CHAPTER 11

Organizational Culture,
Change & Development
Pamela S. Lewis
Stephen H. Goodman
Patricia M. Fandt
Slides Prepared by
© Copyright ©2004 by South-Western, a division of Thomson Learning. Zulema Seguel
All rights reserved.
 Learning Objectives slide 1 of 2

1. Discuss the foundations of organizational

culture.
2. List and explain the two components of
organizational culture.
3. Clarify the differences between the types of
organizational artifacts.
4. Explain impact of culture on the organization.
5. Explain how organizational culture can be
changed.

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2 33
 Learning Objectives slide 2 of 2

6. Identify and discuss the targets of planned

change.
7. Describe the steps for planned change.
8. Identify ways managers can gain support of
employee concerns in the change process.
9. Explain how empowering others to act on a
vision affects the change process.

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3 33
 Foundations of Organizational Culture
• Organizational culture is the shared,
emotionally charged beliefs, values, and
norms that bind people together and help
them make sense of the systems within an
organization.
• The beliefs, values and norms tell people:
– “What is to be done.”
– “How it is to be done.”

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 Organizational Culture and Change
• In order to survive, organizations and their
cultures must continuously evolve and change.
• Conditions prompting change include:
– Economic crises
– Changes in laws or regulations
– Social developments
– Global competition
– Demographic trends
– Explosive technological changes
• Cultures also change when an organization
discovers, invents or develops solutions to
problems it faces.
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 Components of Organizational Culture

• Substance
– Consists of shared systems of beliefs, values,
expectations, and norms.
• Form
– Consists of the observable ways that
members of a culture express ideas.

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 Examining Culture
Through Organizational Artifacts
• Artifacts are the cultural routines, rituals,
ceremonies, etc. that we see in public
functions and events staged by the
organization.
• Artifacts support and reinforce the
organization’s shared beliefs, value
systems, expectations, and norms.

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 Rites, Rituals, and Ceremonies
• A relatively dramatic, usually planned set
of recurring activities used at special
times to influence the behavior and
understanding of organizational members.
• Through rituals and ceremonies,
participants gain an understanding of and
cement beliefs that are important to the
organization’s culture.

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 Language, Metaphors and Symbols
• Language includes certain words, phrases,
speeches, etc.
• Metaphors use familiar elements or objects to
make behavior or other unfamiliar processes or
actions comprehensible.
– Special terminology
– Abbreviations
– Jargon or slang
– Gestures
• Symbols can be a picture, a shape, or a
particular object.

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 Stories and Sagas slide 1 of 2

• Stories and sagas graphically and quickly

communicate emotionally charged beliefs to
organization members.
• Stories have important meaning for all
employees, but especially for new employees.
• Organizational stories tell new members:
– The real mission of the organization
– How it operates.
– What behavior is acceptable.
– How individuals can fit into the organization.

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 Stories and Sagas slide 2 of 2

• Stories also serve as symbols of the

organization’s entrepreneurial orientation
and promote values that unify employees
from diverse organizational units.
• Sagas are historical accounts describing
the unique accomplishments of a group
and its leaders or heroes.

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11 33
 The Impact of Culture on Organizations
• Strong Cultures
– Shared values and beliefs create a setting in
which people are committed to one another
and share an overriding sense of mission.
– A strong culture can cause a resistance to
change, however, by reinforcing a singular
view of the organization and the
environment.

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 Culture Issues slide 1 of 2

• Three important issues are embedded in

an organization’s culture.
– Ethics
– Diversity of employees
– Leadership behavior

• How does all this fit together?

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 Culture Issues slide 2 of 2

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.

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Aligning Culture to Maximize Technology
• An organization culture aligned to maximize
technology will embrace continuous
information flows and instantaneous
communication within and among businesses.
• In turn, this pulls together organizational layers,
flattening organizational charts.
• Managers can provide data that employees need
and employees can quickly resolve concerns
with management.

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 The Technology Downside
• We can “overdo it” with information
technology.
– People are buried in e-mail messages.
– Issues concerning using technology for
personal use from shopping online to
viewing pornographic sites or receiving
unsolicited pornographic emails.
• These things must be managed properly so
that they don’t interfere with the tremendous
contribution that comes from information
technology.

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 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 that they must:
– Involve the keepers and holders of the
culture.
– Build on what all organizational members
share.
– Teach new members how to behave.

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 Organizational Change
• Organizational change refers to any
alteration of activities in an organization.
• Alterations can involve:
– The structure of the organization
– The transfer of work tasks
– The introduction of new products, systems,
or technologies or behavior among members.

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 Targets for Change

• Individual targets
• Group targets
• Organizational targets
• Environmental targets

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 Individual Targets
• Involves human resource changes.
• 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.

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 Group Targets
• Involves changes in the nature of the
relationship between managers and
subordinates or the relationships within
work groups.

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 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

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 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

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 Force Field Analysis
• A systematic examination of the pressures that
are likely to support or resist a proposed change.
• This approach recognizes that merely
introducing a change does not guarantee that the
change will be successful.
• Force-field analysis includes:
– The unfreezing process
– How change occurs.
– The refreezing process of new behaviors.

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 Steps for Planned Change
Evaluate: Examine feedback
Establishes criteria for success and monitors changes

Institutionalize: Refreeze
Reinforces and rewards the new behaviors

Empower employees to act

Provides training and development to implement

Communicate: Share information

Gains support and helps members learn

Create a vision: Unfreeze behavior

Clarifies and directs change effort

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25 33
 Step 1: Creating A Vision
• The vision often triggers the beginning of the
unfreezing process.
– Unfreezing is a process that involves developing an
initial awareness of the need for change and the
forces supporting and resisting change.
• Other relevant topics.
– Driving force - The push for change in the status
quo.
– Restraining force - The force to keep the status quo.
– External forces - Forces that are fundamentally
beyond the control of management.

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Step 2:
Communication and Information Sharing
• Valuable way to help organization members
learn to embrace change.
• To gain the support of employees for the change
efforts, management should consider their most
commonly expressed concerns.
– Information - “What’s going to happen?”
– Personal involvement - “How will I fit in?”
– Implementation - “How do I get started on the
change?”
– Impact - “What will be different?”

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 Step 3: Empowering
Others To Act On The Vision slide 1 of 2

• The change process focuses on providing

training and educational opportunities to help
employees learn the new behavior they need to
implement the vision.
• Many changes that occur in an organization are
relatively easy to implement in isolation.
• However, major difficulties can arise when
dealing with human reactions to such
organizational changes or attempting to change
human actions and relationships directory.

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 Step 3: Empowering
Others To Act On The Vision slide 2 of 2

• All of these things are components of

individual and organizational
development.
– Individual development includes anything
that helps an individual learn how to adapt to
change.
– Organization development refers to teaching
people to interact successfully with others in
the organization.

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29 33
Step 4: Institutionalization
or Refreezing the New Approaches
• Reinforcing new behavior, usually by positive
results, feelings of accomplishment, or rewards
from others.
• The new way of doing things must be
embedded in the “new culture” including:
– Rewards
– Changing goals
– Policies
– Rules
– Performance appraisal
– Behavior of managers/leaders

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 Step 5: Evaluation
• An important and often overlooked step.
• Management needs to know whether the change
had the intended effects.
• Too many managers undertake change with the
mistaken belief that simple because the change
was made, it will be successful.
• Evaluation forces the manager to establish
criteria for judging change success before the
change is instituted.
• Mangers must also give careful thought as to
how the results of the change will be measured.

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 Implications for Leaders:
Organizational Culture & Change slide 1 of 2

• Solicit input from those who will be affected by

organizational change. Involvement is essential
to accepting the need for change.
• Carefully formulate your message regarding the
need for and nature of organizational change.
The success of the change process will depend
on effective communication.
• Assess your organizational environment and be
sure that the tone and the tempo of the change
fits the organization. Timing is everything.

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 Implications for Leaders:
Organizational Culture & Change slide 2 of 2

• Serve as a role model, a leader, for the

behaviors sought by the organizational change.
Actions speak louder than words.

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