Chapter 3

Changing the Culture

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 Learning Objectives
• Recognize importance of corporate
culture.
• Identify key factors assessing culture.
• Describe culture leading to effective
organizations.
• Describe ethical, value, and goal
considerations.
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 Creating Climate for Change
• Challenge of managers is:
– Create renewing system.
– Develop long-term efforts.
• Culture often key to success.
• Cultural change result of complex
strategy.

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 Understanding Corporate
Culture
• Environment of rapid change.
• Static organizational culture no longer
effective.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 What Is Corporate Culture?
• Culture is system of:
– Shared values.
– Beliefs.
– Behavioral norms.
• Observed behavioral norms.
• Dominant values.
• Learning ropes for newcomers.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 Culture Comes from 2
Subsystems
• Managerial.
• Organizational.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 Managerial Subsystem
Creates Culture
• How employees are treated.
• Through actions and words.
• Vision articulated by top management.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 Organizational Subsystem
Creates Culture
• Outside factors (market, etc.) define
culture.
• Technology.
• Job descriptions.
• Type of structure (tall vrs. flat).

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 Figure 3.1
Culture Formation

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 Corporate Culture and
Success
• High-performing companies have strong
cultures.
• Many cultures fail to adapt to change.
• Following corporate mergers, cultures
often clash.

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 Key Factors to Improve
Culture
• Create vision for the future.
• Develop model for change.
• Reward changes.

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Cultural Resistance to Change
• Changing culture not easy.
• Time required.
• Culture can prevent company from
adapting.

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 Pressure Points to Bring
About Change
• Recession. • Social factors.
• Deregulation. • Global
• Technological competition.
upheavals. • Outsourcing.
• Markets.

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 Tools for Change (part 1 of 4)
• Information.
• Support.
• Resources.

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 Information (part 2 of 4)
• Provide information to people.
• Provide ability to gather information.
• One method is open-book
management.

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 Support (part 3 of 4)
• Support and collaboration from other
departments.
• Management support to provide climate
of risk taking.

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 Resources (part 4 of 4)
• Funds. • Equipment.
• Staff. • Materials.

• Innovative programs for providing

resources include:
– Venture capital.
– Innovation banks.

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 Organizational Dimensions
Affecting Performance
• Managerial effectiveness.
– Accomplishing goals and objectives.
• Managerial efficiency.
– Ratio of results to resources.
• Motivational climate.
– Employee attitudes that influence
performance.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 Other Criteria for
Organizational Effectiveness

• Adaptability.
• Sense of identity.
• Capacity to test reality.

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OD Professional Values and
Ethics
• Expertise.
• Autonomy.
• Commitment.
• Code of ethics.

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 OD Implementation Issues
(part 1 of 4)

• Success depends on:

– Congruence between OD values and
organization’s values.
• Key issue is fit between between
practitioner and client:
– Compatibility of values.
– Imposed change.
– Priority of goals.
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 Compatibility of Values
(part 2 of 4)

• Practitioners differ on degree of

congruency with client values.
– Some believe personal values are
compatible with client.
– Others will help client as long as
operations legal.

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 Imposed Change
(part 3 of 4)

• OD ideally implemented voluntarily.

• Top management may impose program.
• OD practitioners cognizant of power
and politics.

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 Priority of Goals
(part 4 of 4)

• Determine goals given precedence.

• Challenge to develop balanced
intervention:
– One that improves productivity and
– Quality of work for members.

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 OD Values About Nature
of Organization Members
• Respect for people.
• Trust and support.
• Power equalization.
• Confrontation and open communication.
• Participation.

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 Table 3.1
OD Values

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 OD Application
Culture and Setpoint Systems
• Setpoint builds unique automation
equipment.
• Required are self-motivated employees.
– Who can solve problems and
– Look for ways to improve processes.
• Uses project management and open-
book accounting.
An Experiential Approach to Organization Development 8 th edition Chapter 3
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• Production employees use these
techniques to:
– Understand the business and
– Know where to focus attention.
• Culture is one where employees:
– Understand the business and
– Provide thorough attention to financials.

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 OD Application
How Trilogy’s University Helps
Build Its Culture
• Trilogy is small but competes with large
software companies.
• Key goal is to attract talented people.
• Fosters new methods in relationships
with clients and employees.

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• It operates a three-month long “boot
camp.”
– New employees integrated into company.
– Employees learn values and culture.
– Receive comprehensive evaluation and
feedback.
• Program provides source for renewal.
– Provides new services and products.
• Relationships formed, new leaders
created.
An Experiential Approach to Organization Development 8 th edition Chapter 3
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 Key Words and Concepts
• Corporate culture.
– System of shared values and beliefs.
– Interact with people, structure, systems.
• Managerial effectiveness.
– Ability to accomplish specific organizational
goals.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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• Managerial efficiency.
– Ratio of output (results) to input
(resources).
• Motivational climate.
– Employee attitudes that influence
performance.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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• Open-book management.
– Employees understand accounting
statements.
– Use knowledge in work.
• Professionalism.
– Value system that is part of profession.

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 OD Skills Simulation 3.1
The Dim Lighting Co.
• Purpose:
– Compare decisions made by individuals
with those made by group.
– Practice effective consensus-seeking techniques.
– Gain insights into concept of cultural values.

An Experiential Approach to Organization Development 8 th edition Chapter 3

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Preparations for Next Chapter
• Read Chapter 4.
• Complete Steps 1 through 4 of OD
Skills Simulation 4.1.
• Read and prepare Case: The Grayson
Chemical Company

An Experiential Approach to Organization Development 8 th edition Chapter 3

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 An Experiential Approach to Organization Development 8 th edition Chapter 3
Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall Slide 36