Change Management And Organizational Culture Management Essay

1. INTRODUCTION

This assignment discusses on two major change management issues, which are culture and leadership, pertaining to a cultural change. The nature of cultural change will be discussed in two parts which are the different approaches to viewing cultural change in an organisation leading to its implications and two reasons why cultural change is needed. Culture and leadership are essential in a cultural change because they are fundamentally conceptually intertwined (Section 3). In culture, we will be discussing the different perspectives of how culture is shared which leads to the issue on subcultures and change resistance. Furthermore, different approaches to effect a cultural change will be discussed as well. In leadership, theories on effective leadership styles will be looked into together with guidelines on how to effect a cultural change. Case studies and recommendation will be laid out for each issue. Beginning with the end in mind, change agents leading a cultural change will have a deeper understanding of its main issues and recommendations for an effective and successful change.

2. THE NATURE OF CULTURAL CHANGE

The scientific approach views culture as an ‘object’ or a ‘thing’ that organisations ‘have’. McKinsey 7s framework (Peters & Waterman, 1982) illustrates culture, shared values, as one of the several components (strategy, skills, staff, system, structure etc) of an organisation. Thus, cultural change is defined as “unlike other forms of organisational change, it is the change of shared beliefs, values and behaviours of organisational members rather than solely focusing on the systems and structures within which people work” (Waterhouse & Lewis, 2004:353).

However, the anthropological approach sees culture as what an organisation is or is being. Anthropologist suggests that if cultures in societies are regarded as something societies are, should not organisations be view in the same way too? In support of this view, one suggests that, “since organisation ultimately resides in the heads of the people involved, effective organisational change implies cultural change” (Morgan, 1986:138).

There are two implications resulting from the idea that organisational change is cultural change. The first is that since cultural change is organisational change, no distinction made between a ‘strategy for cultural change’ and a ‘strategy for organisational change’ (Bates, 1994). The second is that cultural change is not about what we study, rather; the way one looks at an organisation. Therefore, in a cultural change, one must think culturally rather than to think about culture (Bate, 1994).

Although there is no hard and fast rule when it comes to deciding which approach is right, one must therefore take balanced view that the anthropological approach is good for theory’s sake while the scientific approach is helpful for practise.

Two main reasons for a cultural change

The first reason lies in the question, “what cause organisations to change if cultural change implies organisational change?” One main answer is that the environment is ever-changing thus methods used today may not be relevant and successful for tomorrow. Now, basic assumptions shared among members are considered as methods and processes in an organisational of how people work and solve problems. Thus the change in methods implies change in basic assumptions which means a cultural change.

The second reason lies in the perception that there is a relationship between an organisation’s performance and its culture (Kotter & Heskett, 1992). Furthermore, researchers argue that this positive link will exist only if the culture has the ability to adapt to changes. Therefore, changing culture can result in higher performance in an organisation.

3. TWO CHANGE MANAGEMENT ISSUES: Organisational Culture & Leadership

Culture and leadership are the ‘non-negotiables’ in cultural change as they are “conceptually intertwined” (Schein, 1992 pg2). Culture begins with leaders who instil values and assumptions on an organisation which in time are taken for granted if proven to be successful. In this case, “the culture now defines leadership” (Schein, 1992 pg2).

Case in point: Richard Branson, CEO of Virgin Corporate, is famous for his radical, charismatic and unconventional leadership style. In 2007, he pulled out a publicity stunt during the launch of Virgin America by jumping off the Palms Casino Hotel in a bungee rope (Yaqoob, 2007). The point is- the reason to Virgin’s phenomenal culture is largely rooted in Branson’s leadership. Thus, one may also understand his leadership style by examining Virgin’s culture.

Since cultures begin with leaders, developing and transforming culture has to begin with leaders too and this justifies the need to examine culture and leadership as the two major change management issues in any cultural change of an organisation.

4. ORGANISATIONAL CULTURE

Although many writers have associated organisational culture as an organisation’s climate (Schneider, 1990), embedded skills (Argyris & Schon, 1978), habits of thinking (Hofstede, 1980) and shared meanings (Geertz, 1973), they just seem unable to hit ‘it’ on the nail. They are merely descriptions of what culture is but not its definition and as Schein puts it, “none of them are “the culture” of an organisation” (Schein, 1992 pg10).

In this view, Schein defines culture as a shared “pattern of (1) basic assumptions that a given group has invented, discovered or developed (2) in learning to cope with its problems of external adaptation and internal integration, and that have (3) worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (Schein, 1992 pg12).

4.1 Dimensions of Organisational Culture

The understanding of what organisational culture is leads one to question, “What constitutes to an organisation’s culture?” To answer this, there are two models of cultural dimensions. The first is the ‘cultural web’ model (Johnson & Scholes, 1992) which lays out six dimensions (stories, symbols, power, structure, controls and rituals) constituting culture. The second is the ‘levels of culture’ model (Schein, 1992) which describes three dimensions in degrees of depth:

1. Artefacts (surface level): This refers to the physical architecture of the organisation, the mannerisms, attire and even gossips/stories of the organisation (Schein, 1992 pg17).

2. Espoused values (middle level): They are strategies, goals and philosophies of the organisation.

3. Basic assumptions: This refers to the way things are done in the organisation (e.g. processes of solving issues) that are taken for granted, changing these requires much time and can be very difficult and anxiety provoking (Schein, 1992).

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Iceberg concept

The knowledge of what constitutes to an organisation’s culture provides a clear, comprehensive and deep understanding of it. Furthermore, one can derive from this knowledge a clear direction of what needs to be changed and worked on in a cultural change.

When managing a cultural change, one must be mindful of not falling into the error of the Iceberg concept (Watson, 2002). Cultural changes are often reflected only at the top of the iceberg (e.g. physical appearances, attires, vision etc) while the processes and basic assumptions among the members have not changed or are not changing.

Therefore, it is our recommendation that change agents look into the dimensions of the organisation’s culture (maybe as a checklist) ensuring every aspect are taken into account of for a successful change.

Case in point (http://www.income.com.sg/aboutus/releases/2009/aug28.asp): Since the start of a ‘cultural revolution’ led by Mr Tan Suee Chieh, CEO of Income cooperative, many aspects of the Income’s culture have been changed. At the surface level (Artefacts), Income’s logo was re-designed, particularly from red to orange, to give a sense of relevance and vibrancy. At the deeper level, philosophies and strategies are re-constructed from a ‘work-life balanced’ perspective to a competitive oriented one. Basic assumptions have been changed to encourage members to be take initiatives rather than wait for a top-down ‘order’.

4.2 Subcultures

Speaking of shared “shared basic assumptions”, an important question one must consider is, “to what extent are they shared?” To answer this, Martin suggests that there are three perspectives to view it (Martin, 2002).

The ‘Integration perspective’ refers to a unanimous consensus of the organisation’s culture shared across every level and department with no room for ambiguity. “Differentiation perspective” refers to a certain level of ambiguity and inconsistency in interpretation resulting in a collection of subcultures. Members who have shared norms and beliefs gravitate together forming subcultures. Subcultures may or may not be from the same subgroups or divisions of an organisation and the norms and beliefs they share often arise from changing demands. Subcultures may also be a place to express common unhappiness and conflicts. “Fragmentation/ambiguity perspective” has a high level of ambiguity and unclear consistent or inconsistent manifestations. Subcultures are unbounded and are extremely dynamic.

In other words, organisations can either only have single cultures with no subcultures or a collection of subcultures with a/no overarching culture. It is useful to understand this when overcoming resistance as subcultures can be a resistant to change.

4.3 Resistance

Unfortunately, change resistance are inevitable and often begins at the initial stage when motivating members to change. Subcultures, fears, anxieties, uncertainties, misunderstandings and the inertia to change can contribute to change resistance resulting in a ‘stall’ in the change process.

Case in point (Madslien, 2010): Lufthansa and British Airways found hard to persuade members to accept operational changes as they could not “win the hearts and minds of their staff”. The contributing factor is plausibly that there is a great inertial in members to change.

We recommend change agents six ways to overcome resistance to change (Kotter & Schlesinger, 1979):

1. Education and persuasion- Provide information for the need for change.

2. Participation and involvement- Empowering members with the sense of ownership in the change.

3. Facilitation and support- Provide counselling and coaching.

4. Negotiation and agreement- Embrace the ‘give and take’ spirit.

5. Manipulation and cooptation- Distort information forcing them to accept change.

6. Direction and reliance (coercion)- Similar to the aggressive approach where it commands/directs members to change if not they have to face certain consequences.

Change agents may also use the expectancy theory model (Vroom, 1964) to motivate members to change. The key is that members would be more motivated to change (if there is a reward/benefit at the end) by integrating all three aspects:

1. Valence- The willingness members to change for a particular outcome.

2. Instrumentality- The effort members must put in to achieve a particular outcome. This must be weighed with the reward/benefit (equity) gained from change.

3. Expectancy- The capability required of an individual to accomplish the task/s.

Case in point (www.osl.ltd.co.uk): Joseph, general sales manager of Universal Property Agency Ltd, decided to propose a sales contest to motivate his staff for better sales. He believed that members would be motivated to bring in more sales by rewarding them with cash rewards

Members may feel that the effort they must produce is more than the reward, although they may seem attractive. Thus, we recommend that change agents take in to account all three aspects of the expectancy model together in order to motivate members to change.

4.4 Two types (strategies) of cultural change

‘Developmental’ change focuses on strategies to maintain order and continuity of an organisation’s culture while ‘transformational’ change seeks for change and discontinuity. To avoid a Castalian tragedy, we recommend change agents to integrate both strategies; linking each strategy to a different point in the cultural development cycle (CDC) (Bate, 1994).

Case in point (http://www.income.com.sg/aboutus/brands/index.asp): Income underwent a ‘cultural revolution’ of both developmental and transformational change. It is developmental because the point of cultural change is for Income to remain to its cause by being relevant and competitive. It is transformational because the logo of Income is changed and the values and basic assumptions among members are re-constructed.

In order for a comprehensive integrated strategy, one must consider the following:

1. The existing culture- Nature of present culture to be changed.

2. Origins & trajectory through time- A ‘telescopic’ perspective to gain a complete picture.

3. The CDC & the stage an organisation has reached- The life cycle of its culture and stage where the organisation is at.

4. The environmental context- The context outside the organisation where the culture is situated.

5. The subjective dimension- The culture envisaged after change.

4.5 Four approaches to effect cultural change

Aggressive approach

The aim is to cause disruption of traditional values, fears and panic among members as a clear intention that change is on its way regardless how members feel or prefer. It is like someone barging into the meeting room forcing a change down the throats of everyone.

Case in point (T. Nakajo & T. Kono, 1989): Japanese Brewery, Asahi, threw the idea of ‘capitalism’ out of the window taught members the idea of ‘communism’. Food ration were reduced to anyone who resisted the change.

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Aggressors claim to use this approach only as the last resort for survival where “radical times demand radical remedies” (Dunphy & Stace, 1988:321). In other words, it is “being cruel to be kind” (Bate, 1994:177).

Furthermore, aggressors argue that unlike democracy that allows the opposition to sip in, they should take the initiative and have a single say where there is no chance for negotiation but only complete submission.

This approach is dangerous as it may backfire; caused by increase in segmentation of unhappy members. Secondly, the aggressor may be too self-centred and motivated by selfish desires that the change may ‘sidetrack’ off its intended purpose.

Conciliative approach

Conciliative approach believes that mutuality is key as it promotes incremental changes quietly without offending either the proposition or opposition. Conciliatives see resistors as being reasonable and believe that both parties are able to work things out amiably.

Conciliative use this approach because they feel they have a lack of power to compel members to change.

Case in point (Mayo, 1989): Although Peter Bonfield, chairman of ICL, saw the need for a ‘total cultural change’; he did not dare to impose it as he did not feel empowered to effect the change.

Also, conciliatives use this approach because they want to avoid conflict. They believe it is always better to collude than to collide with members who object the ways things are done. Lastly, conciliatives believe in promoting continuity for cooperative relations rather than discontinuity which breeds resistance. It is an attempt to avoid opposition through gradual continuous development (Renfrew, 1979).

However, this approach may be time wasting as conciliatives are always afraid of conflict thus it is difficult to move on (Bate, 1994). Also, one need to critique whether revolutionary changes possible through evolutionary change.

Corrosive approach

As the name implies, this approach sees cultural change as a political process and aims to incrementally ‘corrode’ the opposition’s power until “they become either submissive or irrelevant” (Bate, 1994:187). This is achieved through networking and deviously manipulating relationships.

They argue that cultural change has to involve networking as it is at the core of cultural development and change (Bate, 1994); empowering individuals which in turn will collaborate with other individuals to effect a cultural change (Brass, 1984). Furthermore, they claim to focus on actions instead mouthing change; it is a concept of ‘pulling’ rather than ‘pushing’ for change.

This can be dangerous as it can subtly move from change-directed to order-directed and relationships formed are considered as informal which may shift frequently.

Indoctrinative approach

This approach sees cultural change as a learning process (Schein, 1985) whereby members are being educated of the new culture through intentional training and workshops. This approach is used to change the underlying assumptions of members in an organisation and give new meaning to them.

Case in point (Financial Times, 27 March 1991): British Telecom organised a successful three-day course (‘Project Sovereign’) to educate staff the new culture- “the new BT will not allow customer calls to get lost”.

Case in point (Andrew Mayo, Director of Personnel, ICL International, 1989): ICL International conducted major educational programmes to educated members “why we are doing what we are doing, to know why they have to shift their thinking”.

However, this approach faces a problem whether members will ‘buy’ the message conveyed. Furthermore, the new messages conveyed may not be realistic in actual practise.

Change agents may face the issue of how to select the best approach. Thus, we recommend using each approach in different stages of the CDC in a sequential/continuum way (although they are distinct and independent). For example, the Aggressive approach can be used in the unfreezing stage followed by the Conciliative (hearing from members’ suggestions) and Indoctrinative approach during the cognitive reconstructing stage. Lastly, the Corrosive approach can be used for networking to sustain change.

5. LEADERSHIP

Although Stogdill suggests, “There are almost as many definitions of leadership as there are persons who have attempted to define the concept” (Stogdill 1974 pg259), we believe the most appropriate definition is- “leadership is a process whereby an individual influences a group of individuals to achieve a common goal” (Northouse 2004 pg 3). And “process” denotes that “leadership and learning are indispensable to each other” (John F. Kennedy).

Moving on from the definition of leadership, one must also consider the different theories on understanding effective leadership in practise. The development of leadership theories can be understood in two categories and they are the classical and emerging approach in chronological order. We have characterised the two approaches in that the classical approach focuses on the ‘hardware’ of leadership (which includes traits, functions, behaviours etc) while the emerging approach looks into the ‘software’ of leadership (relationships, emotional/social intelligence, charisma etc).

5.1 Classical approach

Trait theory

Trait theory is simply a response to the question of, “what qualities distinguish an individual as a leader?” It believes that effective and successful leadership styles are dependent on certain traits. Examples of leadership traits are self-efficacy, physical characteristics, conscientiousness and skills distinguish a leader from an ordinary man (Carlyle, 1841). These traits are argued to be inherited as “leadership cannot be created or promoted and it cannot be taught or learned” (Drucker, 1954 pg158).

However, behavioural theory suggests that people can learn such traits through learning and observing others. According to the managerial grid theory (Blake & Mouton, 1964), there are five different leadership styles resulting from two dimensions of behaviours (concern for people and concern for task) – country club style, impoverished management, middle of the road, team management and authority compliance.

Although both theories agree that effective leaders must possess certain traits, they differ in that behavioural theory believes that such traits can be acquired. Thus, a learning attitude is important for effective leadership (Schein, 1992).

Situational theory

Unlike trait and behavioural theories, Situational theory argues that successful leadership styles are dependent on the situational contexts (Hemphill, 1949). Therefore, it is crucial that leaders examine the situation prior to effecting any change.

Case in point (Hogan, 2003): Enron, a real-life example of situational theory, was caught in a major scandal in 2001 for insider trading and conspiracy. Due to this situation, an immediate action was taken by dismissing many senior management and leaders.

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Contingency theory

Contingency theory is an expansion of situational theory that suggests effective leadership styles are dependent on the situation and environmental variables such as the group’s atmosphere, task structure and leader’s power position (Fielder, 1967). The Vroom-Yetton contingency model elaborates Fielder’s theory stating that personal characteristics and attributes of the leader are important contingent elements too (Vroom & Yetton, 1973).

Therefore, there is no right leadership style but only the best depending on the environment after carefully examining it.

Functional theory

Functional theory “dismisses the idea that effective leaders possess a common set of traits but propose that they possess the competence to handle a wide range of different situations” (Gill, 2006). According to the Action Centred Leadership model (Adair, 1973), there are three areas a leader must consider:

1. Task- Accomplishing the team’s goal.

2. Team- The development and building of teamwork.

3. Individual- Empowering and helping individuals develop full potential.

As all three aspects are interdependent, it is crucial for a leader to strike a balance among them in order for the group to succeed.

Leadership styles

An expansion of Lewin’s theory of three main leadership styles which are autocratic, participative and laissez-faire (Lewin, 1939) resulted in a continuum of seven leadership styles (Tannenbaum and Schmidt, 1958):

Figure 1 (www.mindtools.com) describes the seven leadership styles by arranging them in a single continuum. This means that leaders are not restricted to choosing only one style (independent) but are able to select any point of degree within the continuum.

5.2 Emerging approach

Transformational/charismatic theory

Transformational theory suggests that effective leadership styles depend on the form of relationship between a leader and his members; e.g. “leaders and followers encourage one another to higher levels of morality and motivation” (Burns, 1978). This can be measured in the influence (trust, respect, inspiration and admiration) a leader has on his followers (Bass, 1985). The relationship between the leader and follower is extremely crucial and is likened to a magnetic force attracting people.

Case in point: Herb Kelleher, CEO of the Southwest Airlines, is an example of a transformational leader. Some call him the “energizer bunny of the skies” (Jones, 1994) and “America’s funniest fly-boy” (Beddington & Loftus, 1998). His personality emanates a force that draws and influences others, producing warm and determined employees which ultimately define culture.

5.3 Selecting the right theory

Most leaders face the question, “How does one select the right theory or approach and apply it in a cultural change?” Our first recommendation is that leaders can employ any one or more theories on a case by case basis. This means that if a leader needs to learn how to connect with his staff in order to motivate them for change, he can employ the trait/behavioural and/or transformational theory. Or the leader can employ the situational/contingency theory in the case of examining and understanding the current situation prior to effecting change.

Secondly, we recommend leaders to adopt all theories in a step by step manner sequentially:

Step 1 (situational/contingency): Scan the environment to know what leadership needs are essential for change.

Step 2 (trait): Select particular traits to meet particular demands for a successful change.

Step 3 (styles): Select a style along the continuum model for conveying messages, leading members and motivating them for change.

Step 4 (functional): Be clear on areas under each function that is needed to be considered when effecting change

Step 5 (transformational): Build and maintain relationships with members during the change for a successful outcome.

To conclude, it is crucial to note that there are no right leadership styles or approaches, rather; there are only the best ones depending on the situational context.

5.6 Effecting a cultural change

We now move on from selecting leadership styles to effect change to the actual steps in effecting change. We recommend the use of Lewin’s three steps model to effect change as a guiding principle:

1. Unfreezing: To weaken resistance to change (Schein, 1992) and motivate members for change (Lewin, 1951) in three stages.

(a) Disconfirming data: This refers to any information that shows an organisation that it is not meeting its goals in order to stir up “discomfort and disequilibrium” (Schein, 1992 pg299). (b) Anxiety and/or guilt: Disconfirming data must generate anxiety/guilt in order to leave members with no choice but to accept change.

(c) Psychological safety: Change is stressful (Korunka, 2003) as it removes members from their ‘comfort zone’ (Jarrett, 2003) causing fears of uncertainty and discouragement. Providing a ‘psychological safety’ net for members through adequate assurances (long term especially); relevant information and gratitude to members (Weick & Quinn, 1999)

2. Cognitive restructuring: Redefine organisational traditional values, basic assumptions and processes etc through workshops and courses.

3. Refreezing: Constantly reinforce changes through artefacts reflections, certain behaviours and processes.

Case in point (http://www.youtube.com/user/tansueechieh): Income’s CEO gave disconfirming data in his speech entitled, ‘cultural revolution’, awakening staff of their lethargy. Cognitive restructuring was accomplished through workshops and new company’s statement. Furthermore, Income underwent a rebranding reflected in advertisements, new logo and new colours. These help to reinforce the changes and new culture of Income.

Sustaining a new culture, be it a discontinuity or continuity change, is tedious and difficult. The ‘role of rites’ theory, by Trice and Beyer (1990), suggests cultures can be reinforced by repeating a certain set of rituals. The six rites are the rites of passage (induction), enhancement (rewards), degradation (to publicly identify failures; AT&T case), conflict reduction (acknowledge and resolve differing opinions), integration (foster cohesion) and renewal (maintenance).

4. CONCLUSION

We have began with the end in mind which is that change agents will have a deeper understanding of two major change management issues, which are culture and leadership, when managing a cultural change. This assignment has discussed issues pertaining to culture such as resistance, different perspectives and the iceberg concept. Issues pertaining to leadership such as the different theories and the guidelines on how to effect a cultural change have been described in detail as well. Both change management issues are supported with case studies and recommendations to assist change agents make better decisions.

(4,187 words in total)

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