ORGANIZATION CULTURE IN ACTION

Chapter 10

Organizational Culture
and Change

Chapter 10, Nancy Langton and Stephen P. Robbins, Fundamentals of Organizational Behaviour, Third Canadian Edition 10-1
Copyright © 2007 Pearson Education Canada

Chapter Outline

• What Is Organizational Culture?
• Creating and Sustaining Culture
• Matching People With Organizational Cultures
• The Liabilities of Organizational Culture
• Approaches to Managing Change
• Resistance to Change


1. What is the purpose of organizational culture?
2. How do you create and maintain organizational
culture?
3. What kind of organizational culture might suit you?
4. Can organizational culture have a downside?
5. How do organizations manage change?
6. Why do people and organizations resist change?


Henry Mintzberg on Culture

• “Culture is the soul of the organization — the
beliefs and values, and how they are
manifested. I think of the 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.”



• The pattern of shared values, beliefs, and
assumptions considered to be the appropriate
way to think and act within an organization.
– Culture is shared.
– Culture helps members solve problems.
– Culture is taught to newcomers.
– Culture strongly influences behaviour.


Exhibit 10-1 Layers of Culture


Levels of Culture
• Artifacts
– Aspects of an organization’s culture that you see, hear, and feel
• Beliefs
– The understandings of how objects and ideas relate to each
other
• Values
– The stable, long-lasting beliefs about what is important
• Assumptions
– The taken-for-granted notions of how something should be in
an organization


Characteristics of
• Innovation and risk-taking
– The degree to which employees are encouraged to be innovative and take
risks.
• Attention to detail
– The degree to which employees are expected to exhibit precision,
analysis, and attention to detail.
• Outcome orientation
– The degree to which management focuses on results or outcomes rather
than on technique and process.
• People orientation
– The degree to which management decisions take into consideration the
effect of outcomes on people within the organization.


Characteristics of Organizational
Culture
• Team orientation
– The degree to which work activities are organized around teams
rather than individuals.
• Aggressiveness
– The degree to which people are aggressive and competitive rather
than easygoing.
• Stability
– The degree to which organizational activities emphasize
maintaining the status quo in contrast to growth.


Exhibit 10-2 Contrasting
Organizational Cultures
Organization A Organization B

• Managers must fully document • Management encourages and
all decisions. rewards risk-taking and change.
• Creative decisions, change, and risks • Employees are encouraged to
are not encouraged. “ run with ” ideas, and failures are
treated as “ learning experiences. ”
• Extensive rules and regulations exist • Employees have few rules and
for all employees. regulations to follow.
• Productivity is valued over employee • Productivity is balanced with treating
morale. its people right.
• Employees are encouraged to stay • Team members are encouraged to interact
within their own department. with people at all levels and functions.
• Individual effort is encouraged. • Many rewards are team based.


Culture’s Functions
• Boundary-defining
• Conveys a sense of identity for organization
members
• Facilitates commitment to something larger
than one’s individual self-interest
• Social glue that helps hold an organization
together
– Provides appropriate standards for what
employees should say or do


Culture’s Functions

• Serves as a “sense-making” and control
mechanism
– Guides and shapes the attitudes and behaviour of
employees


Do Organizations Have Uniform
Cultures?
• Organizational culture represents a common
perception held by the organization members.
• Core values or dominant (primary) values are
accepted throughout the organization.
– Dominant culture
• Expresses the core values that are shared by a majority of the
organization’s members.
– Subcultures
• Tend to develop in large organizations to reflect common
problems, situations, or experiences.


Exhibit 10-3 How Organizational
Culture Forms

Top
Philosophy management
of Selection Organization's
organization's criteria culture
founders
Socialization


Creating and Sustaining Culture:
Keeping a Culture Alive
• Selection
– Identify and hire individuals who will fit in with the
culture.
• Top Management
– Senior executives establish and communicate the norms
of the organization.
• Socialization
– Organizations need to teach the culture to new employees.


A Socialization Model

Socialization Process Outcomes

Productivity

Prearrival Encounter Metamorphosis Commitment

Turnover


Exhibit 10-5
Four-Culture Typology
High Networked Communal
Sociability

Low Fragmented Mercenary

Low High

Solidarity
Source: Adapted from R. Goffee and G. Jones, The Character of a Corporation: How Your Company’s Culture Can Make or Break Your Business (New York: HarperBusiness, 1998), p. 21.


Finding Your Culture
• Networked culture: you possess good social skills and empathy;
you like to forge close, work-related friendships; you thrive in a
relaxed and convivial atmosphere.
• Mercenary culture: you are goal-oriented, thrive on competition,
like clearly structured work tasks.
• Fragmented culture: you are independent, have a low need to be
part of a group atmosphere, are analytical rather than intuitive.
• Communal culture: you have a strong need to identify with
something bigger than yourself and enjoy working in teams.


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.


Strategies For Merging Cultures

• Assimilation
• Separation
• Integration


Change Agents

• People who act as catalysts and assume the
responsibility for managing change activities.


Outside agents

• Can offer an objective perspective.
• Usually have an inadequate understanding of
the organization’s history, culture, operating
procedures, and personnel.
• Don’t have to live with the repercussions
after the change is implemented.


Internal agents

• Have to live with the consequences of their
actions.
• May be more thoughtful.
• May be more cautious.


Approaches To Managing Change

• Lewin’s Three-Step Model
• Kotter’s Eight-Step Plan for Implementing
Change
• Action Research
• Appreciative Inquiry


Exhibit 10-6 Lewin’s Three-Step
Change Model

Unfreezing Moving Refreezing


Lewin’s Three-Step Model For
Implementing Change
• Unfreezing
– Change efforts to overcome the pressures of both
individual resistance and group conformity.
• Moving
– Efforts to get employees involved in the change process.
• Refreezing
– Stabilizing a change intervention by balancing driving and
restraining forces.


Exhibit 10-7
Unfreezing the Status Quo
Desired
state
Restraining
forces

Status
quo

Driving
forces

Time

Unfreezing

• Arouse dissatisfaction with the current state.
• Activate and strengthen top management support.
• Use participation in decision making.
• Build in rewards.


Moving
• Establish goals.
• Institute smaller, acceptable changes that
reinforce and support change.
• Develop management structures for change.
• Maintain open, two-way communication.


Refreezing

• Build success experiences.
• Reward desired behaviour.
• Develop structures to institutionalize the change.
• Make change work.


Exhibit 10-8 Kotter’s Eight-Step Plan
for Implementing Change
1. Establish a sense of urgency.
2. Form a coalition.
3. Create a new vision.
4. Communicate the vision.
5. Empower others to act.
6. Develop short-term “wins.”
7. Consolidate improvements.
8. Reinforce changes.
Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996).


Action Research

• A change process based on the systematic
collection of data and then selection of a
change action based on what the analyzed data
indicate.


The Process of Action Research

• Diagnosis
• Analysis
• Feedback
• Action
• Evaluation


Appreciative Inquiry

• An approach to change that seeks to identify
the unique qualities and special strengths of an
organization, which can then be built on to
improve performance.


Steps of Appreciative Inquiry

• “Four D’s”
– Discovery
– Dreaming
– Design
– Destiny


Exhibit 10-9 Sources of Individual
Resistance to Change
Selective
information Habit
processing

Individual
Resistance
Security
Fear of
the unknown

Economic
factors


Cynicism About Change

• Feeling uninformed about what was
happening.
• Lack of communication and respect from one’s
supervisor.
• Lack of communication and respect from one’s
union representative.
• Lack of opportunity for meaningful
participation in decision making.

Exhibit 10-11 Sources of
Organizational Resistance to Change
Threat to established Structural
resource allocations inertia

Threat to established Organizational Limited focus
power relationships Resistance of change

Threat to Group
expertise inertia


Overcoming Resistance to Change
• Education and communication
– This tactic assumes that the source of resistance lies in misinformation or
poor communication.
– Best used: Lack of information, or inaccurate information
• Participation and involvement
– Prior to making a change, those opposed can be brought into the decision
process.
– Best used: Where initiators lack information, and others have power to
resist
• Facilitation and support
– The provision of various efforts to facilitate adjustment.
– Best used: Where people resist because of adjustment problems


Overcoming Resistance to Change
• Negotiation and agreement
– Exchange something of value for a lessening of resistance.
– Best used: Where one group will lose, and has considerable power to
resist
• Manipulation and cooperation
– Twisting and distorting facts to make them appear more attractive.
– Best used: Where other tactics won’t work or are too expensive
• Explicit and implicit coercion
– The application of direct threats or force upon resisters.
– Best used: Speed is essential, and initiators have power


Summary and Implications
1. What is the purpose of organizational
culture?
– Organizational culture provides stability and
gives employees a clear understanding of “the
way things are done around here.”
2. How do you create and maintain culture?
– An organization’s culture is derived from the
philosophy of its founders. It is
communicated by managers and employees
are socialized into it.

3. What kind of organizational culture might suit you?
– Organizational cultures can be analyzed in terms of members’
friendliness (sociability) and task orientation (solidarity).
4. Can organizational culture have a downside?
– A strong culture can have a negative effect, including
“pressure-cooker” cultures, barriers to change, difficulty in
creating an inclusive environment, and hindering mergers
and acquisitions.
5. How do organizations manage change?
– Kurt Lewin argued that successful change should follow
three steps: unfreezing, moving, and refreezing. John Kotter
built on Lewin’s work to offer an eight-step model. Two
other theories include action research and appreciative
inquiry.



6. Why do people and organizations resist change?
– Individuals resist change because of basic human
characteristics such as perceptions, personalities,
and needs. Organizations resist change because
they are conservative and because change is
difficult.


OB at Work


For Review

1. How can an outsider assess an organization’s culture?
2. What defines an organization’s subcultures?
3. Can an employee survive in an organization if he or she
rejects its core values? Explain.
4. What benefits can socialization provide for the
organization? For the new employee?
5. Describe four cultural types and the characteristics of
employees who fit best with each.


For Review

6. How can culture be a liability to an organization?
7. How does Lewin’s three-step model of change deal with
resistance to change?
8. How does Kotter’s eight-step plan for implementing
change deal with resistance to change?
9. What are the factors that lead individuals to resist
change?
10.What are the factors that lead organizations to resist
change?


For Critical Thinking

1. How are an individual’s personality and an
organization’s culture similar? How are they different?
2. Is socialization brainwashing? Explain.
3. Can you identify a set of characteristics that describes
your college’s or university’s culture? Compare them
with several of your peers’ lists. How closely do they
agree?
4. “Resistance to change is an irrational response.” Do you
agree or disagree? Explain.


Point-CounterPoint
• Why Culture Doesn’t • When Culture Can
Change Change
Culture develops over many There is a dramatic crisis.
years, and becomes part of There is a turnover in
how the organization thinks leadership.
and feels.
The organization is young and
Selection and promotion small.
policies guarantee survival of
There is a weak culture.
culture.
Top management chooses
managers who are likely to
maintain culture.


Breakout Group Exercises
• Form small groups to discuss the following:
1. Identify artifacts of culture in your current or previous
workplace. From these artifacts, would you conclude that the
organization has a strong or weak culture?
2. Have you or someone you know worked somewhere where the
culture was strong? What was your reaction to that strong
culture? Did you like that environment, or would you prefer to
work where there is a weaker culture? Why?
3. Reflect on either the culture of one of your classes or the
culture of the organization where you work, and identify
characteristics of that culture that could be changed. How
might these changes be made?


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