Session 8 Organizational Culture

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Session 8 Organizational Culture Change
Management
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Agenda

• Housekeeping
• Questions on assignments
• Lecture
• Organizational Culture
• Chapter 10
• BREAK
• Change Management
• Chapter 11

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Organizational Culture So What?

• Organizational culture and analysis necessary in
  order to understand how new technologies
  influence and are influenced by organizations.
• Illuminates norms and assumptions
• Consists of ambiguities, paradoxes,
  contradictions
• Impacts capabilities and competences needed to
  achieve sustainable competitive advantage

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Organizational Culture Definition

• A pattern of shared basic assumptions that the
  group learned as it solved its problems of
  external adaptation and internal integration.
  This pattern has proven successful over time and
  is taught to new members as the correct way to
  perceive, think and feel in relation to these
  problems

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Levels of Culture
Artifacts
Espoused Values
Basic Underlying Assumptions
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Culture and Leadership

• Culture is created, embedded, manipulated,
  managed and changed
• The dynamic processes of culture creation and
  management are the essence of leadership
• Culture and leadership two sides of same coin
• Cultures begin with leaders who impose their own
  values and assumptions on a group

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Three Key Concepts

• Uniqueness of organizational cultures
• Differences between objective and subjective
  organizational culture
• Organizational subcultures

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Cultural Uniqueness

• Four general corporate cultures based on degree
  of risk and speed of feedback in an industry
• Tough/guy macho success determined by ability
  to take risks
• Process ability to manage details low risk and
  slow feedback (I.e. insurance and utility)
• Bet your company high risk, slow feedback
  industries (I.e. aircraft manufacturers)
• Work hard/play hard success based on action and
  highly motivated employees

• Artful blending of four types to create unique
  cultural configuration
• Cultural differences most notable in mergers and
  acquisitions

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Organizational Style
Focus
Outward Facts Principles Controls
Inward Meanings Values Options
Information
Evaluation
Orientation
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Competing Polarities - Work Systems
Shared Values
Rules Planned Managerial Core Competencies
Inspirations Opportunistic Transformational
Adaptive
Strategy
Style
Skills
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Competing Polarities in the Human Systems
Team Future Person-centered Everbody
Wins Leads
People
Individual Present Principle-centered We
Win Manages
Communications
Coaching
Negotiating
Representative of the People
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Why is Learning So Critical Today?
Revised valuation of human capital brings
attention to skill gaps
Grow
Knowledge and skills recognized as critical
resource in global economy
Attract
Employee
Retain
RESULT
Increased focus on continuous learning
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Principles for Organizational Capability- Culture
Fit

• To what extent do we have a shared mindset inside
  and outside the organization?
• Internalize customer values-the ability to make
  customer values employee values
• Mindset dispersion-the ability to build a shared
  mindset inside and outside the organization
• To what extent does my business demonstrate
  world-class performance in each source of
  uniqueness as well as the ability to integrate
  the four sources of uniqueness?
• Paradox-the ability to deal with competing
  demands
• To what extent do we understand and meet customer
  needs?
• Customer intelligence-the ability to scan
  continuously and learn from customers
• Competitor intelligence-the ability to examine
  continuously and learn from competitors
• To what extent do we understand economic and
  social conditions affecting our business?
• Continuous learning-the ability to learn
  continuously about business conditions that
  affect the firm

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Stability Change
Stability Change

Continuity
Innovation
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Chaos
Stagnation
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Stuck in the Downside of Stability
Stability Change

Continuity
New Energy
-
Chaos
Stagnation
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Goal Stability and Change
Stability Change

Continuity
New Energy
-
Chaos
Stagnation
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Organization Life Cycles
Building (The Expanding Stage)
Exploring (The Maturity Stage) Institutionalizi
ng (The Entrenched Stage)
Venturing (The Emerging Stage)
Dreaming
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The Four Horsemen of Contemporary Business

• Increased competition

Tighter budgets
Proliferating technology
Smaller labor pools
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Tool Kit

• SWOT
• Strengths/Weaknesses
• Opportunities/ Threats
• Research Methods
• Surveys
• Questionnaires
• Interviews/observations
• Industry/organization data
• Culture/Leadership/Human Asset Valuation
• Organization values assessment
• Individual SWOT assessment
• Team structure and roles

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Corporate Culture Survival Guide by Edward
Shein

• Define Business Problem
• Review Concept of Culture
• Culture Delineation
• Identify artifacts
• Identify practices and espoused values (e.g.
  strategies, goals, philosophies, key norms
  justifications)
• Identify underlying organizational values and
  assumptions
• Culture Analysis
• Culture Assessment
• Creation of Action Plan
• Text Figure 10-4 page 297

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Team Discussion

• Get into project teams
• Choose one of your teams organizations and
• Apply business analysis tools to determine how
  your companys culture has impacted its ability
  to achieve sustainable advantage? Be specific.
• Based on your analysis what would you change in
  the culture to improve its success?
• What role should HR play in the change process?
• Select spokesperson to lead discussion

Culture has been defined as a pervasive and
powerful force in shaping behavior
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• What you do speaks so loudly
• I cannot hear what you say.
• Ralph Waldo Emerson

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Break
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• Change dynamics

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Content of Change

• Centrality principle states change must be
  clearly and obviously linked to core strategic
  issues of the enterprise
• Three-Theme principle - identify themes to
  communicate and conceptualize changes
• Magic Leader principle - individual leader who is
  the focal point for the change
• Envisioning, Energizing, Enabling
• Success depends on broad range of support

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Types of Organizational Change

• Incremental Strategic
• Anticipatory Tuning Reorientation
• Reactive Adaptation Re-creation

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Magnitudes of Change
Continuous Improvement
Discontinuous Change
Generative Change
Landmark/CMD, 1993
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Achieving Change

• Planning and opportunism principle- requires
  intensive planning based on diagnosis and
  development of vision use iterative planning
• Many-bullets principle - incorporate
  intentionally redundant activities to overcome
  resistance
• standards and measures of performance
• rewards and incentives
• budgeting and resource allocation
• information systems

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Achieving Change

• Investment and Returns
• measure investment of time, effort and dollars
• predictable change states include
• awareness
• experimentations
• understanding
• commitment
• education
• application of leveraged issues and integration
  into on -going behaviors refreezing new behaviors

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Principles of Effective Frame Bending

• Diagnostic thinking -analyzing the organization
  in its environment, understanding strengths and
  weaknesses and implications guides identification
  of appropriate change type and needed strategies

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Choosing the right change path

• Moderate change forces require reactive change
  (i.e. business performance is affected)
• Less need to get peoples attention
• Expose people directly to need for change
• Use multidisciplinary teams to develop
  value-creating ideas

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Choosing the right change path

• Proactive change occurs while change force is
  weak. Hurdles include
• Get peoples attention
• Shock others into recognizing need for change
• Develop value-creating ideas from change agents
  in first stage

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Choosing the right change path

• Strong change forces demand rapid change
• Survival threatened and full attention is given
• Direction of the change is clear - save the
  business, cut costs, regroup around core
  competencies or strong points, adapt tactics of
  successful competitors
• Commit the business to the new opportunity
  quickly

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Change resistance

• Depends on the degree to which people may lose or
  gain by changing
• Depends on how organizational culture shapes the
  way they respond to change

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Change resistance in closed organizations

• Confront directly top resistors with moments of
  truth (MOT)
• When an organization is closed to change and
  survival is at stake radical restructuring
  required.

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Change resistance moderate

• Existing pockets of change agents exist and
  typically are team-oriented cultures
• Makes it possible to hurdle experimentation
• Get management to deal directly with resistors
• Might require top-down experimentation and task
  forces - create prototypes

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Ten Commandments for managing change by Todd
Jick

• Analyze organization and its need for change
• Create shared vision and common direction
• Separate from past
• Create sense of urgency
• Support strong leader role

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Jicks Ten Commandments

• Line up political sponsorship
• Craft an implementation plan
• Develop enabling structures
• Communicate, involve people, and be honest
• 10. Reinforce and institutionalize change

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• Great minds discuss ideas,
• average minds discuss events,
• small minds discuss people.
• Admiral Hyman Rickover