The document discusses organizational culture and change management. It defines organizational culture and describes its components. Strong cultures that have clearly defined and widely shared values can provide competitive advantages by increasing employee commitment and performance. The document also examines different types of organizational cultures and dimensions of culture. It then discusses managing cultural change, including reasons for change, planned and unplanned change, and models for managing change such as Lewin's three-stage model of unfreezing, changing, and refreezing as well as the ADKAR model of creating Awareness, Desire, Knowledge, Ability, and Reinforcement of change. The McKinsey 7S model also provides a

1. ORGANIZATION CULTURE
AND
CHANGE MANAGEMENT
By
MRUTU LUKIO
3–1
A strong culture creates organization competitive advantage

2. 3–2
The Organization’s Culture
• Organizational Culture
A system of shared meanings and common beliefs
held by organizational members that determines, in a
large degree, how they act towards each other.
“The way we do things around here.”
Implications:
 Culture is a perception.
 Culture is shared.
 Culture is descriptive.
A strong culture creates organization competitive advantage

3. Components of Culture
 Values,
 Norms
 symbols,
 rituals,
 myths, and
 practices
3–3
A strong culture creates organization competitive advantage

4. Types/classifications of org culture
• Power culture- centered to individual personality
who controls everything
• Role culture – work is controlled by procedures
and rules and not a person. Focus on legality,
legitimacy and bureaucracy
• Task oriented- focus on competency. Here
power is derived from ones expertise and not
personality
• Support culture- people have high commitment
their relationship is built out of mutual trust
3–4
A strong culture creates organization competitive advantage

5. Continues
• Achievement culture- here focus is on
achievements whereby individual motivation and
commitment, action and excitement are valued
3–5
A strong culture creates organization competitive advantage

6. 3–6
Dimensions of Organizational Culture
A strong culture creates organization competitive advantage

7. 3–7
Strong versus Weak Cultures
• Strong Cultures
Are cultures in which key values are deeply held and
widely held.
Have a strong influence on organizational members.
• Factors Influencing the Strength of Culture
Size of the organization
Age of the organization
Rate of employee turnover
Strength of the original culture
Clarity of cultural values and beliefs
A strong culture creates organization competitive advantage

8. 3–8
Benefits of a Strong Culture
• Creates a stronger employee commitment to the
organization.
• Aids in the recruitment and socialization of new
employees.
• Fosters higher organizational
performance by instilling and
promoting employee initiative.
A strong culture creates organization competitive advantage

9. 3–9
Organizational Culture
• Sources of Organizational Culture
The organization’s founder
 Vision and mission
Past practices of the organization
 The way things have been done
The behavior of top management
• Continuation of the Organizational Culture
Recruitment of like-minded employees who “fit”
Socialization of new employees to help them adapt
to the culture
A strong culture creates organization competitive advantage

10. 3–10
Exhibit 3–4 Strong versus Weak Organizational Cultures
A strong culture creates organization competitive advantage

11. 3–11
How Employees Learn Culture
• Stories
 Narratives of significant events or actions of people that convey
the spirit of the organization
• Rituals
 Repetitive sequences of activities that express and reinforce the
values of the organization
• Material Symbols
 Physical assets distinguishing the organization
• Language
 Acronyms and jargon of terms, phrases, and word meanings
specific to an organization
A strong culture creates organization competitive advantage

12. 3–12
Creating a More Ethical Culture
• Be a visible role model.
• Communicate ethical expectations.
• Provide ethics training.
• Visibly reward ethical acts and punish unethical
ones.
• Provide protective mechanisms so employees can
discuss ethical dilemmas and report unethical
behavior without fear.
A strong culture creates organization competitive advantage

13. 3–13
Suggestions for Managers: Creating a More Customer-Responsive
Culture
• Hire service-contact people with the personality and attitudes
consistent with customer service—friendliness, enthusiasm,
attentiveness, patience, concern about others, and listening skills.
• Train customer service people continuously by focusing on
improving product knowledge, active listening, showing patience,
and displaying emotions.
• Socialize new service-contact people to the organization’s goals and
values.
• Design customer-service jobs so that employees have as much
control as necessary to satisfy customers.
• Empower service-contact employees with the discretion to make
day-to-day decisions on job-related activities.
• As the leader, convey a customer-focused vision and demonstrate
through decisions and actions the commitment to customers.
A strong culture creates organization competitive advantage

14. Functions of organization culture
3–14
•Create uniqueness and differences between organizations
• It serves as an identify for organization members
•Fosters employees commitment
•Act as a social glue to unite all employees
•Create a good organization image
•Lower turnover rates
A strong culture creates organization competitive advantage

15. MANAGING CULTURE CHANGE
3–15
•Can we change the culture of an organization?
•It is difficult but not impossible to change
•Some of the methods which be used
Creating or existing dramatic crisis
Turnover in leadership
Young and small organizations
Weak culture
Continues education
A strong culture creates organization competitive advantage

16. MANAGING CHANGE
A strong culture creates organization competitive advantage 3–16
• Change is inevitable. Nothing is permanent
except the change.
• It is the duty of the management to manage
change properly.
• Organizations must carefully observe the
environment and incorporate suitable
changes the situation demands.
• Change is a continuous phenomenon

17. Causes of organization change
A strong culture creates organization competitive advantage 3–17
 The external environment factors i.e. political,
social, technological, and economic stimuli outside of
the organization
 The internal environment factors associated by
organization’s management policies and styles,
systems, and procedures, as well as employee
attitudes.

18. Types of Organizational Change
A strong culture creates organization competitive advantage 3–18
Strategic: Sometimes in the course of normal business operation
it is necessary for management to adjust the firm’s strategy to
achieve the goals of the company
Structural: Organizations often find it necessary to redesign the
structure of the company due to influences from the external
environment. Structural changes involve the hierarchy of authority,
goals, structural characteristics, administrative procedures, and
management system
Process-oriented: Organizations may need to reengineer processes
to achieve optimum workflow and productivity. Process-oriented
change is often related to an organization’s production process or
how the organization assembles products or delivers services.

19. Types of Organizational Change
A strong culture creates organization competitive advantage 3–19
People-centered: This type of change alters the attitudes,
behaviors, skills, or performance of employees in the company.
Changing people centered processes involves communicating,
motivating, leading, and interacting within groups

20. Planned & Unplanned Changes
A strong culture creates organization competitive advantage 3–20
• Planned changes are those which are taken deliberately to cope or
meet particular demand
• Unplanned changes are those which organizations are forced to
make without a plan
• To plan change, managers must predict and diagnose the need for
change
• It is good for organization to be prepared for changes as they are
inevitable

21. Steps in Planned Change
A strong culture creates organization competitive advantage 3–21

22. Opposition to Organizational Changes
A strong culture creates organization competitive advantage 3–22
Here are some of the most common reasons employees
resist change
 Uncertainty and insecurity
 Reaction against the way change is presented
 Threats to vested interests
 Cynicism and lack of trust
 Perceptual differences and lack of understanding

23. Organizational change models
A strong culture creates organization competitive advantage 3–23
In overcome resistance to change, some models can be applied
• AKDAR model
• Lewin’s model
• Mc Kensey 7’s model

24. Lewin’s Model
A strong culture creates organization competitive advantage 3–24
The process of change has been characterized as having three basic
stages: unfreezing, changing, and refreezing
• Unfreezing. This step involves developing an initial awareness of
the need for change and the forces supporting and resisting change
 A successful change process must overcome the status quo by
unfreezing old behaviors, processes, or structure
 Involves a series of consultations, discussions, presentations,
training to clear any doubts
• Changing. This step focuses on learning new behaviors. Change
results from individuals being uncomfortable with the identified
negative behaviors and being presented with new behaviors, role
models, and support
 In this phase, something new takes place in a system, and change
is actually implemented

25. Lewin’s Model
A strong culture creates organization competitive advantage 3–25
• Refreezing is the final stage. Refreezing centers on reinforcing new
behaviors, usually by positive results, feelings of accomplishment, or
rewards
• Behaviors that are positively reinforced tend to be repeated. In
designing change, attention must be paid to how the new behaviors
will be reinforced and rewarded

26. ADKAR
A strong culture creates organization competitive advantage 3–26
• The ADKAR model of change is a practical answer to effective
change management for individuals and organizations. The model
is developed from a study of 900 organizations across 59 countries
over a 14-year period, carried out by the US research organization
• This model, developed by Jeff Hiatt, and first published in 2003,
focuses on 5 actions and outcomes necessary for successful
individual change, and therefore successful organizational change.
 (A) Awareness of the need for change.
 (D) Desire to support the participate in the change.
 (K) Knowledge of how to change.
 (A) Ability to implement the change.
 (R) Reinforcement to sustain the change

27. Awareness of the need for change
A strong culture creates organization competitive advantage 3–27
• What is going on? What is our current status? Is it
enough/ok?
• Should we remain the way we are or something has to be
done?
• Understanding why change is necessary is the first and main
key aspect of successful change
• This step explains the reasoning and thought that underlies
a required change.
• When this step is successfully completed the individual
(employee) will fully understand why change is necessary

28. Desire to support the participate in the
change
A strong culture creates organization competitive advantage 3–28
• Understanding the factors that influence the individual’s desire
to change is an important first step to
• achieving this element of the ADKAR model
• Represents the motivation and ultimate choice to support and
participate in a change
• Naturally a desire to support and be part of the change can only
happen after full awareness of the need for change is established

29. Knowledge of how to change
A strong culture creates organization competitive advantage 3–29
• Represents how to implement the change.
• This element providing knowledge about the change, that can be
achieved through normal training and education methods
• Two types of knowledge need to be addressed: knowledge on
how to change (what to do during the transition) and knowledge
on how to perform once the change is implemented

30. Ability to implement the change
A strong culture creates organization competitive advantage 3–30
• Represents the demonstrated capability to implement the change
and achieve the desired performance level.
• In this model Ability is understood to be the difference between
theory and practice. Once knowledge on how to change is in place
(theory) the practice, or actual performance of the individual,
needs to be supported.
• This can take some time and can be achieved through practice,
coaching and feedback

31. Reinforcement to sustain the change
A strong culture creates organization competitive advantage 3–31
• This final stage of the model is an essential component in
which efforts to sustain the change are emphasized.
• Ensuring that changes stay in place and that individuals do
not revert to old ways can be achieved through positive
feedback, rewards, recognition, measuring performance and
taking corrective actions.

32. Mc Kensey 7’s model
A strong culture creates organization competitive advantage 3–32
The McKinsey 7-S Model is a change framework based on a
company’s organizational design. It aims to depict how change
leaders can effectively manage organizational change by strategizing
around the interactions of seven key elements: structure, strategy,
system, shared values, skill, style, and staff

33. The Elements of the McKinsey 7-S
Framework
A strong culture creates organization competitive advantage 3–33
1.Strategy
2.Structure
3.System
4.Shared Values
5.Skill
6.Style
7.Staff

34. 7s
A strong culture creates organization competitive advantage 3–34
• Strategy is a plan developed by a firm to achieve sustained
competitive advantage and successfully compete in the market.
In general, a sound strategy is the one that’s clearly articulated,
is long-term, helps to achieve competitive advantage and is
reinforced by strong vision, mission and values
• Structure represents the way business divisions and units are
organized and includes the information of who is accountable to
whom. In other words, structure is the organizational chart of the
firm. It is also one of the most visible and easy to change
elements of the framework

35. 7s
A strong culture creates organization competitive advantage 3–35
• Systems are the processes and procedures of the company,
which reveal business’ daily activities and how decisions are
made. Systems are the area of the firm that determines how
business is done and it should be the main focus for managers
during organizational change.
• Skills are the abilities that firm’s employees perform very well.
They also include capabilities and competences. During
organizational change, the question often arises of what skills
the company will really need to reinforce its new strategy or
new structure.
• Style represents the way the company is managed by top-level
managers, how they interact, what actions do they take and
their symbolic value. In other words, it is the management style
of company’s leaders.

36. A strong culture creates organization competitive advantage 3–36
• Shared Values. They are the norms and standards that guide
employee behavior and company actions and thus, are the
foundation of every organization.

37. QUIZ
A strong culture creates organization competitive advantage 3–37
• With examples, explain contributions of AKDAR, Lewin’s change
management model and Mc Kensey 7’s model managing change
process
• Why do you think changes are necessary for an organization?