15.3 Creating Culture Change
Learning Objectives
- Explain why culture change may be necessary.
- Describe the process of culture change.
How Do Cultures Change?
Culture is part of a company’s DNA and is resistant to change efforts. Unfortunately, many organizations may not even realize that their current culture constitutes a barrier against organizational productivity and performance. Changing company culture may be the key to the company’s turnaround when there is a mismatch between an organization’s values and the demands of its environment.
Certain conditions may help with culture change. For example, if an organization is experiencing failure in the short run or is under threat of bankruptcy or an imminent loss of market share, it would be easier to convince managers and employees that culture change is necessary. A company can use such downturns to generate employee commitment to the change effort. However, if the organization has been successful in the past and if employees do not perceive an urgency necessitating culture change, the change effort will be more challenging. Sometimes the external environment may force an organization to undergo a culture change. Mergers and acquisitions are another example of an event that changes a company’s culture. In fact, the ability of the two merging companies to harmonize their corporate cultures is often what makes or breaks a merger effort
Step 1: Creating a Sense of Urgency
In order for the change effort to be successful, it is important to communicate the need for change to employees. One way of doing this is to create a sense of urgency on the part of employees and explain to them why changing the fundamental way in which business is done is so important. In successful culture change efforts, leaders communicate with employees and present a case for culture change as the essential element that will lead the company to eventual success.
Step 2: Changing Leaders and Other Key Players
A leader’s vision is an important factor that influences how things are done in an organization. Thus, culture change often follows changes at the highest levels of the organization. Moreover, in order to implement the change effort quickly and efficiently, a company may find it helpful to remove managers and other powerful employees who are acting as a barrier to change. Because of political reasons, self-interest, or habits, managers may create powerful resistance to change efforts. In such cases, replacing these positions with employees and managers giving visible support to the change effort may increase the likelihood that the change effort succeeds.
Step 3: Role Modelling
Role modelling is the process by which employees modify their own beliefs and behaviours to reflect those of the leader (Kark & Van Dijk, 2007). CEO/GMs can model the behaviours that are expected of employees to change the culture. The ultimate goal is that these behaviours will trickle down to lower-level employees. When such behaviour is modelled at top levels, it is likely to have an impact on the company culture (Barron, 2007).
Step 4: Training
Well-crafted training programs may be instrumental in bringing about culture change by teaching employees the new norms and behavioural styles.
Step 5: Changing the Reward System
The criteria with which employees are rewarded and punished have a powerful role in determining the cultural values in existence. For example, in the pro shop, switching from a straight salary system plus collective sales targets to an hourly plus commission-based incentive structure for merchandise sales may be instrumental in bringing about customer focus among sales staff. Moreover, by rewarding employees who embrace the company’s new values and even promoting these employees, organizations can make sure that changes in culture have a lasting impact. If a company wants to develop a team-oriented culture where employees collaborate with each other, methods such as using individual-based incentives may backfire. Instead, distributing bonuses to intact teams might be more successful in bringing about culture change.
Step 6: Creating New Symbols and Stories
Finally, the success of the culture change effort may be increased by developing new rituals, symbols, and stories. By replacing the old symbols and stories, the new symbols and stories will help enable the culture change and ensure that the new values are communicated.
Exercises
- Can new employees change a company’s culture? If so, how?
- Are there conditions under which change is not possible? If so, what would such conditions be?
- Have you ever observed a change process at an organization you were involved with? If so, what worked well and what didn’t?
- What recommendations would you have for someone considering a major change of culture within their own organization?
“15.5: Creating Culture Change” from Organizational Behavior by LibreTexts is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 International License, except where otherwise noted.
