Organizational Change & CultureMatthew L. Eisenhard, Psy.D.Week 12: Psychology for Business & Industry

Life is About Changes“It is not the strongest of the species that survive, nor

the most intelligent, but the one most responsive to change.”~Charles Darwin~

• Managing change is crucial to all elements of life and business.▫ An organization’s (or a person’s)

success or failure can depend on how well they adapt to change.

▫ Sounds easy, but it is not! Example: Blockbuster Video.

Types of Change

• Self-assessment 12.1 examines your openness to change.

• Organizations are composed of four interactive variables – they are the types of changes.▫ Technological.▫ Structural.▫ Task.▫ People.

Technological Change• Machines

▫ Any new type of manufacturing equipment – especially computers.

• Automation▫ Simplification or reduction of human

effort to do a job.▫ Changes the types of jobs available.▫ Increases the need for training and education for skilled

workers – while need for unskilled jobs declines.• Process

▫ How a business changes raw material into finished goods, services, or information.

▫ Management information systems (MIS) = a formal system for getting, processing, and sending out information.

Structural Change• Structure of an organization means how it is designed.

▫ How departments are divided.▫ The employee hierarchy.

• Important to change the structure to go with technological changes.

Task Change• Tasks are the day-to-day things that

people do to perform their jobs.▫ As technology and structures

change, so do people’s routine tasks.

▫ People’s skills must change – ongoing job training is necessary.

▫ Organizations need to be prepared to hire new employees with the necessary skills.

People Change

• People are the most important resource in any organization.▫ People create, manage, and use technology.▫ The social changes that go

along with the technical changes affect people the most. Success depends on integrating

people and technology – a sociotechnical system.

Stages in the Change Process• DENIAL

▫ “Oh that can’t be true!” – it affects others, but not me.• RESISTANCE

▫ Following the initial shock, reality hits, and the person resists the change. “No I won’t do it!”

• EXPLORATION▫ Once the changes are implemented, people start to

understand it more and try to see how they fit into it.• COMMITMENT

▫ Once people are trained they will either embrace the change, move and grow with it – or continue to be resistant.

Resistance to Change• People resist change for a number

of reasons.▫ Want to maintain the status quo –

like things the way they are.▫ Fear the unknown – uncertainty

makes us nervous.▫ Anxiety about having to learn

something new.▫ Fear of losing their jobs, feel threatened, out of control of

situation• INTENSITY: acceptance – tolerance – resistance – rejection.• SOURCES: facts – beliefs – values.• FOCUS: self – others – work environment.

Overcoming Resistance to Change

Types of Resisters• THE BLOCKER

▫ Refuses – ask what they want to do instead.

• THE ROLLER▫ Seems confused – be specific and detailed.

• THE STALLER▫ Puts you off, says “later” – ask why not now?

• THE REVERSER▫ Says “ok” but does not do it (passive-aggressive).▫ If you like the change, why did you not do it like you said

you would?• THE SIDESTEPPER

▫ Asks you to delegate it to someone else – say “no, I asked you because…”

Types of Resisters• THE THREATENER

▫ Complies but says others will not like it – tell them “let me worry about that part.”

• THE POLITICIAN▫ Tries to get out of it by saying you owe them something –

say “ok, but I need this now.”• THE TRADITIONALIST

▫ That’s not the way we do things here!▫ “Well we need to make an exception and do it this way

now.”• THE ASSAULTER

▫ Gets verbally abusive – you can refuse to tolerate it or try to be empathetic.

Change Models

Lewin’s Change Model• Kurt Lewin – 1950s.• Three steps used to change

people’s behavior, skills, and attitudes.▫ UNFREEZING

Reducing forces that maintain the status quo.▫ MOVING

Learning new desirable behaviors, skills, and attitudes.

▫ REFREEZING Establishes the new status quo through positive

reinforcement.

Lussier’s Change Model• Five steps to effective change.

▫ DEFINE the change. Clearly define what it is and the systems effects it will generate.

▫ IDENTIFY possible resistance. Be prepared for all the reasons people will resist.

▫ PLAN the change. Make a clear and reasonable plan – set a timetable.

▫ IMPLEMENT it. Give the facts – what effects it will have on the people. Involve the employees – ownership helps get commitment. Provide support – get input and help from employees – listen to their

concerns – provide training.▫ CONTROL it.

Follow-up to make sure it is working. If not make corrections where necessary to attain the desired

outcome.

Organizational Culture

• Consists of the shared values and assumptions of how its members will behave.▫ Success and shared experiences also shape

culture.• Learned mostly by observing people and events

in the organization.▫ New people need to learn and become integrated

into an organization’s culture to be a part of it.

Five Ways to Learn the Culture• HEROES

▫ Those who make outstanding contributions to the organization.

• STORIES▫ Often about the founders/heroes that make the

organization special – public statements and speeches can also be stories.

• SLOGANS▫ The organization’s philosophy statement(s).

• SYMBOLS▫ Plaques – pins – jackets – caps – business cards – signage.

• CEREMONIES▫ Awards dinners for top performers, etc.

Important Definitions Related to Organizational Culture• Most effective organizational structure is STRONG and POSITIVE.▫ Strong = have clear values that are shared to the

extent of similar behavior.▫ Positive = has norms that contribute to effective

performance and productivity.▫ Weak = no stated values and do not enforce

behavior standards.▫ Negative = experiences resistance and turmoil

that hinders effective performance.

Organizational Climate• The relatively enduring quality of the internal

environment of the organization as perceived by its members.

• The employee’s perception of the atmosphere of the internal workings of the organization.▫ Important because employees’

perceptions are the basis for their attitudes toward their jobs – and their attitudes influence their behavior.

Morale

• Is a state of mind based on attitudes and satisfaction with the organization.▫ Can vary at different levels within the

organization.▫ Commonly measured on a continuum ranging

from high to low based on 7 dimensions of climate.

7 Dimensions of Climate• STRUCTURE

▫ Constraints – rules – regulations – policies and procedures.• RESPONSIBILITY

▫ Degree of control over your own job (autonomy).• REWARDS

▫ Degree of being reinforced or punished.• WARMTH

▫ Degree of satisfaction with human relations on the job.• SUPPORT

▫ How much help you get and the level of cooperation.• ORGANIZATIONAL IDENTITY & LOYALTY

▫ Degree to which employees identify with and feel loyal to.• RISK

▫ How much risk taking is encouraged.

Organizational Development (O.D.)• Ongoing process of change

used as a means of improving the organization’s effectiveness in solving problems and achieving its goals.▫ A Change-Agent is a person responsible for an

O.D. program. Training = process of developing necessary skills to

perform the present job. Development = process of developing the ability to

perform both present and future jobs.

The Training Cycle – 5 Steps• DO A “NEEDS” ASSESSMENT

▫ Who needs training and what kind.• SET GOALS

▫ What will they be able to do at end of training.• PREPARE FOR THE TRAINING

▫ Decide what methods of training are best.• CONDUCT THE TRAINING• MEASURE AND EVALUATE THE RESULTS

▫ A “follow-up” to see what has been learned – performance appraisal.

Performance Appraisals

• Ongoing process of evaluating employee job performance.▫ Typically after someone is hired (during and after

their training) and on a quarterly, bi-annual, or annual basis.

▫ Two objectives: Development of the employee. Evaluation of the employee.

More on Steps 2 & 3• STANDARDS

▫ Describes performance levels in the areas of quantity, quality, time, and cost.

• COACHING▫ Refer to past feedback.

What were they supposed to do?▫ Describe current performance.

Give specific examples of needed changes.▫ Describe desired performance.

In detail and why it is important – more training.▫ Get a commitment for change.

Must be a willingness to change/improve.▫ Follow-up.

Include positive reinforcement and how follow-up will be done.

Survey Feedback• An O.D. technique that uses questionnaires to gather

data that are used as the basis for change.▫ Commonly used to measure climate.

• Six steps:▫ Preliminary planning to develop survey.▫ Questionnaire is given to all members of organization.▫ Data analysis is conducted.▫ Change agent gives results to management.▫ Management evaluates and discusses with employees.▫ Correction active plans are developed and implemented.

Force Field Analysis• Technique that diagrams:

▫ Current level of performance.▫ Forces that hinder change.▫ Driving forces toward change.

• Particularly useful for group problem solving as it helps people to visualize problems and solutions.

Team Building• An O.D. technique designed to help

work groups operate more efficiently.▫ Typical agendas vary according to the

change agent and needs of the organization – but usually include the things we have discussed about team development.

• Goals of team building:▫ Clarify goals and personal responsibilities.▫ Identify obstacles/problems in the way.▫ Develop team skills.▫ Determine preferred style of teamwork.▫ Use talents/strengths of all team members.▫ Develop open/honest/trusting relationships.

Team Building Program Agenda• Climate Building

▫ Change Agent develops trust and openness.• Process & Structure Evaluation

▫ Team decides it’s ideal norms.• Problem Identification

▫ Team identifies weak/strong areas.• Problem Solving

▫ Priorities are set.• Training

▫ To address the new skills needed.• Closure

▫ Summary – set follow-up – commitments.

Global Differences in Change• Individual Based Cultures

▫ Concerned more about helping themselves.▫ More likely to resist change if it does not directly benefit

them.▫ Overall they value change and the ability to deal with

change positively.• Slower to Change Cultures – Value Tradition More

▫ Asian countries and some Middle Eastern.• Collective Based Cultures

▫ Tend toward improving the team effort.▫ Japan, Mexico.

• Respond More to Power▫ France, China, India.

Chapter Summary• 4 Types of Changes• Resistance to Change• Change Models• 2 Dimensions of Organizational

Culture• 7 Dimensions of Organizational

Climate• 5 Organizational Development

Techniques• The Training Cycle• 5 Steps of Performance

Appraisals• The Coaching Model• Relationship between Org.

Culture, Climate, and Development

• CLIMATE▫ Values and assumptions of

the ideal environment.• CULTURE

▫ Shared values and assumptions of the actual internal environment.

▫ Culture informs climate.• DEVELOPMENT

▫ Vehicle used to change culture and/or climate in search of improvement toward the ideal.