Managing ChangeKey Influences on the Change Process: Culture Bureaucratic 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 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!
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.
Organisational 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 What are the key features of the organisational culture at Google? How might this influence the business performance? BUSS4.10 Culture
How culture might be demonstrated • 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
Types of Organisational culture The AQA specification states that types of organisational culture include: power, entrepreneurial and task • 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 Can you define all the terms used within this slide? BUSS4.10 Culture
Strong or weak culture? Strong Weak Staff understand and respond to culture Little need for policies and procedures Consistent behaviour Culture is embedded Little alignment with business values Inconsistent behaviour A need for extensive bureaucracy & procedures
Handy’s Four Classes of Culture Power Role Task Person
Power culture • 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 Power
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) Functional Depts Project Teams
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
Your task Take each of these ‘cultures’ – decide which leadership style would work best for each. Justify your choice.
Reasons for changing organisational culture • Change 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 together • Responding to market conditions • New competition • Economic climate How might the organisational culture of a business have to change to respond to different functional strategies? BUSS4.10 Culture
Problems of changing organisational culture • Resistance to change • Lack of trust • Period of adjustment • Alienation of: • Suppliers • Customers • Other stakeholders Read the Business Week article on how to change corporate culture BUSS4.10 Culture
Competitiveness of the business Innovation Adaptability Brand image Consumer perception Stakeholder opinion The importance of organisational culture • Impact on staff motivation • Communication • Retention • Personnel performance indicators • Effects decision making • Speed • Level of involvement • Scientific v Intuition BUSS4.10 Culture
Barriers to cultural change • Tradition and set ways: • Loyalty to existing relationships • Failure to accept the need for change • Insecurity • Preference for the existing arrangements • Different person ambitions • Fear of: • Loss of power • Loss of skills • Loss of income • The unknown • Inability to perform as well in the new situation • Break up of work groups
Activity • What 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… • List 3 common factors you would expect to find in the culture of these organisations • 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 title • Research 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)
Essay 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