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Chapter

Managing Organizational
Culture and Change

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

 Learning Objectives
After 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.

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 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.

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 Levels of
Corporate Visible Culture

Culture
Expressed Values

Core Values

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 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

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 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

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 Stages of the Socialization Process

Pre-arrival

Encounter

Metamorphosis

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 Creating and Sustaining Organizational
Culture
Cultural Symbols Company Rituals and
Ceremonies

Company Heroes

Stories

Language
Organizational Policies
and Decision Making
Leadership

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 Characteristics and Types of
Organizational Culture
Cultural Uniformity versus
Heterogeneity
Strong versus Weak
Cultures
Culture versus
Formalization
National versus
Organizational Culture
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 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
 emphasizesparticipation and
involvement

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 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

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 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

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 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

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 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

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 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.

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 Resistance to Change

Self-Interest

Cultures that Value Lack of Trust and

Tradition Understanding

Different Perspectives
and Goals Uncertainty

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

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

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 Lewin’s Force Field Analysis Model

Increase driving forces that

drive change
Reduce restraining forces
that resist change
or do both

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 Force-field Model of Change

Desired
state

Restraining forces

Status quo

Driving forces

Time
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 Implementing Organizational Change

Top-down Change

Change Agents

Bottom-up Change

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 Eight Steps to a Planned Organizational
Change
 Establish a sense of  Empower others to act
urgency. on the vision.
 Form a powerful  Plan and create short-
coalition of supporters of term wins.
change.  Consolidate
 Create a vision of change. improvements and
 Communicate the vision produce still more
of change. change.
 Institutionalize new
approaches.

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 Tactics for Introducing Change

Communication and
Education
Employee Involvement

Negotiation

Coercion

Top-Management Support

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 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.

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 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.

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 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.

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