McGraw-Hill

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

2. Chapter 4 Managing Organizational Culture and Change McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

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

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

5. Levels of Corporate Culture Visible Culture Expressed Values Core Values McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

6. Functions Performed By Organizational Culture • Employee Self-Management • Sense of shared identity • Facilitates commitment • Stability • Sense of continuity • Satisfies need for predictability, security, and comfort McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

7. Functions Performed By Organizational Culture(cont) • Socialization • Internalizing or taking organizational values as one’s own • Implementation Support of the Organization’s Strategy • If strategy and culture reinforce each other, employees find it natural to be committed to the strategy McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

8. Stages of the Socialization Process Pre-arrival Encounter Metamorphosis McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

9. Creating and Sustaining Organizational Culture Company Rituals and Ceremonies Cultural Symbols Company Heroes Stories Language Organizational Policies and Decision Making Leadership McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

10. Characteristics and Types of Organizational Culture • Cultural Uniformity versus Heterogeneity • Strong versus Weak Cultures • Culture versus Formalization • National versus Organizational Culture McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

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

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

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

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

15. Forces for Change: Environmental Forces • Put pressure on a firm’s relationships with customers, suppliers, and employees. • Environmental forces include: • Technology • Market forces • Political and regulatory agencies and laws • Social trends McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

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

17. Resistance to Change Self-Interest Cultures that Value Tradition Lack of Trust and Understanding Different Perspectives and Goals Uncertainty McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

18. Models of Organizational Change: The Star Model • The Star Model: Five Points • Types of change-evolutionary or transformational • Structure • Reward system • Processes • People McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

19. Lewin’s Three-Step Model of Organizational Change • Unfreezing--melting away resistance • Change--departure from the status quo • Refreezing--change becomes routine McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

20. Lewin’s Force Field Analysis Model • Increase driving forces that drive change • Reduce restraining forces that resist change • or do both McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

21. Force-field Model of Change Desired state Restraining forces Status quo Driving forces Time McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

22. Implementing Organizational Change Top-down Change Change Agents Bottom-up Change McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

23. 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. Eight Steps to a Planned Organizational Change McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

24. Tactics for Introducing Change Communication and Education Employee Involvement Negotiation Coercion Top-Management Support McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

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

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

27. 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.