Chapter 10 Organizational Culture and Change

CHAPTER 10
ORGANIZATIONAL CULTURE AND CHANGE

CHAPTER OUTLINE

What Is Organizational Culture?

Definition of Organizational Culture
Levels of Culture
Functions of Culture
Culture Creates Climate
Do Organizations Have Uniform Cultures?
Creating and Sustaining an Organization's Culture
How a Culture Begins
Keeping a Culture Alive
Selection
Top Management
Socialization
The Liabilities of Organizational Culture
Barrier to Change
Barrier to Diversity
Barrier to Mergers and Acquisitions
Strategies for Merging Cultures
Approaches to Managing Change
Lewin's Three-Step Model
Kotter's Eight-Step Plan for Implementing Change
Action Research
Appreciative Inquiry
Resistance to Change
Individual Resistance
Cynicism
Organizational Resistance
Overcoming Resistance to Change
The Politics of Change
Summary and Implications
OB at Work

LEARNING OUTCOMES

1. What is the purpose of organizational culture?

2. How do you create and maintain organizational culture?
3. Can organizational culture have a downside?
4. How do organizations manage change?
5. Why do people and organizations resist change?

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Chapter 10 Organizational Culture and Change

CHAPTER SYNOPSIS

The idea of viewing organizations as cultures, where there is a system of shared meaning among
members, is relatively new and comes to OB from the field of anthropology. Organizations have mostly
been thought of as being a rational means by which to coordinate and control a group of people.
Organizations are more than vertical and horizontal compartments and authority relationships; they have
personalities just like individuals. They can be thought of as living organisms. This chapter undertakes the
subject of organizational culture. It covers a definition of organizational culture, what cultures do, how
employees learn culture, some examples of organizational culture in action, and implications for
performance and satisfaction.

The chapter then examines how to understand and manage change. We look at resistance to change
(both by individuals and by organizations), how to overcome resistance to change, and the approaches
for managing organizational change.

STUDY QUESTIONS

It is impossible to cover all the material contained in the chapter during one or two lectures. To deal with
this problem, I present my students with a list of study questions to indicate what material they will be
responsible for on exams. I tell them that they will be responsible for these, even if the material is not
covered in class. I have found that this reduces anxiety overall, and I find it helps to make students aware
that not everything in a chapter is required material. I realize instructors vary in their approach, so this is
simply my approach.

My study questions for this chapter are as follows:

 What is organizational culture?

 Describe differences between dominant cultures, subcultures, and organizational cultures.
 How does an organization create and sustain an organizational culture?
 What does organizational culture do?
 What are some potential downsides of organizational culture?
 How do new employees get socialized into an organizational culture?
 How do cultures form and how do employees learn them?
 What can be changed in an organization?
 What is Lewin's three-step model of change?
 What causes resistance to change?
 How can you overcome resistance to change in an organization?

SUGGESTED TEACHING PLAN

I start this class by putting up a slide on the characteristics of culture. An alternative way to frame the
discussion would be to do the following:

1. As a class, discuss and decide what the culture of your college or university is. Students may
have a very different perspective than you do as faculty, so choose which "organization" you are
assessing—the one visible to students or to faculty.

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Chapter 10 Organizational Culture and Change

2. Once the culture is identified, discuss with students what would be involved in changing the
culture of your college or university. Explain to students, for the sake of the exercise, that they
should consider that the culture is in need of change to deal with the new dynamics facing
institutions of higher education. You should choose a contrasting culture to the one identified in
the students' earlier discussion.

3. This discussion should consider:

 The current culture and target culture

 What change techniques could be used
 What elements of culture maintenance need to be addressed in the change effort
 Who would resist this change and why

The discussion should help students realize the effort involved in changing organizational culture and
help them decide which side of this debate they most identify with.

You could use this as your guide to framing the lecture, and return to the different questions as you
proceed through the lecture.

Be sure to examine "Exploring Topics on the Web" in the supplemental section at the end of this chapter’s
notes for possible additional ideas to cover in class or assign for homework.

ANNOTATED LECTURE OUTLINE

Notes:
A. What Is Organizational Culture?

 Henry Mintzberg says that “culture is the soul of the organization—the beliefs
and values, and how they are manifested. I think of the structure as the
skeleton, and as the flesh and blood. And culture is the soul that holds the
thing together and gives it life force.”
 Culture provides stability to an organization and gives employees a clear
understanding of “the way things are done around here.”
 Culture sets the tone for how an organization operates and how individuals
within the organization interact. Organizations differ considerably in the
cultures they adopt.

1. Definition of Organizational Culture

 Culture is the system of shared meaning held by members that distinguishes

the organization from other organizations.
 Primary characteristics of culture are as follows:
 Innovation and risk taking. The degree to which employees are
encouraged to be innovative and take risks.
 Attention to detail. The degree to which employees are expected to work
with precision, analysis, and attention to detail.
 Outcome orientation. The degree to which management focuses on
results or outcomes rather than the processes.

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Chapter 10 Organizational Culture and Change

 People orientation. The degree to which management decisions take into

consideration the effect of outcomes on people within the organization.
 Team orientation. The degree to which work activities are organized
around teams rather than individuals.
 Aggressiveness. The degree to which people are aggressive and
competitive rather than easygoing and supportive.
 Stability. The degree to which organizational activities emphasize
maintaining the status quo in contrast to growth and change.
 These seven characteristics form a composite picture of the organization’s
culture. They can be mixed to create diverse organizations.

(See Exhibit 10-1 Contrasting Organizational Cultures)

2. Levels of Culture

(See Exhibit 10-2 Layers of Culture)

 A simmering volcano is used to represent the layers of culture by showing

the visible and the invisible aspects of culture.
 Artifacts: Aspects of an organization’s culture that you see, hear, and feel.
 Beliefs: The understanding of how objects and ideas relate to each other.
 Values: The stable, long-lasting beliefs about what is important.
 Assumptions: The taken-for-granted notions of how something should be
in an organization.

3. Functions of Culture

 Culture performs various functions within an organization:

 It has a boundary-defining role because it creates distinction between
one organization and others.
 It conveys a sense of identity for organization members.
 It facilitates commitment to something larger than one’s individual self-
interest.
 It enhances stability. It is the social glue that helps hold an organization
together. It provides appropriate standards for what employees should
say or do.
 It serves as a control mechanism because it guides and shapes the
attitudes and behaviour of employees

4. Culture Creates Climate

 Organizational climate refers to the shared perceptions members have about

their organization and work environment.

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Chapter 10 Organizational Culture and Change

 Psychological climate is strongly related to individuals’ level of job

satisfaction, involvement, commitment, and motivation.
 Positive workplace climate has been linked to higher customer satisfaction
and financial performance. Climate influences the habits people adopt.

5. Do Organizations Have Uniform Cultures?

 Organizational culture represents a common perception held by the

organization members.
 Most organizations have a dominant culture and numerous sets of
subcultures.
 Dominant culture: Expresses the core values that are shared by a
majority of the organization’s members.
 Subcultures: Tend to develop in large organizations to reflect common
problems, situations, or experiences. Subcultures include the core values
of the dominant culture plus additional values unique to members of the
subculture.

Teaching Tip: This is a good place to get students to think about the culture of
their college or university. Generally, different departments have different
cultures. Ask them to compare what they know about the culture of Arts students
vs. those in Business.

B. Creating and Sustaining an Organization’s Culture

 A variety of forces influence the creation of a culture and reinforce and

sustain these forces once they are in place.

(See Exhibit 10-3 How Organizational Cultures Form)

1. How a Culture Begins

 Culture begins with the organization's founders, who have a major impact in
establishing the early culture. Founders have a vision or mission of what the
organization should be.
 Culture creation occurs in three ways:
 Founders hire and keep only employees who think and feel the way they
do.
 Founders indoctrinate and socialize employees to their way of thinking
and feeling.
 Their own behaviour encourages employees to identify with the founders’
beliefs, values, and assumptions.

Teaching Tip: When discussing this point, get students in the class who have
some work experience to tell the “creation stories” of organizations in which they
have worked and discuss how those stories fit in with the organizational culture.

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2. Keeping a Culture Alive

 Once culture is in place, several practices can be adopted to maintain it.

 Selection process identifies and hires individuals who fit the culture.
 The top management maintains culture by their actions and words.
 Socialization of new employees and others throughout their careers in
the organization contribute to keeping the culture alive.

Teaching Tip: Ask students who have work experience or who have been in the
military whether the organization did anything to introduce them to the culture.
What was it? How effective was it?

C. The Liabilities of Organizational Culture

 Culture can have potentially dysfunctional influence on the organization’s

effectiveness.

1. Barrier to Change

 When an organization is undergoing change, culture may impede change by

making it difficult to respond to change. This is true especially of
organizations with strong cultures that are entrenched.

2. Barrier to Diversity

 Strong cultures put considerable pressure on employees to conform to the

existing culture. By limiting the range of values and styles that are acceptable,
strong cultures may diminish diverse views and behaviour.

3. Barrier to Mergers and Acquisitions

 Merging the cultures of two organizations can be difficult.

 Strategies for Merging Cultures
 Assimilation. This strategy works best when one of the organizations has
a relatively weak culture. However, if a culture is simply imposed on an
organization, it rarely works.
 Separation. The organizations remain separate and keep their individual
cultures. This strategy works best when the organizations have little
overlap in the industries in which they operate.
 Integration. A new culture is formed by merging parts of each of the
organizations. This strategy works best when aspects of each
organization's culture need to be improved.

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D. Approaches to Managing Change

 Organizational cultural issues, specifically mergers, lead to cultural change

that requires careful management. The question arises as to who is
responsible for managing this change. Change agents can be leaders,
managers, employees, or outside consultants.

1. Lewin's Three-Step Model

(See Exhibit 10-5 Lewin's Three-Step Change Model)

 Lewin's three-step model consists of unfreezing the status quo, moving to a

new state, and refreezing the new change to make it permanent.
 The status quo is an equilibrium state and unfreezing is necessary for the
change to happen. Unfreezing is influenced by two forces:

(See Exhibit 10-6 Unfreezing the Status Quo)

Teaching Tip: I like to illustrate this by talking about wanting to change an ice
cube from a round shape to a square shape: need to unfreeze the ice cube,
move the liquid to a square-shaped container, and refreezing the ice cube. This
provides the imagery to continue the lecture.

 Driving forces: Direct behaviour away from the status quo toward the
desired state and should be increased.
 Restraining forces: Attempt to retain the status quo and should be
decreased. Restraining happens because people question the need for
change. Companies with strong cultures experience more restraining
forces in the face of radical changes.

Teaching Tip: I ask students to think of something they've tried to change in the
past (weight, study habits, exercise habits, eating healthier), then we list the
driving and restraining forces for change.

The Working with Others Exercise on page 363 gives students the opportunity to
identify driving and restraining forces in an organization.

 Research shows that for change to be effective it has to happen quickly.

 For the change to be sustained, the new situation must be “refrozen” to
balance the driving and restraining forces.
 A key feature of the three-step model is view of change as an episodic
activity. However, in today’s fast-moving business climate, change has to be
an ongoing process.

Teaching Tip: It is important to emphasize to students that unless the change is

reinforced continuously, it is very easy to slip back to the original state. That is

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why it's so important to change the reward system to reinforce the change. For
instance, if an organization is now putting in teamwork, it needs to stop rewarding
individual rewards exclusively, and figure out how to give rewards for the team-
based behaviour.

2. Kotter's Eight-step Plan for Implementing Change

 Kotter first listed common failures when managers try to introduce change:
 Inability to create a sense of urgency about the need for change.
 Failure to create a coalition for managing the change process.
 The absence of a vision for change and to effectively communicate that
vision.
 Not removing obstacles that could impede the achievement of the vision.
 Failure to provide short-term, achievable goals.
 The tendency to declare victory too soon.
 Not anchoring the changes in the organization's culture.

– He then suggested ways to implement change with an eight-step plan.

(See Exhibit 10-7, Kotter's Eight-Step Plan for Implementing Change)

 This plan builds on Lewin’s model. The first four steps represent the
“unfreezing” stage; steps 5–7 represent “moving”; and step 8 represents
“refreezing.”
 This is considered a more detailed guide for implementing change
successfully.

3. Action Research

 A change process is based on the systematic collection of data, followed by

the selection of a change action based on what the analyzed data indicate.
 The process of action research consists of five steps:
 Diagnosis: The change agent gathers information about problems,
concerns, and required changes from members of the organization by
asking questions, interviewing employees, reviewing records, and
listening to the concerns of employees.
 Analysis: The change agent organizes the information gathered into
primary concerns, problem areas, and possible actions.
 Feedback: The change agent shares with employees what has been
found during diagnosis and analysis. The employees, with the help of the
change agent, develop action plans for bringing about any needed
change.
 Action: The employees and the change agent carry out the specific
actions to correct the problems that have been identified.
 Evaluation: The action plan's effectiveness is evaluated using the data
gathered initially as a benchmark.

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 Action research benefits:

 Problem focused—look at the type of problem, which determines the
type of change action.
 Employee involvement—active participation reduces resistance to
change.

4. Appreciative Inquiry

 Appreciative inquiry seeks to identify the unique qualities and special

strengths of an organization, which can then be built upon to improve
performance. It focuses on an organization's successes rather than on its
problems.
 The appreciative inquiry process consists of four steps:
 Discovery. Find out what people think are the strengths of the
organization. For instance, employees are asked to recount times they
felt the organization worked best or when they specifically felt most
satisfied with their jobs.
 Dreaming. The information from the discovery phase is used to
speculate on possible futures for the organization. For instance, people
are asked to envision the organization in five years and to describe what
is different.
 Design. Based on the dream articulation, participants focus on finding a
common vision of how the organization will look and agree on its unique
qualities.
 Destiny. Participants discuss how the organization is going to fulfill its
dream. This typically includes the writing of action plans and the
development of implementation strategies.

E. Resistance to Change

 Organizations and their members typically resist change. Resistance can be

positive if it leads to open discussion and debate.
 Change agents can use resistance to modify the change to fit the
preferences of employees.
 If resistance is treated only as a threat, dysfunctional conflict may increase.
 Resistance can be overt, implicit, immediate, or deferred.
 Resistance can come from individual and organizational sources, which often
overlap.

Teaching Tip: Ask students to give examples of change attempts they've tried to
make for themselves. These will likely include studying harder, losing weight,
exercising more, etc. Ask them how successful they've been. Likely not very
successful. Then talk about why the change was so difficult.

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1. Individual Resistance to Change

(See Exhibit 10-9 Sources of Individual Resistance to Change)

 The following are sources of individual resistance to change:

 Self-interest. People worry that they will lose something of value if
change happens. Thus they look after their own self-interests rather than
those of the total organization.
 Misunderstanding and lack of trust. People resist change when they don't
understand the nature of the change and fear that the cost of change will
outweigh any potential gains for them. This often occurs when they don't
trust those initiating the change.
 Different assessments. People resist change when they see it differently
from their managers and think the costs outweigh the benefits, even for
the organization.
 Low tolerance for change. People resist change because they worry that
they do not have the skills and behaviour required of the new situation.
They may feel that they are being asked to do too much too quickly.
 Individuals may worry that being asked to change may indicate that what
they have been doing in the past was somehow wrong.

Teaching Tip: The Case Incident, "GreyStar Art & Greetings," in the
supplemental section can be used to encourage students to think about how they
might handle change when they face a resistant employee.

 Cynicism may be strong if employees have been through change efforts

before and nothing appears to have changed.
 The major elements contributing to cynicism are as follows:
 Feeling uninformed about what was happening.
 Lack of communication and respect from one's supervisor.
 Lack of communication and respect from one's union representative.
 Lack of opportunity for meaningful participation in decision making.
 Employees with negative personalities were more likely to feel cynical.
Organizations need to provide greater communication, respect, and
opportunities to take part in decision making.
 Cynicism leads to lower commitment, less job satisfaction, and reduced
motivation.

(See Exhibit 10-10 for a lighthearted look at cynicism)

Teaching Tip: The Case Incident, “Is a 5S Culture for You?” on page 365 looks
at one approach companies are using to engage employees in cultural change.

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2. Organizational Resistance

(See Exhibit 10-11 Sources of Organizational Resistance to Change)

 Organizations tend to be conservative and actively resist change. Traditional

organizations provide good examples.
 Major sources of organizational resistance to change include the following:
 Structural inertia: Organizations have built-in mechanisms to produce
stability; this structural inertia acts as a counterbalance to sustain
stability.
 Limited focus of change: Organizations are made up of a number of
interdependent subsystems. Changing one affects the others.
 Group inertia: Group norms may act as a constraint.
 Threat to expertise: Changes in organizational patterns may threaten the
expertise of specialized groups.
 Threat to established power relationships: Redistribution of decision-
making authority can threaten long-established power relationships.
 Threat to established resource allocations: Groups in the organization
that control sizable resources often see change as a threat. They tend to
be content with the way things are.

3. Overcoming Resistance to Change

 Not all change is good. Sometimes those who are initiating change fail to
realize the full magnitude of the effects they are causing or to overestimate
the true costs.
 Eight tactics suggested for use by organizations in dealing with resistance to
change are as follows:
 Education and communication. Communicate the logic of change so as
to minimize the effects of misinformation. Communication can be helpful
in selling the need for change.
 Participation and involvement. Those opposed can be brought into the
decision process to obtain commitment. Participants must have the
expertise to make a meaningful contribution.
 Building support and commitment. Offering a range of supportive efforts
to facilitate adjustment, such as counselling or new-skills training. This
could increase the emotional commitment.
 Developing positive relationships. Building trust to prove that the work
environment supports employees.
 Implementing changes fairly. Employees must see the reasons for the
change and perceive that changes are implemented consistently and
fairly.
 Manipulation and co-optation. Twisting and distorting facts to make them
appear more attractive. Or trying to “buy off” the resistors by giving them
key roles in the process.

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 Selecting people who accept change. People who adjust best to change
are those who are open to experience, take a positive attitude toward
change, are willing to take risks, and are flexible in their behaviour.
 Explicit and implicit coercion. The application of direct threats or force
upon resisters.

4. The Politics of Change

 Change threatens the status quo, making it an inherently political activity.

 Demand for change is likely to come from outside change agents, employees
who are new to the organization, or managers who are removed from the
main power structure.
 Senior managers are often major impediments to change because they feel a
threat to their status power and position.
 When forced to introduce change, the long-time power holders tend to
introduce incremental change because radical change is too threatening.
This explains the need to bring in outside change agents.

(See OB in Action: How to Speed Up the Pace of Change)

F. Summary and Implications

1. What is the purpose of organizational culture?

Organizational culture is the pattern of shared values, beliefs, and assumptions considered to be the
appropriate way to think and act within an organization. Culture provides stability to an organization and
gives employees a clear understanding of “the way things are done around here.”

Culture performs a number of functions within an organization. First, it creates distinctions between one
organization and others. Second, it conveys a sense of identity for organization members. Third, it helps
create commitment to the organization. Fourth, it's the social glue that helps hold the organization
together. Fifth, it helps employees make sense of the organization.

2. How do you create and maintain organizational culture?

The original culture of any organization is derived from the philosophy of its founders. That philosophy
influences what types of employees are hired. The culture of the organization is then reinforced by top
management, who signal what is acceptable behaviour and what is not. Employees are socialized into the
culture and will be more easily socialized to the extent that the employee's values match those of the
organization.

3. Can organizational culture have a downside?

Many of the functions of culture are valuable for both the organization and the employee. Culture
enhances organizational commitment and increases the consistency of employee behaviour. Culture also
reduces ambiguity for employees by telling them what's important and how things are done. However, a
strong culture can have a negative effect, such as Enron's pressure-cooker culture, which led to the
company's ultimate collapse. Culture can also act as a barrier to change. It can make it difficult to create
an inclusive environment, and it can hinder the success of mergers and acquisitions.

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4. How do organizations manage change?

Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the
status quo, moving to a new state, and refreezing the new change to make it permanent. John Kotter built
on Lewin's three-step model to create a more detailed eight-step plan for implementing change. Another
approach to managing change is action research. Other organizations use appreciative inquiry to manage
change.

5. Why do people and organizations resist change?

Individuals resist change because of basic human characteristics, such as perceptions, personalities, and
needs. Organizations resist change because they are conservative and because change is difficult. The
status quo is often preferred by those who feel they have the most to lose if change goes ahead.

OB AT WORK: FOR REVIEW

(Note to instructors: The answers here are starting points for discussion, not absolutes!)

1. How can an outsider assess an organization's culture?

The public image an organization projects reflects its culture. An outsider can read the annual report and
examine press releases for cues to culture. If the outsider actually gets a first-hand view of a physical
plant of the organization, the tips on page 363 can be used (From Concept to Skills).

2. Why do subcultures develop in an organization?

The extent of the diversity of the workforce defines the organization's subcultures. The hiring of new
employees, who because of educational background, race, gender, ethnic, or other differences are not
like the majority of the organization's members, creates subcultures. For example, an organization can
develop subcultures of "people who do software" or "jocks."

3. Can an employee survive in an organization if he or she rejects its core values? Explain.

In most organizations, the answer is "No!" The core values are the central meaning and justification for
the organization. The occasional brilliant maverick may be tolerated, but the organization will almost
always try to change such an employee. As well, the employee who perceives incongruency between his
or her values and the organizational culture will likely be unhappy and leave.

4. What benefits can socialization provide for the organization? For the new employee?

From the organization's standpoint, socialization makes for a smooth-running operation. People will hold
homogeneous values and attitudes. Conflicts are kept to a minimum because people have a common
perspective of what the organization is. From the new employees' perspective, socialization provides a
sense of belonging and security. They feel they are a part of the organization because they think and
behave as management desires.

5. How can culture be a liability to an organization?

Too weak or too strong a culture can be a liability to an organization. Such factors as degree of risk
tolerance, team emphasis, and support of people contribute to an overall subjective perception of the
organization. And whether favourable or unfavourable, these perceptions affect employee performance
and satisfaction. The impact of this affect is greater for stronger cultures since strong culture can be a
barrier to change.

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6. How does Lewin's three-step model of change deal with resistance to change?

Lewin's three-step model consists of unfreezing the status quo, moving to a new state, and refreezing to
the new change to make it permanent. It deals with resistance to change by increasing the driving forces
away from the status quo, by decreasing the restraining forces, or through a combination of both.

7. How does Kotter's eight-step plan for implementing change deal with resistance to change?

Kotter's plan expands upon and extrapolates from Lewin's three-stage model. Essentially, Kotter's first
four steps extrapolate on the "unfreezing" stage. Steps 5 through 7 represent "moving" away from the
status quo, and the final step works on "refreezing." Kotter's contribution lies in providing managers and
change agents with a detailed guide for successfully implementing change.

8. What are the factors that lead individuals to resist change?

The factors that lead to individual resistance to change include habit, security, economic factors, fear of
the unknown, selective information processing, and cynicism.

9. What are the factors that lead organizations to resist change?

The factors that lead to organizational resistance to change include structural inertia, limited focus of
change, group inertia, threat to expertise, threat to established power relationships, and threat to
established resource allocations.

OB AT WORK: FOR CRITICAL THINKING

(Note to instructors: The answers here are starting points for discussion, not absolutes!)

1. Is socialization brainwashing? Explain.

Socialization is the process that adapts employees to the organization's culture. To the extent that it
"adapts" employees, it can be considered brainwashing in that the organization seeks to mould the new
employee into a member who fits the organizational idea of a good employee.

2. Can you identify a set of characteristics that describe your college or university's culture? Compare
them with several of your peers' lists. How closely do they agree?

Student responses may vary widely depending on their individual experience and background. This is an
opportunity to determine if the students perceive the organization's culture as strong or weak. See the
Working with Others Exercise, "Rate your Classroom Culture."

3. "Resistance to change is an irrational response." Do you agree or disagree? Explain.

Sometimes resistance is rational, sometimes irrational. Resistance to change provides a degree of

stability and predictability to behaviour. Were it not for resistance, organizational behaviour would take on
characteristics of chaotic randomness. It can be a source of functional conflict and can stimulate healthy
debate over the merits of an idea and result in a better decision. On the other hand, resistance to a
change that could clearly be beneficial is irrational. That kind of resistance hinders adaptation and
progress.

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Chapter 10 Organizational Culture and Change

POINT/COUNTERPOINT SUMMARY AND ANALYSIS

Summary

Point: Organizational Culture Does Not Change

The first article argues that culture is relatively unmanageable and very difficult to change. There are
many forces that act to maintain it even when it needs changes. Change will occur only when the
organization confronts a survival-threatening crisis.

Counterpoint: How to Change an Organization’s Culture

The second article is more optimistic about changing culture. The case presents examples, as with Lee
Iacocca and Chrysler, that culture can be changed. The article offers eight actions that can lead to
cultural change. This article echoes the first one in that it suggests that some dramatic crisis or change in
leadership can stimulate cultural change. As well, it is acknowledged that quick fixes should not be
expected; it can take years to change a culture.

Analysis

The issue addressed here (can culture be changed?) is extremely important and likely to be the subject of
debate for a number of years. If culture cannot be changed, it cannot be managed. It therefore becomes a
constraint that management must work around. If it can be changed, managers can modify their culture to
align with the organization's changing environment. Management scholars have a vested interest in
promoting the argument that culture can be changed. The second article expands on the notion of
managers as directing the future of their organizations not as impotent observers, but rather as people
who take credit for successes and blame for failures.

COMMENTS ON LEARNING ABOUT YOURSELF EXERCISE: What Kind of Organizational Culture

Fits You Best?

This assessment is based on the seven characteristics that make up aspects of organizational culture.
What does an individual score mean? The higher your score (positive), the more comfortable you'll be in
a formal, mechanistic, rule-oriented, and structured culture. This is synonymous with large corporations
and government agencies. Negative scores indicate a preference for informal, humanistic, flexible, and
innovative cultures, which are more likely to be found in research units, advertising firms, high-tech
companies, and small businesses.

COMMENTS ON BREAKOUT GROUP EXERCISES

1. Identify artifacts of culture in your current or previous workplace. From these artifacts, would you
conclude that the organization had a strong or weak culture?

Students should discuss whether or not there were uniforms, slogans, icons, and a variety of other items
present, and how this linked to the strength of the culture.

2. Have you or someone you know worked somewhere where the culture was strong? What was your
reaction to that strong culture? Did you like that environment, or would you prefer to work where there
is a weaker culture? Why?

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Some students really dislike strong cultures, but others will express some preference for it. They will
argue that it helps people feel more connected to each other, and makes it easy to understand what is
expected.

3. Reflect on either the culture of one of your classes or the culture of the organization where you work
and identify aspects of that culture that could be changed. How might some of these changes be
made?

Students will have a variety of examples they might share. You might want to concentrate on problematic
areas of culture—things that affect productivity or morale, for instance. Encourage them to think about
change in the following terms:

a) Unfreezing: What could be done to make participants aware of the problems that the culture
is causing, and how could one get the participants to accept that the culture is part of the
problem?
b) Moving: What actions and behaviours could be introduced to replace the old culture?
c) Refreezing: What rewards and incentives can be used to lock in the change? What could be
done when participants try to revert to their old habits?

COMMENTS ON WORKING WITH OTHERS EXERCISE: The Beacon Aircraft Company

This is an exercise done in small groups to identify the driving forces and resisting forces to
organizational change. The data obtained in each group can be very different. However, it appears that
the experience with the matrix form of organization was not completely disavowed by the marketing
division of the Beacon Aircraft Company. It appears that they really would like to benefit from the matrix
form or organization without having to pay the costs. A better understanding of the two forms of
organization is indicated. Training in the pros and cons of the various forms of organization may be in
order. The consultant should devise such a training program.

COMMENTS ON ETHICAL DILEMMA EXERCISE: Is There Room for Snooping in an Organization's

Culture?

Summary

Although some of the spying Hewlett-Packard performed on some members of its board of directors
appeared to violate California law, much of it was legal. Moreover, many companies spy on their
employees—sometimes with and sometimes without their knowledge or consent.

Surveillance in most industries is on the upswing. There are several reasons for this, including the huge
growth of two sectors with theft and security problems (services and information technology, respectively)
and the increased availability of surveillance technology.

This exercise asks us to consider the ethics of surveillance in the workplace. It also asks what the use of
surveillance tells us about an organization's culture.

Analysis

Is it ethical to use surveillance in the workplace? Most people recognize that in today's society, security
needs to be a top priority. More and more companies are using surveillance systems for basic protection.

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Consumer goods that are in high demand by the public are at risk. Companies who sell popular consumer
goods (electronics like computers and televisions) usually install security systems to monitor the delivery
and storage of these expensive items. Insurance costs are high and companies do what they can to
prevent theft.

While companies need to protect themselves from outside forces that may be a hazard, there are also
risks from within the organization itself. Sometimes the thieves are the employees who work for the
organization. Staff with special access and knowledge about a company may be tempted to use their
status to take from the organization, especially during an economic downturn. Workers who become
disgruntled or angry can sometimes turn against the company they work for and resort to theft or
vandalism as a means of expressing their negative feelings.

Sometimes surveillance is used to protect people from other people. Long-term care facilities and
hospitals that care for vulnerable people install cameras to monitor who goes in and out of patient rooms.
Sadly, there are health care workers who abuse the very people they have been hired to protect. While a
confused elder may not be able to speak for him or herself, a video camera can capture any instance of
abuse.

Surveillance is an effective type of technology that consumers trust and request to feel secure. Most
people understand that defence contractors must use surveillance to provide adequate protection. In fact,
this is an expectation. Similarly, a homeowner has no qualms about using surveillance to protect his or
her property. If the purpose of an organization is to provide protection and surveillance is used to achieve
this, the culture will be supportive of this behaviour. However, if the purpose of an organization does not
require the use of surveillance, and in fact the practice is used but hidden from members, this then can be
argued as unethical.

CASE INCIDENT: Is a 5S Culture for You?

Teaching Tip: As students may not be familiar with the 5S concept, it might be a good idea to assign an
activity either as homework or as an assignment to research and prepare a summary of the 5S program
before discussing this case.

Summary

Japanese manufacturer Kyocera is implementing the 5S concept, which is a workplace organization

method focusing on efficiency and effectiveness. The 5S program was developed in Japan as a tool for
production systems improvement. The 5Ss—Sorting, Straightening, Shining, Standardizing, and
Sustaining—are used rigorously at Kyocera and they have recently hired an inspector to oversee the
program. A brief example of how the program works shows the inspector wanting to see inside an
employee’s desk where a drawer full of clutter becomes an immediate target for the 5S process.

Questions:

(Note to instructors: The answers here are starting points for discussion, not absolutes!)

1. What would you see as the value in Kyocera using 5S?

The most obvious benefit would be to serve as a control mechanism that guides and shapes attitudes and
behaviour of employees. Relating to dimensions of culture, 5S specifically addresses the attention to
detail and outcome orientation aspects. As far as organizational culture is concerned, 5S could be used to
create a climate for efficiency and effectiveness. Students will expand and further analyze the value of the
5S method.

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2. What are some advantages and disadvantages of trying to impose a similar culture in Canadian
companies?
The most immediate advantages would focus on improved productivity. Canadian companies are
criticized for lagging behind other developed countries in productivity. Japanese are the best example of
implementing productivity improvement programs, and 5S could be used as an example of a tool to
improve production processes. As mentioned in the case, Canadian workplaces might require some
discretion as to how employees’ personal space is viewed and organized.

Disadvantages could be that the program may seem too rigorously focused on restrictive and mechanistic
activities. Adopting the 5S method would require a major shift in organizational culture and may not be
viewed positively by employees who resent micro-management. Unions might also resist the program as
having to take on tasks that are not part of one’s job position.
3. What might your response be to having to engage in the 5S principles in your workplace?
Students’ personal opinions and examples will differ, depending on what kinds of workplace experiences
they have. This question could also be applied to the school/classroom environment, where students
currently are.

FROM CONCEPTS TO SKILLS: How to “Read” an Organization’s Culture

Summary

The ability to read and assess an organization’s culture can be a valuable skill. Some of things an
individual can do is to observe the physical surroundings and people; ask questions about the founders,
senior managers, new employee orientation, and socialization. It is helpful to know something about the
culture of a potential employer to see how one would fit into that culture successfully.

Practising Skills

The case shows how nursing teams can resist reorganizing themselves to better serve patients. Students
should identify possible sources of the resistance, then suggest ways to break down resistance to change.

Reinforcing Skills

The purpose of this exercise is to encourage students to apply material from the chapter in various ways.
The suggested activities encourage students to think about both culture and change. In the first two
activities, students compare the culture of two courses and then the culture of two organizations to get a
sense of how different cultures make them feel. They can also use these examinations to identify the
artifacts of culture and the things that keep the different cultures alive. In the third activity students are
asked to relate the concept of change to their own lives, examining something they tried to change and
whether that change was successful. This is a good opportunity to have students think about resistance
to change and breaking down resistance to change. In the final activity, students are asked to talk to
managers who have tried to introduce change to learn from their experiences. What do the students feel
most leads to successful change? Are there any commonalities in resistance to change that is
encountered?

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KEY TERMS

Action research – A change process based on the systematic collection of data and then the selection of
a change action based on what the analyzed data indicate.
Appreciative inquiry – An approach to change that seeks to identify the unique qualities and special
strengths of an organization, which can then be built on to improve performance.
Artifacts – Aspects of an organization's culture that you see, hear, and feel.
Assumptions – The taken-for-granted notions of how something should be.
Beliefs – The understandings of how objects and ideas relate to each other.
Change agents – People who act as catalysts and assume the responsibility for managing change
activities.
Core values – The primary, or dominant, values that are accepted throughout the organization.
Dominant culture – A system of shared meaning that expresses the core values shared by a majority of
the organization's members.
Driving forces – Forces that direct behaviour away from the status quo.
Moving – Efforts to get employees involved in the change process.
Organizational climate – The shared perceptions organizational members have about their organization
and work environment.
Organizational culture – A system of shared meaning held by members that distinguishes the
organization from other organizations.
Refreezing – Stabilizing a change intervention by balancing driving and restraining forces.
Restraining forces – Forces that hinder movement away from the status quo.
Socialization – The process that adapts new employees to the organization's culture.
Subcultures – Mini-cultures within an organization, typically defined by department designations and
geographical separation.
Unfreezing – Change efforts to overcome the pressures of both individual resistance and group
conformity.
Values – The stable, long-lasting beliefs about what is important.

SUPPLEMENTAL MATERIAL

 Exploring Topics on the Web

 Case Incident: GreyStar Art & Greetings Makes Technological Changes

EXPLORING TOPICS ON THE WEB

1. What do you think it would be like working for the "Happiest Place on Earth?" Of course, it is
Disney World! Disney is huge—so much more than theme parks. Go to
http://disney.go.com/disneycareers/index.html to get a feel for what their corporate culture might

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Chapter 10 Organizational Culture and Change

be like. Click on the Disney Corporate Sitemap found at the bottom of the page and explore
various items that might reveal the company’s culture. Be prepared to talk about what you
learned about the Disney Corporation in class.

2. Take a “web walk” and learn about organizational culture. In Google, search for “organizational
culture.” There are a variety of links—pick topics that are of interest to you and explore. Write a
short two-page reaction paper about what you learned on your journey and bring it to class for
more discussion.

3. What would be your strategy if you were called upon to be a "change agent" for your organization?
How would you begin to gather information and create buy-in for your ideas? Read an article
featured in Fast Company on this topic at www.fastcompany.com/27514/9-tips-change-agents .
Even more interesting, read several of the reader responses linked at the bottom of the page.
Write a short reaction paper on why you think there is such a difference from the article's
perspective vs. the readers' comments. What OB strategies would you use as a change agent to
address some of those readers' concerns?

4. Resistance to change is a concern when making organizational changes, but as we read in the
text this is to be expected. Read about the theory of constraints (TOC) model used by some
organizations to better know where resistance is and how to develop a strategy for addressing it.
Visit www.focusedperformance.com/articles/resistance.html to find an article on TOC and how to
take advantage of resistance. Print it and bring to class for further discussion.

CASE INCIDENT: GreyStar Art and Greetings Makes Technological Changes

(Handout master provided at the end of this section)

Summary

Tammy Reinhold is upset because she's going to have to do all her work on a computer. GreyStar Art &
Greetings Cards' two artists, Mike Tomaski and Maggie Lyall, were just as concerned. GreyStar Art &
Greetings is a small maker of greeting cards and specialty wrapping paper. It has modest resources and
modest ambitions. Management has always pursued progress slowly. It was late in introducing
computerized technology to its production operations. And it no longer wanted its artists to do hand-
rendered work. Management had bought three high-powered Mac computers and equipped them with the
latest graphics and photo-manipulation software including Photoshop, Quark, and Illustrator.

Courtland Grey, the company's owner, called Tammy, Mike, and Maggie into his office to tell them about
the changes that were going to be made. Grey acknowledged that the three were going to have a lot to
learn to be able to do all their work on computers. But he stressed that the changes would dramatically
speed up the art-production and photo-layout processes and eventually result in significant cost savings.
He offered to send the three to a one-week course in Vancouver specifically designed to train artists in
the new technology. He also said he expected all of the company's art and photo operations to be
completely digitalized within three months. The three artists had been hoping they might escape having to
learn these programs. After all, GreyStar is not Hallmark.

Questions

(Note to instructors: The answers here are starting points for discussion, not absolutes!)

1. Explain Tammy's resistance.

Tammy doesn't want to learn the new technology because she's been happy working the way she has in
the past. She may be feeling insecure: What if she isn't able to handle the technology? This is heightened

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Chapter 10 Organizational Culture and Change

by her fear of the unknown: This could make her a more creative artist, or, if production speeds up a lot,
maybe she or one of the others will be out of a job. This could hurt her economically.

2. Evaluate the way Courtland Grey handled this change.

He simply told them what would be happening, and did not encourage buy-in slowly. So the employees
may feel that they've been treated unfairly.

3. What, if anything, would you have done differently if you had been Grey?

The information in the section "Communicating Effectively When Undergoing Change" gives many ideas
for how this could be handled better. Grey might also think about applying Lewin's three-step analysis to
the problem.

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Chapter 10 Organizational Culture and Change

Masters for Chapter 10

Case Incident: GreyStar Art & Greetings Makes Technological Changes

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Chapter 10 Organizational Culture and Change

CASE INCIDENT: GreyStar Art & Greetings Makes Technological Changes

Tammy Reinhold didn’t believe the rumours. Now that the rumours were confirmed, she was in denial. “I
can’t believe it,” she said. “I’ve worked as a greeting-card artist here for over 15 years. I love what I do.
Now they tell me that I’m going to have to do all my work on a computer.”

Tammy was not alone in her fear. The company’s other two artists, Mike Tomaski and Maggie Lyall, were
just as concerned. Each had graduated from art school near the top of his or her class. They came to
work for GreyStar Art & Greetings right out of school—Mike in 1990, Tammy in 1996, and Maggie in 2002.
They chose the company, which had been around for more than 50 years, because of its reputation as a
good place to work. The company also had never had a layoff.

GreyStar Art & Greetings is a small maker of greeting cards and specialty wrapping paper. It has modest
resources and modest ambitions. Management has always pursued progress slowly. Artists do much of
their work by hand. Today, however, the company installed three high-powered Mac computers equipped
with the latest graphics and photo-manipulation software, including Photoshop, Quark, and Illustrator.

Courtland Grey, the company’s owner, called Tammy, Mike, and Maggie into his office this morning. He
told them about the changes that were going to be made. Grey acknowledged that the three were going
to have a lot to learn to be able to do all their work on computers. But he stressed that the changes would
dramatically speed up the art-production and photo-layout processes and eventually result in significant
cost savings. He offered to send the three to a one-week course in Vancouver specifically designed to
train artists in the new technology and software. He also said he expected all of the company’s art and
photo operations to be completely digitalized within three months.

Tammy is not stupid. She has been following the trends in graphic art. More and more work is being done
on computers. She just thought, as did Mike and Maggie, that she might escape having to learn these
programs. After all, GreyStar Art & Greetings is not Hallmark. But Tammy was wrong. Technology is
coming to GreyStar and there isn’t much she can do about it. Other than complain or look for another job!

Questions

1. Explain Tammy’s resistance.

2. Evaluate the way Courtland Grey handled this change.

3. What, if anything, would you have done differently if you had been Grey?

Copyright © 2014 Pearson Canada Inc. 10-23