Organization Culture and

Change Management

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Organization 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.

In order to survive, organizations and their cultures must continuously evolve

and change.

Conditions prompting change

• Economic crises• Changes in laws or regulations• Social developments• Global competition• Demographic trends• Explosive technological changes

“Cultures change when an organization discovers,

invents or develops solutions to problems it faces.”

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.

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

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.

Organization Culture Issues

Three important issues in an Organization’s Culture

– Ethics– Diversity of employees– Leadership behavior

How does all this fit together ?

Managers and leaders must use good leadership practices

to be sure to introduce, develop, reward, and

“cement” ethical practices and positive ways of working

with diversity into the organization culture

Changing Organizational Culture

Top leaders can set the tone for a culture and for culture change.

Leaders who strive for high-quality products and services understand

• Involve the keepers and holders of the culture.• Build on what all organizational

members share.• Teach new members how to behave.

Implementing Organizational Change

Top-down Change

Change Agents

Bottom-up Change

Targets for Change

• Individuals• Groups• The Organization• The Environment

Individual Targets

Changes in this area are triggered by new staffing strategies or by an effort to enhance workforce diversity.• The number and skills of the human resource

component.• Improving levels of employee motivation and

performance.

Group TargetsInvolves changes in the nature of the relationship

between managers and subordinates or the relationships within work groups.

Organizational Targets• Changes in any of the following

areas:– Basic goals and strategies of the

organization– Products, quality, or services offered– Organizational structure– The composition of work units– Organizational processes such as

reward, communication, or information processing system

– The culture

Environmental Targets

• Involves changing sectors of an organization’s environment– For example, changes in

products or services offered may require new technology or a new distribution system.

Change agents should take the following steps to obtain a successful

change outcome1. 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.

Change Agent’s Profile

ACTION !

BREAKTHROUGH