This document discusses organizational culture and change. It describes how organizational culture helps management achieve objectives through shared values, assumptions and norms. Cultural symbols, rituals, stories and heroes are used to sustain culture. There are different types of cultures that fit different personalities. The document also discusses forces that drive organizational change, models of change like Lewin's three-step model, and tactics managers can use to implement and deal with resistance to change.

1. Chapter 5
Managing
Organizational Culture
and Change

2. 5-2Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Management Challenges
After reading this chapter, you should be able to:
 Describe how organizational culture helps
management achieve its objectives.
 Understand how cultural
symbols, rites, ceremonies, heroes, and stories are
used to sustain an organization’s culture.
 Recognize the differences between strong and
weak organizational cultures, and identify situations
in which each of these cultures may be
advantageous.
 Adapt to organizational change and the forces that
drive change.

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Management Challenges (continued)
 Identify the four different types of organizational
cultures and the characteristics of people who fit
best with each.
 Direct and counsel employees who resist
organizational change.
 Apply the tactics of change agents while taking into
consideration potential sources of resistance.
 Use tools that enhance our understanding of the
change process, such as Lewin’s three-step model
of change and force field analysis.

4. 5-4Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Skills for managing organizational culture and
change:
 Cultural diagnostic skills
 Cultural strategic skills
 Managing culture skills
 Change management skills

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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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Core
Values
Expressed
Values
Visible
Culture
Levels of Corporate
Culture

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Functions performed by organizational
culture:
 Employee Self-Management
 Sense of shared identity
 Generation of commitment
 Stability
 Sense of continuity
 Satisfies need for predictability, security, and
comfort

8. 5-8Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Functions performed by organizational
culture: (continued)
 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
Leadership
Organizational
Policies and
Decision Making

11. 5-11Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Aspects of organizational culture
 Cultural Uniformity versus Heterogeneity
 Strong versus Weak Cultures
 Culture versus Formalization
 National versus Organizational Culture
 Organizational Fit
 Baseball team culture
 Club culture
 Academy culture
 Fortress culture

12. 5-12Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Managing Organizational Change
 Organization culture can facilitate or inhibit
change in an organization.
 A firm attempts to change organizational
culture because the current culture hinders
the attainment of corporate goals.
 Environmental and internal forces can
stimulate the need for organization change.

13. 5-13Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Forces for Change: Environmental Forces
 Put pressure on how a firm conducts its
business and its relationships with
customers, suppliers, and employees.
 Environmental forces include:
 Technology
 Market forces
 Political and regulatory forces
 Social trends

14. 5-14Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Forces for Change: Internal Forces
 Come from decisions made 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.

15. 5-15Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Resistance to Change
Self-Interest
Lack of Trust and
Understanding
Uncertainty
Different
Perspectives and
Goals
Cultures that
Value Tradition

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Models of Organizational Change
 Lewin’s three-step model
 Force-field analysis model

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Lewin’s Three-Step Model of Organizational
Change
Unfreezing RefreezingChange

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Restraining forces
Driving forces
Status
quo
Desired
state
Time
Force-field Model of Change

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Implementing Organizational Change
Top-down Change
Change Agents
Bottom-up Change

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Change agents should take the following steps
to obtain a successful change outcome:
1. Establish a sense of
urgency.
2. Form a powerful
coalition of supporters
of change.
3. Create a vision of
change.
4. Communicate the
vision of change.
5. Empower others to
act on the vision.
6. Plan and create short-
term wins.
7. Consolidate
improvements and
produce still more
change.
8. 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 of Management Perspectives:
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.

23. 5-23Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Applications of Management Perspectives:
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.

24. 5-24Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Applications of Management Perspectives:
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.