Organizational Culture and Change

Organizational Culture

system of shared assumptions, values, and beliefs indicating what is appropriate behavior

• matters because it often has a strong influence on people’s behaviors

strength is measured by consensus

• how much agreement is there on what is right (acceptable) or wrong (unacceptable)

• the stronger it is, the less variance there is in people’s behaviors

Culture as an Asset

Generally more effective way of managing employee behavior than rules or regulations

Can bring employees together and crease a sense of identity

Culture as a Liability

The “wrong” one can make it difficult for organizations to respond to changes in the environment

Employees who do not agree it may rebel against it

Subculture

set of values unique to a limited cross-section of an organization

Counterculture

shared values that are in direct opposition to values of broader organizational culture

Iceberg Model of Culture

Artifacts

the visible and tangible elements of organizational culture

• physical layout of company, dress code, decorations, signage

Values

shared principles, standards, and goals

• mission statement

Assumptions

taken for granted beliefs about human nature and reality

• is the least visible of the three

Founder’s Values

culture is tied to the personality and values of its founder(s)

• establish the vision for the company in initial stages

  • goals, policies, structure

  • Southwest airlines

Industry Demands

force to create similarities among organizational cultures

• (institutional) isomorphism

• ex. business schools

Attraction-Selection-Attrition

culture maintenance

culture acts as a self-defending organism and intrusive elements are kept out

: people self-reflect in and apply to organizations they think they will fit

: attraction is not enough because misfit candidates might still apply so organization screens candidates and look for those who will fit culture

: selection imperfect because there will still be employees who do not fit so organizations eventually eliminate candidates who do not share company’s values

Onboarding

process through which employees learn the KSAs and behaviors to be an effective organizational member

• can be done by organizations through assigning formal orientation program and mentors

  • can be done by new employees by seeking feedback and building social networks

Reward Systems

plays a role in how culture is maintained

Potential criteria

• is it for behavior or results?

• is it based on performance or seniority?

• is it based on tangible metrics? or are there intangible aspects?

Rating system: absolute or relative?

Leadership

shape culture through their day to day actions and reactions to behaviors

Messaging: what is their vision? what stories are they choosing to tell? are they setting a good example?

Responsiveness: do they show concern about culture? open to feedback? do they seek improvement?

Control

Organizational Culture Types (Stable)

• companies emphasize predictable, rule-oriented, and bureaucratic adherence to rules and regulations

Performance

Organizational Culture Types (Aggressive)

• Companies emphasize outperforming competitors through competitive actions

Relationship

Organizational Culture Types (People-Oriented)

• Companies emphasize fairness, supportiveness, and respecting individual rights

Responsive

Organizational Culture Types (Innovative)

• companies are flexible, adaptable, and willing to experiment with new ideas

Organizational Change

movement of an organization from one state of affairs to another

can take many forms:

• culture, structure, strategy, decision making processes, etc.

this is inevitable and often essential for company to remain competitive

Reasons for Change

• changes in environment

• technology

• globalization

• market conditions

• poor performance

Resistance for Change

disrupted habits

• don’t want to learn something new if it requires more cognitive effort

• inertia and path dependency

feelings of uncertainty

• how it will be implemented and what the consequences might be creates stress

fear of failure

• people might fear their performance might worsen under new system

perceived loss of power

• threats of losing power and influence if one worked hard to earn status

Kurt Lewin’s Change Model

Three stages of change

Unfreezing

• many change efforts fail because people are insufficiently prepared

1. create a sense of urgency

   1. make the case for why change is needed

   2. people don’t change unless they absolutely have to

2. Build a coalition

   1. enlist the right people who can become helpful allies to get everyone else on board

3. Communicate vision for new way of operating

   1. Drew Carton: few goals, describing concrete future = higher motivation

Executing Change

1. Eliminate obstacles to change

   1. points of resistance

   2. can you partially accommodate these points without sacrificing the new culture?

2. create small wins

   1. break up change into smaller targets so people can realize their efforts

   2. change that is too far out to see results will lead to demotivation

3. capitalize on momentum

   1. one results start coming, don’t declare victory too early

   2. try to make continuous improvements while things are still fluid

Refreezing

1. reward change adoption

   1. modify reward system to recognize when employees adopt changes

   2. reinforce behaviors to make sure these behaviors are more likely to be repeated

2. publicize success

   1. share results: what was gained? how much money did company save?

3. Make change part of the culture

   1. real change is not reflected in superficial elements or artifacts (website, mission statements, etc)

   2. work on shifting values and assumptions