal Analysis
compares the additional cost in a particular decision rather than average cost
Game Theory
mathematical models that analyze multi-party decision contexts
Linear Programming
for optimally solving resource allocation problems
Queuing Theory
for calculating waiting lines 5

34. The Relationship among Organizational Culture, Climate, and Development (1 of 2)
Climate is a sharing of perceptions and intangibles of the internal environment
Culture is the values and assumptions of the ideal environment
Culture informs climate
Often, the concept of culture encompasses that of climate

35. The Relationship among Organizational Culture, Climate, and Development (2 of 2)
OD is commonly used as the vehicle to change culture or climate
OD programs tend to be wider in scope than culture or climate
Culture and climate changes can be part of an extensive OD program addressing other issues as well

36. Global Differences Openness to change is influenced by:
Cultural values
Collective versus individual societies
Openness to power and following orders for change without questioning authority
Culture and country development
Multinational corporations are continually seeking best practices to implement at all their global facilities