Changes In Company's Culture - Research Paper Example

and Number of the Teacher’s CHANGE IN ORGANIZATIONAL CULTURE Introduction Organizational culture refers to “the set of shared values, shared beliefs, and customary ways of thinking and doing things” (Awal et al 79) which guide and form the behavior of organizational members. Its significance is related to its ability to influence the activities of members and the functioning of the organization without particular control measures. Each employee or organizational member’s perceptions on the company’s culture are associated with their extent of motivation and job satisfaction at both cognitive and affective levels. An organization’s culture related to various time frames and local factors forms the organizational climate. This is a factor that encompasses organizational design, work performance and job satisfaction. A company’s culture explains its achievement of broad corporate goals such as innovative characteristics, service efficiency and ability for quality enhancement. Thesis Statement: The purpose of this paper is to investigate the process of change in organizational culture, as well as related aspects of corporate culture change. The Two Levels of Organizational Culture There is a strong relationship between culture and performance. A supportive culture enhances the organization’s competitive advantage in terms of higher outputs, improved profits, increased employee retention and enhanced working environment. Culture determines employee attitudes, their motivation and consequent organizational performance. According to Schneider et al (p.5), “because organizational culture concerns the firmly implanted beliefs and values of organizational members, it resides at a deeper level of people’s psychology” as compared to organizational climate. Culture encapsulates subtle psychology of the workplace, which is intangible. Organizational climate’s policies, practices and rewards are visible, however, the beliefs and values of culture are not directly visible. The difference between organizational culture and organizational climate is the same as Kotter & Heskett’s (p.4) two levels of organizational culture. Organizational culture has two levels which are different in terms of their visibility and in their resistance to change. “At the deeper and less visible level culture refers to values that are shared by people in a group and that tend to persist over time even when group membership changes” (Kotter & Heskett 4). These concepts related to priorities can vary greatly in different companies. In some settings people are intensely money oriented, in others they care greatly about technological innovations, and about employee well-being. At this deep level, culture can be very difficult to change, partly because members of the organization are generally unaware of many of the values that they share as a group. On the other hand, at the more visible level, culture is manifested in the behavior patterns or style of an organization that new employees are involuntarily urged to follow by their colleagues. Examples of this visible level of culture are seen in different employee groups being known as “hard working”, “friendly”, “conservatively dressed” or by other characteristics. Culture in this level is not easy to change, but is not as difficult as at the level of fundamental values at a deeper level. Both levels of culture have an inherent tendency to influence each other. An example is shared values impacting group behavior, as seen in commitment to customers influencing the speed with which customer complaints are dealt with. On the other hand, behavior and practices can also influence values. For instance, when employees who have never had any exposure to commercial trade situations begin to interact with customers, they begin to value the needs and problems of customers more greatly (Kotter & Heskett 4). Culture in an organization differs from its strategy or structure; however, these terms can be used interchangeably along with other concepts such as vision or mission. This is based on the fact that all these concepts along with the competitive and regulatory environment play a vital part in forming people’s behavior (Kotter & Heskett 4). The Use of Culture Measures in Change Situations Organizational culture at the collective level is measured by identifying the norms and expectations in the company, which are intended to govern the behavior of its members. Examples are competitiveness between members where they believe that they should outperform one another, and collaboration among members who seek each other out to combine their efforts to produce joint results. Thus, culture is a powerful concept for research study, and for change managers to use in affecting member behaviors’ efficiency, satisfaction, and commitment to the company (Awal et al 79). Culture measures are useful for corporate management in change situations. The uses of culture measures range from evaluating gaps between existing and required situations, to helping top management create strategic and structural changes for the organization. Awal et al (p.79) state that organizations using culture as a construct for driving change, benefit from addressing two issues: the extent to which culture as an index of the norms, values and beliefs of organizational members has the power to guide change, foster adaptation, and yield competitive success, and the extent to which ethical issues involved in endeavors intended to change the organization’s culture. Theory E and Theory O represent the two completely opposite approaches to organizational change being implemented in the world today. Theory E aims to create economic value often expressed as shareholder value, with a focus on formal structure and systems of an organization. Change is planned and programmed, and is driven from the top, with great help from consultants and financial incentives (Beer & Nohria 3). Theory O seeks to develop the organization’s human capability to implement strategy and to learn from actions taken about the effectiveness of changes made. It focuses on developing a high commitment culture. Change is spontaneous, less planned or programmatic. This change theory includes high involvement, and low reliance on consultants and incentives (Beer & Nohria 3). Failure in Achieving Change in Organizational Culture When change in organizational culture does not take root and produce the intended results, “the unfulfilled hopes lead management to introduce other seemingly promising change” (Schneider et al 1). These attempts also may be unsuccessful. With the sequence being repeated in an unending cycle of high expectations of required outcomes followed by failure, ultimately there is frustration on the part of management and cynicism on the part of workers. These dysfunctional downward spirals may be caused by various factors. However, one key reason is that the changes introduced are unsuccessful in altering the basic psychology of the organization to its members. It is this intangible psychological “feel” of the organization that directs and motivates employee efforts. For sustained change to take place, the psychology of the members in the organization has to change. This is because organizations are directly represented by the people in them; “if the people do not change, there is no organizational change” (Schneider et al 1). Changes carried out in the hierarchy, technology, communication networks, and other areas are effective with successful results only to the extent that these structural changes are associated with changes in the psychology of employees. An example is divestiture in the early 1980s which American Telephone & Telegraph (AT&T) went through. The organization’s greatest challenge was to change the psychology of the people, from the attitude of their being a monopoly with the time to do things their own way, to one of having to compete in the market, realising the requirement for paying attention to their customers and the competition, as well as taking the above actions in a speedy manner. Thus, divestiture created the crisis required to undertake change. However, the actual changes in the organizational culture of AT&T were brought about by the “thousands, if not millions of specific changes in the organization’s everyday policies, practices, procedures, and routines that altered the psychology” (Schneider et al 1) and thus permitted the kind of changes that were required. Thus, sustainable organizational change requires management of groups at all levels in the organization. People are the binding factor that keep the change effort going forward, they are the “medium for communicating the intent and substance of the change” (Schneider et al 15) and the medium of carrying out the change process. Managing change among groups requires communicating to groups, hiring people for groups, socializing and training people in groups, rewarding group accomplishments, and allocating resources to groups. Implementing Organizational Culture Change Effectively “Organizational change efforts vary to the extent that they focus on formal, organizational arrangements such as structure and systems and the extent to which they acknowledge and deal with culture” (Beer & Nohria 137). Organizational change is frequently brought about with the transformation of the company’s culture. This method of addressing the organizational culture is found to be effective, since fundamental changes have to first implemented in people’s psychology and behavior. An example for successfully implementing organizational culture change is as follows. Carol Lavin Bernick, president of the automobile company Alberto-Culver North America stated that to effectively change organizational culture, they took four major steps: first, the company made an issue of culture, and focused attention and resources on an aspect they had not taken into consideration earlier. Second, they made the process of culture change a job, devoting the required time and other resources for the purpose. Third, they designed methods for measuring their gains on cultural change, doing so with great determination. And fourth, they reinforced their stated values by celebrating those aspects of culture that they wanted to retain through the change process. Thus, Bernick’s approach to cultural change confirms that in working towards note-worthy change “a company will often have to devote significant time and resources to the cause” (Ahls 8). The effort is worth the investment of time and attention. Further, for organizational change to take place successfully, a sense of urgency is critically required. Employees who are not in the frontlines may be too complacent about the competition, and consequently less willing to adapt to the new culture early. A guiding coalition with sufficient authority to provide direction to the change effort should be formed, to lead by example. The change process requires a vision and strategy, for achieving the desired outcomes. Further, change necessitates different modes of thinking and behaving from what employees are accustomed to. Thus, change management involves conveying a well-communicated vision and path to achieve the results. Careful planning will ensure that all aspects of the project would be taken into consideration, “and unexpected roadblocks will be avoided or minimized (Ahls 8). It is important to create short-term wins which allows the workforce to understand the benefits of the change process early. This acts as a motivating force for the remainder of the change evolution. Additionally, consolidating short-term gains prove to be vital for justifying a change project to upper management whose approval may be required. Further, quick wins remove doubt about the benefits of the change, “and increase everyone’s confidence when unforeseen changes are needed” (Ahls 8). The new approach should be made a part of the company’s culture. If not done correctly, it may slide back and cause wasted effort. The change can be sustained successfully only when the company’s business model is made an integral part of the company culture. Conclusion This paper has highlighted change in organizational culture, the two levels of organizational culture, the use of culture measures in change situations, failure to achieve organizational culture change, and implementing the process successfully. Sustainable organizational change cannot be effectively implemented by structural or systemic changes to the organization. On the other hand, it is brought about by powerful techniques that work successfully through strong communications with employees. These communications convey both the means by which the organization will change the way it functions and about the new cultural goals of the organization. Effective organizational change occurs when completely new climates and cultures are created and maintained by the company. Different types of climates and cultures may be equally effective for different organizations according to their industry, markets and nature of their workforce. Thus, climate and cultural changes brought about by the top management’s implementation of cultural practices and communication of cultural values influences the achievement of cultural change. To ensure successful cultural change management in an organization, and to break the spiral of dysfunctional failures, the climate and culture levels offer numerous opportunities for the company’s management to bring about sustainable change. The greater the number of opportunities addressed by the change leaders, the higher is the likelihood of the cultural change being implemented, sustained, and successful outcomes achieved. Significantly, the key to ensuring sustained cultural change lies in effectively changing the psychology and behavioral patterns of the employees. Works Cited Ahls, Bill. Organizational behavior: A model for cultural change. Industrial Management, 43.4 (July/ August 2001): pp.6-9. Awal, Deepa, Klingler, J., Rongione, Nicholas & Stumpf, Stephen A. Issues in organi- zational culture change: A case study. Journal of Organizational Culture, Communication and Conflict, 10.1 (2006): pp.79-85. Beer, Michael & Nohria, Nitin. Breaking the code of change. New York: Harvard Business Press. (2000). Kotter, John P. & Heskett, James L. Corporate culture and performance. The United States of America: Simon and Schuster. (1992). Schneider, Benjamin, Brief, Arthur P. & Guzzo, Richard A. Creating a climate and culture for sustainable organizational change. Chapter forty-one. (1996). 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