1. Chapter
4
Managing Organizational
Culture and Change
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

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

3. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

4. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

5. Levels of
Corporate Visible Culture
Culture
Expressed Values
Core Values
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6. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

7. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

8. Stages of the Socialization Process
Pre-arrival
Encounter
Metamorphosis
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

9. Creating and Sustaining
Organizational Culture
Cultural Symbols Company Rituals and
Ceremonies
Company Heroes
Stories
Language
Organizational Policies
and Decision Making
Leadership
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

10. Characteristics and Types of
Organizational Culture
Cultural Uniformity versus
Heterogeneity
Strong versus Weak
Cultures
Culture versus
Formalization
National versus
Organizational Culture
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

11. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

12. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

13. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

14. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

15. 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
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

16. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

17. Resistance to Change
Self-Interest
Cultures that Value Lack of Trust and
Tradition Understanding
Different Perspectives
and Goals Uncertainty
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

18. Models of Organizational Change:
The Star Model
The Star Model: Five Points
Types of change-evolutionary or
transformational
Structure
Reward system
Processes
People
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

19. Lewin’s Three-Step Model of
Organizational Change
Unfreezing--melting away
resistance
Change--departure from
the status quo
Refreezing--change
becomes routine
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

20. 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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21. Force-field Model of Change
Desired
state
Restraining forces
Status quo
Driving forces
Time
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22. Implementing Organizational Change
Top-down Change
Change Agents
Bottom-up Change
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

23. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

24. Tactics for Introducing Change
Communication and
Education
Employee Involvement
Negotiation
Coercion
Top-Management Support
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

25. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

26. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

27. 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.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.