Exploring Management

John Schermerhorn, Jr. and Daniel G. Bachrach

Sixth Edition

Chapter 9

Organizational Cultures,
Innovation, and Change
“…we’re very clear not
everyone fits in this quirky
company. We put potential
hires through seven to eight
interviews. Sometimes people
look at us like we’re crazy and
run away. When employees
don’t understand the team
atmosphere, we let them go…”

--Kip Tindell, CEO of Container

Store

Copyright ©2018 John Wiley & Sons, Inc. 2

 Your Chapter 9 Takeaways
• What is the nature of organizational culture? (9.1)

• How do organizations support and achieve

innovation? (9.2)

• How do manages lead the processes of

organizational change? (9.3)

Copyright ©2018 John Wiley & Sons, Inc. 3

ORGANIZATIONAL CULTURE 9.1

Takeaway 9.1 – answers to come

• Organizational culture is the personality of the
organization.
• Organizational culture shapes behavior and
influences performance.
• Not all organizational cultures are alike.
• The observable culture is what you see and hear
as an employee or customer.
• The core culture is found in the underlying values
of the organization.
• Value-based management supports a strong
organizational culture.

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ORGANIZATIONAL CULTURE 9.1

Organizational Culture
• Culture is the personality of the
organization
• Shared beliefs and values that
develops in an organization and
guides the behavior of its members

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ORGANIZATIONAL CULTURE 9.1

Strong Cultures
• Organizational culture shapes behavior and
influences performance
• Strong cultures are clear, well-defined,
and widely shared among members
• Socialization helps new members learn
the culture

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ORGANIZATIONAL CULTURE 9.1

Organizational Cultures

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ORGANIZATIONAL CULTURE 9.1

Observable Culture
• what you see and hear as an employee or
customer

Figure 9.1 FIGURE 9.1 What Are the Main

Components of Organizational Culture?

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ORGANIZATIONAL CULTURE 9.1

Organizational Culture
• Core culture is found in the underlying
values of the organization.
• Core values are the beliefs that shape
behavior.

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ORGANIZATIONAL CULTURE 9.1

Value-Based Management
• Values-based management actively develops,
communicates, and enacts shared values.
• Workplace spirituality involves creating meaning
and community for employees.
• Common elements are meaningful work,
respect for diversity, work/life balance, and
ethical behavior
• Symbolic leaders model and teach the culture
and values.

Copyright ©2018 John Wiley & Sons, Inc. 10

ORGANIZATIONAL CULTURE 9.1

Study Guide for Takeaway 9.1

Rapid Review:
• Organizational culture is a climate of shared values and
beliefs that guides the behavior of members; it creates the
character and personality of the organization and sets its
performance tone.
• The observable culture is found in the everyday rites, rituals,
stories, heroes, and symbols of the organization.
• The core culture consists of the core values and fundamental
beliefs on which the organization is based.
• Value-based management communicates, models, and
reinforces core values throughout the organization.
• Symbolic leadership uses words, symbols, and actions to
communicate the organizational culture.
Copyright ©2018 John Wiley & Sons, Inc. 11
ORGANIZATIONAL CULTURE 9.1

Study Guide for Takeaway 9.1

Questions for Discussion:
1. Can an organization achieve success with a
good organizational design but a weak
organizational culture?
2. When you are in your local bank or any other
retail establishment as a customer, what do you
see and hear around you that identifies its
observable culture?
3. What core values would you choose if you were
creating a new organization and wanted to
establish a strong performance-oriented
culture?
Copyright ©2018 John Wiley & Sons, Inc. 12
ORGANIZATIONAL CULTURE 9.1

Be Sure You Can…for Takeaway 9.1

• explain organizational culture as the personality
of an organization.
• describe how strong cultures influence
organizations.
• define and explain the process of socialization.
• distinguish between the observable and the core
cultures.
• explain value-based management.
• explain symbolic leadership.

Copyright ©2018 John Wiley & Sons, Inc. 13

HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Takeaway 9.2 – answers to come

• Organizations pursue process, product, and business
model innovations.
• Green innovations advance the goals of sustainability.
• Social innovations seek solutions to important societal
problems.
• Commercializing innovation turns new ideas into salable
products.
• Disruptive innovation uses new technologies to displace
existing practices.
• Innovative organizations share many common
characteristics.

Copyright ©2018 John Wiley & Sons, Inc. 14

HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Types of Innovation
• Innovation – taking a new idea and putting it into
practice
• Process innovation results in better ways to do
things.
• Product innovation results in new or improved
goods or services.
• Business model innovations are new ways to
make money.

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HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Types of Innovation
• Green innovations
• Earth friendly business models
• Social innovations
• Business models that help solve the world’s
social problems
• Social Entrepreneurship
• Ways to solve social problems

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HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Commercializing Innovation
• Commercializing innovation
• Turns ideas into products, services, or processes

Figure 9.2 How Do Organizations

Commercialize Innovation?

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HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Commercializing Innovation
• Reverse innovation
• takes products created for small or emerging
markets and moves them into larger
distribution
• Disruptive innovation
• the creation of an innovative product or
service that starts out small scale and then
moves “up market” to where it is so widely
used it displaces prior practices and
competitors

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HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Innovative Organizations

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HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Study Guide for Takeaway 9.2

Rapid Review:
• Innovation is a process that turns creative ideas into products
or processes that benefit organizations and their customers.
• Organizations pursue process, product, and business model
innovations.
• Organizations pursue green innovations that support
sustainability.
• Organizations pursue social business innovations to tackle
important societal problems.
• The process of commercializing innovation turns new ideas into
useful applications.
• Highly innovative organizations tend to have supportive
cultures, strategies, structures, staffing, and top management.

Copyright ©2018 John Wiley & Sons, Inc. 20

HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Study Guide for Takeaway 9.2

Questions for Discussion:
1. Are there any potential downsides to making
organizational commitments to green
innovation?
2. What are the biggest trouble points in a large
organization that might prevent a great idea
from becoming a commercialized innovation?
3. What difference does a leader make in terms of
how innovative an organization becomes?

Copyright ©2018 John Wiley & Sons, Inc. 21

HOW ORGANIZATIONS ACHIEVE INNOVATION 9.2

Be Sure You Can…for Takeaway 9.2

• discuss differences among process, product, and
business model innovations.
• explain green innovation and social business
innovation.
• list five steps in the process of commercializing
innovation.
• list and explain four characteristics of innovative
organizations.

Copyright ©2018 John Wiley & Sons, Inc. 22

ORGANIZATIONAL CHANGE 9.3

Takeaway 9.3 – answers to come

• Organizations and teams need change leaders
• Organizational change can be transformational or
incremental
• Three phases of planned change are unfreezing,
changing, and refreezing.
• Times of complexity require improvising in the
change process
• Managers use force-coercion, rational persuasion,
and shared power change strategies.
• Change leaders identify and deal positively with
resistance to change.

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ORGANIZATIONAL CHANGE 9.3

Types of Change
• Change leaders
• Leaders who take responsibility for change

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ORGANIZATIONAL CHANGE 9.3

Types of Change
• Transformational change
• Results in major and comprehensive
redirection of the organization
• Incremental change
• Smaller change that aligns systems and
practices with strategy

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Organizational Change Pyramid

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ORGANIZATIONAL CHANGE 9.3

Change Process
Kurt Lewin described change as a three part process.

Figure 9.3
What Are the Change Leader Responsibilities in
Lewin’s Three Phases of Planned Change?

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ORGANIZATIONAL CHANGE 9.3

Improvising Change
• Improvising can be critical to the planned
changed process.
• Improvisational change
• makes continual adjustments as changes are being
implemented.

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ORGANIZATIONAL CHANGE 9.3

Strategies for Leading Change

Figure 9.4 What Happens When a Change Leader Uses

Different Types of Change Strategies?

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ORGANIZATIONAL CHANGE 9.3

Resisting Change
Why People May Resist Change
Fear of the unknown—not understanding what is happening or what comes next
Disrupted habits—feeling upset to see the end of the old ways of doing things
Dress professionally—Don’t be casual, even if at home; dressing right increases
confidence and sets a professional tone.
Loss of confidence—feeling incapable of performing well under the new ways of doing
things
Loss of control—feeling that things are being done “to” you rather than “by” or “with” you

Copyright ©2018 John Wiley & Sons, Inc. 30

ORGANIZATIONAL CHANGE 9.3

Study Guide for Takeaway 9.3

Rapid Review:
• Transformational change makes radical changes in organizational
directions; incremental change makes continuing adjustments to existing
ways and practices.
• Change leaders are change agents who take responsibility for helping to
change the behavior of people and organizational systems.
• Lewin’s three phases of planned change are unfreezing (preparing a
system for change), changing (making a change), and refreezing
(stabilizing the system with a new change in place).
• Successful change agents understand the force-coercion, rational
persuasion, and shared power change strategies, and the likely outcomes
of each.
• People resist change for a variety of reasons, including fear of the
unknown and force of habit; this resistance can be a source of feedback
that can help improve the change process.
• Change agents deal with resistance to change in a variety of ways,
including education, participation, facilitation, negotiation, manipulation,
and coercion.
Copyright ©2018 John Wiley & Sons, Inc. 31
ORGANIZATIONAL CHANGE 9.3

Study Guide for Takeaway 9.3

Questions for Discussion:
1. When is it better to pursue incremental rather
than transformational change?
2. Can the refreezing phase of planned change
ever be completed in today’s dynamic
environment?
3. Should managers avoid the force-coercion
change strategy altogether?

Copyright ©2018 John Wiley & Sons, Inc. 32

ORGANIZATIONAL CHANGE 9.3

Be Sure You Can…for Takeaway 9.3

• differentiate transformational and incremental
change.
• discuss a change leader’s responsibilities for each
phase of Lewin’s change process.
• explain the force-coercion, rational persuasion,
and shared power change strategies.
• list reasons why people resist change.
• identify strategies for dealing with resistance to
change.

Copyright ©2018 John Wiley & Sons, Inc. 33

Copyright
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