Organisation Culture and Change PDF

ORGANISATION CULTURE AND CHANGE DR. ANGELQUE YUE FU Learning Outcomes 01. 02. Understanding of what organisational culture is and why it is important Knowledge of reasons why organisations introduce change and why this might not always work 03. Insight into ways to manage different types of organis...

ORGANISATION CULTURE AND CHANGE DR. ANGELQUE YUE FU Learning Outcomes 01. 02. Understanding of what organisational culture is and why it is important Knowledge of reasons why organisations introduce change and why this might not always work 03. Insight into ways to manage different types of organisational change Organisational culture Organisational change Drivers and types of change What is culture? Why does change often fail? Types of culture Ways to improve effectiveness of Why is culture important? Overview change Understanding Organisational Culture “A pattern of basic assumptions invented, discovered or developed by a group as it learns to cope with the problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to problems” Organisational Culture Schein, E.H., (1990). Organizational Culture. American Psychologist, 45 (2), 109-119 “The way things are done around here” The personality of an organisation Shared Organizational Values, Beliefs and Norms – the glue that holds organisations together (van den Berg & Wilderom, 2004) Key aspects of organisational culture Culture shared amongst members of organisations Defines how those in an organisation should behave under particular circumstances Affects all in the organisation (from senior managers to cleaners and porters) How can we ‘measure’ culture? What ‘things’ would you observe, analyse, study or review to try and understand an organisation’s culture? Imagine I’ve set you a project to go into the Business School and to analyse its culture… Defining Organizational Culture Defining Organizational Culture 1. Basic Assumptions Defining Organizational Culture Taken for Granted Ways of Seeing the World Unspoken assumptions about how problems are to be solved, about the environment, about human activity ‘Non-debatable’ or “Truisms” Difficult to ‘pin down’ E.g., Quality, Stability, Morality, Predictability, Innovativeness, Profitability, Customers, Employees 2. Values Accumulated beliefs and norms about how work should be done, how things ‘ought’ to be done, how people ‘ought’ to behave, how others ought to be treated. E.g., Honesty, citizenship, hard work, obedience, loyalty, collegiality Defining Organizational Culture University Values University of Manchester 2020 Strategic Vision: We will be guided in all our activities by our motto ‘Cognito, Sapentia, Humanitas’ (Knowledge, Wisdom, Humanity). We will be led by the discovery of new knowledge, and aim to maximise the maximise the impact of that knowledge through education, innovation and and delivering value to society. We will be an ethical organisation with exemplary policies, procedures and and behaviours. We will be committed to environmental sustainability, setting and meeting meeting the highest possible standards across the full range of our activities. activities. Durham university - Our Core Lived Values Inclusivity - Together we celebrate difference, value one another, and are each responsible for creating an inclusive community that is respectful and fair for all. Integrity - We are open, honest, ethical, lead and manage by example and follow through on our commitments. Collaboration - We listen to each other, disagree well, with a commitment to academic freedom, are compassionate, and work as a team to achieve our goals. Defining Organizational Culture 3. Artefacts Visible manifestations of culture D efining O rg aniz ational C ulture Organizational logos and mottoes Just Do It Impossible Is Nothing Think Different Leap ahead Selection Selecting recruits with the ‘right’ values Job previews so applicants deselect themselves Culture Transmission Socialization Learning organisations values, norms, ways of behaving Induction & Training Rituals and Ceremonies Reward and control systems Stories Role modelling Classifying Culture (Robbins 2005) Innovation and risk-taking Attention to detail Outcome People Team orientation Aggressiveness Stability Activity - What is the organisation culture of Google? - Focus on contingency variables (job sector; organisational factors; national culture) to explain A c tivity Choose another organisation of your choice What is the difference to Google? Focus on what the differences are and use the contingency variables (job sector; organisational factors; national culture) to explain the differences. Handy’s (Harrison’s) Cultures Handy’s (Harrison’s) Cultures Power culture Role culture Task culture Person culture Cultures and Subcultures Dominant cultures Subcultures counter-cultures Integration, differentiation or ambiguity? (Meyerson & Martin) Discussion : Is a strong culture better than a weak culture? Is a strong culture better than a weak culture? Advantages of a strong culture Unites and motivates staff Increases internal integration (working together) E.g., Apple, Disney, Google Kotter & Heskett (1992) survey of 207 firms Cultural strength had moderate correlations with economic success Stronger correlations in stable environments (contingency effects) Is a strong culture better than a weak culture? Disadvantages of a strong culture Conformist attitudes – insularity, less diversity Slow to change, less innovative Fail to challenge ‘orthodoxy’ Especially problematic if unethical cultures develop, e.g., GFC – investment banking Why is culture important? Provides insight into organisation – how things are done and why Person-organisation fit (selection, stress/motivation) Performance Peters and Waterman (1982)/Deal and Kennedy (1982) suggest that culture is central to organisational success Hansen and Wernerfelt (1989) argue culture is more important in driving profit that economic factors Must understand culture if you want to introduce change in your organisation Organisational change Change is ever present in organisations and seems to be increasing Managers list their ability (or inability) to manage change as number one obstacle to increased competitiveness of their organisation (Hanson, 1993) Why Change? Drivers of Change P E S T L E Political Government policy/ ideology War/civil unrest Interest groups Trade union activities Economic Economic growth/contraction Competitor behaviour Supplier behaviour Raw material prices Currency exchange rates Tax and wage rates Social Demographic trends Lifestyle preferences Social values Attitudes to work Discrimination trends Labour mobility Skills availability Technological New products/faciliti es Computing power and costs New materials Internet trading Innovations in transport, engineering etc. Legal Ecological Environmental Legislation – concerns international, Reduction of toxic trading zone e.g.emissions, spills, Europe, local. pollution Specialist techniques Trade and regulation of agreements Human rights e.g. genetic Local regulationsmodification Hazard protection and by-laws Noise reduction Types of change Types of change SOFT Culture Leadership style Interpersonal behaviour Team-orientation Knowledge and skills HARD Strategy Structure Technology Processes Physical location HARD SOFT Episodic Tends to be infrequent, discontinuous and intentional Often precipitated by severe external challenges or by changes in key personnel who wish to make their mark Types of change Continuous Developmental, ongoing, incremental and partly unplanned Approach is processual, based on assumption that small incremental changes will cumulatively add up to substantial change HARD SOFT Continuous Types of change Episodic Transformational Intended to have a radical impact on the organisations strategies, structures, people, processes or values Incremental Concerned with improving efficiency or effectiveness but within the existing framework or strategy and organising Change management is a structured approach to move an organisation from a current state to a future desired state. Organizational change covers all the tools and processes needed to ensure successful change in organisations. Change is not always something desirable, positive or long-lasting. Change Management Activity What do you think work has changed as a result of the pandemic? What businesses are doing well? Change is not always successful Between 60-80% of change efforts fail to achieve their objectives (Jones et al., 2006) Why? Most organisational scholars conclude that managers are good at managing the technical aspects of change but poor at managing the people aspects. Culture Psychological reactions If proposed changes contradict cultural biases and traditions, it is inevitable that they will be difficult to embed in the organisation (Clarke, 1994) Time to cross your arms I would like you all to cross your arms Fold them together, like you are bored or waiting for something Now fold your arms the other way (i.e., other arm on top) How did it feel when you were asked to cross your arms the other way? Did it come naturally or did you have to stop and think about it? Were you comfortable with the change? Psychological reactions to change Change is a very complex process involving humans – without understanding psychological issues around change, cannot implement changes effectively How do people respond to change? Having no effect on the individual Irrelevant appraisal A challenging opportunity Positive appraisal Having harmed or damaged the individual in some way e.g. reduced self-esteem or conferred a sense of powerlessness/loss of control Potentially threatening to the individual Negative appraisal Negative appraisal Having no effect on the individual A challenging opportunity Having harmed or damaged the individual in some way e.g. reduced self-esteem or conferred a sense of powerlessness/loss of control Potentially threatening to the individual -> Ambivalence, acceptance -> Enthusiasm, commitment -> Anger, resistance -> Fear/anxiety, resistance (Ivancevich, 1987) “Evolutionary advantage should surely favour those able to make changes quickly and easily. It would seem counter-productive to have evolved a system geared to maintaining the present and clinging to the past. Yet it appears that responding adversely to change and transition is characteristic for many people, at least initially.” Fisher and Cooper (1990) Kubler-Ross (1969) bereavement model Kubler-Ross (1969) bereavement model Why Change? Risks of not changing Lower market share, performance and productivity Redundancies, organizational failure and so on Risks of change Making the wrong changes Implementing change poorly Too many changes, too quickly, too often (Ji et al., 2014) Many change initiative fail Why Change? Planned Approach to Organisational Change Approaches to Change Dominant approach Many competing but similar perspectives An ‘industry Emergent Approach to Organisational Change Critical of planned approach Less well developed, fewer practical models Planned Approach to Organisational Change Kurt Lewin ‘Father of Planned Change’ Three step model of change Unfreezing present condition, move to new conditions, refreezing new conditions Unfreeze Change Refreeze Planned Approach to Organisational Change Force Field Analysis Kurt Lewin Force Field Analysis Restraining Forces Organisational Individual/Group Structure, Rules, and Procedures Routines Inter-organizational Agreements Fears Sunk Cost and Investments Social Relationships Limited Resources Economic Reasons Organizational Culture/s HR Practices 1. Create a sense of urgency 2. Build a guiding coalition 8. Institute Change 7. Sustain Acceleration The Big Opportunity 6. Generate Short-term wins 5. Enable action by removing barriers 3. Form a strategic vision & initiatives 4. Enlist a volunteer army Kotter’s 8-Step Change Model Planned Approach to Organisational Change Critiques Less suitable for slow transformational change Assumes common agreement can be reached, down plays power and politics Assumes a punctuated & linear approach to change Change is continuous, messy, non-linear, complex and unpredictable Top down approach - Less emphasis on employee involvement Emergent Approach to Change Assumes change is: A process that is continuous, messy, non-linear, and which unfolds in unpredictable ways Managing change: A pragmatic and political process of trial and error A continuous activity that is an important part of every manager’s role Manage change as a bottom-up not top-down process Change not made by ‘senior managers’ alone Need to instill practices that foster adaptation and change Organisational culture of change Organisational Structure Flatter structures, networked organisation Emergent Approach to Change Power & politics Organisational Learning Empowered staff, involvement and participation in change Effective communication and training Managerial Behaviour Managers as facilitators and coaches Large Scale Transformation Emergent Approach to Change Emergent Slow Change Culture Change Team Building Planned Downsizing New Task procedure Emergent or Planned Planned Small Scale Change Burnes, 2004 Rapid Change Toyota’s Commitment to Continuous Improvement Emergent Approach to Change Toyota's Commitment to Continuous Improvement is based on an emergent approach to change. Managing Resistance Resistance to change as a hindrance to the change process that must be eliminated (a problem to be overcome) - Emphasis on effective communication; use of change agents Reactions to change are essential part of a successful change – a positive force within the change process. - Encourages employees to voice challenges and make suggestions about change Managing Resistance to change Summary 01. 02. 03. 04. Organisational culture describes how things are usually done and how things should be done in organisations Culture is related to employees’ motivation, stress and performance, and affects the change process Organisational change is an integral part of organisational success, but often fails Strong psychological reactions to change mean that change must be handled well and the right approach must be taken