Organizational Culture and Change

Organizational Culture • What is organizational culture? • When is organizational culture functional? Dysfunctional? • How do employees learn about the culture of their organization? • THE WAY THINGS ARE DONE AROUND HERE Components of Organizational Culture • Routine behaviors. • Norms shared by teams. • Dominant values. • Guiding philosophy for policies toward employees and customers. • The rules of the game for getting along in the organization. • The climate of the organization. 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.” Organizational Culture • 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 Organizational Culture • 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. • 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. 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. 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 Culture’s Functions • Social glue that helps hold an organization together – Provides appropriate standards for what employees should say or do • Boundary-defining • Conveys a sense of identity for organization members • Facilitates commitment to something larger than one’s individual self-interest • Enhances social system stability • Serves as a “sense-making” and control mechanism – Guides and shapes the attitudes and behaviour of employees Culture as a Liability • 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 Conditions for Culture Change • A dramatic crisis • Turnover in leadership • Young and small organizations • Weak culture How Employees Can Change Unethical Behavior • Secretly or publicly reporting unethical actions to a higher level within the organization. • Secretly or publicly reporting unethical actions outside the organization. • Secretly or publicly threatening an offender or responsible manager with reporting unethical actions. • Quietly or publicly refusing to implement an unethical order or policy. Actions Organizations Can Take to Develop an Ethical Culture • Be realistic in setting values and goals regarding employee relationships. • Encourage input from organization members regarding appropriate values and practices for implementing the culture. • Do not automatically opt for a “strong” culture. • Provide training on adopting and implementing the organization’s values. Exhibit 10-6 Suggestions for Changing Culture • Have top-management people become positive role models, setting the tone through their behaviour. • Create new stories, symbols, and rituals to replace those currently in vogue. • Select, promote, and support employees who espouse the new values that are sought. • Redesign socialization processes to align with the new values. Exhibit 10-6 Suggestions for Changing Culture (cont’d) • Change the reward system to encourage acceptance of a new set of values. • Replace unwritten norms with formal rules and regulations that are tightly enforced. • Shake up current subcultures through transfers, job rotation, and/or terminations. • Work to get peer group consensus through utilization of employee participation and creation of a climate with a high level of trust. Exhibit 10-7 Lewin’s Three-Step Change Model Implementing Change • Unfreezing: getting ready for change – Minimizing resistance • Moving: making the change – Changing people (individuals and groups); Tasks; Structure; Technology • Refreezing: stabilizing the change – Reinforcing outcomes, evaluating results, making constructive modifications Exhibit 10-8 Unfreezing the Status Quo Unfreezing • Arouse dissatisfaction with the current state – Tell them about deficiencies in organization • Activate and strengthen top management support – Need to break down power centres • Use participation in decision making – Get people involved • Build in rewards – Tie rewards to change/use recognition, status symbols, praise to get people to go along Moving • Establish goals – E.G. Make business profitable by end of next year • Institute smaller, acceptable changes that reinforce and support change – E.G. Procedures and rules, job descriptions, reporting relationships • Develop management structures for change – E.G. Plans, strategies, mechanisms that ensure change occurs • Maintain open, two-way communication Refreezing • Build success experiences – Set targets for change, and have everyone work toward targets • Reward desired behaviour – GOOD - reward behaviour that reinforces changes – BAD - reward old system (e.g., people relying on old systems while computerization is going on) • Develop structures to institutionalize the change – Organizational retreats, appropriate computer technology, performance appraisals that examine change efforts • Make change work Exhibit 10-9 Sources of Individual Resistance to Change 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 Overcoming Resistance to Change • Education and Communication – This tactic assumes that the source of resistance lies in misinformation or poor communication. • Participation – Prior to making a change, those opposed can be brought into the decision process. • Facilitation and Support – The provision of various efforts to facilitate adjustment. Overcoming Resistance to Change • Negotiation – Exchange something of value for a lessening of resistance. • Manipulation and Cooperation – Twisting and distorting facts to make them appear more attractive. • Coercion – The application of direct threats or force upon resisters. Summary and Implications • Employees form an overall subjective perception of the organization based on such factors as degree of risk tolerance, team emphasis, and support of people. – This overall perception becomes, in effect, the organization’s culture or personality. – These favourable or unfavourable perceptions then affect employee performance and satisfaction, with the impact being greater for stronger cultures. • Just as people’s personalities tend to be stable over time, so too do strong cultures. – This makes strong cultures difficult for managers to change. Summary and Implications • One of the more important managerial implications of organizational culture relates to selection decisions. – Hiring individuals whose values don't align with those of the organization is not good. • Change must be managed, it is not an easy process • Individuals and organizations resist change – To be successful at change, it is necessary to break down the resistance to change OB at Work For Review 1. Can an employee survive in an organization if he or she rejects its core values? Explain. 2. How can an outsider assess an organization’s culture? 3. What defines an organization’s subcultures? 4. How can culture be a liability to an organization? 5. What benefits can socialization provide for the organization? For the new employee? For Review 6. Describe four cultural types and the characteristics of employees who fit best with each. 7. How does Lewin’s three-step model of change deal with resistance to change? 8. What is the difference between driving forces and restraining forces? 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. Contrast individual personality and organizational culture. How are they similar? How are they different? • Is socialization brainwashing? Explain. • Can you identify a set of characteristics that describes your college’s or university’s culture? Compare them with several of your peers. How closely do they agree? • “Resistance to change is an irrational response.” Do you agree or disagree? Explain. Breakout Group Exercises • Form small groups to discuss the following: 1. Choose two courses that you are taking this term, ideally in different faculties, and describe the culture of the classroom in each. What are the similarities and differences? What values about learning might you infer from your observations of culture? 2. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you conclude that the organization had a strong or weak culture? 3. Reflect on either the culture of one of your classes, or the culture of the organization where you work, and identify aspects of that culture that could be changed. How might some of these changes be made?