Chapter 10 Organizational Culture and Change Chapter 10

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

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

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?

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 Copyright © 2007 Pearson Education Canada 10 -4

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.

Exhibit 10 -1 Layers of Culture Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright © 2007 Pearson Education Canada 10 -6

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 Copyright © 2007 Pearson Education Canada 10 -7

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.

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 Copyright © 2007 Pearson Education Canada 10 -9

Exhibit 10 -2 Contrasting Organizational Cultures Organization A • 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. Organization B • 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 Copyright © 2007 Pearson Education Canada 10 -10

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

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 Copyright © 2007 Pearson Education Canada 10 -12

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.

Exhibit 10 -3 How Organizational Culture Forms Philosophy of organization's founders Top management Organization's culture Selection criteria Socialization

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.

A Socialization Model Socialization Process Outcomes Productivity Prearrival Encounter Metamorphosis Commitment Turnover

Sociability Exhibit 10 -5 Four-Culture Typology High Networked Communal Low Fragmented Mercenary Low High Solidarity 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: Harper. Business, 1998), p. 21. Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright © 2007 Pearson Education Canada 10 -17

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 Copyright © 2007 Pearson Education Canada 10 -18

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.

Strategies For Merging Cultures • Assimilation • Separation • Integration Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright © 2007 Pearson Education Canada 10 -20

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 Copyright © 2007 Pearson Education Canada 10 -21

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 Copyright © 2007 Pearson Education Canada 10 -22

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 Copyright © 2007 Pearson Education Canada 10 -23

Approaches To Managing Change • Lewin’s Three-Step Model • Kotter’s Eight-Step Plan for Implementing Change • Action Research • Appreciative Inquiry

Exhibit 10 -6 Lewin’s Three-Step Change Model Unfreezing Moving Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright © 2007 Pearson Education Canada Refreezing 10 -25

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.

Exhibit 10 -7 Unfreezing the Status Quo Desired state Restraining forces Status quo Driving forces Time Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition Copyright © 2007 Pearson Education Canada 10 -27

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

Moving • Establish goals. • Institute smaller, acceptable changes that reinforce and support change. • Develop management structures for change. • Maintain open, two-way communication.

Refreezing • • Build success experiences. Reward desired behaviour. Develop structures to institutionalize the change. Make change work.

Exhibit 10 -8 Kotter’s Eight-Step Plan for Implementing Change 1. 2. 3. 4. 5. 6. 7. 8. Establish a sense of urgency. Form a coalition. Create a new vision. Communicate the vision. Empower others to act. Develop short-term “wins. ” Consolidate improvements. 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 Copyright © 2007 Pearson Education Canada 10 -31

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 Copyright © 2007 Pearson Education Canada 10 -32

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 Copyright © 2007 Pearson Education Canada 10 -33

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 Copyright © 2007 Pearson Education Canada 10 -34

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 Copyright © 2007 Pearson Education Canada 10 -35

Exhibit 10 -9 Sources of Individual Resistance to Change Selective information processing Habit Individual Resistance Fear of the unknown Economic factors Security

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.

Exhibit 10 -11 Sources of Organizational Resistance to Change Threat to established resource allocations Threat to established power relationships Threat to expertise Organizational Resistance Structural inertia Limited focus of change Group inertia

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

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 Copyright © 2007 Pearson Education Canada 10 -40

Summary and Implications 1. 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.

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 Copyright © 2007 Pearson Education Canada 10 -42

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 Copyright © 2007 Pearson Education Canada 10 -43

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

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 Copyright © 2007 Pearson Education Canada 10 -45

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 Copyright © 2007 Pearson Education Canada 10 -46

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 Copyright © 2007 Pearson Education Canada 10 -47

Point-Counter. Point • Why Culture Doesn’t Change s Culture develops over many years, and becomes part of how the organization thinks and feels. s Selection and promotion policies guarantee survival of culture. s Top management chooses managers who are likely to maintain culture. • When Culture Can Change s There is a dramatic crisis. s There is a turnover in leadership. s The organization is young and small. s There is a weak culture.

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