This Document Contains Chapters 14 to 15 14. Organizational Culture SOLUTIONS TO CRITICAL THINKING QUESTIONS 1. Superb Consultants has submitted a proposal to analyze your organization’s culture. The proposal states that Superb has developed a revolutionary new survey to tap the company’s true culture. The survey takes just 10 minutes to complete, and the consultants say results can be based on a small sample of employees. Discuss the merits and limitations of this proposal. Answer: Understanding an organization’s culture requires painstaking assessment of many artifacts because they are subtle and often ambiguous. Consequently, we should be skeptical about claims that a consultant can assess an organization’s culture quickly through a survey. Moreover, a survey is more likely to determine an organization’s espoused values – the values people say they believe in – rather than its enacted values – the values that actually guide individual decisions and behaviour in the workplace. To effectively analyze an organization’s culture, consultants need to investigate subtle artifacts, ranging from daily rituals to the physical workspace. 2. Some people suggest that the most effective organizations have the strongest cultures. What do we mean by the “strength” of organizational culture, and what possible problems are there with a strong organizational culture? Answer: Cultural strength refers to how many employees in the organization accept the dominant values; how strongly, deeply, and intensely they believe in these values; and how long these values have dominated in the organization. Strong cultures are long-lasting, dispersed across subunits, deeply internalized by employees, and institutionalized through well-established artifacts. Although potentially beneficial, strong cultures also create three potential problems. First, strong culture increases organizational effectiveness only when the cultural content is appropriate for the organization’s environment. If the cultural values are incompatible with the environment, then the organization is misaligned and will be less effective. A second problem is that a company’s culture might be so strong that employees blindly focus on the mental model shaped by that culture. They have difficulty seeing different perspectives of problems and, consequently, might not make appropriate decisions. A third problem with strong cultures is that they discourage people from holding or expressing dissenting values. In the long term, this prevents organizations from nurturing new cultural values that might emerge as dominant values as the environment changes. 3. The CEO of a manufacturing firm wants everyone to support the organization’s dominant culture of lean efficiency and hard work. The CEO has introduced a new reward system to reinforce this culture and personally interviews all professional and managerial applicants to ensure that they bring similar values to the organization. Some employees who criticized these values had their careers sidelined until they left. Two midlevel managers were fired for supporting contrary values, such as work–life balance. Based on your knowledge of organizational subcultures, what potential problems is the CEO creating? Answer: This incident describes how an organization subdues organizational subcultures, particularly countercultures. The textbook explains that organizational subcultures serve two important functions. First, they maintain the organization's standards of performance and ethical behaviour. Employees who hold countercultural values are an important source of surveillance and critique over the dominant order. This monitoring role is lost if subcultures are suppressed. Second, subcultures are the spawning grounds for emerging values that keep the firm aligned with the needs of customers, suppliers, society, and other stakeholders. Companies eventually need to replace their dominant values with ones that are more appropriate for the changing environment. If subcultures are suppressed, the organization may take longer to discover and adopt values aligned with the emerging environment. 4. Identify at least two artifacts you have observed in your department or school from each of the four broad categories: (a) organizational stories and legends, (b) rituals and ceremonies, (c) language, (d) physical structures and symbols. Answer: Understanding your department or faculty’s culture requires assessment of many artifacts that may be subtle and ambiguous. The following questions are intended to serve as a framework for generating a variety of responses from students. a. Organizational stories and legends – These are descriptions of incidents in the past that send a message about the way things should, or should not, be done. – What could cause someone to be fired? – Who if anyone can break the rules? – How much help/support can students expect? b. Rituals and Ceremonies – (These could be considered two types of artifacts, but are grouped together logically). Rituals are the programmed routines of daily life that dramatize the culture. This includes the way people are greeted and addressed, etc. Ceremonies are more formal and deliberate artifacts, such as graduation ceremonies or other special events. – What daily routines frequently occur? – What planned activities are carried out? – What achievements are celebrated? c. Language – Language represents a subtle artifact that communicates culture. This particularly applies to the special vocabularies that represent each person’s perspective of reality. – How do instructors and department/faculty address students? Co-workers? – Are there any phrases, or other language that reveal what is most important to your department/faculty? d. Physical structures and symbols – The size, shape, location, and age of buildings often indicate the emphasis on certain values or beliefs. The same is true of the use of physical space inside those buildings. – What are your observations about the type of classrooms, classroom technology and furnishings, office space, wall hangings, etc. that are observable in your department/faculty? – What do these observations tell you about your department/faculty? 5. “Organizations are more likely to succeed when they have an adaptive culture.” What can an organization do to foster an adaptive culture? Answer: An adaptive culture exists when employees focus on the changing needs of customers and other stakeholders and support initiatives to keep pace with these changes. Organizations are more likely to succeed when they have an adaptive culture. Based on the textbook’s description of an adaptive culture, here are ways to foster such a culture: Encourage an external focus. Organizations foster an adaptive culture by adopting an external focus – creating a common mental model that the organization’s success depends on monitoring and supporting external stakeholders and by continuously adapting to their changing needs and expectations. Create a sense of ownership. Encourage employees to assume responsibility for achieving organizational goals and performance expectations. They take responsibility for the organization’s performance and alignment with the external environment. This might occur by giving employees more autonomy, responsibility, and accountability. Pay attention to organizational processes. Help employees to be continuously mindful of the need for continuous improvement of internal processes (e.g. productivity, customer service) to serve external stakeholders. Support a learning orientation culture. Support employees’ efforts to engage in action-oriented discovery. Welcome learning opportunities and view reasonable mistakes as part of the learning process. 6. Suppose you are asked by senior officers of a city government to identify ways to reinforce a new culture of teamwork and collaboration. The senior executive group clearly supports these values, but it wants everyone in the organization to embrace them. Identify types of activities that would strengthen these cultural values. Answer: The textbook identifies five ways to strengthen organizational culture: Actions of founders and leaders. Transformational leaders strengthen organizational culture by communicating and enacting their vision of the future. Cultural values are particularly reinforced when leaders behave in ways that are consistent with the vision. Aligning artifacts. Ceremonies, language, routine behaviours, stories, and physical workspace not only symbolize the organization’s culture; they also reinforce and maintain that culture. To support a culture of teamwork and collaboration, for example, the city might refer to employees as “team members”, engage in events that emphasize teamwork and cooperation, and rearrange the workplace in a way that encourages teamwork. Introducing culturally consistent rewards and recognition. Reward and recognition systems strengthen corporate culture when they are consistent with cultural values. A team-oriented city might introduce more team-based rewards, for example. Support workforce stability and communication. Culture is embedded in the minds of its employees, so culture is strengthened and maintained when organizations minimize turnover of staff. Also, communication among employees strengthens organizational culture because communication enables employees to develop shared language, stories, and other artifacts. In this incident, the city government might hold cross-departmental gatherings where employees shares stories reflecting the city’s values. Selecting and socializing employees. The city should consider hiring people whose values are consistent with teamwork and collaboration. Then, new staff should receive a formal socialization process to reinforce these values. 7. Is it possible to have knowledge of what an organizational culture is before you become a part of the organization? How important is it for you to align yourself with your organizational culture? Answer: Organizational culture is artifacts and shared values and assumptions. Artifacts may be observable before you become a part of the organization but the shared organizational values and assumptions are the intangibles and difficult to decipher before you become a part of it. It is important to align with the organizational culture because it represents the way things work in the organization. Organizational culture acts as the control system, the social glue and sense making. Any violation of what is shared by members of an organization is likely to create alienation for a new member. 8. Socialization is most intense when people pass through organizational boundaries. One example is your entry into the college or university that you are now attending. What learning and adjustment occurred as you moved from outsider to newcomer to insider as a student here? Answer: This discussion question will generate a number of interesting stories, many of them negative, about initial experiences at school. The concept of “reality shock” will likely emerge from the discussion, such as how people were overwhelmed with the number of buildings, rules, task requirements, and other forms of learning and adjustment. Some students will likely note how attending school required adjustment to their non-school life, such as the amount and form of social and family activity. Finally, this discussion should bring out the sense that students experience being an “insider”, that is, an experienced student who knows his/her way around the system and can lead others as they adjust as newcomers. As I transitioned from an outsider to an insider at my college, several learning and adjustment phases occurred: 1. Outsider: Initial learning involved understanding the campus layout, academic requirements, and available resources. I felt unfamiliar with the culture and norms. 2. Newcomer: I adjusted by participating in orientation programs, joining student groups, and developing relationships with peers and professors. I learned the unwritten rules and expectations, such as classroom etiquette and social dynamics. 3. Insider: I became fully integrated by engaging in academic and extracurricular activities, building a network, and contributing to the community. I developed a sense of belonging and understood the institution's values and culture. CASE STUDY: HILLTON’S TRANSFORMATION Case Synopsis This case describes organizational changes over twenty years in the municipality of Hillton (not its real name). As a community of 70,000 residents, Hillton’s rule of employment was that employees should learn the job skills, maintain a reasonably good work record, and wait their turn for promotion. The organization’s culture could be described as one of entitlement and comfort. The community grew rapidly as an outer suburb of a large Canadian metropolitan area, so there were few cost or employment controls and senior people came mainly from outside departments (e.g. road building). But as the city expanded and more professionals moved into the area, increased pressure was placed on “soft” services and customer service. In the mid-1990s, a new mayor and city council was elected. Over the next two years, the city manager and several senior managers were replaced with qualified candidates from large municipal corporations elsewhere. The new executives, known as the “professionals”, dramatically changed municipal practices and values (e.g. customer service, performance-based employment). They experienced resistance from workers in outside departments, who no longer had co-workers in senior positions. What Actually Happened: This case is adapted from actual events in a Canadian suburban municipality. The community has continued to grow (after the temporary slow down) and has developed a very professional approach to municipality management. It has become a centre for trade and home to a large upwardly-mobile population with diverse cultural backgrounds. Although some degree of entitlement value still exists among employees, it is mostly overshadowed by the need for good customer service. Note: Since writing this case, other municipal leaders have commented to the author about similar experiences, either about the dichotomy between inside and outside workers or about the entitlement culture that they faced when joining the organization. In other words, the inside-outside conflict as well as the customer-focused culture issue are not unique to Hillton. Suggested Answers to Case Questions 1. Contrast Hillton’s earlier corporate culture with the emerging set of cultural values. Answer: During the early years, Hillton’s corporate culture was described as one of entitlement and comfort. The rewards and promotion system reinforce seniority and city employees faced few controls from elected officials. There was little emphasis on customer service. In contrast, Hillton’s emerging corporate culture – which was introduced by the new group of city managers – places more emphasis on performance and customer service. The value of entitlement has weakened significantly, as noted by the layoffs and decreased importance of seniority in promotions. Accountability also seems to be a value or belief that has gained importance. 2. Considering the difficulty in changing organizational culture, why does Hillton’s management seem to be reasonably successful at this transformation? Answer: One of the main reasons why Hillton’s corporate culture has changed relatively easily is that there has been a complete overhaul among the senior management as well as elected officials. This enabled the new group to send a common signal to employees regarding the emerging set of corporate values. They were consistent in their leadership behaviours. Moreover, they seem to have altered the reward system (promotions) to be more consistent with the new set of cultural values. A second reason why the cultural transformation occurred was that there was external pressure to change. The community was no longer growing quickly and people living in the community had developed a different set of needs from the municipality. Moreover, there were complains about poor services. It is likely that employees increasingly realized that the old corporate culture was now misaligned with the external environment. 3. Identify two other strategies that the city might consider to entrench the new set of corporate values. Answer: The textbook identifies four strategies for strengthening an organization’s culture. Two of these – role of leaders and introducing culturally-consistent rewards –have been applied by city managers. Students may therefore identify any two of the following three strategies: One strategy for maintaining and strengthening the new corporate culture is to carefully select and socialize new hires. The municipality should test the customer service orientation and respect for accountability among people who apply for positions. Employee orientation and training programs could be introduced to further reinforce the emerging belief system. Another strategy is to introduce other artifacts that support the new culture. These might range from customer focused symbols throughout buildings and special ceremonies and everyday rituals that might remind employees of the customer orientation. Other Issues to Consider This case raises other organizational behaviour topics that instructors may want to discuss in class. One of these is the process of organizational change. Another topic is organizational power, influence, and politics. For example, students should consider the influence tactics used by outsiders to retain their control. TEAM EXERCISE: ORGANIZATIONAL CULTURE METAPHORS Purpose Both parts of this exercise are designed to help students understand, assess, and interpret organizational culture using metaphors. Part A: Assessing Your School’s Culture Instructions A metaphor is a figure of speech that contains an implied comparison between a word or phrase that is ordinarily used for one thing but can be applied to another. Metaphors also carry a great deal of hidden meaning – they say a lot about what we think and feel about that object. Therefore, this activity asks you to use several metaphors to define the organizational culture of your university, college, or institute. Alternatively, as mentioned in the exercise, the instructor might ask students to assess another organization that most students know about. The class is divided into teams of 4 to 6 members. Each team will reach consensus on which words or phrases should be inserted in the blanks of the statements presented below. This information should be recorded on a flip chart or overhead acetate for class presentation. The exercise states that the instructor will provide 15 to 20 minutes for teams to determine which words best describe the college’s culture, although you may change this if you wish. If our college were an animal, it would be a __ because _ If our college were a food, it would be __ because __. If our college were a place, it would be __ because __. If our college were a season, it would be __ because _. If our college were a TV show or movie, it would be __ because ___. The class will listen to each team present the metaphors that it believes symbolizes the college’s culture. For example, a team that picks winter for a season might mean they are feeling cold or distant about the college and its people. The class will discuss the discussion questions stated below. Comments for Instructors The authors of this exercise (David L. Luechauer and Gary M. Shulman) did an admirable job developing this activity. I have had very good success with it. Indeed, it has been one of the most popular exercises in some courses. However, the conditions must be right. Students need to be comfortable discussing (and lampooning) their college. They must be a creative bunch so that entertaining and representative metaphors are identified. I also introduced this exercise several times with military officers (Majors in a command and staff college) in the Singapore Armed Forces. It was the hit of the course! Presented below are a few of the metaphors that this group of military officers presented, including their explanations. These metaphors illustrate their creative spirit and pride in their organization. Metaphors Used by Students in a Military Command and Staff Course Discussion Questions for Part A 1. How easy was it for your group to reach consensus regarding these metaphors? What does that imply about the culture of your school? Answer: The easier it is to reach a consensus, the more likely it is that the institution has a strong and easily identifiable corporate culture. 2. How do you see these metaphors in action?. In other words, what are some critical school behaviours or other artifacts that reveal the presence of your culture? Answer: Students might cite examples from any aspect of college life. They might refer to the registration process, student life after school, relations between instructors and students, and so on. In one university, students identified the culture partly by the building design, which consisted of a maze of hallways and drab concrete exterior. Critical school behaviors and artifacts that reveal the presence of a school's culture can include: 1. Classroom Interaction: The way teachers and students interact, such as collaborative group work or open discussions, can reflect a culture of inclusivity and respect. 2. School Events: Regularly scheduled events like cultural fairs, talent shows, or community service projects highlight the school’s values and priorities. 3. Rules and Policies: The enforcement and communication of school rules, such as anti-bullying policies, demonstrate the school’s commitment to a safe and supportive environment. 4. Student Leadership: Opportunities for student councils or leadership programs indicate a culture that values student voice and empowerment. 5. Visual Displays: Hallway posters, artwork, and bulletin boards showcasing student achievements and diversity reflect the school’s ethos and community pride. 3. Think of another organization to which you belong (e.g., work, religious congregation). What is its dominant cultural values, how do you see them in action, and how do they affect the effectiveness of that organization? Answer: This question asks students to present various artifacts as well as their interpretation of those artifacts in terms of the organization’s dominant culture. If you have a class with students who are mainly in the workforce, you could have many excellent examples. In classes with students who lack work experience, you may need to prompt them with questions about other organizations they participate in. In the workplace, the dominant cultural values are collaboration, innovation, and integrity. These values are seen in action through open communication channels, team-based projects, and a strong emphasis on ethical conduct. Employees are encouraged to share ideas and work together on problem-solving, fostering a supportive and creative environment. This culture enhances the organization's effectiveness by promoting trust, driving innovation, and ensuring high ethical standards in all operations. Part B: Analyzing and Interpreting Cultural Metaphors Instructions In the previous section, students completed a metaphor exercise to describe the corporate culture of their university or college. That exercise gave them a taste of how to administer such a diagnostic tool and draw inferences from the results generated. This activity builds on that experience and is designed to help refine the students’ ability to analyze such data and make suggestions for improvement. Five work teams (4 to 7 members/mixed gender in all groups) of an organization located in Cincinnati completed the metaphor exercise similar to the exercise in which you participated in class (see Part A above). Their responses are shown in the table in the exercise. Working in teams, students are asked to analyze the information in this table and answer the discussion questions. Comments for Instructors This second part of the exercise generally doesn’t take much time. Students seem to recognize some of the meaning behind the metaphors. In my experience, they have more difficulty recognizing the type of organization, although the authors of this exercise report that many of their students do recognize this as an advertising agency. (NOTE: Most original answers in the “TV show” category were quite dated, so we have replaced them with contemporary programs.) You may also want to put together an exhibit showing some of the metaphors presented by the Singapore military officers (described above). This is a distinctly different set of metaphors with some very interesting interpretations of their meaning. Discussion questions for Part B 1. In your opinion, what are the dominant cultural values in this organization? Explain your answer. Answer: The organization had just reorganized to form competitive teams, and this is noted by the predator/prey nature of the animals and the shows, which were largely based on the notion of chasing or being chased. 2. What are the positive aspects of this type of culture? Answer: This culture’s benefits are that it encourages a lot of preparation, desire to excel, and speed (responsiveness). 3. What are the negative aspect of this type of culture? Answer: This culture’s main problems are that it emphasizes excessive competition and a win-lose mentality. 4. What is this organization’s main business, in your opinion? Explain your answer. Answer: The company is an advertising agency. Students should link their interpretation of each metaphor with their image of the company they identified. 5. These groups all reported to one manager. What advice would you give to her about this unit? Answer: It seems that these teams have experienced a lot of change and may need to plateau before experiencing more change. There may be some dysfunctional competition amongst teams that should be minimized. The elephant group stands out among the others and may require some exploration. SELF-ASSESSMENT: WHICH CORPORATE CULTURE DO YOU PREFER? Purpose This self-assessment is designed to help students to identify a corporate culture that fits most closely with your personal values and assumptions. Overview and Instructions This corporate culture preferences scale estimates the extent to which students prefer each of four corporate cultures. These corporate cultures may be found in many organizations, but they represent only four of many possible organizational cultures. Students should also keep in mind none of these subscales is inherently good or bad. Each is effective in different situations. Students are asked read each pair of the statements in the Corporate Culture Preference Scale and circle the statement that describes the organization they would prefer to work in. Then students use the scoring key to calculate their results for each subscale (or complete this self-assessment online for automatic scoring). This exercise is completed alone so students assess themselves honestly without concerns of social comparison. However, class discussion will focus on the importance of matching job applicants to the organization’s dominant values. Feedback for the Corporate Culture Preference Scale This self-assessment estimates the extent to which students prefer each of four corporate cultures. Each subscale has a potential score ranging from 0 to 6 points. Higher scores indicate that students have a stronger preference for organizations with that type of culture. The tables provide norms based on a sample of more than 200 MBA students. Control Culture This culture values the role of senior executives to lead the organization. It’s goal is to keep everyone aligned and under control. Scores on this subscale range from 0 to 6. The average score among a sample of MBA students was 1.1. Score Interpretation 3 to 6 .6 to 2 0 to .5 Strong preference Average preference Low preference Performance Culture This culture values individual and organizational performance and strives for effectiveness and efficiency. Scores on this subscale range from 0 to 6. The average score among a sample of MBA students was 2.9. Score Interpretation 5 to 6 3 to 4 0 to 2 Strong preference Average preference Low preference Relationship Culture This culture values nurturing and well-being. It considers open communication, fairness, teamwork, and sharing a vital part of organizational life. Scores on this subscale range from 0 to 6. The average score among a sample of MBA students was 3.9. Score Interpretation 5 to 6 3.6 to 4.9 0 to 3.5 Strong preference Average preference Low preference Responsive Culture This culture values its ability to keep in tune with the external environment, including being competitive and realizing new opportunities. Scores on this subscale range from 0 to 6. The average score among a sample of MBA students was 4.1. Score Interpretation 5 to 6 3.6 to 4.9 0 to 3.5 Strong preference Average preference Low preference 15. Organizational Change SOLUTIONS TO CRITICAL THINKING QUESTIONS 1. Chances are that the school you are attending is currently undergoing some sort of change to adapt more closely with its environment. Discuss the external forces that are driving the change. What internal drivers for change also exist? Answer: There are many possible changes that your college is currently experiencing. Some of the more common changes might be: (a) shift from quarter to semester schedule; (b) introduction of online learning; (c) changing library hours; (d) new courses and disciplines; (e) reassignment of physical space due to new construction or closure of old buildings. There are just as many possible external forces for change to consider, including: (a) increased competition for students; (b) emerging technologies; (c) cost pressures (restricted budgets); (d) changing student expectations (e.g. new course content, more flexible learning); (e) college ratings. Internal forces for change mainly come from such things as leadership, physical structures (e.g. aging buildings), and student and faculty coalitions. It is important to distinguish the changes from the forces for change. For example, the introduction of online learning might have resulted from both new technologies and increased competition for students. 2. Use Lewin’s force field analysis to describe the dynamics of organizational change at Lambeth Council in London. The Global Connections 15.1 feature about Lambeth council provides some information, but think about other forces for and against change beyond the information provided in this vignette. Answer: This open-ended question will get students thinking about the dynamics of the external environment for city government organizations, no matter whether they are in London, England or somewhere in Canada. There are too many to list here, but some of the top factors might include declining budgets, changing citizen expectations, and changing provincial or federal regulations (e.g. safe streets). Students should not only identify these and other potential forces for change, but also forces that restrain organizational change. Using Lewin’s force field analysis, the dynamics of organizational change at Lambeth Council in London can be described as follows: Driving Forces for Change: 1. Need for Modernization: Pressures to update outdated systems and processes for efficiency. 2. Improved Public Services: Desire to enhance service delivery and customer satisfaction. 3. Budget Constraints: Financial pressures necessitate more efficient operations. 4. Technological Advancements: Availability of new technologies that can streamline processes. Restraining Forces Against Change: 1. Resistance to Change: Employees' reluctance to adopt new systems and procedures. 2. Cultural Inertia: Long-standing traditions and norms that are difficult to alter. 3. Limited Resources: Budget and resource limitations that restrict the scope of change. 4. Skills Gap: Lack of necessary skills among staff to implement and manage new technologies. Balancing these forces is crucial for successful change management at Lambeth Council. The organization must strengthen driving forces, such as investing in training and communicating the benefits of change, while minimizing restraining forces by addressing concerns and providing adequate support. 3. Employee resistance is a symptom, not a problem, in the change process. What are some of the real problems that may underlie employee resistance? Answer: The textbook outlines six main reasons why employees resist change. The following reasons explain the real problems that employees experience and are concerned about with change processes. Negative valence of change. Employees apply a cost–benefit analysis to determine if the change will make them better or worse off. Resistance to change is higher when employees believe that: (a) the change will have more negative than positive outcomes (e.g., lost status, lower pay, poorer working conditions), and (b) the negative outcomes have a high probability of occurring and the positive outcomes have a low probability of occurring. Fear of the unknown. People resist change because they are worried they will not be able to adopt the new behaviours required.. Not-invented-here-syndrome. Some employees oppose change whose success threatens their self-esteem. This occurs when the change was within the individual’s job duties or mandate, but was discovered or decided by others instead. Breaking routines. People do not want to give up their comfort zones and daily routines that provide predictability. Incongruent team dynamics. Team norms may conflict with the desired change and consequently reinforce conformity to the status quo. Incongruent organizational systems. Organizational systems may actually be discouraging employees from adopting new ways. For example, the organization’s reward, selection, training and other control systems may be causing employees to maintain the status quo. 4. Senior management of a large multinational corporation is planning to restructure the organization. Currently, the organization is decentralized around geographic areas so that the executive responsible for each area has considerable autonomy over manufacturing and sales. The new structure will transfer power to the executives responsible for different product groups; the executives responsible for each geographic area will no longer be responsible for manufacturing in their area but will retain control over sales activities. Describe two types of resistance senior management might encounter from this organizational change. Answer: The answer to this question should include direct costs as one type of resistance to change among the geographic executives. They will lose status, power, and responsibility from the change effort. The other type of resistance to change might be incongruent organizational systems, incongruent team dynamics, or breaking routines. Unless the company has taken specific steps to alter organizational systems, these systems might still support the decentralized organizational structure. For example, communication patterns and physical structures might still be configured around the geographic rather than product structure. Regarding team dynamics, departmental norms might support the geographic executive. For example, employees might have developed a “we-they” attitude toward product leaders in headquarters. Although the restructuring placed regional product groups under product executives, these antagonistic norms may continue. Finally, some students might argue that resistance will occur because employees will be breaking routines. For instance, geographic executives and their employees may have formed habits regarding relations between sales and production units. Now that production units are no longer under the executives’ control, these habits must be altered and perhaps sales practices changed to fit the new reporting structure. 5. Discuss the role of reward systems in organizational change. Specifically, identify where reward systems relate to Lewin’s force field model and where they undermine the organizational change process. Answer: Students should recognize that reward systems can be either a source of resistance to change or a system that reinforces the desired change (i.e. refreezes the system). As a source of resistance, rewards would be an incongruent organizational system, such as where rewards reinforce efficiency but the organization is trying to change toward a customer focus. As a mechanism for refreezing, rewards are introduced or change so they are compatible with the desired behaviours. 6. Web Circuits is a Malaysian-based custom manufacturer for high-technology companies. Senior management wants to introduce lean management practices to reduce production costs and remain competitive. A consultant has recommended that the company start with a pilot project in one department and, when successful, diffuse these practices to other areas of the organization. Discuss the advantages of this recommendation, and identify three ways (other than the pilot project’s success) to make diffusion of the change effort more successful. Answer: A pilot project is usually an effective change management strategy. It is more flexible and less risky than centralized organization wide programs. There are several ways to make diffusion of the change effort more successful. Several strategies are described in the textbook around the four elements of the MARS model. Here is a summary of these recommendations: Motivation: Ensure that employees see that the pilot project is successful and that people in the pilot project receive recognition and rewards for changing their previous work practices. Supervisors need to actively support and reinforce the desired behaviours. They also need to remove sources of resistance that act as counter-motivators to diffusion of change. Ability: employees must have the ability – the required skills and knowledge – to adopt the practices introduced in the pilot project. Also, people adopt ideas more readily when they have an opportunity to interact and learn from others who have already applied the new practices. Role Perceptions: Employees need to understand how the practices in a pilot project apply to them even though in a completely different functional area. This requires guidance that is neither to specific, because it might not seem relevant to other areas of the organization, nor too abstract. Situational Factors: Employees require supportive situational factors, including the resources and time necessary to adopt the practices demonstrated in the pilot project. 7. What is the role of formal and informal networks in organizations interested in undergoing change? Answer: Environmental forces push companies to change. However, change agents cannot lead the initiative alone. It requires assistance from several others equally committed to the change. A formal guiding coalition can be structured to serve this purpose, however, change also occurs informally through social networks. These informal social networks have an important role in communication and influence, both of which are key ingredients for organizational change. 8. Suppose that you are vice president of branch services at the Kelowna Credit Union. You notice that several branches have consistently low customer service ratings, even though there are no apparent differences in resources or staff characteristics. Describe an appreciative inquiry process in one of these branches that might help overcome this problem. Answer: Appreciative inquiry reframes relationships around the positive and the possible. The credit union branches should look at another branch that has been successful. This increases open dialogue by redirecting attention away from internal problems. If branch rivalries are a problem, then each branch might compare itself with a successful operation in another organization or industry. There are four main stages to appreciative inquiry. The process begins with the discovery stage, whereby the participants identify the positive elements of the observed organization. As they discuss their findings, participants shift into the dreaming stage by considering what might be possible in an ideal organization. The third stage of appreciative inquiry is known as designing, in which participants listen with selfless receptivity to each other’s models and assumptions, and eventually form a collective model for thinking within the team. Throughout this stage, team members shift the focus back to their own organization and eventually enter the delivering stage. This is the phase in which participants begin discussing their own organization again. They establish specific objectives and direction for their own organization based on their model of what should be. CASE STUDY: TRANSACT INSURANCE CORPORATION Case Synopsis TransAct Insurance Corporation (TIC) provides automobile insurance throughout parts of Canada. Jim Leon was hired as vice-president of Claims and immediately began a series of changes. He decided to make morale and supervisory leadership his top priority. One of Leon’s most pronounced symbols of change was the "Claims Management Credo" outlining the philosophy that every claims manager would follow. After the credo was “approved” by claims managers, Leon announced plans to follow up with an annual survey to evaluate each claims manager's performance. One year later, a survey of claims centre employees was held. Claims managers didn’t believe that Leon would really conduct the survey. The survey had a high response rate, with most managers receiving moderate or poor ratings on the ten credo items. The survey results, including every comment made by employees at that claims centre, were shown to employees. Claims centre managers were shocked. Discussion meetings with employees were attended by the regional director to control or avoid confrontations. Soon after these meetings, some claims managers quit or asked for transfers into nonmanagement jobs. Epilogue. Shortly after the first survey, the newsletter was suspended. Jim had many more meetings with his managers and directors. Jim eventually concluded that too many of his managers were “technical experts” in insurance and lacked the people skills necessary for management. To resolve this problem, managers were asked to compete for revised positions with a greater emphasis on management ability rather than technical prowess. A few new managers were brought in but most of the successful candidates were selected from the existing roster of managers. Employee surveys stopped after four years. Jim left and went into semi-retirement. Suggested Answers to Case Questions 1. Identify the forces pushing for change and the forces restraining the change effort in this case. Answer: Transact faced increased pressure to improve its competitiveness and customer service. The board of directors clearly were forces for change here, although the external pressures probably motivated them to change. Within Jim Leon’s division, it was apparent that management was too authoritarian, morale was very low, and employee-management relations were guarded. High workloads and isolation (adjusters work in tiny cubicles) were two other common complaints. Several managers acknowledged that the high turnover among claims adjusters was partly due to these conditions. Against these forces for change were apparent forces resisting change. Notice that employees appeared keen for change. They had a high response rate on the survey. They apparently made use of the flex-time schedule because it became a model for other units. Most of the resistance came from claims centre managers. Students can look through the sources of resistance to change in the textbook to see that many of them apply here. Negative valence of change. Managers were probably concerned that they would lose power. Through greater accountability to employees, they would have to work harder to perform their jobs. Fear of the unknown. This organization had guarded employee-management relations. Managers had done the same work for quite some time. Leon’s survey would require new behaviours (that it became apparent some managers couldn’t apply) and new relations with employees. Breaking routines. The claims managers would have to change the way they interacted with employees. We don’t have any information about organizational systems or team norms. Team norms among managers are probably still aligned with past behaviours. 2. Was Jim Leon successful at bringing about change? Why or why not? Answer: Jim Leon was unsuccessful with this change process. Although his small changes described at the beginning of the case seem to have worked, the survey process created such resistance and reaction from managers that change probably became more difficult afterwards. By looking at the action research model, we can see that at least the first two stages were not conducted sufficiently well. The main causes can be identified from evidence of (a) the lack of urgency to change among managers, (b) various sources of resistance to change, and (c) lack of diagnosis for the change intervention. Lack of urgency. Jim Leon did not diagnose the readiness for change of his claims managers and employees. The claims managers did not believe that the survey would be conducted, they doubted the importance of the Claims Management credo, and they did not support the open survey feedback process. Consequently, Leon did not provide enough evidence and argument to motivate the claims managers to embrace or at least prepare themselves for the change process. Sources of Resistance. The claims managers engaged in passive resistance to the change. Students should be able to identify likely reasons for this resistance. The intervention might require changing managerial practices, which relates to breaking routines, fear of the unknown, and possibly negative valence of change (where managers lose power, resources, or status). Managerial norms of behaviour might also be present that interfere with the desired changes. We don’t have information about systems or structures, but they might also act as barriers. Students might note the lack of involvement of managers in the change process. Although they identified the survey performance factors, this list was really restricted to the point that Leon was more in control of the factors to be considered. Diagnose Need for Change. The employee survey is an intervention, because it was intended to be an ongoing system in management development at TransAct. However, the initial survey was also a diagnostic tool to help Leon and claims managers identify areas that need improvement. Although students may debate the appropriateness of a survey for data collection, the main problem is that the data were not fed back to claims managers in a way that minimizes perceptual defence. This is important, because it affects the willingness of participants to continue with the intervention. For example, the survey data were both an evaluation tool and a organizational change assessment tool. Moreover, the process was delayed for one year, so managers may have lost any inertia toward change that occurred when the credo was formed a year earlier. Another concern is that some of the survey items may relate to factors over which the claims managers have no control. Employees had low morale and overwork before Leon took over as VP of claims. Several years of pent-up frustration were vented in the survey, and claims managers were not completely responsible for those feelings. There are arguments in favour of using the employee survey process — e.g. it is cost-efficient for large groups. However, the survey design and feedback should be changed to improve their relevance and acceptability to everyone involved. The claims managers should be put in a better state of readiness to participate in the survey design process. The questions should be clearly and objectively related to the claims manager’s jobs. The survey feedback should be more confidential, perhaps with feedback sessions based only on overall statistical results across the claims division (i.e., not within the small claims centres and not with individual comments). 3. What should Jim Leon do now? Answer: It is unclear whether Jim Leon will regain sufficient trust from employees to continue in this position. The company should begin the change process again, beginning by identifying what needs to change (more customer focus? cost efficiency? employee engagement?). Next, the change process calls for better ways to create an urgency to change — evidence of increased competition, greater potential efficiencies, etc. Third, in line with action research, employees and management needs more real involvement in the process. Jim Leon and the CEO may have ultimate decision control, but involvement from others is critical for buy in. The CEO and Leon might also consider a pilot project if the change is difficult and risky. However, since the unit is integrated, a pilot project may be difficult. Finally, the choice of intervention needs to be carefully chosen such that it is aligned with the change objectives. This may involve training, changing rewards and information systems, or other systems alterations. Students should also discuss Jim Leon as a change agent. Specifically, there is reason to believe that Leon has lost trust, respect, and credibility to lead the change process. This does not necessarily mean that he needs to be replaced as head of claims. Rather, an external consultant who works with management and employees may be required to engage in the next attempt to change. TEAM EXERCISE: STRATEGIC CHANGE INCIDENTS Purpose This exercise is designed to help students to identify strategies to facilitate organizational change in various situations. Instructions Step 1: The instructor will place students into teams, and each team will be assigned one of the scenarios presented in this exercise. Step 2: Each team will diagnose its assigned scenario to determine the most appropriate set of change management practices. Where appropriate, these practices should (a) create an urgency to change, (b) minimize resistance to change, and (c) refreeze the situation to support the change initiative. Each of these scenarios is based on real events. Step 3: Each team will present and defend its change management strategy. Class discussion regarding the appropriateness and feasibility of each strategy will occur after all teams assigned the same scenario have presented. The instructor will then describe what the organizations actually did in these situations. Comments for Instructors This exercise has been used several times in MBA classes and executive development programs, with consistently good results. The activity should also work well with undergraduate university and college classes because it is straightforward and applies concepts from the textbook. The activity is made more interesting by the fact that these scenarios involve REAL COMPANIES, so the instructor can advise students that their strategies will be compared with what the companies actually did. The PowerPoint file for this chapter includes a summary of these scenarios, including the actions taken by the two real organizations. (These PowerPoint slides appear after the slides for the chapter content.) Scenario 1: Greener Telco The board of directors at a large telecom company wants its executives to make the organization more environmentally friendly by encouraging employees to reduce waste in the workplace. Government and other stakeholders expect the company to take this action and be publicly successful. Consequently, the managing director wants to significantly reduce paper, usage, refuse, and other waste throughout the company’s many widespread offices. Unfortunately, a survey indicates that employees do not value environmental objectives and do not know how to “reduce, reuse, recycle.” As the executive responsible for this change, you have been asked to develop a strategy that might bring about meaningful behavioural change toward this environmental goal. What would you do? What Actually Happened: This incident describes the “Zero Waste” program several years ago at Bell Canada. Although the intervention occurred almost two decades ago, it is a timeless incident for discussion because it applies to behaviour change that might occur in any organization and would involve employees at all levels. Bell Canada invoked change by applying several strategies to minimize resistance to change. Here are the steps the telephone company took to bring about Zero waste: Communication: Employees attended information sessions and saw banners at the front entrance about the beginning of “Zero Waste”. A task force of employee representatives kept everyone informed about developments leading up to the first day of zero waste. Training. Employees were shown how to reduce paper waste by using both sides of paper, using scrap paper as memo pads, re-using office envelopes, and relying more on email and voice mail than written memos. In the cafeteria, they learned to separate leftover food and deposit it into the appropriate compost bin. The company also installed a special telephone hotline to answer questions about recycling. Bell Canada employees also received feedback about their progress toward the waste reduction goal. The task force weighed the garbage twice each week and publicly displayed these results on charts. The garbage was occasionally ‘audited’ for incorrect behaviours, such as throwing apple cores in the paper recycling bin. Offending employees were politely encouraged to use the compost bin instead. Employee involvement. Bell Canada deliberately selected the more popular employees in each department to serve on a special task force to develop the Zero Waste program. These employees quickly became champions as they took ownership of the program. They were also conduits of information and enthusiasm back to the departments where they worked. Coercion. The Zero Waste program created barriers to wasteful behaviour. Paper towels were replaced with electric hand dryers in the washrooms. Styrofoam cups were replaced with reusable mugs at each employee’s desk. Metal garbage cans at each workstation were replaced with plastic recycling bins. Employees were left with tiny reusable bags to carry nonrecyclables to specially marked bins located elsewhere in the building. Along with these strategies, Bell Canada began the program as a pilot project in one of its largest buildings. That pilot project reduced waste by 98 percent – from nearly 1,000 pounds of waste each day to less than 25 pounds of waste each day. The company subsequently applied similar change management principles to improve energy conservation. Some students might correctly suggest that the change process is essentially applying the MARS model to alter individual behaviour. Bell Canada motivated employees, changed their role perceptions, and improved their ability through training to reduce waste. Perhaps most important, Bell Canada changed the environment so that situational factors made it more difficult to engage in wasteful behaviour. References: J. Mills, “Bell Sets Example with ‘Zero Waste’ Program,” Montreal Gazette, (February 14, 1993), p. C3; C. Mahood, “Bell Zeros in on Waste,” Globe & Mail, (May 4, 1992), pp. B1, B2; “Bell Canada,” Inside Guide, (January 1993), pp. 46-48; D. Hogarth, “Firms Reap Green Harvest,” Financial Post, (June 15-17, 1991), p. 18. Scenario 2: Go Forward Airline A major airline had experienced a decade of rough turbulence, including two bouts of bankruptcy protection, 10 managing directors, and morale so low that employees had ripped off company logos from their uniforms out of embarrassment. Service was terrible and the airplanes rarely arrived or left the terminal on time. This was costing the airline significant amounts of money in passenger lay-overs. Managers were paralyzed by anxiety and many had been with the firm so long that they didn’t know how to set strategic goals that worked. One-fifth of all flights were losing money and the company overall was near financial collapse (just three months to defaulting on payroll obligations). The newly-hired CEO and you must get employees to quickly improve operational efficiency and customer service. What actions would you take to bring about these changes in time? What Actually Happened: Scenario #2 describes the troubles that Continental Airlines experienced during the 1980s and early 1990s. The airline was the results of seven merged airlines and had been managed badly over the previous decade. Continental went into bankruptcy twice and was almost out of cash when Gordon Bethune and Greg Brenneman were hired as chairman and president, respectively. The company was continually losing money and its continuous cost-cutting only made matters worse by destroying customer service and employee loyalty. Continental executives Gordon Bethune and Greg Brenneman applied the following change management strategy: Communication. Bethune and Brenneman constantly communicated their “Go Forward” strategic plan to save the airline. Go Forward covered four cornerstones: market, financial, product, and people. Bethune and Brenneman also worked alongside baggage staff and other employees, discussing their go forward plan while performing the front-line work. The company also posted news of the change process on bulletin boards, in weekly voice mails from Bethune, and in monthly open house meetings with employees. Training. There were no apparent training programs to change Continental airlines. Bethune and Brenneman argued that employees already knew their jobs, but lacked the opportunity and strategy to put their skills and knowledge to use. However, Continental introduced new goals (such as on-time departures) and used Department of Transportation monthly measures as feedback on how well the company performed on these performance metrics. Employee Involvement. Bethune and Brenneman collected the “Thou Shalt not” manual – the guidebook on what employees are not allowed to do – and publicly burned them in the parking lot. Then Bethune and Brenneman told employees to make customer service happen. Coercion. Fifty-one of the 60 executives were replaced within a couple of months. Bethune and Brenneman stated that it is difficult for people who get a company into a mess to get them out. Moreover, the executives who made these mistakes for so long would not be trusted by employees to lead them into the future. Along with these strategies, Continental introduced rewards that aligned employees with the company’s new strategic goals. Rather than reduce costs, Continental was going to improve service. Thus, employees were each paid $65 for each month that Continental placed in the top five airlines for on-time service, according to the Department of Transportation. In change management, rewards relate to introducing systems and structures to “refreeze” the desired conditions. Bethune and Brenneman also brought about rapid change by hiring senior executives (replacing those fired) with competencies and values that were more aligned with the Go Forward plan. References: G. Brenneman, “Right Away and All at Once: How We Saved Continental,” Harvard Business Review, September-October 1998, pp. 162-79; T. Kennedy, “Confidence returns with Continental's strong comeback,” Minneapolis Star Tribune, February 1, 1998, p. 1A. SELF-ASSESSMENT: ARE YOU TOLERANT OF CHANGE? Purpose This exercise is designed to help students understand how people differ in their tolerance of change. Background Some people are naturally less comfortable than other people with the complexity and uncertainty of change. This selfassessment provides an estimate of how tolerant people are of change. Students are asked to read each of the statements and circle the response that best fits their personal belief. They then use the scoring key to calculate their results. This self-assessment is completed alone so that students rate themselves honestly without concerns of social comparison. However, class discussion will focus on the meaning of tolerance of change, how this scale might be applied in organizations, and the limitations of measuring tolerance of change in work settings. Feedback for the Tolerance of Change Scale This measurement instrument is formally known as the “tolerance of ambiguity” scale. Although it was developed forty years ago, the instrument is still used today in research. People with a high tolerance of ambiguity are comfortable with uncertainty, sudden change, and new situations. These are characteristics of the hyperfast changes occurring in many organizations today. The table below indicates the range of scores for high, medium, and low tolerance for change. These norms are based on results for MBA students. Solution Manual for Organisational Behaviour: Emerging Knowledge, Global Insights Steven McShane, Mara Olekalns, Alex Newman, Angela Martin 9781760421649, 9780071016261
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