Organisational Culture and Change

Professor Ming Sun

School of Energy, Geoscience, Infrastructure & Society

Heriot-Watt University

ORGANISATION CULTURE

What is Culture?

• Culture is “a set of values, attitudes, beliefs,

and meanings that are shared by the members

of a group or organisation”.

• It is often the primary way in which one ‘group’

(organisation, team, etc.) differentiates itself

from others.

Organisational Culture Defined

Reflects the underlying assumption about the way work is performed, what is acceptable and not acceptable, and what behaviour and actions are encouraged and discouraged

Atkinson

The collection of traditions, values, beliefs, and attitudes that constitute a pervasive context for everything we do and think in an organisation.

McLean & Marshall

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.”

Chapter 10, Nancy Langton

and Stephen P. Robbins,

Fundamentals of

Organizational Behaviour,

Third Canadian Edition

10-6

Copyright © 2007 Pearson

Education Canada

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.

Culture and Behaviour

Williams & Dobson

Culture Types

Harrison & Handy

Culture Types according to Deal & Kennedy

• Tough-guy, macho culture

– police departments, construction, management consulting

• Work-hard / play-hard culture

– estate agents and computer companies, mass consumer

companies

• Bet-your-company culture

– oil companies, investment banks

• Process culture

– insurance companies, financial services, and the civil service

Influencing Factors on Organisational

Culture

• Organizational

characteristics:

– Size and age

– Founders’ values

– New managers’ values

– Subordinates’ values.

• Management:

– Strategy and structure

– Leadership

– Personnel management.

• Operation:

– Task

– Technology.

• Environment:

– External

– Internal.

MANAGING CHANGE

“It is not the strongest species that survive, nor the most intelligent,

but the ones who are most responsive to change” - Charles Darwin

Internal Drivers of Organisational

Change

• The need for performance improvement

• Adoption of new technology

• Changes in staff

• Changes to business processes

• New ways of working and management

External Drivers of Organisational

Change

• Uncertain economic conditions

• Globalisation and fierce competition

• Regulatory requirements

• Technological advances

• Demands of sustainable development

• Mergers and acquisitions

• Changes in customers’ demands

Benefits of Embracing Change – An

Organisation Perspective • Change provides opportunity for business growth.

• It gives the opportunity to develop solid strategic planning and tactical manoeuvres.

• It can create more efficient processes and systems.

• It enables organisations to adapt and respond quicker than competition.

• It reduces the status quo mentality.

• It promotes system thinking and long term vision.

• It brings on innovation.

• It encourages proactive approach to risk management.

• It's a lot more interesting than something that is static and stable all the time.

Benefits of Embracing Change – An

Individual Perspective • Change provides personal growth, through learning new skills.

• It makes people more adaptable to new situations, new

environments, and new people.

• It provides opportunity for improvement in personal life.

• Changes bring new beginnings and excitement to life.

Refreezing Moving Unfreezing

Creating

the

motivation

to change

Learning

new

concepts &

meanings

Internalizing

new

concepts &

meanings

Lewin’s 3-Step Change Model

Step 1: Unfreezing

• Launch change efforts to overcome the pressures of individual resistance and group conformity – Arouse dissatisfaction with the current state

– Bring in “disconfirming” information

– Help people “unlearn” conventional wisdom

Step 2: Moving

• Get employees involved in the change process – Establish goals

– Activate and reinforce top management support

– Recruit and empower change agents

– Encourage participatory decision-making

– Institute smaller, acceptable changes that reinforce and support change

– Reward and celebrate success

– Maintain open, two-way communication

Step 3: Refreezing

• Stabilize the change intervention by rebalancing driving and restraining forces.

– Build success experiences.

– Reward desired behaviour.

– Develop structures to institutionalize the change.

– Make change work.

Kotter’s Eight-Step Plan for

Implementing Change 1. Establish a sense of urgency

2. Build a guiding team

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).

UNFREEZING

MOVING

REFREEZING

1. Establish a Sense of Urgency

• Examining the market and

competitive realities

• Identifying and discussing crises,

potential crises, or major

opportunities

2. Build a Guiding Team

• Putting together a group with enough

power to lead the change

• Getting the group to work together

like a team

3. Create a New Vision

• Creating a vision to help direct the

change effort

• Developing strategies for achieving

that vision

4. Communicate the Vision

• Using every vehicle possible to constantly

communicate the new vision & strategies

• Having the guiding coalition role model

the behavior expected of employees

5. Empower Others to Act

• Getting rid of obstacles

• Changing systems or structures that

undermine the change vision

• Encouraging risk taking and

nontraditional ideas, activities, and

actions

6. Develop Short-term “Wins”

• Planning for visible improvement in

performance or “wins”

• Creating those wins

• Visibly recognizing and rewarding

people who made the wins possible

7. Consolidate Improvements

• Using increased credibility to change all systems, structures, and policies that don’t fit together and don’t fit the transformation vision

• Hiring, promoting, and developing people who can implement the change vision

• Reinvigorating the process with new projects, themes, and change agents

8. Anchoring New Approaches in

the Culture • Creating better performance through

customer and productivity oriented

behavior, more and better leadership,

and more effective management

8. Reinforce changes

• Articulating the connections between new

behaviors and organizational success

• Developing means to ensure leadership

development and succession

Sources of Individual Resistance

to Change • Selective perception: Staffs tend to be sceptical about manager-driven

change programs.

• Established habits. Changes may require them to change their existing

habits. This is not easy.

• Loss of freedom: People may perceive that the introduced changes will

cause inconvenience or loss of freedom for themselves.

• Economic loss: People are likely to resist change that is perceived as

reducing their pay and other rewards.

• Loss of security: Existing ways of working give people comfort and sense

of security. Changes will bring in new ideas and new methods. Some

people would rather stick to the old ways.

• People may resist change simply for the fear of the unknown.

Sources of Organisational

Resistance to Change • Organisation culture tends to be developed over a long period of time;

change of culture is not easy.

• Organisations, especially large ones, need formal rules and procedures to maintain stability and standard of performance. Such a need for maintaining stability often creates resistances to necessary change.

• Implementing change usually requires investment of resources in money and staff time. These are not always made available.

• At any time, an organisation would have many commitments to external stakeholders in the form of contracts and agreements. These may impose constraints on the speed and scale of changes the organisation can undertake.

• Changes, especially structural changes, can reduce the power and influence of certain groups inside the organisation. If that is the case, the affected groups will resist the changes.

Overcoming Resistance to

Change Kotter and Schlesinger proposed a six Approach

Model to deal with change resistance:

1. Education and communication

2. Participation and involvement

3. Facilitation and support

4. Negotiation and agreement

5. Co-optation and manipulation

6. Explicit and implicit coercion

Education and Communication

• Assumes source of resistance lies in misinformation or poor communication.

• One of the best ways to overcome resistance to change is to educate people about the change effort beforehand. Up-front communication and education helps employees see the logic in the change effort. This reduces unfounded and incorrect rumours concerning the effects of change in the organization.

• Best used: When information is lacking or is inaccurate.

Participation and Involvement

• Prior to making a change, bring opponents into the process.

• When employees are involved in the change effort they are more likely to buy into change rather than resist it. This approach is likely to lower resistance more so than merely hoping people will acquiesce to change.

• Best used: Where initiators lack information, and others have power to resist.

Facilitation and Support • The provision of various efforts to facilitate adjustment.

• Managers can head-off potential resistance by being

supportive of employees during difficult times.

Managerial support helps employees deal with fear and

anxiety during a transition period. This approach is

concerned with provision of special training,

counselling, time off work.

• Best used: Where people resist because of adjustment

problems.

Negotiation and Agreement • Exchange something of value in exchange for lessening of

resistance.

• Managers can combat resistance by offering incentives to

employees not to resist change. This can be done by allowing

change resistors to veto elements of change that are threatening,

or change resistors can be offered incentives to go elsewhere in

the company in order to avoid having to experience the change

effort. This approach will be appropriate where those resisting

change are in a position of power.

• Best used: Where one group will lose, and has considerable

power to resist.

Co-optation and manipulation • Twisting and distorting facts to make them appear more

attractive.

• “Co-optation” involves the patronizing gesture of bringing a person into a change management planning group for the sake of appearances rather than their substantive contribution. This often involves selecting leaders of the resisters to participate in the change effort. These leaders can be given a symbolic role in decision making without threatening the change effort.

• Best used: Where other tactics won’t work or are too expensive.

Explicit or Implicit Coercion

• Use or threat of force or punishment on

resisters.

• Managers can explicitly or implicitly force

employees into accepting change by making

clear that resisting change can lead to losing

jobs, firing, or not promoting employees.

• Best used: When speed is essential, and

initiators have power.

Expected Learning Outcomes

• Students should know about organisational culture and the

common types of culture;

• Students should know the main factors that influence

organisational culture;

• Students should understand the benefits and main drivers of

organisational change;

• Students should know the main barriers to organisation

change at both individual and organisation levels

• Students should know the steps of successful organisational

change, as suggested by Kotter and Cohen.