Managing ChangeManaging ChangeKey Influences on the Change Key Influences on the Change Process: Process:

CultureCultureBureaucratic and risk averse environments are career

killers because of their impact on learning.John Kotter

We need a can-do, vibrant, innovation-driven culture. Not wearing a tie is just a snippet of that.

Paul Walsh

BUSS4.10 Culture

In this topic you will learn In this topic you will learn about:about:

Types of organisational culture

Reasons for and problems of changing organisational culture

Assessing the importance of organisational culture

BUSS4.10 Culture

What is corporate culture?

“The way we do things

around here!

“The way we do things

around here!

Culture consists of…

The shared values of a business

The beliefs and norms that affect every aspect of work life

The behaviours that are typical of day-to-day behaviour

The strength of a culture determines how difficult or easy it is to know how to behave in the business

Different types of ‘business’ culture – some real examples

Both of these communities are based in my home area of Blaenavon and Ebbw Vale. My grandparents and parents worked in these communities.

Different types of ‘business’ culture – Google culture!

Organisational CultureOrganisational Culture“The specific collection of values and norms that are shared by people and groups in an organisation and that control the way they interact with each other and with stakeholders outside the organisation.”

Source : Wikipedia

The culture of a business affects the way in which

the business operates. This includes:◦ Decision Making◦ Organisational Structure◦ Communication◦ Leadership styles (cause or effect?)◦ Attitude towards work

BUSS4.10 Culture

What are the key features of the

organisational culture at Google?

How might this influence the business

performance?

How employees are recruited

The way that visitors and guests are looked after

How the working space is organised

The degree of delegation & individual responsibility

How contracts are negotiated and agreed

The personality and style of the sales force

The responsiveness of communication

The methods used for communication

How staff call each other

How culture might be demonstrated

Types of Organisational Types of Organisational cultureculture

Power culture

◦ A few people central to the organisation have control

◦ Associated with Centralised decision making Autocratic leadership

Entrepreneurial culture

◦ Risk taking and innovation are actively encouraged and rewarded, whilst failure is not criticised

◦ Associated with Decentralised decision making Democratic leadership

Task culture

◦ Emphasis on achieving set outcomes through cooperation and team work

◦ Associated with Matrix structures Delegation

BUSS4.10 Culture

The AQA specification states that types of organisational culture include: power, entrepreneurial and task

Can you define all the terms used within this

slide?

Strong or weak culture?

Staff understand and respond to culture

Little need for policies and procedures

Consistent behaviourCulture is embedded

Staff understand and respond to culture

Little need for policies and procedures

Consistent behaviourCulture is embedded

StrongStrong

Little alignment with business values

Inconsistent behaviourA need for extensive

bureaucracy & procedures

Little alignment with business values

Inconsistent behaviourA need for extensive

bureaucracy & procedures

WeakWeak

Handy’s Four Classes of Culture

PowerPower RoleRole

TaskTask PersonPerson

Power culture

• Control radiates from the centre

• Concentrates power among a few

• Few rules and little bureaucracy

• Swift decisions are possible

• Control radiates from the centre

• Concentrates power among a few

• Few rules and little bureaucracy

• Swift decisions are possible

Role culture

• People have clearly delegated authorities within a highly defined structure

• Hierarchical bureaucracy

• Power derives from a person's position

• Little scope exists for expert power

• People have clearly delegated authorities within a highly defined structure

• Hierarchical bureaucracy

• Power derives from a person's position

• Little scope exists for expert power

PowerPower

Task culture

• Teams are formed to solve particular problems

• Power derives from expertise as long as a team requires expertise

• No single power source

• Matrix organisation

• Team may develop own objectives (a risk)

• Teams are formed to solve particular problems

• Power derives from expertise as long as a team requires expertise

• No single power source

• Matrix organisation

• Team may develop own objectives (a risk)

Functional DeptsFunctional Depts

Proj

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eam

sPr

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t Tea

ms

Person culture

• People believe themselves to be superior to the business

• Business full of people with similar training, background & expertise

• Common in firms of professionals – e.g. accountants & lawyers

• Power lies in each group of individuals

• People believe themselves to be superior to the business

• Business full of people with similar training, background & expertise

• Common in firms of professionals – e.g. accountants & lawyers

• Power lies in each group of individuals

Your task

Take each of these ‘cultures’ – decide which leadership style

would work best for each.

Justify your choice.

Culture types and leadership style

Cultural Type

Suitable Leadership Style

Power Autocratic

Role Autocratic or paternalistic

Task Paternalistic / democratic

Person Democratic

Reasons for changing Reasons for changing organisational cultureorganisational cultureChange in owners / leaders

◦ Recap BUSS4.7 - how might a change in ownership mean a change in culture?

Change in corporate objectives

Change in size◦ Mergers and takeovers can often mean

businesses with different cultures joining togetherResponding to market conditions

◦ New competition◦ Economic climate

BUSS4.10 Culture

How might the organisational culture of a business have to change to respond to different functional strategies?

Problems of changing Problems of changing organisational cultureorganisational cultureResistance to change

Lack of trust

Period of adjustmentAlienation of:

◦Suppliers◦Customers◦Other stakeholders

BUSS4.10 Culture

Read the Business Week

article on how to change corporate

culture

The importance of The importance of organisational cultureorganisational culture

Impact on staff motivation◦ Communication◦ Retention◦ Personnel

performance indicators

Effects decision making◦ Speed◦ Level of

involvement◦ Scientific v Intuition

Competitiveness of the business◦ Innovation◦ Adaptability

Brand image◦ Consumer

perception◦ Stakeholder

opinion

BUSS4.10 Culture

Barriers to cultural changeTradition and set

ways:Loyalty to existing

relationshipsFailure to accept

the need for change

InsecurityPreference for the

existing arrangements

Different person ambitions

Fear of:Loss of powerLoss of skillsLoss of incomeThe unknown Inability to perform as

well in the new situation

Break up of work groups

ActivityActivityWhat type of organisation would you like

to work for in the future - what sort of culture would it have?

Watch this video about the top 100 organisations to work for in 2009

BUSS4.10 Culture

Culture activity Using The Sunday Times 100 Best companies to work

for…

1. List 3 common factors you would expect to find in the culture of these organisations

2. Explain how the culture of an organisation can impact upon its overall performance.

Select THREE companies within the 100 Best… What are the key features that these companies have? Why do the staff value about the company that they work

for? What ‘organisation culture’ systems do they operate?

Do some more research from the The Times 100 http://business.timesonline.co.uk/tol/business/career_and_jobs/best_100_companies/best_100_tables/

Essay titleResearch among schools and businesses points to ‘cultural differences’ as being the key problem in mergers.

Discuss why cultural differences are so hard to overcome when bringing two organisations together. (40)

EssayEssay

Employees at Google enjoy a creative, relaxed and innovative culture. The open plan offices, informal structure and entrepreneurial culture help to create a fun working environment.

With reference to Google and/or other businesses you have studied to what extent does the culture of a business determine its ability to maintain competitiveness?

BUSS4.10 Culture