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JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12 Edition
th
Chapter 12
Organizational Culture
and Change
©2013 John Wiley & Sons, Inc. All rights reserved. 12-1
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Chapter
1. What is organizational culture?
2. What is a multicultural organization?
3. What is the nature of organizational
change?
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Learning
1. Organizational Cultures
1. Understanding organizational culture
2. The observable culture
3. Values and the core culture
2. Multicultural Organizations
1. Multicultural organizations and performance
2. Organizational subcultures
3. Diversity issues and organizational cultures
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Learning
3. Organizational Change
1. Models of change leadership
2. Incremental and transformational change
3. Phases of planned change
4. Change strategies
5. Resistance to change
©2013 John Wiley & Sons, Inc. All rights reserved. 12-4
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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
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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.
©2013 John Wiley & Sons, Inc. All rights reserved. 12-6
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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
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Organizational Cultures
©2013 John Wiley & Sons, Inc. All rights reserved. 12-8
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Figure 12.1 Levels of organizational culture—observable
culture and core culture in the organizational “iceberg ”
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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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-10
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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
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Organizational Cultures
• Important cultural values include:
– Performance excellence
– Innovation
– Social responsibility
– Integrity
– Worker involvement
– Customer service
– Teamwork
©2013 John Wiley & Sons, Inc. All rights reserved. 12-12
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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
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2: Multicultural Organizations
• Multiculturalism
– involves inclusiveness, pluralism, and
respect for diversity
• Multicultural organizations
– has a culture with core values that respect
diversity and support multiculturalism.
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2: Multicultural Organizations
• Characteristics of multicultural organizations:
– Pluralism
– Structural integration
– Informal network integration
– Absence of prejudice and discrimination
– Minimum intergroup conflict
©2013 John Wiley & Sons, Inc. All rights reserved. 12-16
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2: Multicultural Organizations
• 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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-17
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2: Multicultural Organizations
• Common subcultures include:
– Gender and generations
– Ethnicity or national cultures
– Occupations and functions
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2: Multicultural Organizations
• 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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-19
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2: Multicultural Organizations
• 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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2: Multicultural Organizations
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
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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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-27
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Organizational Change
• Incremental and transformational
change
– Incremental change
• Bends and adjusts existing ways to improve
performance
– Transformational change
• Results in a major and comprehensive
redirection of the organization
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3: 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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3: 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 power bases of legitimacy, 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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-33
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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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-34
Takeaway 3: Organizational Change
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• 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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-35
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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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-36
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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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-37
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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
©2013 John Wiley & Sons, Inc. All rights reserved. 12-38
