Organizational Culture & Change

Todays Readings: Chapter 8 (p 268 277) and Chapter 16 (p. 531 542) Van Maanens The Smile Factory Driving Questions: 1. 2. 3. 4. 5. What is the purpose of organizational socialization and culture? How do you read an organizations culture? How do you create and maintain culture? Can organizational culture have a downside? How can organizations making changes?

Henry Mintzberg on Culture 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. A More Formal Definition The pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization Culture is shared Cultural values are often taken for granted Culture helps members understand Culture is taught to newcomers Culture strongly influences behavior

Almost any group that has been together for a reasonable amount of time will develop a culture Historical Foundations of Culture Anthropology The natives point of view Van Maanens ethnography of Disneyland Sociology Social Psychology Economics Give us an insight about what it is to be a part of a certain culture

Layers of Culture
Material Symbols Artifacts of Language Organizational Rituals Culture Stories Organizational Culture Beliefs Values Assumptions

-Iceberg model above water is the small part, but the substance of the iceberg is under the water and not seen from the surface -Value assumptions and beliefs are the real culture that we cant see -What we see are the artifacts of culture above the water Reading an Organizations Culture *Parts of Iceberg We Can See Artifacts: Aspects of an organizations culture that you (insiders and outsiders) see, hear, and feel Rituals repeated activities, express values of people in organization in Disney always smile, follow the script and say have a good day, know what each encounter should look like, not meant to say anything about an issue as it goes directly to Mgmt, tried to create youth culture = socialization socialize values to new employees, the ride operators and the jokes they were supposed to say Material Symbols markers you can see that show the values, what is important and not important, what they wear, the cars they drive, how the offices look Disney = status of jobs, uniforms not costumes, status is what they were wearing (more fitted ride operator outfits), cleaning, precise and perfect underline culture, wholesome family Language operators were always supposed to be happy to guests, customers are guests not customers, breaks to stay fresh and happy, Disneyland didnt have training, they had Disneyland University saying that they are teaching a unique and higher scale skill set, werent rides were attractions to contribute to experience Stories tell us what the culture is about the founder or legend that expresses the values of the organization and trickles it down to the employees, care about being perfect and precise by saying Walt is always in the park, firing pg. 67

Aspects of Culture that Outsides Cannot See Beliefs: The understandings of how objects and ideas relate to each other understanding of how ideas relate, but we dont actually know (ie. Laurier assumes fairness, so there is a reaction when treated unfairly) Values: The stable, long-lasting beliefs about what is important

everyone is a child at heart at Disneyland

Assumptions: The taken-for-granted notions of how something should be in an organization underlying beliefs of how things should be (ie. Laurier example above) Disneys want people to enjoy their time and have an experience (not just about bringing people in), organization with underlying goal to make money (so values may not be altruistic), Do Organizations Have Uniform Cultures? Organizational culture represents a (largely) common perception held by members Core values are generally accepted throughout the organization Dominant culture: expresses the core values that are shared by a majority of the organizations members Subcultures: Tend to develop in large organizations to reflect common problems, situations, or experiences What were the subcultures in Disneyland? Ambassadors and tour guides Ride operators Sweepers and concession workers Cultures Functions

-Dominant Disney core values -Also have subcultures different cohesive units that work together, ie. Ride operators and tour guides were not paid the same amount as food status issue of more prestigious positions and were more valued and then food and cleaners were paid less creating unintentional subcultures -People working in the same unit different perspectives than organization did about what they should be doing ie trying to get more breaks is not the best thing for the organization

Cultures Functions Social glue that helps hold an organization together o Provides appropriate standards for what employees should say or do Boundary-defining Conveys a sense of identity for members Facilitates commitment to something larger than ones individual self-interest Enhances social system stability and provides a foundation for conflict resolution Serves as sense-making/control mechanism o Guides and shapes the attitudes and behavior of employees Culture makes organization different from other organizations ie makes Disney different than Universal Stability strong culture gets a sense of how people will behave Leadership ie culture for creativity makes it easier as a leader to sell your idea there rather than a culture that is anti-creative Disneys culture functions: No motivation as when you are a sweeper, you are one forever so only motivation is to not get fired Beneficial for guests because they know what to expect setting it up for success scripted to act the same and positively to feel welcomed Stronger the culture the easier the socialization less time to reinforce values because the culture is so strong Formation of Culture 1. Establish Values o Strategic: what you want at the end of the day, for the organization to be profitable o Cultural: what you want people to do to get strategic values 2. Create a Vision 3. Initiate Implementation Strategies o Selection : try to select people into the organization who have the same values o Socialization: once they are in, teach them those values o Remember Disney 4. Reinforce Cultural Behaviors o Reward systems, stories, rituals Disney how did they socialize uniform university process that is intense and detailed training, use culture to make people feel fun and young to get immersed into culture (ie live close), entry level wasnt too hard, competitive bc people really wanted the jobs

Founder: Anita Roddick Her goals & values: Environmental activism In pursuit of social change Communicating human rights Animal protection Community Trade Today, it is impossible to separate the company values from the issues that I care passionately about social responsibility, respect for human rights, the environment and animal protection, and an absolute belief in Community Trade. Environmentally friendly material symbols in store, green uniforms, atmosphere, headline of website Values were infused in the company But What Happened Body Shop agrees L'Oreal takeover The image-conscious Body Shop has agreed to be taken over by the cosmetics Gargantua in a cash deal worth 652 million pounds ($1.14 billion). L'Oreal Chairman and Chief Executive Lindsay Owen-Jones: Combining L'Oreal's expertise and knowledge of international markets with The Body Shop's distinct culture and values will benefit both companies. Customers may be worried by the idea of the marauding megacorp clouding the vision of the small--but pious-retailer. The very fact that L'Oreal still carries out animal testing as part of its every day business practice has riled many devoted fans of the Body Shop, who had become loyal customers on account of the company's strong ethical stand and anti-animal testing practices.

Managing Organizational Culture What can The Body Shop do to preserve its culture? Selection Identify and hire individuals who will fit in with the culture Top Management Senior executives can communicate the values of the organization both across and down the hierarchy Socialization Organizations need to teach the culture to new employees How Body shop could maintain values after being taken over and dominated by LOreal make sure people on both sides are committed to the same values, maintain socialization practices, integrate people more into the organization that share those values, teach the culture to the dominant organization - However Body Shop has lost a lot of its original values because no one is standing behind them 5

The Liabilities of Culture Culture can have dysfunctional aspects in some instances Culture as a Barrier to Change If undergoing change, culture may impede change efforts Culture as a Barrier to Diversity Strong cultures put considerable pressure on employees to conform Culture as a Barrier to M&A Merging the cultures of two organizations is challenging (Body Shop) Cultural Characteristics that Decrease Performance! Change not consistent with culture but might be necessary = might be difficult Diversity pressure to conform to a certain way Merge makes it challenging to merge values Disney change - people could resist and be resentful to switch Diversity majority were white, no room for individualism due to the University, demographically similar, similar looks (long hair, faces etc.) = problem discriminatory, could lose attraction from customers who look for diversity, could be limiting their employee potential because they are looking for certain criteria, limit creativity and idea potential, limit innovation, greater pressure for conformity Note main benefit of diversity = more creativity The Liabilities of Culture Then, how do organizations make changes? Managing and Planning Change Lewins force field analysis model: Driving forces: Forces that push organizations toward change Restraining forces: Forces that maintain the status quo Driving push the organization towards change Restraining anything that pushes us back from changing

Resistance to Change Individual resistance self-interest, habit, save face, security, direct costs (economic factors), fear of the unknown, selective information processing, selective perception, lack of awareness, social factors, strong emotions, lack of trust Organizational resistance threats to expertise, threat to established power relationships, threat to established resource allocations, resistant culture Individual resistance tend to like the familiar, especially when there is threat Organization resistance if everyone agrees and values something then going against it can be hard (ie conservative culture and there is a radical idea that might be necessary organization would push back) Overcoming Resistance Top management support Top management has the power Education and communication Avoid misinformation or poor communication Participation and involvement Those opposed are brought into decision process Facilitation and support Provision of various efforts to facilitate adjustment Reward Contributors Reward people who help make the change a success Involvement get them active in the change so they get more ownership over it Lewins 3-Step Model Unfreezing Creating a disequilibrium between the driving and restraining forces Can increase the driving forces, decrease the restraining forces, or both Change Moving from the old way of doing things to the new way Refreezing Stabilizing the change Introducing conditions to maintain and reinforce desired behaviors Unfreeze current situation driving and restraining forces increase urgency for change or decrease resistance get rid of equilibrium Change make the change

Refreeze most important make it so they dont revert back to the way they were before, stabilize the new change (reward, reinforce) An Example SAS Institute Culture *watch video How can we describe the Culture at SAS? What are the artifacts (rituals, material symbols, stories, language) What do they tell us about SASs values? What are the characteristics of the culture? What are the functions of this culture? Can you see the founders influence? Recall Goodnights comment that the founder must support the culture 100 percent Are there any liabilities of this culture? Would culture be a barrier to change at SAS? Living and working the good life Started with free M and Ms every Wednesday grew into major perks Keep workforce happy No shareholders, no board of directors, he answers to no one way less pressure Public ceo dont have to cheat and lie dont want to be a part of a culture of corporate greed Culture artifacts all the benefits which make a community gives insight into the fact that SAS values their employees, no dress code to show they are relaxed and we have our own thoughts, wouldnt leave for double the pay proving that it is a people oriented organization, benefits started with M and Ms gives insight into authentic and then grew Function profitable bottom line if employees are happy, customers are happy which makes him happy Shows his underlying assumption Founders influence cant have someone who would cut the organization, have to actually believe in this stuff Liabilities massive expectations from customers and employees, if recessions occurred then couldnt even lay off, expensive to maintain culture during rough times, lots of potential for subculture within certain activities, complain about things you couldnt complain about elsewhere, strong culture = magnified counter-actions (ie resist to change etc.)

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