Chapter 5Chapter 5

Managing Managing Organizational Culture Organizational Culture and Changeand Change

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Management ChallengesManagement ChallengesAfter reading this chapter, you should be able to:After reading this chapter, you should be able to:

Describe how organizational culture helps Describe how organizational culture helps management achieve its objectives.management achieve its objectives.

Understand how cultural symbols, rites, Understand how cultural symbols, rites, ceremonies, heroes, and stories are used to ceremonies, heroes, and stories are used to sustain an organization’s culture.sustain an organization’s culture.

Recognize the differences between strong and Recognize the differences between strong and weak organizational cultures, and identify situations weak organizational cultures, and identify situations in which each of these cultures may be in which each of these cultures may be advantageous.advantageous.

Adapt to organizational change and the forces that Adapt to organizational change and the forces that drive change.drive change.

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Management Challenges Management Challenges (continued)(continued)

Identify the four different types of organizational Identify the four different types of organizational cultures and the characteristics of people who fit cultures and the characteristics of people who fit best with each.best with each.

Direct and counsel employees who resist Direct and counsel employees who resist organizational change.organizational change.

Apply the tactics of change agents while taking into Apply the tactics of change agents while taking into consideration potential sources of resistance.consideration potential sources of resistance.

Use tools that enhance our understanding of the Use tools that enhance our understanding of the change process, such as Lewin’s three-step model change process, such as Lewin’s three-step model of change and force field analysis.of change and force field analysis.

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Skills for managing organizational culture and Skills for managing organizational culture and change:change:

Cultural diagnostic skillsCultural diagnostic skills

Cultural strategic skillsCultural strategic skills

Managing culture skillsManaging culture skills

Change management skillsChange management skills

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Organizational CultureOrganizational Culture

A system of shared values, assumptions, A system of shared values, assumptions, beliefs, and norms that unite the members of beliefs, and norms that unite the members of an organization.an organization.

Reflects employees’ views about Reflects employees’ views about “the way “the way things are done around here.”things are done around here.”

The culture specific to each firm affects how The culture specific to each firm affects how employees feel and act and the type of employees feel and act and the type of employee hired and retained by the employee hired and retained by the company.company.

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Core Core ValuesValues

Expressed Expressed ValuesValues

Visible Visible CultureCulture

Levels of Corporate Levels of Corporate CultureCulture

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Functions performed by organizational Functions performed by organizational culture:culture: Employee Self-ManagementEmployee Self-Management

Sense of shared identitySense of shared identity Generation of commitmentGeneration of commitment

StabilityStability Sense of continuitySense of continuity Satisfies need for predictability, security, and Satisfies need for predictability, security, and

comfortcomfort

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Functions performed by organizational Functions performed by organizational culture: culture: (continued)(continued)

SocializationSocialization Internalizing or taking organizational values Internalizing or taking organizational values

as one’s ownas one’s own Implementation Support of the Organization’s Implementation Support of the Organization’s

StrategyStrategy If strategy and culture reinforce each other, If strategy and culture reinforce each other,

employees find it natural to be committed to employees find it natural to be committed to the strategythe strategy

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Stages of the Socialization ProcessStages of the Socialization Process

Pre-arrivalPre-arrival

EncounterEncounter

MetamorphosisMetamorphosis

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Creating and Sustaining Organizational Creating and Sustaining Organizational CultureCulture

Cultural SymbolsCultural Symbols Company Rituals Company Rituals and Ceremoniesand Ceremonies

Company HeroesCompany Heroes

StoriesStories

LanguageLanguage

LeadershipLeadership

Organizational Organizational Policies and Policies and

Decision MakingDecision Making

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Aspects of organizational cultureAspects of organizational culture

Cultural Uniformity versus HeterogeneityCultural Uniformity versus Heterogeneity Strong versus Weak CulturesStrong versus Weak Cultures Culture versus FormalizationCulture versus Formalization National versus Organizational CultureNational versus Organizational Culture Organizational FitOrganizational Fit

Baseball team cultureBaseball team culture Club cultureClub culture Academy cultureAcademy culture Fortress cultureFortress culture

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ManagingManaging Organizational Change Organizational Change

Organization culture can facilitate or inhibit Organization culture can facilitate or inhibit changechange in an organization. in an organization.

A firm attempts to change organizational A firm attempts to change organizational culture because the current culture hinders culture because the current culture hinders the attainment of corporate goals.the attainment of corporate goals.

EnvironmentalEnvironmental and and internalinternal forces can forces can stimulate the need for organization change.stimulate the need for organization change.

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Forces for Change: Environmental ForcesForces for Change: Environmental Forces

Put pressure on how a firm conducts its Put pressure on how a firm conducts its business and its relationships with business and its relationships with customers, suppliers, and employees.customers, suppliers, and employees.

Environmental forces include:Environmental forces include: TechnologyTechnology Market forcesMarket forces Political and regulatory forcesPolitical and regulatory forces Social trendsSocial trends

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Forces for Change: Internal ForcesForces for Change: Internal Forces

Come from decisions made within the Come from decisions made within the company.company.

May originate with top executives and May originate with top executives and managers and travel in a top-down direction.managers and travel in a top-down direction.

May originate with front-line employees or May originate with front-line employees or labor unions and travel in a bottom-up labor unions and travel in a bottom-up direction.direction.

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Resistance to ChangeResistance to Change

Self-InterestSelf-Interest

Lack of Trust and Lack of Trust and UnderstandingUnderstanding

UncertaintyUncertaintyDifferent Different

Perspectives and Perspectives and GoalsGoals

Cultures that Cultures that Value TraditionValue Tradition

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Models of Organizational ChangeModels of Organizational Change

Lewin’s three-step modelLewin’s three-step model

Force-field analysis modelForce-field analysis model

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Lewin’s Three-Step Model of Organizational Lewin’s Three-Step Model of Organizational ChangeChange

UnfreezingUnfreezing RefreezingRefreezingChangeChange

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Restraining forcesRestraining forces

Driving forcesDriving forces

Status Status quoquo

Desired Desired statestate

TimeTime

Force-field Model of ChangeForce-field Model of Change

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Implementing Organizational ChangeImplementing Organizational Change

Top-down ChangeTop-down Change

Change AgentsChange Agents

Bottom-up ChangeBottom-up Change

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Change agents should take the following steps Change agents should take the following steps to obtain a successful change outcome:to obtain a successful change outcome:

1.1. Establish a sense of Establish a sense of urgency.urgency.

2.2. Form a powerful Form a powerful coalition of supporters coalition of supporters of change.of change.

3.3. Create a vision of Create a vision of change.change.

4.4. Communicate the Communicate the vision of change.vision of change.

5.5. Empower others to Empower others to act on the vision.act on the vision.

6.6. Plan and create short-Plan and create short-term wins.term wins.

7.7. Consolidate Consolidate improvements and improvements and produce still more produce still more change.change.

8.8. Institutionalize new Institutionalize new approaches.approaches.

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Tactics for Introducing ChangeTactics for Introducing Change

Communication and Communication and EducationEducation Employee Employee

InvolvementInvolvement

NegotiationNegotiation

CoercionCoercion

Top-Management Top-Management SupportSupport

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Applications of Management Perspectives:Applications of Management Perspectives:For the ManagerFor the Manager

Certain types of changes routinely provoke Certain types of changes routinely provoke strong employee resistance:strong employee resistance: Changes that affect skill requirements.Changes that affect skill requirements. Changes that represent economic or status loss.Changes that represent economic or status loss. Changes that involve disruption of social Changes that involve disruption of social

relationships.relationships. By being aware of the sources of resistance, By being aware of the sources of resistance,

managers can better apply tactics to make the managers can better apply tactics to make the changes more palatable for employees.changes more palatable for employees.

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Applications of Management Perspectives:Applications of Management Perspectives:For Managing TeamsFor Managing Teams

Teams can help test the waters for a Teams can help test the waters for a proposed change.proposed change.

Various employee teams can serve as focus Various employee teams can serve as focus groups in order to find ways to make a groups in order to find ways to make a change in policy more acceptable to change in policy more acceptable to employees.employees.

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Applications of Management Perspectives:Applications of Management Perspectives:For IndividualsFor Individuals

Learning the specifics about the company Learning the specifics about the company culture can help you determine your fit with culture can help you determine your fit with the organization and the possibility of the organization and the possibility of succeeding.succeeding.

Ask questions and gather information during Ask questions and gather information during the recruiting process to get a handle on the the recruiting process to get a handle on the company culture and assess whether you will company culture and assess whether you will function comfortably in it.function comfortably in it.