Chapter 4

1. Chapter 4 Managing Organizational Culture and Change

2. Learning ObjectivesAfter 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.

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.

4. Levels of Corporate Culture Visible Culture Expressed Values Core Values

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

6. Key Effects of Organizational Culture • Employee Self-Management • Sense of shared identity • Facilitates commitment • Stability • Sense of continuity • Satisfies need for predictability, security, and comfort

7. Key Effects of Organizational Culture • 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

8. Stages of the Socialization Process Pre-arrival Encounter Metamorphosis

9. Managing Cultural Processes Company Rituals and Ceremonies Cultural Symbols Company Heroes Stories Language Organizational Policies and Decision Making Leadership

10. Characteristics and Types of Organizational Culture • Cultural Uniformity versus Heterogeneity • Strong versus Weak Cultures • Culture versus Formalization • National versus Organizational Culture

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

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

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

14. Artifacts Ceremonies and rites – McDonald’s, award ceremonies Stories – Dayton-Hudson, Nordstrom Slogans/mission – • Perot: Eagles don’t flock, gather one at a time • Pepsico: We take eagles and teach them to fly in formation Symbols – buttons, badges, logos, Stew Leonard

15. Competing Values Framework Focus External Internal Flexible Control Fixed

16. 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

17. 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

18. 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.

19. Resistance to Change Self-Interest Cultures that Value Tradition Lack of Trust and Understanding Different Perspectives and Goals Uncertainty

20. Models of Organizational Change: The Star Model • The Star Model: Five Points • Types of change-evolutionary or transformational • Structure • Reward system • Processes • People

21. Lewin’s Three-Step Model of Organizational Change • Unfreezing--melting away resistance • Change--departure from the status quo • Refreezing--change becomes routine

22. Lewin’s Force Field Analysis Model • Increase driving forces that drive change • Reduce restraining forces that resist change • or do both

23. Force-field Model of Change Desired state Restraining forces Status quo Driving forces Time

24. Implementing Organizational Change Top-down Change Change Agents Bottom-up Change

25. Four Types of Employees

26. Tactics for Introducing Change Communication and Education Employee Involvement Negotiation Coercion Top-Management Support