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CHAPTER 3

Changing the Culture

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LEARNING OBJECTIVES

 Recognize importance of corporate culture.


 Identify key factors used in assessing culture.

 Describe culture & organizational factors


leading to effective organizations.
 Describe tools for change

 Describe values of OD

 Describe ethical, value, and goal


considerations.
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CREATING CLIMATE FOR CHANGE

 OD provides renewal process enabling


managers to adapt their style & goals to meet
demands of changing environment;
 Focus of changes mean changing organization’s
culture for;
 Improving quality
 Increasing innovation

 Adopting customer orientation

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CREATING CLIMATE FOR CHANGE
 Need to create a ‘renewing “ rather than a
“reactive” managerial style
 Searching ways to manage complex technology
and more sophisticated workforce
 Constantly adapting to change to take
advantage of opportunities that arise.
 To understand soul of organization, need to
travel below charts, rule books, machines, etc
into the underground world of corporate
culture;
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CREATING CLIMATE FOR CHANGE
 Cultural change does not just happen, it’s the result of
complex change strategy.
 Challenge of managers is:
 Create renewing system.
 Develop long-term sustained efforts.
 Organizations not looking for marginal improvements,
goal is to reinvent themselves;
 Creating totally new approaches
 New technologies
 New markets
 Corporate culture must achieve goals as well as satisfy
the needs of members.

Case: The Culture of Setpoint Systems (Page 65)


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WHAT IS CORPORATE CULTURE?
 Culture is system of:
 Shared values.
 Beliefs.
 Behavioral norms ( the way the things are done)
 Tangible & intangible organization characteristics
including ;
 aspirations,
 reward systems,
 behaviors,
 assumptions,
 performance,
 rituals,
 communications and
 heritage
 Culture is glue that holds an organization together.
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WHAT IS CORPORATE CULTURE?
 Culture is derived from both the management and the
organization itself
 Managers thru their actions & words define a
philosophy of how employees are treated;
 Employees treat customers the same way, the employer
treat employee
 Organization also help define the culture;
 The technology a company uses
 Job descriptions & the way its structured, organized:
flat/hierarchical

(See figure on next slide)


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FIGURE 3.1
CULTURE FORMATION

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GOING BEYOND LEGAL CONTRACT:

“IF PEOPLE RELATE TO THE COMPANY THEY


WORK FOR , IF THEY FORM AN EMOTIONAL TIE
TO IT AND BUY INTO ITS DREAMS, THEY WILL
POUR THEIR HEARTS INTO MAKING IT BETTER.”

HOWARD SCHULTZ
FORMER CEO, STARBUCKS

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CORPORATE CULTURE AND SUCCESS
 High-performing companies have strong
cultures;
 Corporate culture gives organization a sense of
flow to behave, what to do, where to set priorities
to get work done.
 Outstanding companies mostly trace their
culture to their founder/leader who personified
value system.
 Many cultures fail to adapt to change.
 Following corporate mergers, cultures often
clash; If culture difference exist, can
manifest a nonproductive “We” versus
“They” situation.
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CORPORATE CULTURE AND SUCCESS
 Create& accelerate a culture of reflexes
 Cool-headed thinking, clear focus & well aimed action
are required.
 Self directed behavior essential today when change is
accelerating.
 Redirect conflict, anger or worry into passionate
pursuit of results
 A culture unwilling to experiment has little chance to
innovate;
 Today’s key words are: Flexibility & Innovation

Culture change implies: change in basic values, in the heart &


mind of individual employees 11
KEY FACTORS TO IMPROVE CULTURE
 Create vision for the future: e.g. Steve Jobs at Apple
Computer dreamed of computers for everyone, :one
person one computer” as a way toward a better world
 Develop model for change: e.g. Steve Jobs started
with a group called his “Pirates” handpicked team
under a black skull-and-crossbones flag, while
developing Apple.
 Reward changes: e.g. at Apple, awards & recognition
used to gain employee involvement & people were
ready to work incredible hours to bring out products,
they wore T-Shirts with mottos like: “Working ninety
hours a week & loving it.”
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CULTURAL RESISTANCE TO CHANGE

 Changing culture not easy.


 Time required.

 “Inappropriate Culture” biggest stumbling block


on the path to adaptation

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PRESSURE POINTS TO BRING ABOUT CHANGE

 Recession.  Social factors.


 Deregulation.  Global

 Technological competition.
upheavals.  Outsourcing.

 Markets.

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TOOLS FOR CHANGE
1. Information:
 Provide Information at every level - increases
motivation & permits faster decision making
 Provide ability to gather information
 New trend (one method) – open book
management:
 Teaching employees understand financial statements &
use the knowledge in work & planning.
 Employees able to understand & analyze problems
themselves so that work teams can make job decisions

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TOOLS FOR CHANGE

2. Support::
 Higher management support & go ahead of
company entrepreneurs as well as cooperation of
peers & subordinates.
 Interdepartmental support (meetings) & training
sessions to bring people together.
 Remove fear of fail & provide climate that
supports people taking risks

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TOOLS FOR CHANGE
3. Resources:
 Third tool is providing resources like – funds,
equipment, staff and materials to carry projects.
 Encourages people to develop their ideas into
projects.
 Provides team focus & authoring of operations

 Innovative programs for providing resources


include:
 Venture capital.
 Innovation banks.

Ingrained culture does not change quickly: Many Key Factors 17


KEY FACTORS IN CULTURAL CHANGE

 Understand the old culture


 Encourage change in employees

 Follow outstanding units

 Don’t impose cultural change

 Lead with a vision

 Large scale change takes time

 Live the new culture

Case Study: How Trilogy’s University helps to build its culture


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ORGANIZATIONAL DIMENSIONS (MICRO ISSUES)
AFFECTING PERFORMANCE/ GOALS & VALUES OF OD
 Managerial effectiveness.
 Degree of Accomplishing goals and objectives or
“doing the right thing”.
 Managerial efficiency.
 Ratio of results to resources or “doing the things
right”.
 Motivational climate.
 Set of Employee attitudes that influence
performance.
Goal of OD: to maximize Effectiveness, Efficiency & Motivational
Climate
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OTHER CRITERIA FOR ORGANIZATIONAL
EFFECTIVENESS
 Adaptability.

 Sense of identity & Vision:


 Knowledge and insight about what its goals are &
what it has to do
 Capacity to test reality:
 Ability to interpret environment
 Integration of organizational goals with
individual goals
 Integration of concern for production with
concern for people.
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OD PROFESSIONAL VALUES AND ETHICS

 Expertise: specialized knowledge & skills


 Autonomy: professionals reserve the right
to decide how their function is performed
 Commitment: professionals feel
committed to the professional discipline
 Code of ethics: professionals adhere to
professional self discipline & code of
ethics
OD Practitioners: Do what is right, Do your best & treat
others the way you want to be treated
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VALUES OF OD: OCTAPACE CULTURE
 Developed by Professor T V Rao.
 It stands for: Openness, Confrontation, Trust,
Authenticity, Proaction, Autonomy, Collaboration
and Experimentation.
 These values help in fostering a climate of
continuous development of employees in an
organization.
 An optimal level of these values is essential for
facilitating HRD. The elements of OCTAPACE are as
follows

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VALUES OF OD: OCTAPACE CULTURE
1. Openness: free to express ideas, willingness to take risk &
experimentation with new ideas
2. Confrontation: face problems & work jointly to solve
problems – facing issues squarely
3. Trust : among employees individually & in groups
4. Authenticity: walking the talk, not pretending
5. Proaction : action oriented, willing to take initiative, show
proactivity
6. Autonomy: freedom to act independently within role
boundaries
7. Collaboration: working together for common cause
8. Experimentation: emphasis to innovation & out of box
thinking
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CORNERSTONES OF OCTAPACE CULTURE

Organizations benefit more with following


combinations working together:
 • Openness and Confrontation

 • Autonomy and Collaboration

 • Trust and Authenticity

 • Proaction and Experimentation.

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ASSIGNMENT FOR STUDENTS

OD Application: How Trilogy’s University helps to


Build its Culture

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Thanks…….

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