Managing Change Internal Causes of Change - econbus

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Managing Change
Key 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-today 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 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

Can you define all the terms
used within this slide?
Task culture
◦ Emphasis on achieving set outcomes through cooperation and team work
◦ Associated with
 Matrix structures
 Delegation
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
Functional Depts
• Power derives from
expertise as long as a team
requires expertise
• No single power source
• Matrix organisation
• Team may develop own
objectives (a risk)
Project Teams
• Teams are formed to solve
particular problems
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.
Culture types and leadership style
Cultural
Type
Suitable Leadership Style
Power
Autocratic
Role
Autocratic or paternalistic
Task
Paternalistic / democratic
Person
Democratic
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:

Read the Business
Week article on how
to change corporate
culture
◦ Suppliers
◦ Customers
◦ Other stakeholders
BUSS4.10 Culture
The importance of organisational
culture

Impact on staff motivation
 Competitiveness of
◦ Communication
the business
◦ Retention
◦ Innovation
◦ Personnel performance indicators
◦ Adaptability

Effects decision making
◦ Speed
◦ Level of involvement
◦ Scientific v Intuition

Brand image
◦ Consumer perception
◦ Stakeholder opinion
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…
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 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

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