John R Schermerhorn, Jr 12 Daniel G Bachrach Introduction to Management th 13 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 Organizational Cultures a) Understanding organizational culture b) Observable culture c) Values and the core culture Multicultural Organizations a) Multicultural organizations b) Organizational subcultures c) Power, diversity, and organizational subcultures Copyright ©2015 John Wiley & Sons, Inc Chapter 12 Outline 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 Copyright ©2015 John Wiley & Sons, Inc 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? Copyright ©2015 John Wiley & Sons, Inc Figure 12.1 Levels of organizational culture—observable culture and core culture in the organizational “iceberg ” CORE CULTURE Core Values • Beliefs about the right ways to behave 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 Figure 12.3 Change leaders versus status quo managers Copyright ©2015 John Wiley & Sons, Inc Organizational Change  Top-down change  Change initiatives come from senior management  Success depends on support of middle-level and lower-level workers Copyright ©2015 John Wiley & Sons, Inc 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 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 Copyright ©2015 John Wiley & Sons, Inc 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 Copyright ©2015 John Wiley & Sons, Inc Figure 12.3 Lewin’s three phases of planned organizational change Copyright ©2015 John Wiley & Sons, Inc Organizational Change  Improvisational Change  Making continual adjustments as changes are being implemented Copyright ©2015 John Wiley & Sons, Inc Figure 12.5 Alternative change strategies and their leadership implications Copyright ©2015 John Wiley & Sons, Inc 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 ... 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 Organizational... Inc Chapter 12 Outline 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... Worker involvement  Customer service  Teamwork Copyright ©2015 John Wiley & Sons, Inc Organizational Cultures  Value-based management:  Describes managers who actively help to develop, communicate,