Organizational Culture&

Managing Change Resistance

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Meaning and dimensions

22

33

Organizational Culture

– What can you readily identify, but can’t accurately define?

– What does every great business have that other competitors do not?

– What is it makes a business into a cult?

It’s the culture

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Organizational Culture

• The shared values and norms in an organization that are taught to incoming employees.

• It involves common beliefs and feelings, regularities in behavior, historical process for transmitting values and norms

“The way we do things around here”

• There are three ways to do things around here:1.The right way.2.The wrong way3.Our way (the company way).

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Organizational Culture

The way we do things around here

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Culture in Society is manifested Culture in Society is manifested asas

poetrypoetry

musicmusic

artartclothesclothes

fashionsfashions

StoriesStories

filmsfilms

folklorefolklore

festivalsfestivals

titlestitles

status symbolsstatus symbols

literatureliterature

• External adaptation and survival• Internal integration

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Organizational Culture

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……Sociological Definition of Sociological Definition of CultureCulture

““It is a Collection ofIt is a Collection of – Values:Values: ideas about what in life ideas about what in life

seems importantseems important– Conformed Norms:Conformed Norms:

expectations of behavior in expectations of behavior in different situationsdifferent situations

– Artifacts:Artifacts: derived things or derived things or materials that support a culturematerials that support a culture..

Dictionary of modern sociology, 1969Dictionary of modern sociology, 1969

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……Sociological Definition of Sociological Definition of CultureCulture

This CollectionThis Collection influences the influences the behavior of the members of the behavior of the members of the society and helps them to cope society and helps them to cope with their world and with one with their world and with one another; these are transmitted another; these are transmitted from generation to generation, from generation to generation, through learning and imitation…”through learning and imitation…”

Dictionary of modern sociology, 1969Dictionary of modern sociology, 1969

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……Organizational Organizational Definition of CultureDefinition of Culture

The system of – Shared beliefs– Values– Customs– Assumptions– Behaviors– Artifacts

Organizational Culture is the unique collection of Shared beliefs

–Values–Customs–Assumptions–Behaviors–Artifacts

that influence the behavior of members in an organization and helps them to cope whilst they work and collectively succeed in achieving their desired state

Allegiance=devotionAllegiance=devotion

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• Rituals and stories play key roles in maintaining organizational cultures

• Stories or myths may convey beliefs of company’s founder, or other major values

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Rituals and Stories

Artifacts/SymbolsArtifacts/Symbols

- Visible objects, actions, stories that represent the culture

- Most easily changed- Rites, rituals, ceremonies- Stories, myths, legends- Symbols- Language/jargon/gestures

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Behavior PatternsBehavior Patterns• Shared ways of

interacting, approaching a task

• Shared ways of responding to something new

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ValuesValues

- Preferred states- Feelings & beliefs

about what’s good or right

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NormsNorms

- Socially constructed preferences

- Group expectations about how things should be done

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Shared AssumptionsShared Assumptions

- Taken for granted- Not conscious- Hard to change

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Changing the Behavior

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• The trick that many organizations have missed is that shared behavior in organizations (culture) does not come because they teach people how to behave in a particular way. The behavior comes as a consequence of a number of different drivers.

• These drivers include:1. Reward systems;2. The way that winners and losers are

defined and treated;3. The examples that are provided by

influential managers, and where they place their emphasis;

4. The nature of the work, and the degree to which tasks are mechanized;

5. The structure.

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Behavior Drivers

• Working with behavior alone is unlikely to produce any sustainable change.

• It is the drivers that influence behavior.• If you want to change behavior, change

the drivers.• As a part of the strategic planning process, it

is essential to understand how the organizational culture influences results today, and what limits it might put on your capacity to change the future.

• There are two characteristics that have a big impact on culture: Fear and Freedom

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Behavior Drivers

• Fear is a primary driver of human behavior.• To a greater or lesser extent we are all defined by

our fear.• Add a little fear into an organization and people

stop taking chances, spend more time diluting responsibility in meetings, and introduce lots of checking steps.

• If the fear persists for years, then people become increasingly uncomfortable with even minor change.

• Build an organization with low levels of fear and you will see the opposite.

• Here you will find creativity, limited use of hierarchy to get things done, all kinds of attempts to make changes, and probably some genuine breakthroughs.

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Fear

• You can measure the fear level using the following questions:1. What are people afraid of in this organization

(losing their jobs, making mistakes, not getting pay increase, their managers. etc)?

2. How rational is that fear?3. How does that fear affect their behavior?4. To what extent have the current managers

developed this fear?

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Fear

• People need to have freedom to work within fairly broad guidelines so that they can get the required outcomes.

• To be able to confer this freedom, an organization needs to be confident it has the right people, the right information systems to support their decision making process and the right feedback system to ensure that every thing does not go of the rails.

• When people have this freedom, then the organization finds ways around day-to-day problems and it is able to cater for new challenges and opportunities.

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Freedom

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Fear-freedom Matrix

Fear

freedom

Low

Low High

High

• Low fear + High freedom = innovative, accepting of change, experimental.

• Low fear + Low freedom = frustration, challenge of authority, rules will be broken.

• High fear + High freedom = upward delegation, meetings to share decisions, low innovation.

• High fear + Low freedom = dependence on rules and precedents, resistance to change.

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Fear-freedom Matrix

Change Resistance

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Resistance to ChangeResistance to Change• No matter how well designed

and planned your change program is, not everyone will be singing its praises.

• Employees resist change for a wide variety of reasons, ranging from a straightforward intellectual disagreement over facts to deep-seated psychological prejudices.

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Reasons of ResistanceReasons of Resistance• Ignorance: a failure to understand the situation or the

problem• Mistrust: motives for change are considered suspicious• Disbelief: a feeling that the way forward will not work• “Power-Cut”: a fear that sources of influence and

control will be eroded.• Loss: change has unacceptable personal costs• Inadequacy: the benefits from the change are not seen

as sufficient• Anxiety: fear of being unable to cope with the new

situation.• Comparison: the way forward is disliked because an

alternative is preferred• Demolition: change threatens the destruction of existing

social networks 2828

Types of Reactants to ChangeTypes of Reactants to Change

1. Enthusiasts 2. Followers 3. Objectors 4. Underground

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Types of Reactants to ChangeTypes of Reactants to Change(1) Enthusiasts(1) Enthusiasts

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• Are intrinsically wedded to the change idea. • They may agree dispassionately that the

change will be of benefit to the organization• They may stand to receive some personal

gain from the change• Enthusiasts will use opportunities to

broadcast approval for the change • They will try to convince others of its merits.• They will also model the new behavior early

and will volunteer for membership of teams. • These early adopters may also make good

choices as trainers and coaches during the implementation process.

Types of Reactants to Types of Reactants to ChangeChange

(2)(2) FollowersFollowers • Range from those that are generally

compliant, wishing to take the path of least resistance, to those that are initially reserved to adapt.

• But eventually they adapt once they accept the inevitability of the change. These change recipients will do what is required, but no more.

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Types of Reactants to ChangeTypes of Reactants to Change(3) Objectors (3) Objectors

• will display their resistance to change whenever the opportunity arises.

• They may disrupt meetings, not attend training, take unapproved leave and refuse to carry out instructions.

• Objectors will continue to use superseded systems and processes when others are taking up the new ways of doing things.

• They are not averse to arguing with managers and fellow workers and will try to convince others to continue with the old ways.

• In a unionized environment, resistance can take the form of strikes, lockouts, “work to rule”, legal challenges and boycotts.

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Types of Reactants to ChangeTypes of Reactants to Change(4) Underground(4) Underground

• Change recipients working for the underground have solid motivations for not making their resistance public.

• They may fear direct punishment, such as termination or fines, or more personal costs, such as ridicule or loss of status and authority.

• Managers who are against the change but need to be seen to be in support of it are prime candidates for promoting underground resistance.

• This style of resistance is, by its nature, always covert and can take many forms ; such as falsifying reports, inputting incorrect data, stealing, damaging infrastructure and equipment, using sarcasm, spreading rumors, excessive absences, shoddy work and “go slow”.

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The Theory of 30 – 40- 30The Theory of 30 – 40- 30

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30%30% 40% 40% 30% 30%

Enthusiasts FollowersObjectors & Underground

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The Theory of 30 – 40- 30

70%70% 30% 30%

Enthusiasts Objectors & Underground

THE CHANGE EQUATION: THE CHANGE EQUATION:

FACTORS NECESSARY FOR EFFECTIVE CHANGEFACTORS NECESSARY FOR EFFECTIVE CHANGE

A The individual, group or organisation level of dissatisfaction with the status quo

B A clear and shared picture of a better future - how things could be

C The capacity of individuals, groups and the organisation to change (orientation, competence and skill)

D Acceptable and “do-able” first action stepsE The cost (financial, time, effort) of making the change to

individuals, groups and the organisation.

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The Change EquationThe Change Equation

A + B + C + D

must be greater than E

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The Change Equation: When The Change Equation: When Elements Are MissingElements Are Missing

B + C +D means that the urgent will drive out the important and change will go to the “bottom of the in-tray”.

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Missing A The individual, group or organization level

of dissatisfaction with the status quo

The Change Equation: When The Change Equation: When Elements Are MissingElements Are Missing

A + B + D means that with no investment to improve change management capacity, anxiety and frustration

will result.

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MissingC The capacity of individuals, groups and the

organisation to change (orientation, competence and skill)

The Change Equation: When The Change Equation: When Elements Are MissingElements Are Missing

A + B + C means that the change effort will be haphazard and there will be a succession of false-starts.

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MissingD Acceptable and “do-able” first action steps

10 Recommendations for Managing Change10 Recommendations for Managing Change

1. Analyze organization and its need for change 2. Create shared vision and common direction 3. Separate from past 4. Create sense of urgency 5. Support strong leader role 6. Line up political sponsorship7. Craft an implementation plan 8. Develop enabling structure 9. Communicate, involve people, and be honest 10. Reinforce and institutionalize change

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“Great Minds discuss ideas,Average minds discuss

events Small minds discuss people”Admiral Hymn Rickover

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A 4-Stage Process For Dealing With A 4-Stage Process For Dealing With Resistance Resistance

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1. Consider Different People2. Work With Values and Beliefs3. Understand and Relate to Needs and Problems4. Tailor Your Message to Your Audience.

1. Consider Different People1. Consider Different People

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1. Identify the “adopters” - the staff the change will affect

2. Identify key professional and organisational groups

3. Identify crucial opinion-leaders in the organization.

2. Work With Values and Beliefs2. Work With Values and Beliefs

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1. Assess what’s important to people with regard to the change at personal, professional and organisational levels

2. Understand and relate to what people consider important.

3. Understand and Relate To 3. Understand and Relate To Needs and ProblemsNeeds and Problems

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1. For all key players, assess “What’s in it for Me?”

2. Don’t be too precious about the detail of the approach proposed

3. Understand people’s problems and needs from different perspectives.

4. Tailor Your Message To Your 4. Tailor Your Message To Your AudienceAudience

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1. Do “homework” - get to know what’s important to individuals and groups

2. Keep the message as simple as possible3. Use case studies and examples to show

benefits4. Highlight multiple pay-offs from change5. Use both informal & formal communication.

Culture differences

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• Research on pace of life in various countries suggest that Westerners have fairly precise measures of time and a stronger concern for punctuality than most other people– Mono-chronic style individuals focus on one

thing at a time; characteristic of USA– Poly-chronic style individuals focus on

several things at one time; characteristics of Latin American countries

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Cultural Differences“Time value”

• Research has shown that countries differ significantly in– Interpersonal trust– Power-distance– Avoidance of uncertainty– Individualism vs. Collectivism– Men vs. women.

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Dimensions of Cultural Differences

• Few people rush into business

• Men and women congregate into separate groups at social functions

• Latin Americans stand more closely to each other than North Americans when in conversation

• Men may embrace

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Doing Business in Latin America

• Guests are expected to arrive late, with exception of American guests

• Little concern about deadlines

• Machismo - expectation that businessmen will display forcefulness, self-confidence, leadership with flourish

• Fatalism

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Doing Business in Latin America (Cont.)

• Japan, Korea, China

• Meetings devoted to pleasantries; serving tea, engaging in chitchat

• Seniors and elders command respect

• Consciously use slow down techniques as bargaining ploys

• Business cards should be bilingual

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Doing Business in East Asia

• Protocol-conscious• Do business only with highest ranking

executives• Appear stiff and dull• More expressive in private than in public• Hard to draw up contracts due to

language barriers• Have no advertising experience

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Doing Business in Russia

• Prefer to act through trusted third parties

• Personal honor given high premium• Fatalism• Emotionally expressive• Intense eye contact• Guests should avoid discussing

politics, religion, host’s family and personal professions

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Doing Business in the Middle East

Some important culture Some important culture differencesdifferences

• Rose Knotts summarized important cultural differences between U.S. and foreign managers as follow:

1. Americans place an exceptionally high priority on time, viewing time as an asset. Many foreigners place more worth on relationships. This difference results in foreign mangers often viewing U.S. managers as “more interested in business than people”.

2. Personal touching and distance norms differ around the world. Americans generally stand three feet from each other in carrying on business conversations, but Arabs and Africans stand about one foot apart. Touching another person with the left hand in business dealings is taboo in some countries. Americans managers need to learn personal rules of foreign managers with whom they interact in business.

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Some important culture Some important culture differencesdifferences

3. People in some cultures do not place the same significance on material wealth as Americans often do. Lists of the “largest corporations” and “highest paid” executives abound in the untied states. “More is better” and “Bigger is better” in the united states, but not everywhere else. This can be a consideration in trying to motivate individuals in other countries.

4. Family roles and relationships vary in different countries. For example, males are viewed more than females in some cultures, and peer pressure, work situations, and business interactions reinforce this phenomenon.

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Some important culture Some important culture differencesdifferences

5. Language differs dramatically across countries, even countries where people speak the language. Words and expressions commonly used in one country may be greedy or disrespectful in another.

6. Business and daily life in some societies is governed by religious factors. Prayer times, holidays, daily events, and dietary restrictions, for example, need to be respected by American managers not familiar with these practices in some countries.

7. Time spent with family and quality of relationships are more important in some cultures than the personal achievement and accomplishments espoused by the traditional American managers. For example, where a person is in the hierarchy of a firm’s organizational structure, how large the firm is, and where the firm is located are much more important factors to American managers than to many foreign managers.

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Cultural pitfalls that you should Cultural pitfalls that you should knowknow

1. waving is a serious insult in Greece and Nigeria, particularly in the hand is near someone’s face.

2. Making a “good bye’ wave in Europe can mean “NO,” but means “come here” in Peru.

3. In China, last names are written first.

4. A man named Carlos Lopez-Garcia should be addressed Mr. Lopez in Latin America, but as Mr. Garcia in Brazil.

5. Breakfast meetings are considered uncivilized in most foreign countries.

6. Latin Americans average being twenty minutes late to business appointments.

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Cultural pitfalls that you should Cultural pitfalls that you should knowknow

7. Direct eye contact is impolite in Japan.

8. Don’t cross your legs in Arab or many Asian countries, it is rude to show the sole of your shoe.

9. In Brazil, touching your thumb and first finger –an American OK sign- is the equivalent to raising your middle finger.

10.Nodding or tossing your head back in southern Italy, Malta, Greece, and Tunisia means “no.” In India, this body motions means “yes.”

11. Snapping your fingers is vulgar in France and Beligum.

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Cultural pitfalls that you should Cultural pitfalls that you should knowknow

12.Folding your arms across your chest is a sign of annoyance in Finland.

13. In China, leave some food on your plate to show that your host was very so generous that you couldn't finish.

14.Do not eat with your left hand when dinning with clients form Malaysia or India.

15.One form of communication works the same worldwide. It is the smile, so take that along wherever you go.

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The Role of HR in The Role of HR in Organization Culture Organization Culture

BuildingBuilding

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……the business casethe business case

• Organizations business success Organizations business success is an outcome of where it wants is an outcome of where it wants to reach vis-à-vis its environment to reach vis-à-vis its environment & its desired state& its desired state

• Achieving the new desired state Achieving the new desired state requires manifestation of requires manifestation of changed behaviors in the new changed behaviors in the new pattern…pattern…

• The set of manifested behaviors The set of manifested behaviors in an organization defines its in an organization defines its culture. Every time model shifts, it culture. Every time model shifts, it calls for a shift in the culturecalls for a shift in the culture

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……the business case the business case (cont’d)(cont’d)

• HR interventions reinforce HR interventions reinforce and facilitate promoting the and facilitate promoting the new behaviors required for new behaviors required for the new culture the new culture

• HR plays a critical role in the HR plays a critical role in the definition, assessment & definition, assessment & building of organization building of organization culture … which leads to its culture … which leads to its successsuccess

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How does Organization How does Organization Culture emerge?Culture emerge?

StrategyStrategy

SkillsSkills StaffStaff

StyleStyle

SystemsSystemsStructureStructure

Shared Shared Values Values

•Code Of Business Conduct•Right & wrong•It defines ‘winning’•Role of integrity•Defines ‘Way of Life’

•Relationship with environment•Definition of customer•Defines the value chain•Defines the speed to market•Defines the route to market•Engagement with other stakeholders

•Flow of power•Resource allocation•Decision process•Flow of communication•Definition of leadership•Rewards & compensations•Capabilities

•Degree of technology involvement•Workflows•Turnaround times•Acceptance and innovation•Scalability

•Entrepreneurship practices•Participative vs. autocratic•Process orientation•Flexibility•Work-life balance

•Sizing•Quality •Diversity•Competency

•Goal setting •Defines development•Defines expectations•Linkage to value chain•Development•Assessment•Rewards

A successful organization in a given pattern isA successful organization in a given pattern isalways existing in a state of cultural equilibrium withalways existing in a state of cultural equilibrium with

the 7 determinants of culturethe 7 determinants of culture

Scalability=able to graded on a scaleScalability=able to graded on a scale

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But when the pattern But when the pattern shifts…..shifts…..

•Everything is reduced to zero…a balanced state of culture becomes imbalanced

•Through diagnosis, we need to test each vertical

‘SS’?????

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But when the pattern shifts…..But when the pattern shifts…..•Testing vertical ‘SS’ and its

impact on the behaviors required for the new culture:– Shared values– Systems– Structure– Skills– Style– Staff– Strategy

• Execute interventions accordingly to arrive at the new equilibrium

Cont’dCont’d

StrategyStrategy

SkillsSkills StaffStaff

StyleStyle

SystemsSystemsStructureStructure

Shared Shared Values Values

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How do organizations measure their How do organizations measure their Culture vis-à-vis the 7 determinants Culture vis-à-vis the 7 determinants

…..?…..?

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Culture ProfilingCulture Profiling

FlexibleFlexible

00

1010

2020

3030

4040

5050

6060

7070

8080

RigidRigid

BureaucraticBureaucratic

AccountableAccountable

IndividualisticIndividualistic

TentativeTentative

Risk-avoidingRisk-avoiding

People-orientedPeople-oriented

DirectiveDirective

Strategically orientedStrategically oriented

Status quoStatus quo

ApatheticApatheticEntrepreneurialEntrepreneurialUnaccountableUnaccountable

CollaborativeCollaborative

DecisiveDecisive

Risk-takingRisk-taking

Task-orientedTask-oriented

ParticipativeParticipative

Short-term orientedShort-term oriented

ProgressiveProgressive

PassionatePassionate

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Organizational Cultural Organizational Cultural WebWeb

FlexibleFlexible

00

1010

2020

3030

4040

5050

6060

7070

8080

RigidRigid

BureaucraticBureaucratic

AccountableAccountable

IndividualisticIndividualistic

TentativeTentative

Risk-avoidingRisk-avoiding

People-orientedPeople-oriented

DirectiveDirective

Strategically orientedStrategically oriented

Status quoStatus quo

ApatheticApatheticEntrepreneurialEntrepreneurial

UnaccountableUnaccountable

CollaborativeCollaborative

DecisiveDecisive

Risk-takingRisk-taking

Task-orientedTask-oriented

ParticipativeParticipative

Short-term orientedShort-term oriented

ProgressiveProgressive

PassionatePassionate

Organization should aim to be amongst the Most Respected Companies globally by leveraging the Per Cap Growth Opportunity and

building a Profitable, Sustainable, Year Round Business

Apathetic=passiveApathetic=passive

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Symptoms to Symptoms to InterventionsInterventions

Symptoms Cultural Area Diagnosis Intervention

Attrition (gradual loss)

Structure/Staff Exit, Market data Skilling & Role enhancements

Low morale Structure/Style/System

Communication media Communications

Absenteeism Style/Systems Leave data, workflows Process optimization, Planning

Integrity issues Shared Value/Style

Workflows Process optimization & audit

Collaboration conflicts

Structure/Strategy Workflows Communication

Slow decision making

Structure/Systems Data points Problem solving techniques

Slow Communication

Structure/Strategy Types of information Information protocols

Reward equity Structure/Skills Assessment, Market data

Performance-Potential Mapping

Capability gaps Structure/ System/ Skills

Training Needs Analysis

Capability Building Programs

Bureaucratic processes

Structure/Systems Workflows Process optimization, protocols

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5 Roles of HR in Culture Building5 Roles of HR in Culture Building

• Defining the culture for the new paradigm – evolving the desired cultural map

• Diagnosis of all ‘S’ for continuation or new desired states

• Identify means of intervention

• Dashboard of programs to support interventions

• Execute intervention; monitoring through metrics (standard of measurement)

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What is YOUR OrganizationalWhat is YOUR OrganizationalCulture?Culture?

• What are acceptable What are acceptable degrees of creativity degrees of creativity and risk?and risk?

• What are your What are your patterns of patterns of communication?communication?

• How do you treat How do you treat your customers?your customers?

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An Adaptive CultureAn Adaptive Culture

• Make the external internalMake the external internal• Strong, clear Strong, clear

communicationcommunication• Externally-focused Externally-focused

(customer oriented)(customer oriented)• Be realistic—change won’t Be realistic—change won’t

happen overnighthappen overnight

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Remember…Remember…

The more The more adaptive an adaptive an organizational organizational culture is, the culture is, the more successful more successful it is.it is.

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““It is not the strongest It is not the strongest of the species that of the species that

survive, nor the most survive, nor the most intelligent, but rather intelligent, but rather

the one most the one most responsive to change.”responsive to change.”

Charles Darwin, “On the Origin of theSpecies by Natural Selection”, 1859

Thank YouThank You