JAIIB (Module A) Indian Financial System Tanushree Mazumdar, IIBF.
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DR. TANUSHREE CHAKRABORTY
ORGANIZATIONAL CULTURE
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A SYSTEM OF SHARED
MEANING HELD BY
MEMBERS THAT
DISTINGUISHES THEORGANIZATION FROM
OTHER ORGANIZATION
Organizational Culture
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Corporate cultureThe total sum of the values, customs, traditions and
meanings that make a company unique.
Corporate culture is often called "the character of anorganization" since it embodies the vision of the
company¶s founders.
The values of a corporate culture influence the ethicalstandards within a corporation, as well as managerial
behavior
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Characteristics
y Innovation and risk taking
y Attention to detail
y Outcome orientation
y People orientation
y Team orientation
y Aggressivenessy Stability
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Strong and Weak Culturey Strong culture demands that organization¶s core
values are intensely held and widely shared
y Conversely, there is weak culture where there is
little alignment with organizational values and
control must be exercised through extensive
procedures and bureaucracy.
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Group discussion:
How the cultural environment
impacts an organization?
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F
unctions of Culturey Boundary defining role
y Sense of identity
y
Social system stabilityy Sense making and control mechanism
y Conformity to rules
y Shared meaning- cooperation
y Consistent decision making
y Reduces communication differences
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Culture¶s Overall Function
Culture is the social glue that helps holdan organization together by providing
appropriate standards for what
employees should say or do.
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Prentice Hall, 2001Chapter 17 9
How EmployeesLearn Culture/How it is reinforced
MaterialMaterial
SymbolsSymbolsLanguageLanguage
StoriesStories RitualsRituals
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Prentice Hall, 2001Chapter 17
10
Organizational Culture
Controlling behavior
Defining boundaries
Conveying identity
Promoting commitment
Blocking mergers
Inhibiting diversity
Inhibiting change
Blocking acquisitions
Functions Liabilities
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11
How OrganizationalHow Organizational
Cultures FormCultures Form
PhilosophyPhilosophy
of theof the
Organization¶sOrganization¶s
Founders:Founders:
Ben & Jerry,Ben & Jerry,
Herb Kelleher,Herb Kelleher,
Bill GatesBill Gates
OrganizationalOrganizational
CultureCultureSelectionSelection
TopTop
ManagementManagement
SocializationSocialization
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How Employees Learn Culture
y STORIES
It is a narrative of significant events or people including
such things as the organization¶s founders, rule breaking,
rags-to-riches successes, reductions in the workforce,
relocation of employees, reactions to past mistakes, and
organizational coping.
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RITUALS
y Rituals are repetitive sequences of activities that
express and reinforce the key values of the
organization, what goals are most important, whichpeople are important, and which is expendable.
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M
aterial Symbols
y Includes the layout of an organization¶s facilities,
dress attire, the types of automobiles top executives
are provided, the presence or absence of corporateaircraft, size of offices, the elegance of furnishings,
executive ³perks´, existence of employee lounges,
etc.
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LANGUAGE
y To identify members of a culture EXAMPLES: big
iron ± mainframe computers
y hypo ± a high-potential employee
y ASAP ± as soon as possible
y PROFS ± Professional Office Systems,
y
IBM
¶s internal electronic mail system
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The Organization and its Environment
y ENVIRONMENT Refers to outside institutions or
forces that potentially affect an organization¶s
performance.
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Culture as Liability
y Barrier to change
y Barrier to diversity
y Barrier to acquisition and Mergers
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A presentation to be made on either of the two-
y1.³CULTURE AT ISB&M´y2.A Strong Culture affects an
organizations efforts to improve
diversity
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Creating a Customer-Responsive Culture
Managerial Actions:
Select new employees with personality and attitudes consistent
with high service orientation.
Train and socialize current employees to be more customer
focused.
Change organizational structure to give employees morecontrol.
Empower employees to make decision about their jobs.
Managerial Actions:
Select new employees with personality and attitudes consistent
with high service orientation.
Train and socialize current employees to be more customer
focused.
Change organizational structure to give employees morecontrol.
Empower employees to make decision about their jobs.
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Creating a Customer-Responsive Culture
Managerial Actions (cont¶d) :
Lead by conveying a customer-focused vision and demonstrating
commitment to customers.
Conduct performance appraisals based on customer-focused
employee behaviors.
Provide ongoing recognition for employees who make special efforts
to please customers.
Managerial Actions (cont¶d) :
Lead by conveying a customer-focused vision and demonstrating
commitment to customers.
Conduct performance appraisals based on customer-focused
employee behaviors.
Provide ongoing recognition for employees who make special efforts
to please customers.
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What Is Organizational Culture? (cont¶d)
y Culture Versus Formalization
A strong culture increases behavioral consistency and can
act as a substitute for formalization.
y Organizational Culture Versus National Culture
National culture has a greater impact on employees than does
their organization¶s culture.
Nationals selected to work for foreign companies may beatypical of the local/native population.
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Institutionalization: A Forerunner of
Culture
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Culture and SpiritualityBELIEVES THAT PEOP LE HAVE AN INNERLIFE
THE INNER SELF SEEKS A MEANINGFULWORK
WORK NEEDS TO BE PURPOSEFUL ANDHAVE A SHOULD RELATION WITH THECOMMUNITY
RESEARCH UNDERTAKEN IN THIS AREAIS LESSER
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y Changed notion towards spirituality
Goal is helping employees find meaning in their work
lives
Rational model for organization has no place for
spirituality
y Spirituality helps in better understanding of OB
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Why Spirituality? y Too much work stress and fast pace
y Temporary nature of jobs
y Formalized religion is less appealing
y Job demands are high, workplace dominance is high
y Desire to integrate personal life values with one¶s
professional life
y Pursuit of material acquisitions leave men unfulfilled
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Spiritual Organization
y Strong sense of purpose
y Trust and respect
y Humanistic work practices
y Tolerance of employee expression
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Understanding Culture y Try to be an impartial observer of your culture in action
y Watch for emotion
y Look at the objects and artifacts that sit on desks and hang on
walls. Observe common areas and furniture arrangements
y When you observe and interact with employees, watch for things
that are not there. If nobody mentions something that you think isimportant (like the customers), that is interesting information.
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Culture is represented in a group¶s:
y language,
y decision making,y symbols,
y stories and legends,and
y daily work practices.
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Forces for Change
y People
y Technology
y Competition
y Information Processing &
Communication
y Social trends
y World politics
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Planned Changey Change activities that ate intentional and goal
oriented
Change Agentsy Persons who act as catalysts and assume the
responsibility for managing change activities
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y Increasing diversity
y In age
y Education
y Ethnicityy Background
y Manufacturing in space, internet, artificial intelligenceIncreasing globalization of markets Computer,
satellite communications, video conferencing
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Resistance to Change
y No matter how well designed and planned your change program is, not everyone will be singing itspraises
y Employees resist change for a wide variety of reasons, ranging from a straightforward intellectual
disagreement over facts to deep-seatedpsychological prejudices.
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Reasons for Resistance y Ignorance: A failure to understand the situation or theproblem
y Mistrust: motives for change are considered suspicious
y Disbelief: a feeling that the way forward will not work
y ³Power-Cut´: a fear that sources of influence and controlwill be eroded.
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Reasons contd««.
y Loss: change has unacceptable personal costs
y Inadequacy: the benefits from the change are notseen as sufficient
y
Anxiety: fear of being unable to cope with the newsituation.
y Comparison: the way forward is disliked because analternative is preferred
y Demolition: change threatens the destruction of existing social networks. Reasons of Resistance(cont.)
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Types of Reactants to Change:
y Enthusiasts
y Followers
y Objectors
y Underground
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(1) Enthusiasts
y Are intrinsically wedded to the change idea. They mayagree dispassionately that the change will be of benefitto the organization They may stand to receive somepersonal gain from the change Enthusiasts will use
opportunities to broadcast approval for the change Theywill try to convince others of its merits. They will alsomodel the new behavior early and will volunteer for membership of teams. These early adopters may alsomake good choices as trainers and coaches during the
implementation process.
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(2) Followers
y Range from those that are generally compliant, wishing to take the path of least resistance, to thosethat are initially reserved to adapt. But eventually
they adapt once they accept the inevitability of thechange. These change recipients will do what isrequired, but no more. Types of Reactants to Change(cont.)
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3) Objectorsy will display their resistance to change whenever the
opportunity arises.
y They may disrupt meetings, not attend training, takeunapproved leave and refuse to carry out instructions.
y Objectors will continue to use superseded systems andprocesses when others are taking up the new ways of doingthings.
y They are not averse to arguing with managers and fellow workers and will try to convince others to continue with the
old ways.y In a unionized environment, resistance can take the form of
strikes, lockouts, ³work to rule´, legal challenges and boycotts.
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4) Underground
y Change recipients working for the underground havesolid motivations for not making their resistance public.
y They may fear direct punishment, such as termination orfines, or more personal costs, such as ridicule or loss of
status and authority.y Managers who are against the change but need to be seen
to be in support of it are prime candidates for promotingunderground resistance.
y This style of resistance is, by its nature, always covert andcan take many forms ; such as falsifying reports,inputting incorrect data, stealing, damaginginfrastructure and equipment, using sarcasm, spreadingrumors, excessive absences, shoddy work and ³go slow´.
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y A=The individual, group or organisation level of dissatisfaction with the status quo
y B=A clear and shared picture of a better future - how
things could bey C= The capacity of individuals, groups and the
organisation to change (orientation, competence andskill)
y D= A cceptable and ³do-able´ first action stepsy E=The cost (financial, time, ³aggro´) of making the
change to individuals, groups and the organisation.
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The Change Equation
y A + B + C + D must be greater than E
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The Change Equation: When Elements Are
Missing:
y B + C +D means that the urgent will drive out theimportant and change will go to the ³bottom of the in-tray´.
y Missing A
y The individual, group or organisation level of dissatisfaction with the status quo
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The Change Equation: When Elements Are
Missingy A + B + D means that with no investment to improve
change management capacity, anxiety and frustration willresult.
y Missing C
The capacity of individuals, groups and the organisation
to change (orientation, competence and skill)
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The Change Equation: When Elements Are
Missing
y A + B + C means that the change effort will behaphazard and there will be a succession of false-starts.
y Missing D
y Acceptable and ³do-able´ first action steps
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Managing Change
1. Analyze organization and its need for change
2. Create shared vision and common direction
3. Separate from past
4. Create sense of urgency
5. Support strong leader role
6. Line up political sponsorship
7. Craft an implementation plan
8. Develop enabling structure
9. Communicate, involve people, and be honest
10. Reinforce and institutionalize change
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y Consider Different People
y Work With Values and Beliefs
y Understand and Relate to Needs and Problems
y Tailor Your Message to Your Audience.
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H
ow Organizational CulturesH
ave anImpact on Performance and Satisfaction
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y Change the reward system to encourage acceptance
of a new set of values.
y Replace unwritten norms with formal rules and
regulations that are tightly enforced.y Shake up current subcultures through transfers, job
rotation, and/or terminations.
y Work to get peer group consensus through utilization
of employee participation and creation of a climatewith a high level of trust.
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Approaches to
Managing Change
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UNFR EEZE CH A NGE R EFR EEZE
Lewin¶s Three Step Model
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y Unfreezing overcomes resistance
y Refreezing reestablishes resistance
y Forces for and against change should beanalyzed first.
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Kotter¶s 8 Step Plan
y Create Urgency
y Form a Powerful Coalition
y Create a Vision for Change
y Communicate the Vision
y Remove Obstacles
y Create Short-term Wins
y
Build on the Changey Anchor the Changes in Corporate Culture
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Action Research Model
y Problem identification
y Consultation with a behavioral science expert
y Data gathering and preliminary diagnosis
y Feedback to a key client or Group
y Joint diagnosis of the problem
y Joint action planning
y Action
y Data gathering after action
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Contemporary Change Issues for Today¶s
Managersy Technology in the workplace
y Stimulating innovation
y Creating learning organizations
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ORGANIZATIONAL
DEVELOPMENT
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Foundations of OD
y OD is a planned effort towards organised change best initiated by an expert who has basic knowledgeof the applied behavioral sciences and has the skill of
applying this knowledge in the organizationalsituation.
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OCTAPACE OF OD
O OPENNESS
C CONFRONTATION
T TRUST
A AUTHENTICITY
P PROACTIVITY
A AUTONOMY
C COLLABORATION
E EXPERIMENTATION
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The Development Process