1.

Organizational Culture

1.1Concept

As per the definition given by Edgar Schein “Organizational culture refers to a pattern of basic
assumptions discovered or developed by a group as it learns to cope with its problems of external
adoption and internal integration that has worked well enough to be considered valuable, and therefore, to
be taught to new members as the correct way to perceive, think and feel, in relation to those problems.”

In simple words, organizational culture refers to the underlying values, beliefs and principles that
serve as a foundation for organization’s management systems, as well as the set of management practices
and behaviors that both exemplify and reinforce those basic principles. It is a system of shared
assumptions, values, and beliefs which governs the behavior of the people in the organization. These
shared values have a strong influence on the people working in the organization and dictate how they
present themselves, communicate with the superiors and peers, and how to perform their jobs in an ethical
manner. Every organization develops and maintains a unique culture, which provides guidelines and
boundaries for the behavior of the members of the organization. It also refers to the values, ethics and
behaviors that contribute to the unique social and psychological environment of an organization which is
based on shared attitudes, beliefs, norms and written and unwritten rules that have been developed over
time and are considered valid. Thus, the organizational culture is a product of inputs (action) and outputs
(results). The inputs are the beliefs, norms, assumptions, values and the outputs are the courses of actions
i.e. the goals, work task, planning, decision making and the procedures.

A good corporate culture is a talent attractor as well as a talent retainer. Now –a-days the
prospective employees not only look at the pays or the increments but also at the organizational culture,
its work environment, the growth prospects and the inter-personal relationships that are prevailing in the
organization. A healthy work environment will always motivate the employees to stay in the organization
and thus will reduce employee turnovers. A culture that is vibrant and allows people to be valued and
express themselves will create a positive energy which may create a new momentum for success.

1.2. Determinants of Organizational Culture:-

1.2.1 Internal Factors

The internal factor includes:

 Employees:
The employees in their own way contribute to the culture of the workplace. The employees in an
organization belong to different cultural and social backgrounds and have different views and
beliefs. No two people can ever have the same experience of life and the same perspective about
it. That which is in nature is manifested in different ways of thinking, feeling and acting, so it
does lead to influence the organizational culture as a whole. The attitudes, mentalities, interests,
perception and even the thought process of the employees affect the organization culture.

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  Management:
The organizational culture is also determined by the management style adopted by the
organization’s top authorities. Organizations that follow strict rules and guidelines provide less
scope for the employees to develop inter-personal relationships where as the organizations that
assigns tasks in groups or which provides a participative culture that allows the employees to
develop a sense of belongingness and attachments with one another. There are certain
organizations where the management allows the employees to take their own decisions and let
them participate in strategy making. In such a culture, employees get attached to their
management and look forward to a long term association with the organization.

Besides, the employee and management reward structure, such as, salary increments, bonus,
incentives etc. need to be considered, as the organizational culture is directly affected by these factors.

 Leadership Style:
It is also important to take into account of leadership style that is demonstrated in the
organization. The leadership style has a lot to do with both innovation and creativity. The
authoritarian or autocratic leadership style may create the climate of fear, anxiety or distress
among the team members, whereas the participative leadership style, enhancing the work culture
and developing the shared vision, can lead to attain the business objective and goals successfully.

 Goals and Objectives:

The goals and objectives as well as the strategies and the procedures designed by the top
management to achieve the goals and objectives also contribute to its culture.

1.2.2 External Factors

 Clients and External Parties:

Who you work with is one thing, but who you work for is another. The clients that the company
serves are an often overlooked factor that affects organizational culture.

 Competition:

The extent of the competition in the market and the number of competitors also determines the
organization’s culture. A more competitive firm is more dynamic and they keep on evaluating the
policies and guidelines and changing them as per the requirements. The degree of
competitiveness in an industry can also impact the ethics of both management and employees,
especially in situations where compensation is based on revenues. In a highly competitive
environment, ethical behavior towards customers and suppliers may slip downward as employees
scramble to bring in more work.

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  Location:

Geographical location can have an influence on the types of clients served and the staff employed
by the organization, as well as opportunities for development. The physical characteristics of the
location such as a busy city center or a rural area are important considerations. These can all have
a significant influence on culture.

2. Organizational Change:

Change is a necessary way of life in most organization. Organizational change is the process of
bringing changes in the internal structure, process, and systems of the organization to make it
capable of responding to the external environment and to sustain itself and grow.Organizations
need to change to sustain, survive, and thrive in the market.

2.1. Nature of Organizational change

The term change refers to an alteration in a system whether physical, biological, or social.
Organizational change is the alteration of work environment in organization. It implies a new
equilibrium between different components of organization – technology, structural arrangement,
job design and people. Thus, Organizational change may have following features.

1. When change occurs in any part of the organizational, it disturbs the old equilibrium necessitating
the development of a new equilibrium. The type of new equilibrium depends on the degree of
change and its impact on the organization.

2. Any change may affect the whole organization; some parts of the organization may be affected
more, others less; some parts are affected directly, others indirectly.

3. Organizational change is a continuous process. However, some changes which are of minor types
may be the existing equilibrium; others, which are major ones, may require special change
efforts.

2.2Causes of organizational change

Organizational change can be understood by understanding why individuals change. Individuals

experience two types changes. One, they try to adjust and adapt to the changes occurring in the external
environment such as offer of a new job, competition or loss of property. Second, even if nothing changes
in the external environment, still individuals automatically keep changing.

Basically all the reasons for organizational change can be classified into two categories:-

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2.2.1External Reasons:-The external environment includes the following

 Government Rules and Regulations: One can catalogue along list of the Government’s
changing rules and regulations necessitating changes in organizations.

 Competition: The present time is the survival of the fittest. Organizations need to come up the
challenges posed by the competitors to sustain and survive.

 Technological advances: Technology has become the buzzword of the time. Rapid changes in
technology have posed a question before the organization –either run or ruin. The revolutionary
change in communication technology compelled the Doordarshan to restructure itself by
segmenting its services.

 Changes in people requirements: Customers dictate organizations what they actually require.
With changing requirements of customers, the five-star hotels have started to offer new services,
such as conference hall, business centres etc.

2.2.2. Internal Reasons: The internal environment includes the following

 Change in leadership: Leadership changes culture and values in the organizations. Ratan Tata
of Tata & Sons is the examples of how the change in leadership led to internal changes in the
organizations.

 Introducing new Technologies: Introduction of a new technology in an organization is bound to

have consequences for other functions as well. For instance computerization of the Examination
Division of the Assam University affected other aspects as well such as, reporting relationships,
span of control, coordination and so on.

 The Domino effect: The source of change is change itself. The domino effect means one change
triggers off a series of related changes. For eg: establishing a new department like the Department
of Business Administration may cause the creation of teaching and non-teaching positions,
budgeting allocations, building construction etc.

 For meeting crisis: Just like human life, some unforeseen happenings, say, crisis in the
organizations makes continuation unthinkable and difficult. Sudden deaths of a CEO, civil
disturbances are some examples. These make the organizational condition unstable and this un-
stability becomes the stimulus for thorough self-assessment and reform to change the
organization to overcome the crisis before it.

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 2.3. Types of Changes

Organizational Changes are of two types:-

2.3.1 Reactive changes: - These changes occur when forces compel the organization to implement
change without delay. When demands made by the forces are complied in a passive manner, such a
change is called reactive change.

2.3.2Proactive changes: - These changes occur when some factors make realize organization think
over and finally decide that implementation of a particular change is necessary. Then, the change is
introduced in a planned manner.

2.3.2. a. Planned Change:

Planned change is occurred when there is a proactive change in an organization. Bringing change in a
planned manner is the prime responsibility of all managers who are forward looking. Planned change
aims to prepare the total organization, or a major portion of it, to adapt to significant changes in the
organization’s goal and direction.

According to Thomas and Bennis, “Planned Change is the deliberate design and implementation of a
structural innovation, a new policy or goal, or a change in operating philosophy, climate or style.

Planned change attempts at all aspects of the organization which are closely interrelated: technology, task,
structure and people.

Under Planned change action for change comprises three stages: unfreezing, changing, and refreezing.

Unfreezing: It is a process in which a person casts aside his old behavior which might be inappropriate,
irrelevant or inadequate to the changing demands of situation. This stage is about getting ready to change.
It involves getting to a point of understanding that change is necessary and getting ready to move away
from our current comfort zone.

Changing: This is a stage at which the individuals being changed learn new behavior- methods of
working, new thinking, perception of new roles etc.

According to Smith, the following should be the guidelines for effective change. They are

1. Recognize that the primary objective of change is to improve performance results.

2. Make individuals responsible for their own change.
3. Encourage improvisation, team performance, and coordinated initiatives.
4. Ensure that people see how they fit into the large organizational picture.
5. Encourage leaning by doing, and provide just-in-time training for performance.

Refreezing: It means that what has been learned is integrated into actual practice. At this stage, the
individual internalize the new beliefs, feeling, and behavior learned during changing stage.

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2.4. Resistance to Change:-

Resistance to Change is the first problem that the managers face in the management of change. People try
to resist many types of changes because new habit or sacrifices are required after the change. When
change is minor and within the scope of correcting programme, adjustment is fairly routine but when a
change is major or unusual, more serious upsets may occur.

2.5. Factors in Resistance to Change:

People try to evaluate the effect of change individually but they express it through group in collective
form. The reasons underlying resistance to change may be identified at individual, groups and
organizational levels.

2.5.1 Individual Resistance :

There are many factors operating at the individual level which are responsible for resistance. Degree of
force in resistance depends on how people feel about change. These feeling may be seen in the context of
three types of factors: economics, psychological and social.

2.5.1.1. Economic Factors:

People feel attached to the organization for satisfying their needs and economic needs- physiological, job
security etc. People may perceive that they will be adversely affected by the change in terms of their need
satisfaction in the following ways.

 Skill Obsolescence

A change is generally meant for better methods of working which may involve new techniques,
technology etc. Whenever people sense that new machinery (change) poses a threat of replacing
them, they simply resist such a change.

 Fear of Economic Loss

A change may create fear of economic loss in the sense that it may affect economic compensation
adversely, reduce job options, and turn into technological unemployment. This feeling is created
because people feel that those who can match the new requirement will be better off than those
who cannot match.

 Reduce Opportunity for Incentives

Employees are generally offered incentives linked to their output in the form of incentives
schemes, bonus etc. whenever there is a change, people may feel that in the new system, they will
have lower opportunity to earn incentives and bonus as the new system requires additional skills.

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2.5.1.2. Psychological Factors:

Psychological factors are based on people’s emotions, sentiments and attitudes towards change. These are
qualitative and therefore may logical from people’s point of view but may be illogical from the change
agent’s point of view. Major psychological factors responsible for resistance are described below.

 Ego Defensiveness: A change may affect the ego of the people affected by the change and in
order to defend their ego, people resist change. A change in itself suggests that everything is not
right at a particular level. Thus the change may be perceived as an instrument exposing their
weakness.

 Status Quo: People want status quo, that is, they do not want any disturbance in their existing
equilibrium of life and work pattern. The change initiated by the organization disturbs such
equilibrium and people have to obtain another equilibrium which is a painful exercise. Therefore
everyone tries to avoid it.

 Low Tolerance for Change: In the context of maintaining status quo, people may differ. Some
people have very low level of tolerance for change and ambiguity as compared to others.
Therefore, these people resist any new idea.

 Lack of Trust in Change Agent: The effect of change is perceived in the context of change
agent. If people have low degree of confidence in the change agent, they show resistance to
change efforts. This is the reason why labor union resists change initiated by management
because of the feeling that labor and management are two different interest groups in the
organization.

 Fear of Unknown: A change may be perceived as entering into unchartered area which is always
not certain. This lack of certainty creates anxiety and stress in the mind of people and they want
to avoid it. The lack of adequate information about the likely impact of change further
complicates the problems.

2.5.1.3. Social Factors:

People derive need satisfaction, particularly social needs, through their mutual compatible interaction.
They form their own social groups at the workplace for the satisfaction of their social needs. To the extent
the satisfaction of these needs is affected by a change, people resist it. The major factor affecting
resistance to change is described below.

 Desire to maintain Existing Social Interaction: People desire to maintain existing social
interaction since it is a satisfying one. When there is any change, there existing social interaction
is likely to be changed which people do not want. Therefore, they resist change.

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  Feeling of Outside Interference: A change bought by the change agent is considered to be
interference in the working of people. Workers may feel that managers try to make workers an
instrument for higher productivity but the outcome of this productivity will be retained by them.

2.5.2. Group Resistance

People may perceive the likely impact of a change individually but they express it in the form of group
response. Their evaluation is subject to the modification by group behavior. Thus group itself become a
source of resistance. The effect of group as a source of resistance may be analyzed in terms of nature of
group dynamics and vested interests.

 Nature of Group Dynamics- Group Dynamics refers to the forces which operate in a group
determining behavior of its members. These factors determine how effective a group would be in
accepting or rejecting a change. Following nature of group dynamic is important:

1. If both change agent and people who are target for change belongs to the same group, the
role of group is more effective.

2. If group is highly cohesive and members have developed strong belongingness to the
group, it has more say in acceptance or rejection of change.

3. The degree of group attractiveness to its members affects how effective the group is in
change response.

4. The degree of prestige of a group, as interpreted by the members, determines the degree
of influence the group has over the members and response to change.

5. Any attempt to change the groups norms by any outside force is resisted specially when
there is high degree of adherence to group norms by the members.

 Vested Interests: In a group some members become more influential than others. These persons
may be group leader appointed formally in a formal group or accepted by the people as a leader in
an informal group. These persons may use the groups as a means for satisfying their own needs.
Thus the vested interests try to influence group behaviour in the form of a uniform response to a
change not based on the merit of the change but based on their personal interests. This
phenomenon is more common in the case of labour unions.

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2.5.3. Organizational Resistance to Change

The organization itself resists many changes because of certain reasons. Many organizations are designed
to be innovation-resisting. The major reasons for organizational failure to change are described below.
Some of the reasons are basics while others are by products of those.

 Counting Past Successes- A major problem before the organizations which have past success
stories is how to face challenges of the changing environment. Since these organizations have
achieved success by following a particular set of management practices, they become too rigid to
change and they hide their failure to change in the guise of past successes.
 Stability of System: The organization may design a system through which it may derive many
benefits. The system is stabilized and any change may be perceived a threat by the organization
itself.

 Resource Limitations: The organization has to adapt the change to its environment but the
adaptation has its own cost. If the organization is not fully equipped for meeting such demands, it
may not be possible for the organization to bring necessary change. For example, if new
technology is adopted, it will require resources to procure machine, building, and training for its
personnel, and commensurate expenses on other items also.

 Sunk Cost: Most of the organizations has sunk cost involved in various assets. Once the assets
are acquired, these can be used for specific period. Now if the change is required, it creates a
problem to these assets. Generally, the organization will like to make a comparison between the
outcomes of changed programme and continuing with the old programme in the lights of this
sunk cost.

 Inter-organizational Agreement: The organization interacts with its environment. In the

interaction process, it may enter into agreement with other organizations over certain aspect of
working. Thus, if any change is to be incorporated, the organization has to take into account the
wishes to other organization too. It is not necessary that other organizations also agree with the
change proposal.

2.6. Managing Resistance to Change:

Organizational change is unavoidable. Therefore, managers should be sensitive to the barriers or

resistance to changes so that it can be overcome. Resistance to change is just a form of feedback that can
be used very productively to manage the change process. Various approaches had been developed and
suggested to manage the organisational change. The six main approaches are described below:

2.6.1. Education and Communication :

If reason of resistance to change is misunderstanding about the change, it can be reduced by

providing employees with details why change is needed. Employees can be educated about the
change through one on one discussion, memos, group representations, or reports. New

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 information is powerful force for change in ambiguous situations. For example new employee
orientations are particularly effective in changing the behavior of new employee because they
wouldn’t have known how to behave otherwise.

2.6.2. Participation :

Research evidence lends support to the fact that individuals find it difficult to resist a change
decision in which they participated. Hence before a change is introduced, particularly those
oppose the change can be brought into the decision process. In classical study, workers in a
garment factory are introduced to change in three different ways. One group was simply told
about the new procedure, one group was introduced to the change by a trained worker, and one
group was allowed to help the implementation of new production. The results were dramatic. The
third group, those who participated in the change adopted the new methods very quickly, was
more productive and experienced no turnover.

2.6.3. Facilitation and Support:

Another strategy for managing resistance to change is providing support and empathy to those
employees who have trouble dealing with the change. Counseling and therapy, skill training or
short paid leave may be examples of support extended to the employees.

2.6.4. Negotiation:

Negotiation particularly with group of powerful individuals resisting to change is yet another
strategy to deal with potential resistance to change. For this, a specific reward package can be
negotiated with the powerful individuals to meet their individual needs. Yes, one cannot ignore its
potentially high costs. In addition, once a few powerful individuals are made so ready to avoid
resistance to change, it may so happen that they are being blackmailed by the change agents to
resolve even rather crucial matters in their favors.

2.6.5. Manipulation and Co-optation:

In brief, manipulation implies convert attempts to influence. Examples of manipulation are

twisting the facts to make them more attractive, withholding information not pleasant to the
receivers, and spreading rumors to make employees ready accept a change. As regards
cooptation, it includes both manipulation and cooptation. The leaders of a resistance group are
invited not to reach to a better decision, but to get their endorsement.

2.6.6. Coercion:

Last on the list of suggested tactics is coercion. The organization, as a last resort, can apply direct
threats on the resisters to make them ready to accept proposed change. Threats of transfer, loss of

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 promotion, negative performance evaluation, a poor report on performance, and dissatisfactory
recommendation are the examples of coercion.

Conclusion

Organizational change takes place for a number of reasons. Often this is because of changes in the
internal and external environment. Change is never done alone. It takes the interactivity of every aspect
of an organization (leaders, individual contributors, tools) to make change management successful.
Training and development ensures that managers have the skills and competencies required to manage
their team through a process of change. It enables them to deal with the change process and to monitor
and evaluate change. This helps to reduce possible resistance to change and establish if the change
objectives were achieved.

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 References

1. Author L. M Prasad, Organizational Behaviuor.

2. Author Dipak Kumar Bhattacharya, Principles of management.
3. Authors Stephen P. Robbins, Timothy A. Judge, Neharika Vohra, Organizational
Behaviuor.
4. https://hbr.org/topic/organizational-culture
5. http://managementstudyguide.com/importance-of-organization-culture.htm
6. http://managementstudyguide.com/types-of-organization-culture.htm
7. http://smallbusiness.chron.com/causes-resistance-change-organization-347.html
8. https://managementisajourney.com/organizational-change-8-reasons-why-people-resist-
change/
9. https://academlib.com/2909/management/causes_resistance_change_employees
10. https://www4.uwm.edu/cuts/bench/change.htm#resist
11. https://academlib.com/2906/management/organiational_change
12. https://trupathsearch.com/organizational-culture-factors/

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