Change Dynamics Culture, Values and Change

Leadership and Change Wednesday; January 31, 2007 Khurram Aziz SBE – UMT, Pakistan

Session Plan

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The impact of organizational Culture and reshaping capabilities on Change implementation success: The mediating role of readiness for Change. A new framework for managing Change across Cultures. If you want strategic Change, don’t forget to Change your Cultural artifacts. Cultural Leadership organization. in

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SBE - UMT

Culture and Change

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Some basic Ideas
 Organizational Culture:
 Pattern of shared values and norms that distinguishes one organization from another.  Indicate what is believed to be important in the organization— what is of value to organizational members.  Indicate how things are done in the organization.  Provide direction and meaning for the organization’s members.  Energize organizational members in the pursuit of organizational purpose.  Culture is organization’s personality.
(as quoted in Higgins & Mcallaster, 2004)

SBE - UMT

Leadership and Change

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Some basic Ideas … cont.
 Change:
 Means several things. Sometimes refers to the external world of technology, customers, competitors and such like. Sometimes refers to internal changes such as practices, styles and strategies.
(Senge, 2001)

 Change can also be the change in shared assumptions, values and practices of organizational factors as they are stimulated by changes in the environment.
(as quoted in Higgins & Mcallaster, 2004)

SBE - UMT

Leadership and Change

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Journal of Management Studies 42:2 March 2005 . Nerina L. Jones.The Impact of Organizational Culture and Reshaping Capabilities on Change Implementation Success: The Mediating Role of Readiness for Change Renae A. Jimmieson and Andrew Griffiths.

1999) has addressed the failure of organizational change programs by arguing that the reason so many change efforts run into resistance or outright failure is traceable to the organization’s inability to effectively unfreeze and create readiness for change before attempting a change induction.UMT Leadership and Change 6 . few are so critical as employees’ attitudes towards the change event.  This attracted researchers attention.  Schein (1987. SBE . R u ready?  While the failure of planned organizational change may be due to many factors.  Organizations often move directly into change implementation before the individual or the group to be changed is psychologically ready. 1988.Rationale ….

2002. 1994).UMT Leadership and Change 7 .Readiness for Change  Readiness for change is the extent to which employees hold positive views about the need for organizational change and the extent to which employees believe that such changes are likely to have positive implications for themselves and the wider organization. (Armenakis et al.. SBE .. 1993. Holt. Miller et al.

Theoretical Framework …… Employee’s perception of Human Relation Values Culture Employee’s perception of Level Of Readiness for Change Employee’s perception of Open System Values Culture CHANGE IMPLEMENTATION SUCCESS Reshaping Capabilities SBE .UMT Leadership and Change 8 .

UMT Leadership and Change 9 .Theoretical Framework …… Employee’s perception of Human Relation Values Culture Employee’s perception of Level Of Readiness for Change Employee’s perception of Open System Values Culture CHANGE IMPLEMENTATION SUCCESS Reshaping Capabilities SBE .

UMT Leadership and Change 10 .  Employees who perceive a human relations cultural environment within their division would report higher levels of user satisfaction and system usage and this relationship would be mediated by their ratings of readiness for change …. would be predictive of change implementation (H2) SBE .Research Hypothesis …. (H1a)  Employees who perceive an open systems cultural environment within their division would report higher levels of user satisfaction and system usage and that this relationship is mediated by their change readiness perceptions (H1b)  Employees who report high levels of reshaping capabilities within their divisions would also perceive heightened levels of readiness for change which. in turn..

Training and Development. precise communication and databased decision-making.Information management. E X T E R N A L Control SBE . Open Systems End – Innovation and Development Means – Adaptability and Readiness. Visionary Communications and Adaptable Decision-Making Rational Goal End – Efficiency and Productivity Means .UMT Leadership and Change 11 . instructional communication and centralized decision-making. Open Communication and Participative Decision-Making. Internal Processes End – Stability and control Means .Goal-setting and planning.The Competing Values Framework Flexibility I N T E R N A L Human Relations End – Cohesion and Morale Means .

Dynamic capabilities refer to the capacity to renew competences so as to achieve congruence with the changing business environment. researchers have begun to focus on capabilities needed to respond to shifts in the internal and external environment.. Teece et al. more concisely. 1994)  Penrose (1959). SBE . 1997). the capabilities needed for change (Teece and Pisano. Teece (1982) and Wernerfelt (1984) acknowledged the concept of organizations being flexible in manipulating current capabilities and developing new ones.Reshaping Capabilities .I  Leading organizations in the current and future global markets will be those that can demonstrate timely responsiveness to effectively coordinate and redeploy external and internal competencies (Teece and Pisano. 1994. 1994).  Recently.UMT Leadership and Change 12 .  Capabilities required for successful change have been specifically addressed by Teece and his colleagues who refer to these capabilities as dynamic capabilities (Teece and Pisano.

and performance management capabilities. Generally do not help organization to manage change effectively.II    Turner and Crawford (1998) discussed organizational capabilities needed for change. The capabilities needed to achieve change implementation success are very different from those required for current business performance. Performance Management involves proactively managing the factors that drive the organization’s performance to ensure it consistently and effectively achieves the intended change. Differentiated between operational capabilities and reshaping capabilities.Reshaping Capabilities .UMT Leadership and Change 13 . Development involves developing all resources and systems needed to achieve the organization’s future directions. development. Proposed a taxonomy consisting of engagement. SBE . Operational capabilities are required for sustaining everyday performance.      Engagement is based on informing and involving organizational members in an attempt to encourage a sense of motivation and commitment to the goals and objectives of the organization.

Instruments asks employees to indicate the extent to which their organizations possesses characteristics associated with each of the four culture types.  Organizational Culture. cohesion. Along five dimensions. SBE .  Reshaping Capabilities.UMT Leadership and Change 14 .  Dimensions include character. leadership.  Respondent’s were asked to indicate the existing strength or weakness of each capability for their division on a five-point scale.Measures ….  Ten items were developed for use in the present study based on Turner and Crawford’s taxonomy of engagement. ranging from 1 to 5. emphases and rewards.  Using Zammuto and Krakower (1991). development and performance management.

accuracy. SBE .  User Satisfaction:  Measured with the End-UserComputing Satisfaction Instrument (Doll and Torkzadeh. ranging from 1 (never) to 5 (all the time)..UMT Leadership and Change 15 . format and timeliness).Measures …. user friendliness. consisting 34 item designed to measure five aspects of user satisfaction (i. 1988).  System Usage:  Consisted of a single item. content.e. ranging from 1 (almost never) to 5 (almost always).  Scale was constructed ranging from 1 (strongly disagree) to 7 (strongly agree).  Responses were made on a 5point scale.  Readiness for Change:  Measured with a 7 item scale designed to assess the extent to which employees were feeling positive about the changes.  Participants responded to each item on a five-point scale.

UMT Leadership and Change .  Multi-item scales were used to ensure adequate measurement of each variable.  Temporal study.  About to implement an end-ser computing system effecting all employees within the organization.  Questionnaires posted to all employees (N=572).  Reliability was ensured using Cronbach’s alpha coefficient. predictors are measured at Time T1. response rate 27%.Methodology  State Government department in Queensland Australia.  Outcome variables were assessed at Time 2 (T2). approximately five weeks after collection of T1 data.  Implementation strategy was incremental with three pilot stages and a “roll-out” to all employees. 16 SBE . just prior to implementation.

UMT . Leadership and Change 17 SBE . H1b not supported       Lack of support for Hypothesis 1b might be explained by a study conducted by Cooper (1994) who examined the compatibility of different types of information systems across the four culture types represented in the CVF.Research Results …. Organizations with a strong open systems culture require information systems that focus on the external environment and allow for the scanning and filtering of opportunities that promote linkages across organizations. Suggested that implementation of information systems that are incompatible with the cultural values of the organization will result in less than successful change outcomes. thereby reducing the role that these cultural values had on change readiness and the outcome variables of user satisfaction and system usage.. Employees with an open systems view of their organizational culture may have felt that the new computing system was incompatible with the way in which work was done in their division. These characteristics are somewhat inconsistent with the type of HRIS implemented in the context of this study which was designed to apply structure to internal communication processes. Organizational systems characterized by informal coordination and reduced control also are key features of this type of organizational culture.

1. 4. March 2004.If You Want Strategic Change. . Higgins & Craig Mcallaster. No. Don’t Forget to Change Your Cultural Artifacts James M. 63–73. Vol. Journal of Change Management.

its value systems and norms –Cultural Artifacts).e. ($200M)1994to$556M1996. converted 11th to 4th. one of the best corporate turnarounds. from loser into a profit makers.  Less than 6 months.UMT  Provided employees with a sense of purpose.Overview  Case study of Continental Airlines and Owens and Minor Inc. invest in people and value them SBE .  Gordon Bethune (CEO) and Greg Brenneman (COO).  Superior Customer Service.. systems and processes) with new strategy and ALSO aligned relevant parts of organizational culture (i.  KSF – aligned major strategy execution factors (structure. rewards for success and improved climate within which to work. 19 Leadership and Change .

1982).  Language systems and metaphors.  Symbols.  Set of attributes – objects and behaviors differentiating one organization to other. you must align organizational culture with strategy.UMT Leadership and Change 20 . rituals and ceremonies  Use physical surroundings including interior design and equipment.  Key values and norms. or face almost certain strategic failure (Peters & Waterman.  Myths and sagas.Cultural Artifacts  Once you change strategy. SBE .  New cultural artifacts reinforced service as a key value as opposed to the previous.

Rituals & Ceremonies ORGANIZATIONAL CHANGE Use of Physical Surroundings SBE .Cultural Artifacts (Shrivastava.UMT Leadership and Change 21 . 1985) Key Values & Norms ORGANIZATIONAL CULTURE Myths & Sagas Language Systems & Metaphors Symbols.

change old myths and sagas to emphasize new values and norms that are being stressed.UMT Leadership and Change 22 . valuing customers through valuing employees. Face-to-face communication explaining strategy. delivery of bonus.  Help shape attitudes of new and veteran employees.  Changing core values in not recommended unless the organization’s competitive environment forces a change in vision and mission.  With new strategy. virtues of services and getting employee buy-in to create that service. if required.  HR Director torn out the most hated policy manual. SBE .  Myths and sagas  Stories about key players and events in organizational history.Alignment of Strategy with Cultural Artifacts -I  Aligning Identifiable Systems & Norms with Strategy:  High productivity. Pay-for-performance.

Make reliability a reality – product / service plan. Work together – people plan. managers work altogether on holidays. Meatball. Fund the Future – Financial Plan.Alignment of Strategy with Cultural Artifacts -II  Language Systems and Metaphors. Demonstrate what is important to the organization (Lange. 1991) Company logo. ideas or events. Seating. Plane coloring.UMT Leadership and Change 23 . and slogans also convey the importance an organization places on certain values.      Symbols. SBE . Rituals and Ceremonies. The runway behind is irrelevant). flag. Fly to Win – Marketing Plan.   Organizations develop their own language for expressing who they are and what they are about. Go Forward Plan – Business Plan (Did you know there are no rear view mirrors on an airplane. Re-carpeting. From Worst to First – Company Slogan.

cannot guarantee strategic success. e.Alignment of Strategy with Cultural Artifacts-III  Use of Physical surroundings including interior design and equipment.UMT Leadership and Change 24 ...  Include plant and equipment  Design and decoration convey important messages to those who work in an organization. SBE . reveal values of organization.  Aligning cultural artifacts with a new strategy. but doing so takes an organization a long way towards successful strategy execution.  Building with majestic exteriors or free flowing designs ma stimulate more innovation than those that are dull and ordinary.  Gray-metal desks and open bays v/s wooden desk and closed offices. even if it is your organization’s first strategy.g.

4. Journal of Change Management. 3. Vol.A New Framework For Managing Change Across Cultures Trompenaars. 361– 375 (2003) . Peter. Fons and Woolliams.

 Existing frameworks tend to want to discard current situation in favor of a new corporate culture. profitability.UMT Leadership and Change 26 . thus discarding best of what already exists.  So rather than seeing change as a ‘thing’ opposing continuity.  The reason for changing certain aspects is to avoid changing in other respects.  Authors believe organizations seek change to preserve the company. SBE .Research Theme ……  New paradigm for management of change is proposed. market share and core competence.  Authors argue that changing an organization’s culture is a contradiction in terms because cultures act to preserve themselves and to protect their own living existence. it is considered as a difference.

SBE . but one needs to be a very good athlete. It is possible.Research Theme ……  Organizations must reconcile change with continuity in order to preserve an evolving identity.  Change processes where leaders are not involved are like uphill skiing.  New approach for the management of change is to reconcile emerging dilemmas.  New methodology is centered on diagnosing the tensions between the current and ideal corporate culture.  Authors demonstrated with examples and offered a new conceptual framework on how seemingly opposing values deriving from the tensions arising from change imperatives can be integrated to achieve a ‘win-win’ outcome.UMT Leadership and Change 27 .

The Family Culture -Power Orientation -Personal Relationships -Entrepreneurial -Affinity/Trust -Power of Person The Eiffel Tower Culture -Role Orientation -Power of Position/Role -Job Description/Evaluation -Rules and Procedures -Order and Predictabiliy SBE .Extreme Stereotypes of Corporate Culture The Incubator -Person oriented -Power of Individual -Self-realization -Commitment to one self -Professional Recognition The Guided Missile -Task Orientation -Power of knowledge/expertise -Commitment to (tasks) -Management by objectives -Pay for performance.UMT Leadership and Change 28 .

UMT Leadership and Change 29 .Top Six Ranked Tension Scenarios Current Guided Missile Eiffel Tower Family Eiffel Tower Family Incubator Ideal Incubator Guided Missile Guided Missile Incubator Incubator Guided Missile Scenario Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6 SBE .

Extrinsic reward job done versus intrinsic reward selfdevelopment Describe task in terms of clearly stated innovation outputs Ideal: Incubator SBE .Dilemmas – An Example Current: Guided Missile Typical Dilemmas Leadership Reconciliation Management Reconciliation Rewards Reconciliation Depersonalized authority v/s development of creative individuals Attribute highest authority to those managers who have innovation and learning as prime criteria in their goals.UMT Leadership and Change 30 . Consistent Goal-Oriented around Task v/s Power of Learning Make learning and innovation part of the task description.

Culture Reconciliation Process Core Values Key Purpose Leadership Competence Leadership Competence Reconciliation Process Business Dilemmas SBE .The Change Process Envisioned Future Current Org.UMT Leadership and Change 31 .

Defining core values and key purpose to develop a sense of what one stands for. Defining major business dilemmas caused by the tensions between envisioned future and key purpose and between current and ideal corporate cultures 6. Defining the ideal corporate culture with CCAP embedding core values and key purpose. 4. 3. SBE . Reconciling four or five major business dilemmas 7. Developing an envisioned future in order to develop a sense of what to go for.New Methodology in Practice 1.UMT Leadership and Change 32 . 2. Implementing new design and defining concrete action points to be taken as defined by the change agents. Diagnosing the current corporate culture with the cross-cultural assessment profiler (CCAP). 5. Diagnosing the current leadership competence to reconcile major value dilemmas 8.

UMT Leadership and Change 33 .The Basic Dilemma Template Current Value / Behavior that one intends to keep 10/1 Value/Behavior taken too far Reconciled Value / Behavior 1/1o Value/Behavior taken too far Ideal value/behavior that one needs to further develop SBE .

5.Basic Pro-Forma Framework On the one hand. 2. 3. 4. 4. we need to and/or keep the following valuesdevelop the following values and and behaviour of our currentbehaviour for supporting our organization envisioned future and core values 1. 1. 3.UMT Leadership and Change 34 . 5. SBE . 2. we want moreOn the other hand.

UMT Leadership and Change 35 . 2. knowledge management. In order to reconcile the first dilemma we need to be taking the following steps in the following areas of: The Market (think about what you could do in areas of customers. quality systems etc) Structure and design (consider what could be done in areas of the design of your organization. how to better translate them into behaviour and action etc) II. objectives. Who is taking action and carries responsibilityIII. appraisal and rewards) Business Systems (what can you do in areas of IT systems. Strategy and Envisioned Future (review vision of leaders. basic flows of materials and information). staff planning. 2. flow of information from and to customers) Human Resources (consider areas such as management development. mission statements. business plans and the like) Core Values (think about action points that could enhance the clarity of values. How to monitor the change process (consider for each of the possible action points(consider milestones and qualitative and who is responsible for the outcome) quantitative measures of genuine change) 1. 1. both formally and informally. goals.Guided Template for action to be taken I. time-to-market response. manufacturing information. SBE .

Trice. 149-169. 2. . Pp. Organization Science. No. 2 (May. Beyer. Janice M.Cultural Leadership in Organizations Harrison M. 1991). Vol.

Overview  “….UMT Leadership and Change 37 .the unique and essential function of leadership is the manipulation of culture. SBE .  Most applications of leadership theory focused on how leaders influence the accomplishment of the work of the organization (Daft 1983).  Part that leadership plays in organizational cultures has not been systematically explored.” (Schein.  The cultural approach to leadership reveals how leaders influence the understandings and networks of meanings that other hold and express through their actions. 1985).

SBE .UMT Leadership and Change 38 . through cultural myths. rites (Trice and Beyer 1984).  Repeated communication and affirmation of the shared understandings. symbols. and rewards (Kerr and Slocum 1987) make cultures concrete and keep them vital. cultures provide some degree of order and continuity in social life (Moore and Meyerhoff 1977).  By providing this sense.Culture and Uncertainty  Cultures never totally resolve uncertainties. merely subjectively reduce them (Greertz 1973)  People need some sense that they understand how the world works in order to behave relatively confidently and consistently within (Apter 1964).

or a manageable one Conservative Ideology Leader represent existing values that were successful in past. Elements of Cultural Leadership Consequences Innovation Maintenance Confidence in group Facilitator Strong Convictions Catalyst Persuasive No crisis.Links between Elements of Cultural Leadership and Consequences for Culture. 39 Drawn from Weber’s and other conception of 1-Personal Qualities Self Confidence Charisma Dominant Strong Convictions Evangelist Dramatic 2-Perceived Situation Crisis 3-Vision & Mission 4. Leadership and Change .UMT Radical Ideology Extraordinary qualities to manage needed to deal the crisis.Follower Attributions SBE .

Motivates Continuation of success. Creates impression of success and competence. confidence in followers. 6-Performace SBE .Links between Elements of Cultural Leadership and Consequences for Culture. Motivates Repeated success in managing crisis Leadership and Change Maintenance Effective role model. Articulate Ideology Communicates high expectations. Articulate Ideology Communicates high expectations. Elements of Cultural Leadership 5-Leader Behavior Consequences Innovation Effective role model. Creates impression of success and competence. confidence in followers.UMT 40 .

8-Use of Cultural Forms 9-Use of Tradition Communicate new cultural Affirms and celebrates ideologies and values existing cultural ideologies and values. or innovative changes in structure and strategies Maintenance Refurbish and strengthen existing structures and strategies. SBE . incremental changes in structure and strategies.Links between Elements of Cultural Leadership and Consequences for Culture.UMT Leadership and Change 41 . Elements of Cultural Leadership 7-Administrative Actions Consequences Innovation New structure and strategies. Establish new traditions Continues existing traditions.

Variants of Basic Types of Cultural Leadership Innovation Variants Core Organ’zatnal Problem Maintenance Embody Integrate To reconcile diverse interests of subcultures. Change To displace To keep elements of old existing culture culture with new vital. Possible Solutions Personal Qualities Rites of Integration Personal Qualities Rites of degradation Rites of renewalRites of conflict reduction Analog in Mgt Charismatic Literature Transformation Inspirational al Consensus SBE .UMT Leadership and Change 42 . ones. Create To attract followers and unite them.

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