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ORGANIZATIONAL TRANSFORMATION
Transformational change refers to change thatcannot be handled within the existing paradigm andorganizational routines
It involves a sea change in the assumptions, valuesand practices of the organization.
It entails reshaping of the organizations culture anddesign
It focuses on changing the behaviour and mindset ofpeople in the organization
Single loop or adaptive learning (improving the
status quo) versus Double loop or generativelearning (changing the status quo) (Chris Argyris,1977). Third type is deuterolearning or learning howto learn.
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WHAT IS CULTURE?
It is the aggregate of beliefs, attitudes, values,
assumptions, and ways of thinking that is shared by
members of an organization and taught to new
members.
Culture is the soul of the organization the beliefs
and values, and how they are manifested. I think ofthe 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. (Henry Mintzberg)
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HOW IS CULTURE OPERATIONALIZED?
Each organization has unique culture, distinguished
by its
Beliefs and philosophy Approaches to decision making and problems solving
Is based on the values and principles displayed by
leaders
Has its own stories and myths
Determines how to respond to threats and
opportunities
In both the external and internal environment Is deeply rooted
Core essence of organization
Often first expounded by founder
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COMPONENTS OF CULTURE
Routine ways of communicating
Norms shared by individuals and teams
Dominant values held by an organization
Guiding philosophy for managements policies
and decision making Rules of the game for getting along in the
organization
Climate of the organization
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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.
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REQUIREMENTS FOR SUCCESSFULLY
CHANGING ORGANIZATIONAL CULTURE
Understand the old culture first
Support employees and teams who have ideas for a better
culture and are willing to act on those ideas
Find the most effective subculture in the organization and use
it as a model
Use the vision of a new culture as a guide for change
Recognize that significant cultural change takes time
Live the new culture
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SOME CHANGE TACTICS
Timing The greater the degree of change the more it may be useful to
build on actual or perceived crisis
Look for windows of opportunity e.g. new CEO, period following
takeover etc. Choose time for promoting change e.g. if there is a need to
reduce personnel do this before embarking on change
Job losses and de-layering Tactical choice of layers to be removed e.g. blockers of change
Avoid creeping job losses
Visible responsible and caring approach towards those who
lose jobs
Visible short term wins
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CHANGING ORGANIZATIONAL
CULTURE Change the reward system to encourage
acceptance of a new set of values.
Replace unwritten norms with formal rules andregulations that are tightly enforced.
Shake up current subcultures through
transfers, job rotation, and/or terminations. Work to get peer group consensus throughutilization of employee participation andcreation of a climate with a high level of trust.
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CREATING A HIGH PERFORMANCE
CULTURE
Culture reinforcement tools
Intensely people oriented Results oriented
Emphasis on achievement and excellence
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RESULTS ORIENTATION
Celebrate employee achievements
Hold managers responsible for growth and
development of people Use the full range of rewards and punishments
to enforce high standards
Encourage employees to use initiative andcreativity
Set reasonable and clear performancestandards for all employees
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EMPHASIS ON ACHIEVEMENT AND
EXCELLENCE
Atmosphere provides pressure to be the best
Management policies and practices inspire
people to do their best Excellence is held above all other goals
There are persistent unit cost reduction, zero
defects, improved product quality, andextraordinary customer service
Cultural changes are linked with improved
results
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LEADING CULTURAL CHANGE
Three key roles for executive leadership in
managing transformational change:
3. Envisioning: articulate a clear and crediblevision; set new and difficult standards for
performance and generate enthusiasm for newstrategy
4. Energizing: demonstrate personal excitement
for change and model he behaviour expectedof others; display integrity and credibility; shareexamples of early success
5. Enabling: provide resources necessary forundertaking the change; use rewards toreinforce new behaviour; build an effectiveTMT to manage new systems and change
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ATTRIBUTES OF EFFECTIVE LEADERS
Inner drive/energy: necessary to initiate and
sustain leadership of change over extended
periods of time. Intellectual capacity: necessary to listen to input
from diverse sources and synthesize vision and
strategy Integrity: necessary to synthesize vision and
strategy that benefits the organization first and
the individual second
Mental/emotion health: necessary for self-
confidence and interpersonal skills
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LEADERS AS CREATORS OF CULTURE
Diagnose which aspect of existing culture arestrategy supportive and which are not
Communicate openly and honestly theaspects of culture being changed or the needfor a new culture
Follow swiftly with visible actions to modify
the culture or implant a new one Top leaders must break the mold of cultural
norms in an existing culture Middle managers transmit and integrate the
culture changes
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LEARNING ORGANIZATIONS
A type of Organizational transformation intervention that aims
at
helping organizations to develop and use knowledge to change
and improve themselves continuously --- this involves twointerrelated processes ----organization learningwhich
enhances
an organization's capacity to acquire and develop newknowledge,
and knowledge managementwhich focusses on how that
knowledge can be organized or used to improve performance.
Can be a source of strategic renewal and can enable
organizations to acquire and apply knowledge faster and more
CHARACTERISTICS OF LEARNING
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CHARACTERISTICS OF LEARNING
ORGANIZATIONS
Learning embedded in culture Values experimentation, initiative, innovation, and
flexibility
Visible and strong management support Mechanisms and structures to nurture ideas Knowledge and information is acquired and
disseminated Resources are committed in fostering learning
Employees empowered to resolve problems
Equal emphasis on short- and long-termperformance
Deep desire throughout to develop, define, andadapt knowledge
GUIDELINES FOR CREATING
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GUIDELINES FOR CREATING
LEARNING ORGANIZATIONS
Encourage creative thinking
Create a climate to encourageexperimentation
Provide incentives for learning and innovation
Encourage systems thinking
Create a culture for team and individual
learning Have a system to channel and nurture
creative ideas and innovation
Create a shared vision for learning Broaden employees frames of reference
Create an environment that allows learning
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ORGANIZATIONAL KNOWLEDGE
The tacit and explicit knowledge that
individuals possess about products,
services, systems, and processes
Often codified in manuals, databases,
and information systems Steps in Knowledge Management:
generating knowledge, organizing
knowledge and distributing knowledge