Unit 6Unit 6

Organizational culture Organizational culture and change and change

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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’ Reflects employees’ views about views about “the way “the way things are done around herethings 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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Organization culture Organization culture is the set of values that is the set of values that helps the organization’s employees helps the organization’s employees understand which actions are considered understand which actions are considered acceptable and which are unacceptableacceptable and which are unacceptable..

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Core Core ValuesValues

Expressed Expressed ValuesValues

Visible Visible CultureCulture

Levels of Corporate Levels of Corporate CultureCulture

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What Do Cultures Do?What Do Cultures Do?

Culture’s Functions:

1. Defines the boundary between one organization and others.

2. Conveys a sense of identity for its members.

3. Facilitates the generation of commitment to something larger than self-interest.

4. Enhances the stability of the social system.

5. Serves as a sense-making and control mechanism for fitting employees in the organization.

Culture’s Functions:

1. Defines the boundary between one organization and others.

2. Conveys a sense of identity for its members.

3. Facilitates the generation of commitment to something larger than self-interest.

4. Enhances the stability of the social system.

5. Serves as a sense-making and control mechanism for fitting employees in the organization.

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How Culture BeginsHow Culture Begins

Founders hire and keep only employees who Founders hire and keep only employees who think and feel the same way they do.think and feel the same way they do.

Founders indoctrinate and socialize these Founders indoctrinate and socialize these employees to their way of thinking and feeling.employees to their way of thinking and feeling.

The founders’ own behavior acts as a role The founders’ own behavior acts as a role model that encourages employees to identify model that encourages employees to identify with them and thereby internalize their beliefs, with them and thereby internalize their beliefs, values, and assumptions.values, and assumptions.

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Keeping Culture AliveKeeping Culture Alive

SelectionSelection Concern with how well the candidates will fit into the Concern with how well the candidates will fit into the

organization.organization. Provides information to candidates about the Provides information to candidates about the

organization.organization.

Top ManagementTop Management Senior executives help establish behavioral norms Senior executives help establish behavioral norms

that are adopted by the organization.that are adopted by the organization.

SocializationSocialization The process that helps new employees adapt toThe process that helps new employees adapt to the the

organization’s culture.organization’s culture.

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Stages in the Socialization ProcessStages in the Socialization Process

Pre-arrival StageThe period of learning in the socialization process that occurs before a new employee joins the organization.

Metamorphosis StageThe stage in the socialization process in which a new employee changes and adjusts to the work, work group, and organization.

Encounter StageThe stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge.

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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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How Employees Learn CultureHow Employees Learn Culture

• Stories

• Rituals

• Material Symbols

• Language

• Stories

• Rituals

• Material Symbols

• Language

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

Unfreezing Unfreezing is the process is the process

by which people by which people become aware become aware of the need for of the need for

changechange

RefreezingRefreezing: : is the process of is the process of

making new making new behaviors behaviors relatively relatively

permanent and permanent and resistant to resistant to

further change further change

Change: Change: movement movement

from the old from the old way of doing way of doing things to a things to a new waynew way

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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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Managing successful organization Managing successful organization change and development.change and development. Consider international issueConsider international issue Take a holistic viewTake a holistic view Start small Start small Secure top management supportSecure top management support Encourage participationEncourage participation Foster open communicationFoster open communication Reward contributorsReward contributors

5-20Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Key impact

Consider international issue Keeps in touch with the latest global developments and how change is handled in different cultures

Take a holistic view Helps anticipate the effects on the social system and culture

Start small Works out details and shows the benefits of the change to those who might resist.

Secure top management support Gets dominant coalition on the side of change: safeguards structural change, heads off problems of power and control

Encourage participation by those affected by change.

Minimizes transition problems of control, resistance and task redefinition

Foster open communication Minimizes transition problems of resistance and information and control systems

Reward contributors Minimises transition problems of resistance and control systems.

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Organizational development Organizational development

------ORGANIZATION DEVELOPMENTORGANIZATION DEVELOPMENT: It is the process of planned : It is the process of planned change and improvement of the organization through change and improvement of the organization through application of knowledge of the behavioral sciencesapplication of knowledge of the behavioral sciences

----

----OD is the systematic application of behavioral science ----OD is the systematic application of behavioral science knowledge at various levels, such as group, inter group, knowledge at various levels, such as group, inter group, organization, to bring about planned change. organization, to bring about planned change.

----Their objective is a higher quality of work life, productivity, ----Their objective is a higher quality of work life, productivity, adaptability and effectivenessadaptability and effectiveness. It accomplishes this by . It accomplishes this by changing attitudes, behaviors, values, strategies, changing attitudes, behaviors, values, strategies, procedures and structures so that the organization can procedures and structures so that the organization can adapt to competitive actions, technological advances and adapt to competitive actions, technological advances and the fast pace of change within the environmentthe fast pace of change within the environment..

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QUALITY OF WORK LIFE: QUALITY OF WORK LIFE: is the extent to which is the extent to which workers can satisfy important personal needs workers can satisfy important personal needs through their experiences in the organization through their experiences in the organization

.