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Organisational Change: 

1 Organisational Change Chapter 4 Organisational Cultures for Change

Objectives (1): 

2 Objectives (1) recognise the importance of the informal organisation and its role in relation to organisations and change; explain the meaning of culture in the context of a range of perspectives offered by researchers in the field; compare and contrast different cultural models and typologies; diagnose organisational culture as the first step in the process of culture change;

Objectives (2): 

3 Objectives (2) identify the sources, including those of the wider society, from which an organisation derives its culture in order to understand how culture pervades all aspects of organisational life; examine different cultures in terms of their capacity to help or hinder organisational change ; investigate degrees of strategy-culture compatibility and their implications for large-scale strategic change .

Organisational culture: 

4 Organisational culture An iceberg the surface is based on a much deeper (and bigger) reality, yet this reality is usually unexamined.

The Organisational Iceberg: 

5 Goals Strategy Structure Systems & procedures Products & services Financial resources Management Values, attitudes & beliefs Leadership style & behaviour Org. Culture & norms of behaviour Power, politics & conflict Informal groupings Formal Organisation Informal Organisation The Organisational Iceberg

Organisational Culture & Change: 

6 Organisational Culture & Change Organisational life is not as neat, tidy or predictable as formal elements of organisation such as structure, strategy & technology may imply. The culture and politics of many organisations constrain the degree of change and transformation in which they can successfully engage, even though such change may be highly desirable for meeting the challenges and demands of the wider environment. Source: Morgan, G. (1989) Creative Organization Theory. A Resource Book , London, Sage.

Meaning of Culture (Societal): 

7 Meaning of Culture (Societal) Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols , constituting the distinctive achievements of human groups, including their embodiment in artifacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values . ( Kroeber, A.L. and Kluckhohn, F. (1952) Culture: A Critical Review of Concepts and Definitions, New York, Vintage Books, p.181)

Meaning of Culture (Organisational): 

8 Meaning of Culture (Organisational) . ..the deeper level of basic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously and define in a basic “ taken for granted ” fashion an organisation's view of its self and its environment. (Schein, E.H. (1992) Organizational Culture and Leadership , San Francisco, CA, Jossey-Bass, p.2.).

Perspectives on Culture Change: 

9 Perspectives on Culture Change 1. Culture can be managed 2. Culture may be manipulated 3. Culture cannot be consciously changed 1 and 2 are still possible even if 3. Is true!

Descriptions of Culture (1): 

10 Descriptions of Culture (1) Handy, C. (1993) Understanding Organizations, London, Penguin, p. 180. differing ways of doing things. differing atmospheres. different ways of doing things. differing levels of energy. differing levels of individual freedom. different kinds of personality.

Descriptions of Culture (2): 

11 Descriptions of Culture (2) Differing cultures, differing… norms values beliefs about authority control rewards, incentives, jobs rules, expenses obedience initiative hours of work dress committees

Descriptions of Culture (3): 

12 Descriptions of Culture (3) Culture manifests itself in symbols, e.g. type of environment (buildings, layout etc.) dress form of address type of person employed the way work gets done .

Organisational Onion: 

13 Organisational Onion The core is shielded by many layers. To change an organisation in any significant or lasting way , you need to change the: VALUES and BELIEFS that lie at the CORE

Hofstede’s ‘Onion’ Model: 

14 Hofstede’s ‘Onion’ Model Shallow Visible Deep Invisible VALUES Symbols Heroes, stories Rituals Practices Shallow Visible

Schein’s Levels of Culture Model: 

15 Schein’s Levels of Culture Model Shallow Visible Deep Invisible Basic underlying assumptions Artefacts Espoused values mission statement ethical code Shallow Visible

Outer Layer of Culture - Artefacts: 

16 Outer Layer of Culture - Artefacts Things that can be directly observed Annual reports Cleanliness of the facilities Design and ambience of the premises and facilities Punctuality or lateness Other things that are observable and are produced by the culture

Inner Layers of Culture: 

17 Inner Layers of Culture Values often written down statements about purpose, mission, objectives usually general/vague (e.g. Service to the Community) Beliefs more specific usually overt/talked about (e.g. the company should not trade with Iraq) Taken-for-granted assumptions this is the real “core” of culture difficult to identify and explain often linked to the raison d’etre of the organisation (e.g. police forces are needed to catch criminals )

Slide 18: 

18 1. Member identity : The degree to which employees identify with the organisation as a whole rather than with their type of job or field of professional expertise. 2 Group emphasis: The degree to which work activities are organised around groups rather than individuals. 3 People focus: The degree to which management decisions take into consideration the effect of outcomes on people within the organisation. Source: Robbins, S.P (1993), Organisational Behaviour, Englewood Cliffs, NJ, Prentice-Hall International, p.602. Characteristics of organisational culture -1

Slide 19: 

19 4 Unit integration : The degree to which units within the organisation are encouraged to operate in a co-ordinated or interdependent manner. 5 Control : The degree to which rules, regulations and direct supervision are used to oversee and control employee behaviour. 6 Risk tolerance : The degree to which employees are encouraged to be aggressive, innovative and risk seeking. Source: Robbins, S.P (1993), Organisational Behaviour, Englewood Cliffs, NJ, Prentice-Hall International, p.602. Characteristics of organisational culture - 2

Slide 20: 

20 7 Reward criteria: The degree to which rewards such as salary increases and promotions are allocated according to employee performance rather than seniority, favouritism, or other non performance factors. 8 Conflict tolerance: The degree to which employees are encouraged to air conflicts and criticisms openly. 9 Means-ends or orientation: The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve these outcomes. 10 Open-system focus: The degree to which the organisation monitors and responds to changes in the external environment. Source: Robbins, S.P (1993), Organisational Behaviour, Englewood Cliffs, NJ, Prentice-Hall International, p.602. Characteristics of organisational culture - 3

‘Measuring’ an Organisation’s Culture - 1: 

21 ‘Measuring’ an Organisation’s Culture - 1 1 Member identity Job.....................................................................…....Organisation 2 Group emphasis Individual....................................................................Group 3 People focus Task....................................................................................People 4 Unit integration Independent..........................................................Interdependent 5 Control Tight......................................................................................Loose Derived from: Robbins, (1993) Organizational Behavior: Concepts, Controversies, Applications (6th edition) Englewood Cliffs, NJ, Prentice Hall.

‘Measuring’ an Organisation’s Culture - 2: 

22 ‘Measuring’ an Organisation’s Culture - 2 6 Risk tolerance Low..................................…….......................................................High 7 Reward criteria other..................................................................................Performance 8 Conflict tolerance Low.......................…….................................................................High 9 Mean-ends orientation Means..........................................................................................Ends 10 Open-system focus Internal......................................................................................External Derived from: Robbins, (1993) Organizational Behavior: Concepts, Controversies, Applications (6th edition) Englewood Cliffs, NJ, Prentice Hall.

Slide 23: 

23 1 degree of Innovation & risk taking . 2 degree of Attention to detail . 3 degree of Outcome orientation . 4 degree of People orientation . 5 degree of Team orientation . 6 degree of Aggression . 7 degree of Stability Source: Robbins, S.P (1993), Organisational Behaviour, Englewood Cliffs, NJ, Prentice-Hall International, p.602. More ‘characteristics’ of organisational culture

Slide 24: 

24 Attempts to ‘measure’ organisational cultures assume that these are objective entities. But some theorists believe that organisational culture is so deep-seated that it is what the organisation essentially is - something unique and self-created, and that cannot be measured . Source: Robbins, S.P (1993), Organisational Behaviour, Englewood Cliffs, NJ, Prentice-Hall International, p.602. Objectivist versus Interpretative views of organisational culture

Cultural Web: 

25 STORIES About important events, personalities, and deviants SYMBOLS Logos, officers, perks, titles, jargon ROUTINES & RITUALS Taken for granted ways of how we do things around here How people get trained, how they get promoted PARADIGM Core values POWER Generally about the most powerful group (top managers) and their core values which are presented as those of the organisation Performance measurements & reward systems and what they focus on ORG. STRUCTURES Chain of command, hierarchy of posts, rules, formal functions Cultural Web CONTROLS

A Cultural Web of the UK National Health Service: 

26 STORIES Cures Villians (politicians) Heroes and heroism Change agents are fools Abuse of managers The golden age SYMBOLS Terminology White coats/uniforms Retinues Mobile phones Doctors’ dining room Big institutions “Royal” ROUTINES & RITUALS Clinical rituals Consultation ceremonies Patient infantalising - waiting rooms - putting to bed - waking up Ward rounds Blaming next tier PARADIGM NHS is a ”Good Thing” Public service Free at point of delivery Clinicians values Providers know best Acute sector superior “Ours” POWER Fragmented: - professional bodies - doctors - senior clinicians “Old Boy” network Politicians Financial reporting Waiting lists Consultant episodes Professional responsibility ORGANISATION Hierarchical Mechanistic Pecking order of services Tribal/Functional A Cultural Web of the UK National Health Service CONTROLS

Cultural Web of the Department of the Social Security in the 1980s: 

27 Cultural Web of the Department of the Social Security in the 1980s CONTROLS STORIES Characters (public) Characters (staff) Coping SYMBOLS Seniority Formal direction ROUTINES & RITUALS Christmas Parties Strong social clubs Industrial conflict PARADIGM Public service Generalist POWER Based on grade Comprehensive instructions Staffing limits ORGANISATION Hierarchical Mechanistic Resistant to change

Cultural Web of the Department of the Social Security in the mid 1990s: 

28 CONTROLS STORIES New developments Working hard Golden age Competition SYMBOLS Corporate image Core values National ideas scheme HR strategy ROUTINES & RITUALS Consultants Awaydays Focus groups PARADIGM Customer Service Professional managers Goal orientated POWER Empowered staff and middle managers Devolved budgets Targets Objectives linked to organisational goals Freedom to manage Threat of competition ORGANISATION Clear accountability Functional approach Responsive to customers Accepting change Cultural Web of the Department of the Social Security in the mid 1990s

Typologies of Culture (Overview): 

29 Typologies of Culture (Overview) Handy (1993) Power Role Task Person Scholz (1987) Evolution-induced Dimension Internal-induced Dimension External-induced Dimension * Stable * Production * Tough-guy macho * Reactive * Bureaucratic * Work-hard/Play-hard * Anticipating * Professional * Bet-your-company * Exploring * Process * Creative Hall (1995) Compass model of dimension * Low v High Assertiveness * Low v High Responsiveness Deal & Kennedy (1982) * Tough-guy macho * Work-hard/Play-hard * Bet-your-company * Process Pheysey (1993) Power Role Achievement Support

Assertive & Responsive Cultures: 

30 Assertive & Responsive Cultures Assertive individualistic demanding pushy challenging driving hardworking fast movers Responsiveness sensitive loyal trusting compromising team players harmony Cultures c an be high on both high on one, low on the other low on both

Slide 31: 

31 . WEB GREEK TEMPLE NET Power culture Role culture Task culture Person culture How structure impacts cultural expression CLUSTER

Deal & Kennedy - How Cultures Adapt to Their Marketplace: 

32 Deal & Kennedy - How Cultures Adapt to Their Marketplace Tough guy/macho high risk, high return, sink or swim Work hard/play hard based on endeavour, persistence, mutual encouragement Bet your company large systems business with long time horizons and based on co-operation, research and hierarchical order Process procedure and mistake-avoidance oriented Cultures change as the marketplace changes

Scholz (1987) - Multidimensional Culture: 

33 Scholz (1987) - Multidimensional Culture Evolution-induced Internal-induced External-induced from strategy from structure from marketplace * Stable * Production * Tough-guy macho * Reactive * Bureaucratic * Work-hard/Play-hard * Anticipating * Professional * Bet-your-company * Exploring * Process * Creative

Can Organisational Culture be ‘Measured’?: 

34 Can Organisational Culture be ‘Measured’? Some say NOT, although measuring ‘tools’ are popular with US academics and with consultants. Qualitative researchers suggest that the researcher can only try to infer the core values and basic underlying assumptions by interviewing individuals or conducting focus groups, or by observing the practices and artefacts which serve as indicators.

Influences on Culture: 

35 Influences on Culture National culture Professional subculture Organisation’s History Organisationalsubculture

National Culture & Company Culture : 

36 National Culture & Company Culture National Culture at Subsidiary Location National Culture at Headquarter Location Company Culture via HQ Culture within the subsidiary

Kluckhohn & Strodtbeck’s Dimensions of National Culture: 

37 Kluckhohn & Strodtbeck’s Dimensions of National Culture People are seen as basically good …. or bad! Domination of the environment …. or harmony with it . Individualism .… or collectivism . Doing (results) …. or being (enjoyment) oriented. Tradition-oriented …. or future/change oriented. Closed/private space…or common/public space.

Hofstede’s Dimensions of National Culture: 

38 Hofstede’s Dimensions of National Culture High/Low Power Distance degree of acceptability of inequity of wealth & privilege Individualism/Collectivism relative weakness/strength of relationships between individuals and the in-group Masculinity/Femininity extent of clarity and distinctiveness of gender roles High/Low Uncertainty Avoidance how upset people get about ambiguity and future doubt

Laurent’s Dimensions of Organisation Culture: 

39 Laurent’s Dimensions of Organisation Culture As political systems As authority systems As role-formalisation systems As hierarchical relationship systems

Organisational Culture & Change - Variables That Support/impair Frame-breaking Change : 

40 Organisational Culture & Change - Variables That Support/impair Frame-breaking Change ORGANISATION’S CAPACITY TO CHANGE Attitudes to criticism Attitudes to conflict Attitudes to experimentation in processes and products Attitudes to sharing information Degree of willingness to give people autonomy and support them in their actions Degree to which the organisation’s structure facilitates change Degree of willingness to discuss sensitive issues openly Degree of management’s openness to new ideas - especially from below

Cultures That Block Innovation (Kanter): 

41 Cultures That Block Innovation ( Kanter) Being suspicious of new ideas from subordinates Approvals up through are required Peer criticism/elimination tournament Insecurity/lack of praise Problems = failure Control and tight surveillance Secret policies, sudden announcements Information hoarding Delegate dirty work only Arrogance at the top

Climates That May Support Change: 

42 Climates That May Support Change Encouragement to voice sensitive issues Test differences of viewpoint with evidence Collate and clarify information Constructive controversy ‘We are in the same boat’ Joint control

Single Loop and Double-loop Learning (1): 

43 Single Loop and Double-loop Learning (1) Single-loop learning = detecting errors in organisational processes (e.g. students falling asleep in lectures) and correcting them (waking them up). Double-loop learning = building new conceptions of what organisational processes should be (e.g. co-operative learning) by challenging existing values, procedures, knowledge and cultural values (e.g. constructive controversy).

Single Loop and Double-loop Learning (2): 

44 Single Loop and Double-loop Learning (2) ACTIONS OUTCOMES EVALUATE OUTCOMES RETHINK ACTIONS Single Loop GOALS Rethink assumptions Behind the goals Double Loop ACTIONS OUTCOMES EVALUATE OUTCOMES RETHINK ACTIONS Single Loop GOALS Rethink assumptions Behind the goals Double Loop

Organisational Culture and Performance: 

45 Organisational Culture and Performance Strong organisational cultures may improve corporate performance through: Social control cultural values guide behaviour Social glue they bond people together, provide social identity Sense-making shared mental models, common interpretation and understanding of expectations

Problems With Strong Cultures: 

46 Problems With Strong Cultures Strong cultures may be a problem when: The strong culture focuses attention on only one mental model. The strong culture suppresses dissenting values from subcultures.

Assessing how Open the Culture is to Change: 

47 Assessing how Open the Culture is to Change The following characteristics of a culture indicate that it is open to change : Innovation & creativity are encouraged . There is collective decision making within strategic bounds. There is easy , informal and friendly communication. People are used to organising on the basis of skills and professionalism. People accept monitoring of performance. People accept performance based appraisal and reward. Source: Morgan, G. (1989) Creative Organization Theory. A Resource Book, London, Sage, p.158.

Deciding what to do about the Culture: 

48 Deciding what to do about the Culture Organisational cultures can be assessed according to the items on the previous slide. The ‘riskiness’ of particular change efforts can be assessed in the light of the culture. Change agents can then decide whether: to ignore the culture ( dangerous ). manage around the culture (set up countervailing role/processes , like the Japanese have done ). try to change the culture to fit the strategy (very difficult - see next slide). to change the strategy to fit the culture. Source: Morgan, G. (1989) Creative Organization Theory. A Resource Book, London, Sage, p.158.

Trying to Change the Culture: 

49 Trying to Chang e the Culture Involve people in problem diagnosis. Develop shared vision. Build consensus. Don’t push for top-down. Formalise new policies, systems & procedures. Monitor and adjust the change process. Also possible to do (but take care!) : select promote & reward capable people who also support the changes. layoff those who are not capable and who do not support the changes.

Major Point about Changing the Culture: 

50 Major Point about Changing the Culture Changing corporate culture is not like changing a suit of clothes. One can change surface appearances , e.g. by giving the corporation a new image /logo , introducing staff picnics, and by espousing new philosophies and beliefs. But to have a significant and lasting impact, basic values also have to change. This is harder to do, and is built up over a long period of time. Source: Morgan, G. (1989) Creative Organization Theory. A Resource Book, London, Sage, p.158.