Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-1Copyright © 2007 Pearson Education Canada

Chapter 10

Organizational Culture and Change

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-2Copyright © 2007 Pearson Education Canada

Chapter Outline

• What Is Organizational Culture?

• Creating and Sustaining Culture

• Matching People With Organizational Cultures

• The Liabilities of Organizational Culture

• Approaches to Managing Change

• Resistance to Change

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-3Copyright © 2007 Pearson Education Canada

Organizational Culture

1. What is the purpose of organizational culture?

2. How do you create and maintain organizational culture?

3. What kind of organizational culture might suit you?

4. Can organizational culture have a downside?

5. How do organizations manage change?

6. Why do people and organizations resist change?

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-4Copyright © 2007 Pearson Education Canada

Henry Mintzberg on Culture

• “Culture is the soul of the organization — the beliefs and values, and how they are manifested. I think of the structure as the skeleton, and as the flesh and blood. And culture is the soul that holds the thing together and gives it life force.”

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-5Copyright © 2007 Pearson Education Canada

Organizational Culture

• The pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization.– Culture is shared.

– Culture helps members solve problems.

– Culture is taught to newcomers.

– Culture strongly influences behaviour.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-6Copyright © 2007 Pearson Education Canada

Exhibit 10-1 Layers of Culture

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-7Copyright © 2007 Pearson Education Canada

Levels of Culture

• Artifacts– Aspects of an organization’s culture that you see, hear, and feel

• Beliefs– The understandings of how objects and ideas relate to each

other

• Values– The stable, long-lasting beliefs about what is important

• Assumptions– The taken-for-granted notions of how something should be in

an organization

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-8Copyright © 2007 Pearson Education Canada

Characteristics of Organizational Culture

• Innovation and risk-taking– The degree to which employees are encouraged to be innovative and take

risks.

• Attention to detail– The degree to which employees are expected to exhibit precision,

analysis, and attention to detail.

• Outcome orientation– The degree to which management focuses on results or outcomes rather

than on technique and process.

• People orientation– The degree to which management decisions take into consideration the

effect of outcomes on people within the organization.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-9Copyright © 2007 Pearson Education Canada

Characteristics of Organizational Culture

• Team orientation– The degree to which work activities are organized around teams

rather than individuals.

• Aggressiveness– The degree to which people are aggressive and competitive rather

than easygoing.

• Stability– The degree to which organizational activities emphasize

maintaining the status quo in contrast to growth.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-10Copyright © 2007 Pearson Education Canada

Exhibit 10-2 Contrasting Organizational Cultures

Organization A Organization B

• Managers must fully document

all decisions.

• Creative decisions, change, and risks

are not encouraged.

• Extensive rules and regulations exist

for all employees.

• Productivity is valued over employee

morale.

• Employees are encouraged to stay

within their own department.

• Individual effort is encouraged.

• Management encourages and

rewards risk-taking and change.

• Employees are encouraged to

“ run with ” ideas, and failures are

treated as “ learning experiences.”

• Employees have few rules and

regulations to follow.

• Productivity is balanced with treating

its people right.

• Team members are encouraged to interact

with people at all levels and functions.

• Many rewards are team based.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-11Copyright © 2007 Pearson Education Canada

Culture’s Functions• Boundary-defining• Conveys a sense of identity for organization

members• Facilitates commitment to something larger

than one’s individual self-interest• Social glue that helps hold an organization

together– Provides appropriate standards for what

employees should say or do

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-12Copyright © 2007 Pearson Education Canada

Culture’s Functions

• Serves as a “sense-making” and control mechanism– Guides and shapes the attitudes and behaviour of

employees

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-13Copyright © 2007 Pearson Education Canada

Do Organizations Have Uniform Cultures?

• Organizational culture represents a common perception held by the organization members.

• Core values or dominant (primary) values are accepted throughout the organization.– Dominant culture

• Expresses the core values that are shared by a majority of the organization’s members.

– Subcultures • Tend to develop in large organizations to reflect common

problems, situations, or experiences.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-14Copyright © 2007 Pearson Education Canada

Exhibit 10-3 How Organizational Culture Forms

Selectioncriteria

Socialization

Organization'sculture

Philosophyof

organization'sfounders

Topmanagement

Selectioncriteria

Socialization

Organization'sculture

Philosophyof

organization'sfounders

Topmanagement

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-15Copyright © 2007 Pearson Education Canada

Creating and Sustaining Culture: Keeping a Culture Alive

• Selection– Identify and hire individuals who will fit in with the

culture.

• Top Management– Senior executives establish and communicate the norms

of the organization.

• Socialization– Organizations need to teach the culture to new employees.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-16Copyright © 2007 Pearson Education Canada

A Socialization Model

Prearrival Encounter Metamorphosis

Socialization Process Outcomes

Commitment

Productivity

Turnover

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-17Copyright © 2007 Pearson Education Canada

Exhibit 10-5Four-Culture Typology

Fragmented

Networked

Low

High

Solidarity

Mercenary

Low High

Communal

Soc

iabi

lity

Source: Adapted from R. Goffee and G. Jones, The Character of a Corporation: How Your Company’s Culture Can Make or Break Your Business (New York: HarperBusiness, 1998), p. 21.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-18Copyright © 2007 Pearson Education Canada

Finding Your Culture

• Networked culture: you possess good social skills and empathy; you like to forge close, work-related friendships; you thrive in a relaxed and convivial atmosphere.

• Mercenary culture: you are goal-oriented, thrive on competition, like clearly structured work tasks.

• Fragmented culture: you are independent, have a low need to be part of a group atmosphere, are analytical rather than intuitive.

• Communal culture: you have a strong need to identify with something bigger than yourself and enjoy working in teams.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-19Copyright © 2007 Pearson Education Canada

The Liabilities of Culture

• Culture can have dysfunctional aspects in some instances.– Culture as a Barrier to Change

• When organization is undergoing change, culture may impede change.

– Culture as a Barrier to Diversity• Strong cultures put considerable pressure on employees to

conform.

– Culture as a Barrier to Mergers and Acquisitions• Merging the cultures of two organizations can be difficult, if

not impossible.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-20Copyright © 2007 Pearson Education Canada

Strategies For Merging Cultures

• Assimilation

• Separation

• Integration

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-21Copyright © 2007 Pearson Education Canada

Change Agents

• People who act as catalysts and assume the responsibility for managing change activities.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-22Copyright © 2007 Pearson Education Canada

Outside agents

• Can offer an objective perspective.

• Usually have an inadequate understanding of the organization’s history, culture, operating procedures, and personnel.

• Don’t have to live with the repercussions after the change is implemented.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-23Copyright © 2007 Pearson Education Canada

Internal agents

• Have to live with the consequences of their actions.

• May be more thoughtful.

• May be more cautious.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-24Copyright © 2007 Pearson Education Canada

Approaches To Managing Change

• Lewin’s Three-Step Model

• Kotter’s Eight-Step Plan for Implementing Change

• Action Research

• Appreciative Inquiry

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-25Copyright © 2007 Pearson Education Canada

Exhibit 10-6 Lewin’s Three-Step Change Model

RefreezingMovingUnfreezing

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-26Copyright © 2007 Pearson Education Canada

Lewin’s Three-Step Model For Implementing Change

• Unfreezing– Change efforts to overcome the pressures of both

individual resistance and group conformity.

• Moving– Efforts to get employees involved in the change process.

• Refreezing– Stabilizing a change intervention by balancing driving and

restraining forces.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-27Copyright © 2007 Pearson Education Canada

Exhibit 10-7 Unfreezing the Status Quo

Time

Drivingforces

Restrainingforces

Desiredstate

Statusquo

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-28Copyright © 2007 Pearson Education Canada

Unfreezing

• Arouse dissatisfaction with the current state.• Activate and strengthen top management support.• Use participation in decision making.• Build in rewards.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-29Copyright © 2007 Pearson Education Canada

Moving• Establish goals.

• Institute smaller, acceptable changes that reinforce and support change.

• Develop management structures for change.

• Maintain open, two-way communication.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-30Copyright © 2007 Pearson Education Canada

Refreezing

• Build success experiences.

• Reward desired behaviour.

• Develop structures to institutionalize the change.

• Make change work.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-31Copyright © 2007 Pearson Education Canada

Exhibit 10-8 Kotter’s Eight-Step Plan for Implementing Change

1. Establish a sense of urgency.

2. Form a coalition.

3. Create a new vision.

4. Communicate the vision.

5. Empower others to act.

6. Develop short-term “wins.”

7. Consolidate improvements.

8. Reinforce changes. Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996).

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-32Copyright © 2007 Pearson Education Canada

Action Research

• A change process based on the systematic collection of data and then selection of a change action based on what the analyzed data indicate.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-33Copyright © 2007 Pearson Education Canada

The Process of Action Research

• Diagnosis

• Analysis

• Feedback

• Action

• Evaluation

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-34Copyright © 2007 Pearson Education Canada

Appreciative Inquiry

• An approach to change that seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-35Copyright © 2007 Pearson Education Canada

Steps of Appreciative Inquiry

• “Four D’s”– Discovery

– Dreaming

– Design

– Destiny

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-36Copyright © 2007 Pearson Education Canada

Exhibit 10-9 Sources of Individual Resistance to Change

Security

Economicfactors

IndividualResistance

Fear ofthe unknown

Selectiveinformationprocessing

Habit

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-37Copyright © 2007 Pearson Education Canada

Cynicism About Change

• Feeling uninformed about what was happening.

• Lack of communication and respect from one’s supervisor.

• Lack of communication and respect from one’s union representative.

• Lack of opportunity for meaningful participation in decision making.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-38Copyright © 2007 Pearson Education Canada

Exhibit 10-11 Sources of Organizational Resistance to Change

OrganizationalResistance

Threat to establishedresource allocations

Structuralinertia

Threat to establishedpower relationships

Limited focus of change

Threat toexpertise

Groupinertia

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-39Copyright © 2007 Pearson Education Canada

Overcoming Resistance to Change

• Education and communication– This tactic assumes that the source of resistance lies in misinformation or

poor communication.– Best used: Lack of information, or inaccurate information

• Participation and involvement– Prior to making a change, those opposed can be brought into the decision

process.– Best used: Where initiators lack information, and others have power to

resist• Facilitation and support

– The provision of various efforts to facilitate adjustment.– Best used: Where people resist because of adjustment problems

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-40Copyright © 2007 Pearson Education Canada

Overcoming Resistance to Change

• Negotiation and agreement– Exchange something of value for a lessening of resistance.– Best used: Where one group will lose, and has considerable power to

resist• Manipulation and cooperation

– Twisting and distorting facts to make them appear more attractive.– Best used: Where other tactics won’t work or are too expensive

• Explicit and implicit coercion– The application of direct threats or force upon resisters.– Best used: Speed is essential, and initiators have power

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-41Copyright © 2007 Pearson Education Canada

Summary and Implications1. What is the purpose of organizational

culture?– Organizational culture provides stability and

gives employees a clear understanding of “the way things are done around here.”

2. How do you create and maintain culture?– An organization’s culture is derived from the

philosophy of its founders. It is communicated by managers and employees are socialized into it.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-42Copyright © 2007 Pearson Education Canada

Summary and Implications

3. What kind of organizational culture might suit you? – Organizational cultures can be analyzed in terms of members’

friendliness (sociability) and task orientation (solidarity).4. Can organizational culture have a downside?

– A strong culture can have a negative effect, including “pressure-cooker” cultures, barriers to change, difficulty in creating an inclusive environment, and hindering mergers and acquisitions.

5. How do organizations manage change?– Kurt Lewin argued that successful change should follow

three steps: unfreezing, moving, and refreezing. John Kotter built on Lewin’s work to offer an eight-step model. Two other theories include action research and appreciative inquiry.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-43Copyright © 2007 Pearson Education Canada

Summary and Implications

6. Why do people and organizations resist change?– Individuals resist change because of basic human

characteristics such as perceptions, personalities, and needs. Organizations resist change because they are conservative and because change is difficult.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-44Copyright © 2007 Pearson Education Canada

OB at Work

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-45Copyright © 2007 Pearson Education Canada

For Review

1. How can an outsider assess an organization’s culture?2. What defines an organization’s subcultures?3. Can an employee survive in an organization if he or she

rejects its core values? Explain.4. What benefits can socialization provide for the

organization? For the new employee?5. Describe four cultural types and the characteristics of

employees who fit best with each.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-46Copyright © 2007 Pearson Education Canada

For Review

6. How can culture be a liability to an organization?7. How does Lewin’s three-step model of change deal with

resistance to change?8. How does Kotter’s eight-step plan for implementing

change deal with resistance to change?9. What are the factors that lead individuals to resist

change?10.What are the factors that lead organizations to resist

change?

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-47Copyright © 2007 Pearson Education Canada

For Critical Thinking

1. How are an individual’s personality and an organization’s culture similar? How are they different?

2. Is socialization brainwashing? Explain.3. Can you identify a set of characteristics that describes

your college’s or university’s culture? Compare them with several of your peers’ lists. How closely do they agree?

4. “Resistance to change is an irrational response.” Do you agree or disagree? Explain.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-48Copyright © 2007 Pearson Education Canada

Point-CounterPoint• Why Culture Doesn’t

Change Culture develops over many

years, and becomes part of how the organization thinks and feels.

Selection and promotion policies guarantee survival of culture.

Top management chooses managers who are likely to maintain culture.

• When Culture Can Change There is a dramatic crisis. There is a turnover in

leadership. The organization is young and

small. There is a weak culture.

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-49Copyright © 2007 Pearson Education Canada

Breakout Group Exercises• Form small groups to discuss the following:

1. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you conclude that the organization has a strong or weak culture?

2. Have you or someone you know worked somewhere where the culture was strong? What was your reaction to that strong culture? Did you like that environment, or would you prefer to work where there is a weaker culture? Why?

3. Reflect on either the culture of one of your classes or the culture of the organization where you work, and identify characteristics of that culture that could be changed. How might these changes be made?