Chapter 4 Managing Organizational Culture and Change Mc

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Chapter 4 Managing Organizational Culture and Change Mc. Graw-Hill/Irwin Copyright © 2008 by The

Chapter 4 Managing Organizational Culture and Change Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Learning Objectives Slide 2 After reading this chapter, you should be able to: •

Learning Objectives Slide 2 After reading this chapter, you should be able to: • Identify the three major aspects of organizational culture. • Apply a simple assessment tool to quickly gain a sense of the culture of an organization. • Describe the importance of organizational culture. • Identify the processes through which organizational culture can be developed and sustained. • Use classification systems to identify various types of organizational culture. • Identify the sources of resistance to change. • Apply models to effectively manage change efforts. Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 3 Organizational Culture • A system of shared values, assumptions, beliefs, and norms

Slide 3 Organizational Culture • A system of shared values, assumptions, beliefs, and norms that unite the members of an organization. • Reflects employees’ views about “the way things are done around here. ” • The culture specific to each firm affects how employees feel and act and the type of employee hired and retained by the company. Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Levels of Corporate Culture Slide 4 Visible Culture Expressed Values Core Values Mc. Graw-Hill/Irwin

Levels of Corporate Culture Slide 4 Visible Culture Expressed Values Core Values Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Key Effects of Organizational Culture Slide 5 Employee Self-management Organizational Culture Stability Socialization Strategy

Key Effects of Organizational Culture Slide 5 Employee Self-management Organizational Culture Stability Socialization Strategy Implementation Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Key Effects of Organizational Culture Slide 6 • Employee Self-Management ØSense of shared identity

Key Effects of Organizational Culture Slide 6 • Employee Self-Management ØSense of shared identity ØFacilitates commitment • Stability ØSense of continuity ØSatisfies need for predictability, security, and comfort Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 7 Key Effects of Organizational Culture • Socialization ØInternalizing or taking organizational values

Slide 7 Key Effects of Organizational Culture • Socialization ØInternalizing or taking organizational values as one’s own • Implementation Support of the Organization’s Strategy ØIf strategy and culture reinforce each other, employees find it natural to be committed to the strategy Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Stages of the Socialization Process Slide 8 Pre-arrival Encounter Metamorphosis Mc. Graw-Hill/Irwin Copyright ©

Stages of the Socialization Process Slide 8 Pre-arrival Encounter Metamorphosis Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 9 Managing Cultural Processes Cultural Symbols Company Rituals and Ceremonies Company Heroes Stories

Slide 9 Managing Cultural Processes Cultural Symbols Company Rituals and Ceremonies Company Heroes Stories Organizational Policies and Decision Making Mc. Graw-Hill/Irwin Language Leadership Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 10 Characteristics and Types of Organizational Culture • Cultural Uniformity versus Heterogeneity •

Slide 10 Characteristics and Types of Organizational Culture • Cultural Uniformity versus Heterogeneity • Strong versus Weak Cultures • Culture versus Formalization • National versus Organizational Culture Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 11 Characteristics and Types of Organizational Culture (continued) • Types: Traditional Control or

Slide 11 Characteristics and Types of Organizational Culture (continued) • Types: Traditional Control or Employee Involvement ØTraditional control üemphasizes the chain of command ürelies on top-down control and orders ØEmployee involvement üemphasizes participation and involvement Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Four Types of Culture Classification Slide 12 – Baseball team culture--rapidly changing environment –

Four Types of Culture Classification Slide 12 – Baseball team culture--rapidly changing environment – Club culture--seeks loyal, committed people – Academy culture--hires experts who are willing to make a slow steady climb up a ladder – Fortress culture--focused on surviving and reversing sagging fortunes Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Competing Values Framework Slide 13 • Based on two dimensions: focus and control Ø

Competing Values Framework Slide 13 • Based on two dimensions: focus and control Ø Focus--whether the primary attention of the organization is directed toward internal dynamics or directed outward toward the external environment ØControl--the extent to which the organization is flexible or fixed in how it coordinates and controls activities Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Competing Values Framework Internal Focus Slide 14 External Flexible Control Fixed Mc. Graw-Hill/Irwin Copyright

Competing Values Framework Internal Focus Slide 14 External Flexible Control Fixed Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Types of Change Slide 15 • Planned Change--change that is anticipated and allows for

Types of Change Slide 15 • Planned Change--change that is anticipated and allows for advanced preparation • Dynamic Change--change that is ongoing or happens so quickly that the impact on the organization cannot be anticipated and specific preparations cannot be made Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Forces for Change: Environmental Forces Slide 16 • Put pressure on a firm’s relationships

Forces for Change: Environmental Forces Slide 16 • Put pressure on a firm’s relationships with customers, suppliers, and employees. • Environmental forces include: ØTechnology ØMarket forces ØPolitical and regulatory agencies and laws ØSocial trends Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Forces for Change: Internal Forces Slide 17 • Arise from events within the company.

Forces for Change: Internal Forces Slide 17 • Arise from events within the company. • May originate with top executives and managers and travel in a top-down direction. • May originate with front-line employees or labor unions and travel in a bottom-up direction. Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 18 Resistance to Change Self-Interest Cultures that Value Tradition Different Perspectives and Goals

Slide 18 Resistance to Change Self-Interest Cultures that Value Tradition Different Perspectives and Goals Mc. Graw-Hill/Irwin Lack of Trust and Understanding Uncertainty Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Models of Organizational Change: The Star Model Slide 19 • The Star Model: Five

Models of Organizational Change: The Star Model Slide 19 • The Star Model: Five Points ØTypes of changeevolutionary or transformational ØStructure ØReward system ØProcesses ØPeople Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 20 Lewin’s Three-Step Model of Organizational Change • Unfreezing--melting away resistance • Change--departure

Slide 20 Lewin’s Three-Step Model of Organizational Change • Unfreezing--melting away resistance • Change--departure from the status quo • Refreezing--change becomes routine Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 21 Lewin’s Force Field Analysis Model • Increase driving forces that drive change

Slide 21 Lewin’s Force Field Analysis Model • Increase driving forces that drive change • Reduce restraining forces that resist change • or do both Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 22 Force-field Model of Change Desired state Restraining forces Status quo Driving forces

Slide 22 Force-field Model of Change Desired state Restraining forces Status quo Driving forces Time Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Implementing Organizational Change Slide 23 Top-down Change Agents Bottom-up Change Mc. Graw-Hill/Irwin Copyright ©

Implementing Organizational Change Slide 23 Top-down Change Agents Bottom-up Change Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Slide 24 Four Types of Employees Performance Low High Mc. Graw-Hill/Irwin Alignment with culture

Slide 24 Four Types of Employees Performance Low High Mc. Graw-Hill/Irwin Alignment with culture No Yes Worst Give Another Chance Make the tough choice Best Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

Tactics for Introducing Change Communication and Education Slide 25 Employee Involvement Negotiation Coercion Top-Management

Tactics for Introducing Change Communication and Education Slide 25 Employee Involvement Negotiation Coercion Top-Management Support Mc. Graw-Hill/Irwin Copyright © 2008 by The Mc. Graw-Hill Companies, Inc. All rights reserved

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