April 28, 2017

Changing Culture - Top Management Challenge

Culture Change is an Important Issue for Top Management

Every year, top managers make changes to the company's strategy, its most important in response to change in environment. The company structure and culture may have to change. Hence, top managers have to engage in culture change. Sometimes a new CEO or CXO is brought from outside. He may think of a big cultural changes to improve performance. This is a still bigger challenge. In this article the theory and practical implications indicated by the theory will described on this topic of culture change.

Luthans, the popular author of Organization Behavior, Textbook wrote that organizational cultures can be managed and changed over time.

He gave the following guidelines (reference to paper, Patrick Flanagan, "The ABC's of Changing Corporate Cultural)

1.Set realistic goals that impact on the performance and the bottom line.
2. Make changes from top down, so that consistent message is delivered.
3. Include employees in change development process.
4. Take out artifacts that support the earlier culture.
5. Expect some leaving of employees
6. You will face resistance. Building momentum in implementing the new culture and deriving benefits from it will help you defuse the resistance.
7. Stay the course by being persistent. Your commitment to the new culture is important and demonstrating it repeatedly and also demonstrating the benefits are important.

Summary of

Understanding Organizational Culture: A Key Leadership Asset

Fred C. Lunenburg
Sam Houston State University
VOLUME 29, NUMBER 4, 2011

It is important for a leader to understand an organization’s culture in order to bring about improved

Organizational theorists indicated that cultures are real. They acknowledged that organizations have
personalities just like people.

Changing Organizational Culture

A portion of the paper is on changing organizational culture

The following components are likely to be involved in the change cycle (Frost, 1991): (a) external enabling conditions, (b) internal permitting conditions, (c) precipitating pressures, (d) triggering events, (e) cultural visioning, (f) cultural change strategy, (g) culture change action plans, (h) implementation of interventions, and (i) reformulation of culture

External Enabling Conditions
Enabling conditions in the environment which support culture change facilitate it.

Internal Permitting Conditions
To increase the likelihood of organizational culture change, four internal permitting conditions must exist: (a) a surplus of change resources or managerial slack (administrative time and energy, financial resources, etc.have to exist beyond those needed for normal operating); (b) system readiness (willingness of most members to deal with a discomforting situation and also live with anxiety that comes with anticipated uncertainty associated with the change - change may succeed or fail); (c) minimal coupling (coordination and integration of system components); and (d) change-agent power and leadership (the ability of administrators to envision alternative organizational futures associated with change in culture).

Precipitating Pressures
Four factors that precipitate organizational culture change include (a) atypical performance (performance not up to expectation); (b) pressure exerted by stakeholders; (c) organizational growth or decrement in size, increase in membership heterogeneity, or increase in structure complexity; and (d) real or perceived crises associated with environmental issue or internal issue

Triggering Events
Culture change usually begins in response to one or more triggering events. Examples include (a) environmental calamities or opportunities such as natural disasters, economic recession, innovations, or discovery of new markets; (b) administrative crises such as a major shakeup of top administrators, an inappropriate strategic decision, or a foolish expenditure; (c) external revolution or changes in the environment and (d) internal revolution such as the installation of a new administrative team within the organization.

Cultural Visioning
Creating a vision of a new, more preferred organizational culture is the starting point. Leaders have to  survey the beliefs, values, assumptions, and behaviors of the organization’s existing culture. They anticipate future business conditions and then predict the organization's performance within that future with existing culture. Then, if the expected performance is not satisfactory, they need to determine the changes in culture required.

Culture Change Strategy
Once a new cultural vision exists, an organization needs a strategy to achieve that culture. Such a strategy outlines the general process of transforming the present culture into the new one.

Culture Change Action Plans
A series of explicit action plans for the inducement, administration, and stabilization of change have t be drawn to implement the strategy. Inducement action planning involves stimulating organizational members to a change or countering resistance to change. Administrative action planning involves outlining interventions and mobilizing change agents. Stabilization action planning focuses on the institutionalization of culture change and making the new culture,  an accepted fact.

Implementation of Interventions
An organization selects culture change interventions based on the ecology of a particular organization for each action plan phase and the change agent’s competencies in implementing them.

Reformulation of Culture
When implemented, the intervention plans result in a reformulated culture. It needs to be maintained

Culture Change Program in Lear Corporation

Tom DiDonato, the chief human resources officer at Lear Corporation and Noelle Gill, vice president for leadership development at Lear Corporation wrote an article in Harvard Business Review explaining the culture change initiative that they undertook in Lear in 2013. They explained the program in four steps: Awareness, Learning, Practice, and Accountability.

Summaries of Research Papers on Cultures


Anne Reino

Organisational values are part of of organisational culture

Organisational culture has been characterised as a “soft” part of an organisation; it is a holistic;
historically determined and socially constructed, and therefore not easily changing concept. Organisational culture can be defined as “a social or normative glue that holds an organisation together” (Wiener, 1988).

Schein (1992) views organisational culture as a result of interaction between an individual and organisation. In the course of time certain methods and systems emerge that keep an organisation
working and as workable and generally accepted solutions reduce uncertainty, people repeat behaviours leading to positive feedback. As a result, organisational culture will take shape.
According to Schein (1992), three levels of organisational culture can be observed - artifacts, values, and basic assumptions. Artifacts are the most visible manifestations of an organisation’s culture,
being expressed in terms of material objects, technology, language, rites, etc. The artifcats enable
the researcher to determine the values and basic assumptions of an organisation. The deepest level of organisational culture – basic assumptions – are taken-for-granted solutions to problems which are held unconsciously and are very difficult to reveal. Values determine what people think ought to be done. 

Concept of value

Values are believed to be defining a social institution, and norms, symbols, rituals and other cultural activities revolve around them (Enz, 1988).

Rokeach defines: “A value is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or endstate
of existence” (Rokeach, 1973: 5). Rokeach (1973) distinguishes between two types of individual values: instrumental values (modes of conduct) and terminal values (end-states of existence). 

Values act as guidelines that help people to choose goals and make decisions about how to realise them. In the case of  an individual values guide how he or she “should” or “ought to” behave. Even though many people tell him what he should do, values expressed by him are his or her internalised interpretations about socially desirable ways to fulfill his or her needs (Meglino, Ravlin, 1998: 354). Rokeach (1973) proposes that the more widely shared a value is (more people declare it as a value), the greater are the societal demands placed upon us and the greater “oughtness” we experience.
Roe and Ester (1999) stress that values are there for groups of people also (e.g. organisation, occupational group, subculture. 

Concept of organisational values

Enz defines organisational values as “the beliefs held by an individual or group regarding means and ends that organisations “ought to” or “should” identify in the running of the enterprise, in choosing what business actions or objectives are preferable to alternate actions, or in establishing rganisational objectives” (Enz, 1988: 287). Values enable members’ activity through self-control and social mechanisms and being clearly communicated to organisational members, they will become the criteria for making decisions and choices in everyday work (Vadi, 2000). Several authors have
seen stabilisation of individual behaviour as a most important function of organisational values (De Witte, van Muijen, 1999).

A clear organisational values system provides depth, stability and consistency to management practices (Padaki, 2000). Organisational values may be used to replace the traditional control mechanism within an organisation and they have an impact on human resource management (Vadi, 2000). More self management can be allowed in an organization where values are strong.

Individuals take their  values to the group and communicates them to the members of the organisation. In the socialisation process a new organisational member learns the organisational values and gives up some of his or her values. Usually it is necessary to accept the organisation’s values in order to fit in with it.

According to  Wiener the sources of forming values could be traditional (values are derived from and passed on between different members of an organisation) or charismatic (values transmitted from the leadership). Values transmitted from workers and those which come from the management should fit in with and would be integrated into the organisational value system. If that is not the case, the organisation has two “parallel systems” (Padaki, 2000) and there may be conflict. If there is no substantial agreement that a limited set of values is important in a social unit, a strong culture cannot be said to exist (O’Reilly, Chatman, Caldwell, 1991). In large decentralised organisations multiple value systems could exist (Wiener, 1988), but even if there are several subgroups in an organisation, all holding differing values, there should be some core values which are shared by the whole organisation and the values of different subgroups should not be. The values of different groups should complement the values of the whole organisation.

There is categorization of  “espoused values” and values “in use” concepts. Formal values could be set up as desirable states and they are communicated publicly to interest groups, but they are not always taken as guidelines in real work situations. Instead the values “in use” are those guiding behaviours that are accepted as decision-making criteria in everyday life. Socially desirable values are expressed publicly (“espoused values”) whether or not they are held internally (“in use”). In case of many organisations, there could be a great difference between the values expressed publicly and
those which are actually shared inside an organization. An organisation’s value system could be seen as one consisting of terminal values (end-states of existence) and instrumental values that should lead to attainment of terminal values. 

Speaking about differences between organisational values, many authors share the position that there are values which are common to many organisations (terminal values), while differences could be found mostly among instrumental values.


Mitja Gorenak and Suzana KoŇ°ir
Management, Knowledge and Learning International Conference 2012

Svetlik (2004, p. 323) says that organizational values are values that are being pushed forward by the management and have proven itself as a good foundation for development of organization. Same author also says that organizational values are intended to inspire employees with creative energy that will push organization forward towards desired goals.

Cingula (1992, pp. 499–500) sees organizational values as: “what people within organization think is good for organization, what needs to happen within organization and what might be needed within organization in the future”. Same author also says that due to mentioned above organizational values reflect the mission and strategic goals of the organization.

The research finds that companies that explicitly stated the values have performance edge. Their conclusion is: "Overall we can say that How are organizational values stated within your organization influences Organizational performance – combined with a 5 % risk interval."

Cultures exist because they work. They may have dysfunctional elements-most do-but a culture survives because it does the group more good than harm.

Change behaviors first, not values. The difference between capabilities and culture is this: Capabilities are the things we do well; culture is all the things we do, including those we do badly. The way to start changing culture is to start with things an organization is doing well. Appreciate and change a few key things for the better. You are strengthening the capability, recognizing the people and providing a platform for further success. You win the trust of the people and then you expand that beachhead to examine things or behaviors which are dysfunctional.
(Source: http://www.freshbusinessthinking.com/corporate-revolution-unlock-your-cultures-revolutionary-zeal/)

Further reading resources

A current active blog on culture development

Competing Values Framework Culture Model



The Changing Culture of a Factory

Elliott Jaques
Psychology Press, 1951 - Social Science - 341 pages

Tavistock Press was established as a co-operative venture between the Tavistock Institute and Routledge & Kegan Paul (RKP) in the 1950s to produce a series of major contributions across the social sciences.
This volume is part of a 2001 reissue of a selection of those important works which have since gone out of print, or are difficult to locate. Published by Routledge, 112 volumes in total are being brought together under the name The International Behavioural and Social Sciences Library: Classics from the Tavistock Press.


Top Management Challenges

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Updated 30 April 2017, 4 April 2017

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