Management – Organizational Change and Development

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Chapter 3

Changing the Culture

Learning Objectives

  • Recognize importance of corporate culture.
  • Identify key factors assessing culture.
  • Describe culture leading to effective organizations.
  • Describe ethical, value, and goal considerations.

Creating Climate for Change

  • Challenge of managers is:
  • Create renewing system.
  • Develop long-term efforts.
  • Culture often key to success.
  • Cultural change result of complex strategy.

Understanding Corporate Culture

  • Environment of rapid change.
  • Static organizational culture no longer effective.

What Is Corporate Culture?

  • Culture is system of:
  • Shared values.
  • Beliefs.
  • Behavioral norms.
  • Observed behavioral norms.
  • Dominant values.
  • Learning ropes for newcomers.

Culture Comes from 2 Subsystems

  • Managerial.
  • Organizational.

Managerial Subsystem
Creates Culture

  • How employees are treated.
  • Through actions and words.
  • Vision articulated by top management.

Organizational Subsystem Creates Culture

  • Outside factors (market, etc.) define culture.
  • Technology.
  • Job descriptions.
  • Type of structure (tall vrs. flat).

Figure 3.1
Culture Formation

Corporate Culture and Success

  • High-performing companies have strong cultures.
  • Many cultures fail to adapt to change.
  • Following corporate mergers, cultures often clash.

Key Factors to Improve Culture

  • Create vision for the future.
  • Develop model for change.
  • Reward changes.

Cultural Resistance to Change

  • Changing culture not easy.
  • Time required.
  • Culture can prevent company from adapting.

Pressure Points to Bring About Change

  • Recession.
  • Deregulation.
  • Technological upheavals.
  • Social factors.
  • Global competition.
  • Outsourcing.
  • Markets.

Tools for Change (part 1 of 4)

  • Information.
  • Support.
  • Resources.

Information (part 2 of 4)

  • Provide information to people.
  • Provide ability to gather information.
  • One method is open-book management.

Support (part 3 of 4)

  • Support and collaboration from other departments.
  • Management support to provide climate of risk taking.

Resources (part 4 of 4)

  • Innovative programs for providing resources include:
  • Venture capital.
  • Innovation banks.
  • Funds.
  • Staff.
  • Equipment.
  • Materials.

Organizational Dimensions Affecting Performance

Managerial effectiveness.

Accomplishing goals and objectives.

Managerial efficiency.

Ratio of results to resources.

Motivational climate.

Employee attitudes that influence performance.

Other Criteria for Organizational Effectiveness

Adaptability.

Sense of identity.

Capacity to test reality.

OD Professional Values and Ethics

  • Expertise.
  • Autonomy.
  • Commitment.
  • Code of ethics.

OD Implementation Issues
(part 1 of 4)

  • Success depends on:
  • Congruence between OD values and organization’s values.
  • Key issue is fit between between practitioner and client:
  • Compatibility of values.
  • Imposed change.
  • Priority of goals.

Compatibility of Values
(part 2 of 4)

  • Practitioners differ on degree of congruency with client values.
  • Some believe personal values are compatible with client.
  • Others will help client as long as operations legal.

Imposed Change
(part 3 of 4)

  • OD ideally implemented voluntarily.
  • Top management may impose program.
  • OD practitioners cognizant of power and politics.

Priority of Goals
(part 4 of 4)

  • Determine goals given precedence.
  • Challenge to develop balanced intervention:
  • One that improves productivity and
  • Quality of work for members.

OD Values About Nature
of Organization Members

  • Respect for people.
  • Trust and support.
  • Power equalization.
  • Confrontation and open communication.
  • Participation.

Table 3.1
OD Values

OD Application
Culture and Setpoint Systems

  • Setpoint builds unique automation equipment.
  • Required are self-motivated employees.
  • Who can solve problems and
  • Look for ways to improve processes.
  • Uses project management and open-book accounting.

  • Production employees use these techniques to:
  • Understand the business and
  • Know where to focus attention.
  • Culture is one where employees:
  • Understand the business and
  • Provide thorough attention to financials.

OD Application
How Trilogy’s University Helps Build Its Culture

  • Trilogy is small but competes with large software companies.
  • Key goal is to attract talented people.
  • Fosters new methods in relationships with clients and employees.

  • It operates a three-month long “boot camp.”
  • New employees integrated into company.
  • Employees learn values and culture.
  • Receive comprehensive evaluation and feedback.
  • Program provides source for renewal.
  • Provides new services and products.
  • Relationships formed, new leaders created.

Key Words and Concepts

  • Corporate culture.
  • System of shared values and beliefs.
  • Interact with people, structure, systems.
  • Managerial effectiveness.
  • Ability to accomplish specific organizational goals.

  • Managerial efficiency.
  • Ratio of output (results) to input (resources).
  • Motivational climate.
  • Employee attitudes that influence performance.

  • Open-book management.
  • Employees understand accounting statements.
  • Use knowledge in work.
  • Professionalism.
  • Value system that is part of profession.

OD Skills Simulation 3.1
The Dim Lighting Co.

  • Purpose:
  • Compare decisions made by individuals with those made by group.
  • Practice effective consensus-seeking techniques.
  • Gain insights into concept of cultural values.

Preparations for Next Chapter

  • Read Chapter 4.
  • Complete Steps 1 through 4 of OD Skills Simulation 4.1.
  • Read and prepare Case: The Grayson Chemical Company