Managing

4Chapter

Managing OrganizationalCulture and Change

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Learning ObjectivesAfter reading this chapter, you should be able to:

Build and maintain an appropriate company culture.Understand the roles of symbols, rites, ceremonies, heroes, and

stories in an organization's culture.Identify the various categories of organizational cultures and

the characteristics of people who fit best with them.Adapt to organizational change and the forces that drive

change.Work with employees who resist change.Use tools to help implement change, including Lewin’s three-

step model of change and force field analysis.

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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.

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Core Values

Expressed Values

Visible Culture

Levels of Corporate Culture

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Functions Performed By Organizational Culture

Employee Self-ManagementSense of shared identityFacilitates commitment

StabilitySense of continuitySatisfies need for predictability, security, and

comfort

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Functions Performed By Organizational Culture (cont)

SocializationInternalizing or taking organizational values as

one’s own

Implementation Support of the Organization’s StrategyIf strategy and culture reinforce each other,

employees find it natural to be committed to the strategy

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Stages of the Socialization Process

Pre-arrival

Encounter

Metamorphosis

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Creating and Sustaining Organizational Culture

Cultural Symbols Company Rituals and Ceremonies

Company Heroes

Stories

Language

Leadership

Organizational Policies and Decision Making

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Characteristics and Types of Organizational Culture

Cultural Uniformity versus Heterogeneity

Strong versus Weak Cultures

Culture versus Formalization

National versus Organizational Culture

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Characteristics and Types of Organizational Culture (continued)

Types: Traditional Control or Employee Involvement Traditional control

emphasizes the chain of command relies on top-down control and orders

Employee involvement emphasizes participation and

involvement

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Four Types of Culture Classification

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

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Competing Values Framework

Based on two dimensions: focus and control

Focus--whether the primary attention of the organization is directed toward internal dynamics or directed outward toward the external environment

Control--the extent to which the organization is flexible or fixed in how it coordinates and controls activities

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Types of Change

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

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Forces for Change: Environmental Forces

Put pressure on a firm’s relationships with customers, suppliers, and employees.

Environmental forces include:TechnologyMarket forcesPolitical and regulatory agencies and lawsSocial trends

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Forces for Change: Internal Forces

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.

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Resistance to Change

Self-Interest

Lack of Trust and Understanding

UncertaintyDifferent Perspectives

and Goals

Cultures that Value Tradition

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Models of Organizational Change: The Star Model

The Star Model: Five Points

Types of change-evolutionary or transformational

StructureReward systemProcessesPeople

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Lewin’s Three-Step Model of Organizational Change

Unfreezing--melting away resistance

Change--departure from the status quo

Refreezing--change becomes routine

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Lewin’s Force Field Analysis Model

Increase driving forces that drive change

Reduce restraining forces that resist change

or do both

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Restraining forces

Driving forces

Status quo

Desired state

Time

Force-field Model of Change

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Implementing Organizational Change

Top-down Change

Change Agents

Bottom-up Change

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Eight Steps to a Planned Organizational Change

Establish a sense of urgency.

Form a powerful coalition of supporters of change.

Create a vision of change. Communicate the vision

of change.

Empower others to act on the vision.

Plan and create short-term wins.

Consolidate improvements and produce still more change.

Institutionalize new approaches.

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Tactics for Introducing Change

Communication and Education

Employee Involvement

Negotiation

Coercion

Top-Management Support

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Applications: Management is Everyone’s Business—For the Manager

Certain types of changes routinely provoke strong employee resistance:Changes that affect skill requirements.Changes that represent economic or status loss.Changes that involve disruption of social relationships.

By being aware of the sources of resistance, managers can better apply tactics to make the changes more palatable for employees.

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Applications: Management is Everyone’s Business—For Managing Teams

Teams can help test the waters for a proposed change.

Various employee teams can serve as focus groups in order to find ways to make a change in policy more acceptable to employees.

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Applications: Management is Everyone’s Business—For Individuals

Learning the specifics about the company culture can help you determine your fit with the organization and the possibility of succeeding.

Ask questions and gather information during the recruiting process to get a handle on the company culture and assess whether you will function comfortably in it.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.