John R. Schermerhorn, Jr.

12 Daniel G. Bachrach

Introduction to
Management
13th edition
CHAPTER 12
ORGANIZATIONAL
CHANGE AND
DEVELOPMENT
PLANNING AHEAD — KEY TAKEAWAYS

 Explain the concept of organizational culture

and discuss how it affects organizational
behavior and performance.
 Describe how a multicultural organization
handles subcultures and diversity issues.
 Identify alternative approaches to organizational
change and the types of change strategies and
resistance to change found in organizations.

Copyright ©2015 John Wiley & Sons, Inc.

 CHAPTER 12 OUTLINE
1. Organizational Cultures
a) Understanding organizational culture
b) Observable culture
c) Values and the core culture
2. Multicultural Organizations
a) Multicultural organizations
b) Organizational subcultures
c) Power, diversity, and organizational
subcultures

Copyright ©2015 John Wiley & Sons, Inc.

 CHAPTER 12 OUTLINE
3. Organizational Change
a) Models of change leadership
b) Transformational and incremental and
change
c) Phases of planned change
d) Change strategies
e) Resistance to change

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES
 Organizational culture
The system of shared beliefs and values that
guides behavior in organizations
 Socialization
How new members learn the culture of the
organization

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES
Four common organizational cultures,
according to LeadershipIQ:
• Hierarchical cultures emphasize tradition and
clear roles;
• Dependable cultures emphasize process and
slow change;
• Enterprising cultures emphasize creativity and
competition; and,
• Social cultures emphasize collaboration and
trust.

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 ORGANIZATIONAL CULTURES
 The best organizations have positive
cultures that:
Respect members
Are customer driven
Are performance-oriented
Encourage positive work behaviors
Discourage dysfunctional behaviors

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES
Questions for reading an
organization’s culture

• How tight or loose is the structure?

• Do most decisions reflect change or the status quo?
• What outcomes or results are most highly valued?
• How widespread is empowerment, worker
involvement?
• What is the competitive style, internal and external?
• What value is placed on people, as customers and
employees?
• Is teamwork a way of life in this organization?

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FIGURE 12.1 LEVELS OF ORGANIZATIONAL CULTURE—
OBSERVABLE CULTURE AND CORE CULTURE IN THE
ORGANIZATIONAL “ICEBERG ”
Stories
Tales about events
conveying core
values

Rites and Rituals CORE CULTURE

Core Values Heroes
Celebration of
heroes and events • Beliefs about the People (past and
displaying core right ways to present) who
values behave display core values

Symbols
Language and other
symbols conveying
core values

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES
 What is observable culture?
What one sees and hears when walking
around an organization
 Elements of observable culture:
Heroes
Ceremonies, rites and rituals
Legends and stories
Metaphors and symbols

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES

 Core culture: consists of the core

values, or underlying assumptions and
beliefs that shape and guide people’s
behaviors in an organization.
 Core values are beliefs and values
shared by organization members

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES
 Important cultural values include:
Performance excellence
Innovation
Social responsibility
Integrity
Worker involvement
Customer service
Teamwork

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CULTURES
 Value-based management:
Describes managers who actively help to
develop, communicate, and enact shared
values

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 ORGANIZATIONAL CULTURES
 Workplace spirituality:
Creates meaning and shared community
among organizational members

Sample values in spiritual

organizational cultures:
• Meaningful purpose
• Trust and respect
• Honesty and openness
• Personal growth and development
• Worker friendly practices
• Ethics and social responsibility

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 MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
 Multiculturalism
involves inclusiveness, pluralism, and
respect for diversity
 Multicultural organizations
has a culture with core values that respect
diversity and support multiculturalism.

Copyright ©2015 John Wiley & Sons, Inc.

 MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
 Characteristics of multicultural
organizations:
Pluralism
Structuralintegration
Informal network integration
Absence of prejudice and discrimination
Minimum intergroup conflict

Copyright ©2015 John Wiley & Sons, Inc.

 MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
 Organizational subcultures
groups of people who share similar beliefs
and values based on their work or personal
characteristics.
Ethnocentrism is the belief that one’s
subculture is superior to all others

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MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
 Common subcultures include:
Generational
Gender
Occupations and functions
Ethnicity or national cultures

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 MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
 Diversity:
Diversity basically means the presence of
differences.
Diversity alone does not guarantee positive
performance impact
 Diversity must be included in training and human
resource practices
 Positive impact results when diversity is embedded

in the organizational culture

Copyright ©2015 John Wiley & Sons, Inc.

 MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
 Challenges faced by minorities and
women:
Glass ceiling
Leaking pipeline problem
Harassment and discrimination
 Minorities may adapt by exhibiting
biculturalism - adopting characteristics of
the majority culture

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 FIGURE 12.2 GLASS CEILINGS AS
BARRIERS TO WOMEN AND MINORITY
CULTURES IN TRADITIONAL
ORGANIZATIONS

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MULTICULTURAL ORGANIZATIONS
AND DIVERSITY
Diversity Leadership

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 ORGANIZATIONAL CHANGE

 Change leader
A change agent who takes leadership
initiative for changing the existing pattern of
behavior of another person or social system

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FIGURE 12.3 CHANGE LEADERS VERSUS
STATUS QUO MANAGERS

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 ORGANIZATIONAL CHANGE
 Top-down change
Change initiatives come from senior
management
Success depends on support of middle-level
and lower-level workers

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 ORGANIZATIONAL CHANGE
 Bottom-up change
The initiatives for change come from any and
all parts of the organization, not just top
management
Crucial for organizational innovation
Made possible by:
 Employee empowerment
 Employee involvement

 Employee participation

Copyright ©2015 John Wiley & Sons, Inc.

ORGANIZATIONAL CHANGE
How to lead transformational
change:

• Establish a sense of urgency for change

• Form a powerful coalition to lead the change
• Create and communicate a change vision
• Empower others to move change forward
• Celebrate short-term wins and recognize those
who help
• Build on success; align people and systems
with new ways
• Stay with it; keep the message consistent;
champion the vision

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CHANGE
 Transformational and incremental change
Transformational change
 Results in a major and comprehensive redirection
of the organization
Incremental change
 Bends and adjusts existing ways to improve
performance

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 ORGANIZATIONAL CHANGE
 Phases of planned change
Unfreezing
 The phase in which a situation is prepared for
change and felt needs for change are developed
Changing
 The phase in which something new takes place in
the system, and change is actually implemented
Refreezing
 The phase of stabilizing the change and creating
the conditions for its long-term continuity

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FIGURE 12.3 LEWIN’S THREE PHASES OF
PLANNED ORGANIZATIONAL CHANGE

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 ORGANIZATIONAL CHANGE

 Improvisational Change
Making continual adjustments as changes are
being implemented

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 FIGURE 12.5 ALTERNATIVE CHANGE
STRATEGIES AND THEIR LEADERSHIP
IMPLICATIONS

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 ORGANIZATIONAL CHANGE
 Force-coercion strategy of change
Uses formal authority as well as rewards
and punishments to induce change
Relies on belief that people are motivated
by self-interest
Direct forcing and political maneuvering
Produces limited and temporary results
Most useful in the unfreezing phase

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CHANGE
 Rational persuasion strategy of change
 Bringing about change through persuasion
backed by special knowledge, empirical data,
and rational argument
 Relies on expert power
 Relies on belief that reason guides people’s
decisions and actions
 Useful in the unfreezing and refreezing phases
 Produces longer-lasting and internalized change

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CHANGE
 Shared power strategy of change
 Engages people in a collaborative process of
identifying values, assumptions, and goals from
which support for change will naturally emerge
 Time consuming but likely to yield high commitment
 Involves others in examining sociocultural factors
related to the issue at hand
 Relies on referent power and strong interpersonal
skills in team situations
 Relies on belief that people respond to sociocultural
norms and expectations of others

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CHANGE
 Why people resist change:
 Fear of the unknown
 Disrupted habits
 Loss of confidence
 Loss of control
 Poor timing
 Work overload
 Loss of face
 Lack of purpose

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CHANGE
 Checklist for dealing with resistance to change:
 Check the benefits – those involved see a clear
advantage
 Check the compatibility – keep change similar to
existing values/processes
 Check the simplicity – make it as easy as possible to
understand
 Check the triability – allow people to slowly try the
change adjusting as progression is made

Copyright ©2015 John Wiley & Sons, Inc.

 ORGANIZATIONAL CHANGE
 Methods for dealing with resistance to change:
 Education and communication
 Participation and involvement
 Facilitation and support
 Negotiation and agreement
 Manipulation and co-optation
 Explicit and implicit coercion

Copyright ©2015 John Wiley & Sons, Inc.